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Guest Post: We're Living Through A Rare Economic Transformation

Tyler Durden's picture


Submitted by Charles Hugh-Smith via Peak Prosperity,

In 1993, management guru Peter Drucker published a short book entitled Post-Capitalist Society.  Despite the fact that the Internet was still in its pre-browser infancy, Drucker identified that developed-world economies were entering a new knowledge-based eraas opposed to the preceding industrial-based era, which represented just as big a leap from the agrarian-based one it had superseded.

Drucker used the term post-capitalist not to suggest the emergence of a new “ism” beyond the free market, but to describe a new economic order that was no longer defined by the adversarial classes of labor and the owners of capital. Now that knowledge has trumped financial capital and labor alike, the new classes are knowledge workers and service workers.

As for the role of capital, Drucker wryly points out that by Marx’s definition of socialist paradise that the workers owned the means of production (in the 19th century, that meant mines, factories and tools) America is a workers’ paradise, because a significant percentage of stocks and bonds were owned by pension funds indirectly owned by the workers.

In the two decades since 1993, privately owned and managed 401K retirement funds have added to the pool of worker-owned financial capital.

Drucker’s main point is that the role of finance and capital is not the same in a knowledge economy as it was in a capital-intensive industrial economy that needed massive sums of bank credit to expand production.

How much bank financing did Apple, Oracle, Microsoft, or Google require to expand?  Investment banks reaped huge profits in taking these fast-growing knowledge companies public, but these tech companies’ need for financial capital was met with relatively modest venture-capital investments raised from pools of individuals.

That the dominant knowledge-based corporations had little need for bank capital illustrates the diminished role for finance capital in a knowledge economy.  (This also explains the explosive rise in the 1990s and 2000s of financialization; i.e., excessive debt, risk, leverage, and moral hazard.  Commercial and investment banks needed new profit sources to exploit, as traditional commercial lending was no longer profitable enough.)

In a knowledge economy, the primary asset knowledgeis “owned” by the worker and cannot be taken from him/her.  Knowledge is a form of mobile human capital.

In Drucker’s view, knowledge, not industry or finance, is now the dominant basis of wealth creation, and this transformation requires new social structures.  The old industrial-era worldview of “labor versus capital” no longer describes the key social relations or realities of the knowledge economy.

The transition from the industrial economy to the knowledge economy is the modern-day equivalent of the Industrial Revolution, which transformed an agrarian social order to an industrial one of factories, workers, and large-scale concentrations of capital and wealth.  These major transitions are disruptive and unpredictable, as the existing social and financial orders are replaced by new, rapidly evolving arrangements.  As Drucker put it, the person coming of age at the end of the transitional period cannot imagine the life led by his/her grandparents the dominant social organizations that everyone previously took for granted have changed.

Following in the footsteps of historian Fernand Braudel, Drucker identifies four key transitions in the global economy:  in the 1300s, from a feudal, agrarian economy to modern capitalism and the nation-state; in the late 1700s and 1800s, the Industrial Revolution of steam power and factories; in the 20th century, a Productivity Revolution as management of work and processes boosted the productivity of labor, transforming the proletariat class into the middle class; and since the 1990s, the emergence of the Knowledge Economy.

In Drucker’s analysis, these fast-spreading economic revolutions trigger equally profound political and social dynamics. The dominant social structures that we take for granted labor and capital, and the nation-state are not immutable; rather, they are the modern-day equivalent of the late-1200s feudal society that seemed permanent to those who had known nothing else but that was already being dismantled and replaced by the Renaissance-era development of modern capitalism.

From this perspective, the nation-state is no longer indispensable to the knowledge economy, and as a result, Drucker foresaw the emergence of new social structures would arise and co-exist with the nation-state.

Drucker summed up the difference between what many term a post-industrial economy and what he calls a knowledge economy this way: "That knowledge has become the resource rather than a resource is what makes our society 'post-capitalist.'  This fact changes fundamentally the structure of society.  The means of production is and will be knowledge."

Knowledge and Management

As we might expect from an author who spent his career studying management, Drucker sees the Management Revolution that began around 1950 as a key dynamic in the knowledge economy.  The lessons in management learned from the unprecedented expansion of U.S. production in World War II were codified and applied to post-war industry, most famously in Japan.

This is the third phase of knowledge being applied to production.  In the Industrial Revolution, knowledge was applied to tools and products.  In the second phase, knowledge was applied to work flow and processes, enabling the Productivity Revolution that greatly boosted workers’ productivity and wages.  The third phase is the application of knowledge to knowledge itself, or what Drucker terms the Management Revolution, which has seen the emergence and dominance of a professional managerial class, not just in the private sector but in the non-profit and government sectors.

The nature of knowledge has changed, in Drucker’s analysis, from a luxury that afforded the Elite opportunities for self-development, to applied knowledge.  In the present era, the conventional liberal-arts university education produces generalists; i.e., a class of educated people.  In terms of generating results in the world outside the person, knowledge must be effectively organized into specialized disciplines that incorporate methodologies that can be taught and applied across a spectrum of people and tasks.

