Capitalism and Western Civilization: Knowledge Workers

William H. Young

Peter F. Drucker (1909‒2005) was an eminent Austrian-born American management consultant, influenced by Joseph Schumpeter, who impressed upon him the importance of innovation and entrepreneurship. An immensely prolific writer, Drucker authored 39 books and countless articles familiar to business leaders, academics, and journalists.

Drucker presciently coined the term “knowledge workers” in The Landmarks of Tomorrow (1959): “those possessing actionable knowledge far beyond that of industrial workers, obtained through continuous high-level education and training and the ability to acquire and apply theoretical and analytical knowledge.” In Post-Capitalist Society (1993), he summarized his views of an economy and society in which “the productivity of knowledge is…the determining factor in the competitive position of a company, an industry, and an entire country.” Knowledge workers are needed at many levels of capitalist businesses, social institutions, and public bureaucracies—information-based organizations.

He considered that “the market, for all its imperfections, is still vastly superior to all other ways of organizing economic activity…and precisely that it organizes economic activity around information.” The only comparative advantage of a business or industry will be its “ability to exploit universally available knowledge…management’s performance in making knowledge productive.”

Drucker set out specifications for the kinds of schools needed to make knowledge productive:

The school we need has to provide universal literacy of a high order—well beyond what literacy means today.

It has to imbue students on all levels and of all ages with motivation to learn and with the discipline of continuing learning.

Universal literacy of a very high order is…is the foundation. Without it, no society can hope to be capable of high performance…. Reading, writing, arithmetic will be needed just as they are today, but literacy now has to go well beyond these foundations. It requires numeracy; it requires a basic understanding of science and of the dynamics of technology…

Universal literacy…demands that the school—especially the school of the beginners, the children—subordinate everything else to the acquisition of foundation skills. Unless the school successfully imparts these skills to the young learner, it has failed in its crucial duty: to give beginners self-confidence, to give them competence, and to make them capable, a few years hence, to perform and achieve in the…knowledge society.

This requires a reversal of the prevailing trend in modern education and especially in American education….What we have to do now is to reassert the original purpose of the school. It is not social reform or social amelioration; it has to be individual learning….

Ironically, as I argued last week in Human Capital, American higher and public education have proceeded in exactly the opposite direction, doubling down on equality and social reform to the neglect of individual learning, with predictable debilitating results.

Rather than improved math and science literacy, a 1998 international comparison showed that American high school seniors were “among the industrial world’s least prepared in mathematics and science….Particularly devastating, American officials said, was the bleak performance of the best American students in advanced subjects. In physics and advanced mathematics, not one of the countries involved—including less-well-off nations like Greece, Cyprus, and Latvia—scored lower than the United States.” (Ethan Bronner, “U. S. Trails the World in Math and Science,” The New York Times, February 25, 1998)

Again in 2007, the best American high school students scored far below their contemporaries in the nations of the Organization for Economic Cooperation and Development, 25th in math and 21st in science out of 30 countries. The gap widened dramatically as grade levels rose.  (Newt Gingrich and Roy Romer,“Losing the Race,” The Washington Times, 13 December 2007)

Rather than approaching universal literacy of a high order, the number of college-educated Americans “proficient in reading” fell from 40 percent in 1992 to 31 percent in 2003, according to the U. S. Department of Education’s National Assessment of Adult Literacy. In 2006, more than 50 percent of students at four-year colleges and more than 75 percent of students at two-year colleges did not “score at the proficient level of literacy,” and were weakest in quantitative literacy, according to the American Institutes for Research.

Other than in the technical professions, only a limited number of Americans are coming out of college with the high-level abstract-reasoning skills required to master new information technologies and meet the needs of today’s knowledge age employers. As Peter Wood observed in Too Much For Too Little, academia has “stripped the college degree of much of its value as a guarantor of broad competency.”

Community colleges have long worked with employers to develop needed high-skill workers. But, as I emphasized in Community Colleges, too few students enroll in courses required by high-skill jobs because such courses are too hard to pass. Young learners in public education have not been adequately prepared for later mastery of higher skills.

These results provide further evidence that education reform needs to proceed in two new and fundamental ways to provide knowledge workers to meet the needs of business and the economy.

·        We should identify, mentor, and educate selected children with the intellectual potential from an early age, placing them on a separate track (ability grouping) to become high-skill workers in the private sector economy. This should not be a track only towards college; qualified high school graduates should be an equal aim. 

·        The track must begin in the primary grades (as Drucker emphasizes above) and continue through secondary schooling to inculcate knowledge upon which later education must build to develop human capital.

From all experience, it is unlikely that the public schools could quickly undergo the kind of top-to-bottom change needed for such reform. Instead, we need new schools embodying Drucker’s recommendations as well as business requirements. How might this be accomplished? I offer some possibilities below.

Each state, in concert with its businesses, should designate or create certain charter schools to focus exclusively on developing graduates with a broad set of high skills required to fill future jobs in business and the private sector economy. This would be a higher level of knowledge than traditional vocational schools. These special charter schools should include primary, middle, and secondary grades.

The children to matriculate in such schools should be selected in the manner stated above and removed from the public schools, carrying their taxpayer funding with them, to be supplemented by business and foundations. The brightest should come from any race or socioeconomic class, selected only on measured ability and intellectual potential—not diversity or equality.

The best charter-school teachers should be assigned to these high-skill schools. A special curriculum, supported by best available materials and latest successful learning tools, such as those of Salman Khan and his Khan Academy, should be deployed. For example, texts existing before the 1970s might be adapted for history courses.

Retired professors and teachers with knowledge in specific areas should be recruited to serve as mentors, with the task of guiding sets of students through all grades until graduation. The brightest should receive the same kind of mentoring in entering and proceeding through colleges in existing and modified programs whose graduates are needed by private sector businesses.

In Part II of his April 2011 essay, Is Our Civilization a Bubble?  Stephen Balch considered whether our civilization has created its own mega-bubble by its runaway expectations of entitlement and concludes that “an accompanying misunderstanding of humanity’s condition is what threatens to puncture it.” The American bubble of economic prosperity is already punctured and deflating. We need fundamental reform along the lines suggested above to avert the bubble’s collapse and to re-inflate it.

The next article will examine critical thinking in this same context of education reform.


This is one of a series of occasional articles applying the lessons of Western civilization to contemporary issues relevant to the academy.

The Honorable William H. Young was appointed by President George H. W. Bush to be Assistant Secretary for Nuclear Energy and served in that position from November 1989 to January 1993. He is the author of Ordering America: Fulfilling the Ideals of Western Civilization (2010) and Centering America: Resurrecting the Local Progressive Ideal (2002).

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