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PARTISAN REVIEW
is a classic Druckerian passage. What does the distinction between
"foremost" and "decisive" mean? What is the "union creed"? Certainly
not the "business unionism" of the AFL and John L. Lewis. The reference
must ·be to the Golden-Murray CIO "union management cooperation"
program. But this aspires merely to getting some voice for the union
in matters of production, and is almost pathetic in its innocence of inten·
tion to effect "a real change in the structure of society." But perhaps by
"union creed" revolutionary Marxism is meant. In this case, (1) the
aim is clearly broader than to replace corporate by union management,
and (2) a real change would be made, for better or worse.
Mr. Drucker's approach to politics is based on two main assumptions:
1. "The exercise of power must be based on an existing and accepted
basic principle in order to be legitimate.
If
there is no such principle,
the power becomes despotic and politically unbearable."
2. "A free society and a free government are possible only if there
are not one but two competing bases of power: one of social and one
of political organization."
These are sensible,
if
not exactly new, propositions from a con·
servative point of view. The real point is to apply them to the world
today, and here the same kind of ignorance and irresponsibility crop
up as in the statements analyzed above. Mr. Drucker's chief criticism of
modern American capitalism, for example, is that economic power is
no longer "legitimate." "The modern corporation," he writes, "is a
political
institution: its purpose is the creation of legitimate power
in
the industrial sphere." (I would say that the purpose of the corporate
form is rather to pool individual capitals into a more powerful combined
capital, and to realize profits thereon; but I realize this is much less
dashing than Mr. Drucker's formulation.) However, the corporation has
developed in such a way that today "the decisive power, that of the
managers, is derived from no one but the managers themselves.••• The
stockholders exercise no influence upon the decisions_ of the management."
And since the managers' power can only legitimately be derived from
their position as agents of the owners, the principle of legitimacy
is
violated.
Thus Drucker agrees with Burnham's managerial thesis, though he
puts a moral minus sign where Burnham puts a plus sign. But it would
appear that this separation of ownership and management, while
un·
doubtedly of immense significance, has not progressed nearly as far as
many writers, including myself, have thought. Berle and Means'
The
Modem Corporation and Private Property
is the authority usually quoted,
and the one that both Burnham and Drucker rely on. But Berle and
Means wrote in 1932, and 'a more recent (1940) and more detailed and
precise study now exists, namely, Monograph No. 29 of the Temporary
National Economic Committee: "The Distribution of Ownership in the
200 Largest Nonfinancial Corporations." This study finds (pp. 103-5)