Drucker characterizes this as the movement from knowledge (generalized) to knowledges (applied, specialized).  Organizations can then focus this methodical knowledge on accomplishing a specific, defined task or mission.

Though it may seem incredulous to us, Drucker observes that the current meaning of “organization” was not listed in the authoritative Oxford dictionary of 1950. While social groups and organizations have existed for as long as humanity itself, Drucker distinguishes between the traditional “conserving institutions” of family, community, and society, and the destabilizing post-capitalist “society of organizations” that is adapted for constant change.

Organizations require management, and in the knowledge economy, that means managing change and helping the organization learn how to innovate.  Innovation can no longer be left to chance; it must be organized as a systematic process.

Without a systematic process of constant innovation, organizations will become obsolete.

Drucker takes this process of innovation one step further and concludes that this requires decentralization, as this is the only means to reach decisions quickly based on performance, and proximity to markets, technology, and the environment.

Though he doesn’t state it directly, this means that the highly centralized sectors of the economy, from finance to government, will be disrupted by a rapidly evolving, decentralized “society of organizations.”

What Work Will Be In Demand (and What Won't) in the Future?

So if this is the nature of the new economy, what type of worker will be most in demand?

Will your current industry, job, or skill set be as relevant? Are there steps you can start taking now to defend or increase your future market value?

In Part II: Positioning Yourself to Prosper in the Post-Capitalist Economy, we examine what impact these transformational forces will have on us as individuals, households, and communities, and how we can best prepare for the fast-evolving knowledge economy.

The global economy has only experienced three major transformations in the past 1,000 years, and arguably, we are living through the fourth. Those who understand the nature of this transition and position themselves intelligently will be disproportionately better off a topic covered fully in my earlier report on The Future of Work.


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Thu, 04/04/2013 - 22:52 | 3410925 jonjon831983
jonjon831983's picture

Even Bill Gross sees the writing on the wall (or he is having nervous breakdown and is trying to say more negative things to relieve pressure on him):

Thu, 04/04/2013 - 23:37 | 3411019 rotagen
rotagen's picture

As long as we hang those Rockefuckers that were responsible for this scam, all is well.

Fri, 04/05/2013 - 06:25 | 3411531 The Second Rule
The Second Rule's picture

Stop being a supporter and producer for an exploitative, cannibalistic system:

Fri, 04/05/2013 - 08:42 | 3411677 rbg81
rbg81's picture

Uh, okay. None of this is really new.  I've been hearing variations on this theme since at least 1980.  I actually think that "labor" as we know it is splitting into the following groups:

1.  Elite - CEOs, National (or trans-National) Politicians, Super-Investors - Top 0.1%

2.  Knowledge Workers - CEOs and corporate officers of mid-small companies, lawyers, university professors, bureaucrats, Gurus of any discipline.  Top 5-10%

3.  Skilled Labor - Highly skilled production workers, engineers, software developers, surgeons, plumbers, electricians, etc.  These people will continue to tread water or marginally prosper.  Their skills are essential and cannot be easily automated or replaced.

4.  Drones - Lower-mid level management, lower-level bureaucrats (or clerks), and marginally skilled production workers.  The group MOST at risk due to increasingly advanced information technology, AI, and automation.  For many of these people, its just a matter of time till their jobs are eliminated.  BTW--many doctors are IN this category.

5.  Unskilled labor - Unskilled production workers, fast food workers, custoidans, bartenders, wait staff, ditch diggers.  These people will continue to have jobs, but at increasingly reduced wages.

6.  Freaks - People willing to debase themselves for $$.  Sex-workers come to mind most readily, but I'm sure there are more categories.  A definite growth area.

7.  Wards of the State -- People who have given up or are (for all practical purposes) unemployable.  These people will be given just enough to subsist.  Thanks to modern electronics, they will be kept entertained and largely docile.  Perhaps the BIGGEST growth area.  Look for the Drones, worn-out Unskilled labor, burned-out Freaks to increasingly join this group.

Fri, 04/05/2013 - 09:37 | 3412275 TwoHoot
TwoHoot's picture

No it isn't new. Alvin Toffler nailed it in four books spanning 30 plus years:

Future Shock (1970)

Third Wave (1980)

Power Shift (1990)

Revolutionary Wealth (2006)

The groups and problems you mention are a natural part of the shift from the Industrial Age to the Knowledge Age.


Thu, 04/04/2013 - 22:56 | 3410930 DoChenRollingBearing
DoChenRollingBearing's picture

Actually we have seen some of this in Peru!   The fleet is ever changing there (much more so than here in the USA).

What this means for us, is that if we can find out the new pieces for recently imported cars, then we have a jump start vs. our competitors.  A lot of our competition is a little stodgy, they do not aggressively go out and seek information.  Recently, we have introduced two new pieces into Peru that were not even there before (for Japanese car wheels, new-ish cars) , we had our Chinese supplier just make them up for us.  They complied..., we did not have to order 5000 pieces, for example.  And, for the moment, we have a monopoly on these bearings and "Hub & Bearing Assemblies".


