This book is a must-read; it will make you smarter and more equipped to analyze any economic policy proposal by reasoning logically through some fundaThis book is a must-read; it will make you smarter and more equipped to analyze any economic policy proposal by reasoning logically through some fundamental truths about human behavior. This is perhaps the best primer on economics. If all college economics courses got rid of their textbooks and had students just read this book, students would have a far more accurate and comprehensive understanding of how economics works. They'll also realize how misguided and confused the majority of "economists" are.
This book is smart, holistic, and very easy to read. It recognizes the importance of systems thinking - how policies effect all actors, the seen and unseen, and their impact on the short and long term. It also recognizes that economics is a social science that can be understood through logical deductions based on human behaviors; it is not something to be mastered through crunching statistical quantitative regressions and throwing around buzzwords and politicized catchphrases that carry little meaning. It is through using logical reasoning and tracing out how a given action or policy will impact the whole that we will better understood the intended and unintended consequences of economic policies.
A core wisdom of the book is the understanding that every group has interests antagonistic to those of all other groups. Therefore there will be public policies that benefit one group only at the expense of all other groups, and the beneficiary will argue for their interests persistently; hire the best buyable minds to devote their whole time to presenting its case, and convince the general public that its case is sound to the point that clear thinking on the subject becomes next to impossible.
By understanding this, we can better grasp the consequences of powerful labor unions, minimum wage laws, public works projects, going to war, fearing the advancement of machinery, etc.
The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.
The author suggests that 90% of economic fallacies in the world today are the result of ignoring this one lesson. Demagogues and bad economists can be more plausible in putting forward economic nonsense because they are presenting half-truths: they’re speaking only of the immediate effect of a proposed policy or its effect upon a single group. There are many of these prominent demagogues running our country and writing for popular journalism columns. Too often, the public is too bored and inattentive to rationalize through the whole truth. This book teaches economics in a comprehensive, clear, and concise way....more
"To be effective is the job of the executive (aka "knowledge worker"). Effectiveness is the specific technology of the knowledge worker. The executive"To be effective is the job of the executive (aka "knowledge worker"). Effectiveness is the specific technology of the knowledge worker. The executive is expected to get the right things done. There seems to be little correlation between a person’s effectiveness and intelligence, imagination, or knowledge. Many brilliant people don’t realize that the brilliant insight is not by itself achievement; insights become effectiveness only through hard systematic work."
Great book, lots of wisdoms. Drucker breaks down fundamental “habits” of an effective executive. This applies to people at any level of an org, manager or not, any industry as long as the person is a knowledge worker - someone who makes decisions that may impact the whole org. I can see a significant performance improvement if an entire organization had employees that were committed to instilling the 5 habits for effectiveness that make up this book. I would recommend that all individuals in startups digest these habits and practice them rigorously in their work as they help people focus on their strengths to do the right things and do them well. This book, focused on habits of the individual, is a great complement to The Fifth Discipline (focused on org systems)
There are Five Essential Practices - Know where their time goes - What can I contribute to the organization? - Making strength productive - First Things First - Making Effective Decisions
Style: Drucker argues using logic and common sense, sprinkled with case studies (outdated but still interesting). His logic is effective because it captures fundamental truths that any person with reasoning abilities and willingness to think through can understand. He doesn’t use empirical studies. It’s important to grasp his meanings of terminology, for example “executive”, “strength”, “decision”, etc. The book risks being misinterpreted because these words may sound simple/generic but carry specific meaning. For this reason, I had to reread many sections to make sure I understood in what particular cases/conditions were his statements true. For his section on decision-making, I had to run through my own cases to see the theoretical play out in tangible steps.
It's important to note that his definition of “Executive” - knowledge workers, managers, or individual professionals who are expected by virtue of their position or their knowledge to make decisions in the normal course of their work that have significant impact on the performance and results of the whole. (In knowledge work, there are also those who do unskilled or routine work; they aren’t “executives”). People don’t realize how many of these workers there are in an organization, who have to make decisions of significant or irreversible impact.
Every decision maker is an executive, even though their scope may be more limited than a CEO’s - as long as they are doing the same kind of work - plan, organize, integrate, motivate, and measure. While manual workers focus on efficiency (do things right), executives focus on effectiveness (do the right things). “Knowledge work” is not defined by quantity or costs, but by results. If an executive finds him/herself with too large a team where he/she spends most time “managing” interactions, then that knowledge worker is not able to focus on results. If that person is too busy checking figures, then that deviates from focusing on results. Executives must make decisions and not just carry out orders. They have responsibility or authority over the direction, content, and quality of the work or the methods of its performance.
Self-development of the effective executive is central to the development of the organization. As execs work toward becoming effective, they raise the performance level of the whole org. They raise the sights of people - their own as well as others. ...more