Knowledge that leads to extra profits.  Drucker is right at least to this degree.

Thu, 04/04/2013 - 22:55 | 3410933 CheapBastard
CheapBastard's picture
Disney to begin layoffs in studio, consumer products


LOS ANGELES (Reuters) - Walt Disney Co expects to begin layoffs at its studio and consumer product divisions within the next two weeks, according to two people with knowledge of the matter, in the latest cost-reduction step to emerge from a company-wide review.

The studio job cuts will center on the marketing and home video units and include a small number from the animation wing, said the sources, who spoke on condition of anonymity because the plans had not been made public.

It is unknown how many jobs will be lost at either division.

Thu, 04/04/2013 - 22:59 | 3410940 otto skorzeny
otto skorzeny's picture

hopefully their parks will be shuttered in a few years by the time my kids are old enough to go.

Thu, 04/04/2013 - 23:17 | 3410977 Skateboarder
Skateboarder's picture

You gotta admit, Robin Williams kills it in Alladin.


Thu, 04/04/2013 - 23:35 | 3411011 Dr. Engali
Dr. Engali's picture

We left Disney four days ago.we spent almost $7,00 for one day in the "Magic Kingdom" and we got to go on 8 attractions. Our intention was to stay for two days then head for Vero Beach,but the only one who really enjoyed the whole day was my six year old. So we left and we will never go back again. It was a big over hyped commercialized waste of money.

Thu, 04/04/2013 - 23:41 | 3411025 hannah
hannah's picture

"We left Disney four days ago.we spent almost $7,00 for one day" spent $7.00 ...?! cheap bastard....!

Fri, 04/05/2013 - 00:43 | 3411139 nightshiftsucks
nightshiftsucks's picture

Need to go during the slow periods,it's a lot of fun and a great way to spend time with your family.

Thu, 04/04/2013 - 23:03 | 3410951 jonjon831983
jonjon831983's picture

Kinda disconcerting the number of layoffs at large corps in recent times...


But DIS? I thought they were doing well.

Let me guess, they'll then hire some of these people back as unpensioned consultants.

Thu, 04/04/2013 - 23:10 | 3410967 DoChenRollingBearing
DoChenRollingBearing's picture

Or part-time...  (to avoid Obamacare)

Fri, 04/05/2013 - 00:01 | 3411057 HD
HD's picture

They shutdown LucasArts. Done. 

Thu, 04/04/2013 - 23:30 | 3410995 tickhound
tickhound's picture

"Knowledge that leads to extra profits.  Drucker is right at least to this degree."

To be honest you haven't seen any of this in Peru because you don't know whatthefuck he was really talking about...

This isn't about knowledge leading to profits and "competitors" and "imported cars" dude.

What he's saying is.... "LABOR IS NO LONGER A FACTOR"

And since KNOWLEDGE should be free and universal for ALL OUR BETTER-MENT, for technology to disseminate... meaning either we HAVE the resources or we DON't... Your Financial Advisor is shit out of luck.  Your BANKER is unnecessary.  Many LAWS are unnecessary.  LAWYERS are a sideshow.  MARKETEEEEERS are obsolete, ADVERTISERS are gone.  Knowledge isn't about BEING AFFORADABLE.  And it certainly isn't about MARKETING. 

The reason why you believe he to be right "at least" in this degree is because you can't get past a growth and PROFIT model....

He's correct about our future in more ways than you seem to comprehend.  If you understand "transformation" as Smith often suggests... he means it LITERALLY.

Knowledge isn't to be proprietary.  It just IS.  And Humanity can either perform tasks or it can't.  It is no longer about LABOR. 

Thu, 04/04/2013 - 23:39 | 3411012 DoChenRollingBearing
DoChenRollingBearing's picture

Labor is certainly a factor in our case: smart labor!  We see no need to "share our knowledge" with our competitors, that we got on our own, through our own efforts.

If we did not make any profit, why would we work?  Our making a profit means that we added value to our customers, to their customers and to Peru as a whole.  If we did not have these pieces, some cars would not run.  These new pieces were unknown in Peru until we brought them there.  Now they sell well, meaning many cars are running...


I would suggest a visit to our company and to Peru as a whole to see if your ideas really stack up.

Thu, 04/04/2013 - 23:41 | 3411028 tickhound
tickhound's picture

You "work" because it hasn't been AUTOMATED YET.  And that "work" you describe will be reduced to simply THINKING OF AN IDEA for technology to produce because earth HAS THE RESOURCES or it DOES NOT.

The fact you even mentioned the word "customers" makes my point.

Do what you do for now.

Cuz it has an endgame.

Again, you speak in 20th century tongue.  The future won't need a Ben Bernank.  While the "future" you describe still needs a fucking bank.


Thu, 04/04/2013 - 23:57 | 3411037 DoChenRollingBearing
DoChenRollingBearing's picture

It's going to be a very long time until our work in Peru is automated, LOL...  Go ahead, automate this:

Unloading 21 pallets of Chinese bearings...


Furthermore, we may not need a bank in the future, we can pay with gold.

Furthermore, you make a big point out of the ideas of Earth's resources...  One would think you would have an open mind to spare parts -- you know -- to fix things, not require new ones...  USE fewer resources...




Fri, 04/05/2013 - 00:05 | 3411066 tickhound
tickhound's picture

Look.  lol.  We have nano-tech.  We have 3-d printing in its INFANCY.  It's still wombed.  We haven't even given BIRTH to what technology, in the very short term, will render obsolete.  You seriously need to update your knowledge of the state of technology even today.

The REASON some of it is NOT FOR YOUR CONSUMPTION is because it isn't PROFITABLE... not because we don't have the resources or we don't have the knowledge.

pay?  "PAY" DUDE?  REALLY?  dochen, there is a 2nd awakening in store for you.  There will be no "pay."  It will be we "can" or we "can't."

Fri, 04/05/2013 - 00:17 | 3411080 DoChenRollingBearing
DoChenRollingBearing's picture

We can.  And we will.  Nano will take some time to get to Peru.  

As soon as 3-D printing is up to snuff, I hope to make ammo with it...  

Maybe bearings later, we'll need good 52100 steel and the means to work it...

Fri, 04/05/2013 - 00:18 | 3411090 tickhound
tickhound's picture

Well nano's not the point.  It was just for effect.  :)

That said, and to this point you tried to make... "smart labor and use fewer resources"

Apply this formula

Product sustainability is INVERSE to economic growth.

"Economic growth" is a false religion.

Fri, 04/05/2013 - 00:23 | 3411103 DoChenRollingBearing
DoChenRollingBearing's picture

More money for our company and its hard work is OK with me though.  When Star Trek comes, with its free food and all, then we'll see.

Fri, 04/05/2013 - 00:40 | 3411116 tickhound
tickhound's picture

This isn't even about "free."  Free assumes "pay."   I mean, work with me here...

To the original point you tried to make.... "Smarter labor and use fewer resources"

Sounds like cost-cutting through automation to me.  Then what?  Bitch about all the former "laborers" being on unemployment???  Just because now it takes 3 humans with bright ideas and some robots to feed thousands?  millions?

This isn't Star Trek.  This is NOW!  It is happening.  That is why articles like this are here!

Honestly.  And I say this in all due respect to you and my fellow bitchez... I hold most of you in very high regard (relative to the rest of the dumbass planet of course)

"Don't be the problem."

Fri, 04/05/2013 - 00:45 | 3411137 DoChenRollingBearing
DoChenRollingBearing's picture

"Smarter labor" means we out-think our competitors, at least for now, until they catch on...   ;)  We do not fire people unless for cause.  Hardly any automation at our company, did you see those pictures?

"Fewer resources" means that Peru, "net-ted out", uses fewer resources to transport their people using our parts vs. buying new.

What's not to like?

Fri, 04/05/2013 - 00:53 | 3411152 tickhound
tickhound's picture

What's not to like?  Um... Your competitor gets squashed?  Great for you....... but someone eating cat food cuz you still want to play caveman?

I realize now, you have NO IDEA where I'm even coming from...  I mean you just can't get it. 

Thanks for reminding me how fucked we are.

Fri, 04/05/2013 - 01:19 | 3411222 DoChenRollingBearing
DoChenRollingBearing's picture


"Your competitor gets squashed?"

If we are more efficient than they are, then what's wrong with them losing out?  Free market.  You snooze, you lose.  "Work smarter, not harder."

At least until Star Trek!   :)

Fri, 04/05/2013 - 01:24 | 3411237 tickhound
tickhound's picture

Primitive market.  You lose, you lose.

Fri, 04/05/2013 - 08:40 | 3411849 thisandthat
thisandthat's picture

I like "sustainable growth" - can't go wrong with that...

Fri, 04/05/2013 - 06:02 | 3411514 granolageek
granolageek's picture

Outsourced to China. Works for you and your family. For Peru as a whole. ...I've seen this movie before.

Thu, 04/04/2013 - 23:42 | 3411032 hannah
hannah's picture

dochen...sounds great but how many cars ya got in peru...?...10 maybe.dont you still eat hamsters...? i would rather import pink slime and make some money.

Thu, 04/04/2013 - 23:51 | 3411042 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1, LOL!

There are about 5,000,000 cars in Peru.  Lots of Hyundais...

Andean people eat guinea pigs ("cuy"), had one myself (first time) in Cajamarca about a month ago.

Fri, 04/05/2013 - 00:25 | 3411107 natronic
natronic's picture


Fri, 04/05/2013 - 00:30 | 3411113 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

Yes!  I like ceviche much better than greasy "cuy"...

Thu, 04/04/2013 - 22:56 | 3410931 zorba THE GREEK
zorba THE GREEK's picture

Drucker is wrong, the nation state and individuality will prevail. Only those nations

whose governments become parasites on the productive citizens will fail.

Thu, 04/04/2013 - 23:59 | 3411055 cherry picker
cherry picker's picture

I don't agree.  As individuals we are losing rights and are being categorized into groups.  We are no longer known by name, but by number.

Nations are on their deathbed insofar as over bearing centralized government is concerned and that is why we are seeing the polarization of America, which may evolve into a splitting up between liberal and conservative states down the road.  For example, prostitution is legal in Nevada, but not in other states where jail time can be incurred.  All in one country.  Obviously the State of Nevada's population have learned to accept prostitution, other populations have not.  It is only an observation, but I think it merits as a rebuttal to your argument.

Fri, 04/05/2013 - 07:11 | 3411572 Urban Redneck
Urban Redneck's picture

Only those whose "knowledge" includes how to produce energy, food and water, as well as the capital to do so in excess of one's consumption will be able to actually set the price for their services.  

For everyone else- there's the Hegelian Dialectic, and a hierarchy of needs.

Economics is about how Society and the State deal with the issue of scarcity

Either way, Drucker is wrong.

Fri, 04/05/2013 - 15:28 | 3413860 AnAnonymous
AnAnonymous's picture

Yeah, that is why we are great. We produce energy. We produce matter. We are Americans.
Never bet against America.

Signed: an American.

Fri, 04/05/2013 - 00:07 | 3411070 Dr. Sandi
Dr. Sandi's picture

Drucker ignored a vital point and Hugh-Smith never called him on it. Knowledge is GREAT, I try to have as much of it as I can.

Meanwhile, who plants the crops, raises the animals, builds the roads, fixes our shoes while we're all sitting at our computers selling each other our knowledge?

Knowledge is great icing. But without somebody to bake the cake, mill the flour and raise the wheat, the frosting of knowledge soon loses its relevance.

Sure, everybody has to know how to do their job (with a few notable exceptions who are elected insted of hired) but the job isn't the thing. It's the product the knowledge produces.

Fri, 04/05/2013 - 00:46 | 3411145 Anusocracy
Anusocracy's picture

Mother Nature has the knowledge to make wheatberries. We just have to extract it, modify it, and make wheatberries (or wheat flour) without the wheat plant. Researchers are working on growing meat in vats, road building and shoe repair could be done by robotic machines.

And probably in three or four decades, intelligent machines will replace the knowledge-making humans.

Humans will shortly become the new chimpanzees on the street named Evolution.

Fri, 04/05/2013 - 02:25 | 3411347 Professorlocknload
Professorlocknload's picture

Interesting "connections;"

And it is, after all, all connected.

Fri, 04/05/2013 - 08:47 | 3411890 thisandthat
thisandthat's picture

Don't contradict utopians...

Thu, 04/04/2013 - 23:02 | 3410939 jonjon831983
jonjon831983's picture

"In a knowledge economy, the primary asset – knowledge – is “owned” by the worker and cannot be taken from him/her.  Knowledge is a form of mobile human capital.

In Drucker’s view, knowledge, not industry or finance, is now the dominant basis of wealth creation, and this transformation requires new social structures.  The old industrial-era worldview of “labor versus capital” no longer describes the key social relations or realities of the knowledge economy."


I was discussing with my friend around this theme... the conclusion I came to is that knowledge economies are eventually not owned by the worker.  It is just a changing of the elite old guard, albeit on a potentially more unstable footing.  Knowledge may be owned by a worker originally, but the worker who sells it to a knowledge based company no longer really owns it. Right?  The new elites (and old elites struggling to change their tune) would be gathering all the patents out there (look at what has been happening with patent wars that was in the news last year and methinks hit a peak in the media with GOOG buying up Motorola "not only for the patents" and buying up start ups to either acquire new processes/business lines or to stifle them.

Fri, 04/05/2013 - 02:33 | 3411355 Professorlocknload
Professorlocknload's picture

Sans State protection, ie; patents, trade restrictions, the worker might again have a say or stake, as would small business. But these protections are bought and paid for, and without them a Corporatocracy wouldn't be possible.

Thu, 04/04/2013 - 23:08 | 3410960 ISEEIT
ISEEIT's picture

Get your IP on bitchez...Ideas do matter. (are matter?)

Thu, 04/04/2013 - 23:22 | 3410992 EmmittFitzhume
EmmittFitzhume's picture

How can we move to post capitalist when capitalism has never been tried?  We are headed into the Fourth Turning that happens every 80 to 120 years.  

Thu, 04/04/2013 - 23:27 | 3411001 Totentänzerlied
Totentänzerlied's picture

Intellectual capital without financial capital is useless, utterly useless, except for artistic value which, while as important to me and others, is not relevant to economics.

Put differently: A nuclear physicist is no better off than a dog-catcher if there is no market for nuclear physics.

Economically valuable knowledge may not be as guarded carefully as in the past, but that's irrelevant. To learn it takes time and energy and money, which means there's an opportunity cost. To use it, one needs to be able to apply it, and it needs to be in demand, and the capital to finance the work must exist somewhere. And anyone who's looked around knows that what you know is everywhere inferior in importance to who you know, and how many favors they owe you.

The knowledge-workers are the new priest-class, the wealthy bourgeoisie who dutifully serve the true owners and rulers using their minds rather than their bodies. They are exploited for knowing some highly specific body of information and for their willingness to apply it regardless of the consequences; case in point the legion of financial scum swarming around NY and London, et al - highly educated and totally amoral. 

And one more thing, this fetishization of knowledge is enabled by - like virtually everything else today - cheap surplus energy. When that energy once again becomes expensive, all the PhDs in the world will be worth less than an acre of arable land. Some things matter more than others. Knowledge workers can only feed themselves because something else is picking up the food-production slack implied by their not being in the fields all day - cheap energy and factory farming of calorie-dense foods.


Thu, 04/04/2013 - 23:30 | 3411004 object_orient
object_orient's picture

Yeah, entrepreneurs and the self-employed need to actually be good at what they do. Most regular jobs, especially with the government, have nothing to do with knowlegde or ability. It's who you know and/or who you are. This is a serivce economy, right? All emails, bullshit and MS Office suite.

Thu, 04/04/2013 - 23:30 | 3411005 Alcoholic Nativ...
Alcoholic Native American's picture

Yes those with the capital are not making the rules these days, it's those with "knoledge".  This article is pure ass.

Thu, 04/04/2013 - 23:33 | 3411010 Hindsight2020
Hindsight2020's picture

We have almost perfected the production side of the supply chain but capitalism doesn't address the consumption side of the equation fairly.  I'm not here with any answers to what is next after capitalism but to think it is the final form of economic activity on planet earth is dead wrong.

Fri, 04/05/2013 - 03:09 | 3411380 Professorlocknload
Professorlocknload's picture

"capitalism doesn't address the consumption side of the equation fairly. "

Capitalism? Where?

Thu, 04/04/2013 - 23:35 | 3411014 Peter Pan
Peter Pan's picture

There is no transformation taking place. There is just a whole lot of shit dove tailing perfectly to form a bottomless pit of poverty, uncertainty, disease, political instability and possibly war.

The knowledge economy is just producing "toys" to keep the sheep mesmerised and the military better equipped to control and supervise the sheep.

Fri, 04/05/2013 - 03:32 | 3411398 22winmag
22winmag's picture

...until the privates in the aforementioned U.S. military begin fragging the seargents, who then begin fragging the lieutentants, who then begin fragging the generals, who then frag their commander... and we all know who that is... the coffee-colored guy from Kenya by way of Indonesia.

Thu, 04/04/2013 - 23:41 | 3411029 Juan Carlos Cantu
Juan Carlos Cantu's picture

Knowledge is a non-rivalrous public good. It has no opportunity cost (nothing is sacrificed to use it) and it shows no diminishing returns the way capital goods do (every additional unit of labor combined with the technology in question yields the same incremental output).Technology is ushering a new economy. These are exciting times we are living in.

Fri, 04/05/2013 - 00:12 | 3411078 q99x2
q99x2's picture

Yep and if ya ain't got the connections to get the silicon connections then you're going to be shit out of luck once the mapping of the human brain is completed.

Tech is advancing faster than you can write about it.

The only reason there are humans to begin with is so they can see each other. I'm not sure if a work around for that problem will ever be overcome.

Fri, 04/05/2013 - 00:26 | 3411108 Stockmonger
Stockmonger's picture

I'm eating a big bowl of knowledge right now.

Tonight I'll snuggle up in a knowledge blanket under my knowledge home.

Tomorrow I'll build something made of knowledge.

I love this post-material world.

Fri, 04/05/2013 - 00:34 | 3411122 smartstrike
smartstrike's picture

This guy is like Kyle Bass, always looking backwards, two decades behind times. On the other hand, Harry Dent who correctly forecast the demographic trends in Japan is looking for an echo boom in Japan just when Kyle Bass is looking at demographics from a twenty year old mirror. Knowledge economy is also a thing of the past- that's extracting rents from lower classes- its part of finacialization on the back of Wall Streets coat-tails.


Fri, 04/05/2013 - 01:13 | 3411217 JOYFUL
JOYFUL's picture


I hadn't read your comment, as I was workin on my own...but you nailed it pardner! Kudos y saludos~!

Fri, 04/05/2013 - 01:10 | 3411200 JOYFUL
JOYFUL's picture

Hughes-Smith appears to be looking to carve out a new niche for himself recently as the master of the day late n dollar short school of completely obsolescent(and repackaged!)ideas. Yesterdays' Proper Use of Credit was bad enuff...this howler is a further descent into intellectual oblivion...

in which, apparently, if one simply 'enrolls' oneself in the master's academy of ideas(for pt 2 of this braintsunami!)one may acquire access to the knowledge tools which will allow them to somehow float above all of the macro-economic and socio-political trends of the moment, to find a niche in some cloud-borne economy of experts who dispense knowledge from 'decentralized' fashion. This just in...there is no such vaccuum...nor refuge from the incoming tide of neo-feudal futures being fomented for us by the usual suspects...and these supposed new economies and their beneficiaries are mere pipe-dreams -for sale by the hustlin class!

Experts and an expert culture always call for more experts. Experts also have a tendency to cartelize themselves by creating 'institutional barricades' - for example proclaiming themselves gatekeepers, as well as self-selecting themselves. Finally, experts control knowledge production, as they decide what valid and legitimate knowledge is, and how its acquisition is sanctioned. Finger and Asún (2001)

As knowledge becomes futher commodified, the process of social disintegration increases...leading to disruptions to economies and societies that put a spanner in all the short-sighted plans of 'organizers' and managers who cannot see past their own nose...or know where their own self interest lies! As long as we live in societies whose bottom line values are premised in 'scarcity' versus abundance economic models, we will see the horizon of opportunity for most of us reduced to just stayin alive.

 Before Cortez, there was a unique Indian corn seed made up of at least 150 distinct genetic strains that came into existence. It was uniquely adapted to the micro-climate of the area where I live. When ground into meal, the corn was the characteristic blue color of local flowers, different from those ten miles east or west of here. Religious festivals, marriage customs, ovens and diet were shaped by that crop.

...then came Dr. Bourlag's "miracle" seed, with government subsidies for fertilizer, insecticides and fungicides. In the first few years, the fields produced fantastic returns. But then, within less than a decade, the terraces which covered this region from pre-Columbian times, left uncultivated, were all washed out. Now, the young people here no longer work in the fields. They seek work in larger towns, repair old cars or try to earn some money peddling household appliances. The tools and donkeys of their fathers have disappeared.

...only by re-entering the present moment with knowledge of the lost time of the blue tortilla will it be possible to establish a new way of seeing and a new set of terms that can guide sustainable "policies" without recourse to "development." Ivan Illich

 All 'knowledge' is be shared and celebrated in conviviality...not 'mined' like bitcoins. When quality of life is placed before primitive, quantity-based systems, the linear, 'progressive' model of history falls into the dustbin, and dupes like the author are ousted from their perches...inside the cuckoo clocks of time!   \Jeff Hendrick - Old School Party\


Fri, 04/05/2013 - 01:15 | 3411218 tickhound
tickhound's picture

A relief post.  Thank you.

Fri, 04/05/2013 - 08:51 | 3411874 flapdoodle
flapdoodle's picture

Drucker is off base when he says that "knowledge" is owned by the worker. While this is "true" in the sense that once you have the knowledge it can't be taken
away from you, the value of this knowledge is extremely ephemeral, and is directly proportional to its exclusivity.

Unfortunately, the great Darwinian game has always been that different groups will actively increase the control they exercise over "their" knowledge so as to increase their profits and power, and actively decrease the value of the knowledge held by their competitors -- or their hapless workers.  

Entities will actively enhance the value of "their" knowledge: via "intellectual property rights", patents, EULAs, encryption, or just plain secrecy. Nothing new: its been so from Egyptian priests keeping secret how they predict the spring floods to the secret techniques of the trade jealously guarded by craftsmen.

Management and others actively work to decrease the value of a  worker's knowledge by stealing it, or otherwise passing that knowlege off to someone
else who is willing to work for less. The hapless knowledge worker in the US still has his knowledge, but so does the cheaper engineer in China who just took the US worker's job. The US worker "knowledge" has become useless to him in a practical sense and he must now join the ranks of the new serfs, the service workers.

Since "knowledge" is like quicksilver and tends to leak out despite the best efforts to contain it, the real danger is that those who hold the "knowledge" will resort to ever more totalitarian techniques to control it. Watch as the
DHS gets more and more involved in tracking down software, music and video piracy - the TSA in principle can already do this when they check what is on your laptop...

Fri, 04/05/2013 - 01:07 | 3411201 YHC-FTSE
YHC-FTSE's picture

This talk of knowledge based era is meat and potatoes to anyone who did graduate work in information systems. It is simply a consequence of living in an information age, knowledge being the third in the progression between data and wisdom. (Data - information - knowledge - wisdom). 

Information, big data, is a huge business that encompasses all industries today. And mining big data to retrieve useful knowledge for targeting personalised services, needs, and predicting the behaviour of individuals,  corporations,  and nations, is going to be the future. I suspect the author will continue the theme by suggesting information systems and management will be the skill sets to have in the next decade. 

There is some merit to the idea of a purely knowledge based era that requires a different approach to the usual big capital way of doing business. Project based collaborations requiring specialist knowledge are popping up and succeeding to new heights with tiny initial budgets,  as opposed to the traditional organisational R&D approach that needs high fixed costs to maintain but rarely produces true innovation.  

Obviously not all specialist knowledge is going to be useful, and big capital will eventually be needed for big ventures. We're very far from being in an era of knowledge gurus who can beam consumer crap to your 3d printer at home. But data mining, specialist scientific/engineering knowledge,  and project management skills may very well be the wave of the future, as it already is today.

 Unfortunately,  that leaves 90-95% of the population with nothing to do but wait for the next consumer craze to be invented so they can tweet about it to their peers. Whatever era we're supposed to be heading into,  the problems of poverty/entitlement,  the power of the financial institutions,  the spread of the military industrial complex, and the corruption in politics that enable the whole mess is not going to be addressed by mere knowledge alone. Perhaps the next era, the era of wisdom will bring real changes to the vast majority who never awaken their full potential. I rather doubt any of us will be alive to see that ever happen.

Fri, 04/05/2013 - 05:01 | 3411477 Atticus Finch
Atticus Finch's picture

I suggest this line change,"the problems of poverty/entitlement,  the power of the financial institutions" to
the problems of poverty,  the power of the financial institutions/entitlement"

Fri, 04/05/2013 - 01:27 | 3411242 joego1
joego1's picture

I think people confuse information with knowledge these days. By any means humans are on info overload. I think in the near future people will have signs "Will trade knowledge for food".

Fri, 04/05/2013 - 02:03 | 3411313 steve from virginia
steve from virginia's picture



Drucker is an idiot. Why he gets any valuable electrons in a magnetic matrix is a mystery. It must be the buzzwords:


"Drucker’s main point is that the role of finance and capital is not the same in a knowledge economy as it was in a capital-intensive industrial economy that needed massive sums of bank credit to expand production."


Drucker doesn't understand industrialization, if he did he'd have to write about something else. Industries need massive amounts (sums) of capital (resources) simply to get their bloated selves off the ground They need more capital resources to operate. What is done with these resources?


They've been burned up for nothing! Turned into waste. Lied about afterward, endlessly. Where is the fucking knowledge? We have an ignorance based economy, a stupidity based economy an economy where there are no penalties for any sort of bad behavior. We have a kleptonomy. 


"How much bank financing did Apple, Oracle, Microsoft, or Google require to expand?"


Wrong question: how much bank financing did Apple's customers require to buy Apply products? Tens of billions! How much did Oracle's customers need? How about Microsoft's customers? These companies borrowed against their customers' accounts, some of them borrowed against the credit accounts of the sovereigns. They also borrowed by way of stock buybacks and options from Wall Street and from overnight money markets ... hundreds of billions of dollars.


All of the knowledge industry is another gigantic ponzi scheme with a handful of tycoons at the center .. surrounded by millions of greater fools.


Like Drucker.

Fri, 04/05/2013 - 06:31 | 3411535 negative rates
negative rates's picture

It doesn't have to be that way, we could ALL burn the midnite oil and have only denile to show for it.

Fri, 04/05/2013 - 07:59 | 3411650 GoldBricker
GoldBricker's picture

I don't know why so many people junked you. Drucker was in the business of selling books and he peddled ideas that were comfortable and flattering to his customers.

Yes, knowledge is important for economic growth, always has been. Imagine the collective knowledge required to sail a cargo somewhere in ancient times, or for a Dutch merchantman to make it from Amsterdam to the East Indies in 1600. We're less special than we think.

And what if peak oil bites and this just-in-time, interconnected (think derivatives) world comes unglued? Then the hot knowledge might be in survival skills, adapting the detritus of the old society, etc.

What Drucker missed was the world he was swimming in. The 20th century's growth depended on oil, and when its price rises meaningfully in real terms, then we'll see what knowledge comes into vogue.

Try reading Club Orlov or the Archdruid for insight, not the business section at the airport bookstore.

Fri, 04/05/2013 - 02:18 | 3411333 Bear
Bear's picture

Is 'Government Worker' an oxymoron? Can a decentralized society be governed by one centralized power?

So society is going one way and DC the other.

Fri, 04/05/2013 - 02:32 | 3411335 Joe A
Joe A's picture

People'd better have knowledge about how to farm or fend for themselves. And terms such as wisdom society just makes me laugh. What, everybody becomes Budha?

Fri, 04/05/2013 - 02:20 | 3411337 New American Re...
New American Revolution's picture

He's still operating in the tyrannical state, which is no longer a sustainable model of governance.  We have to go beyond it and install the freedom and operating model of political Liberty.  This changes the economic dynamic from one of the tyrannical state of influence, to that of strictly the clarity and self cleansing nature of the market.  Political policy sets economic policy, not the other way around.  The world is suffering from systemic failure, so logic dictates that the system be replaced.  The diametric opposition of tyranny is political Liberty.  That is what we are doing at   We have a Declaration of American Liberty that defines the bare bones required to restore political Liberty to America and HM 535, the 2014 Congressional campaign to open up the races for Congress, slashing the price of running that allows normal Americans to run for Congress and get elected.   We mean business, and our business is Liberty.  Our objective is to replace the Congress, and restore all of its constitutional powers to it, and operate them exclusively in the Public Forum.  This creates the Transparency the people require to render their true Consent of the Governed.  This is the definition of Liberty, where the people rule their government.  This removes the powers of government from the factions of unprincipled men, who now use those powers for their engrandizement, as they use government to rule the people, and is the very means by which free governments are destroyed.   Serfs Up America!

Fri, 04/05/2013 - 02:23 | 3411341 Debugas
Debugas's picture

as in the past the workforce percentage working in agriculture decreased dramatically due to automation the same has happened across most industries thus reducing percentage in the industries. Will all the freed workforce shift to knowledge based work is a question to the rich people who will decide what kind of a transformation of the world (if any) they want to see

Fri, 04/05/2013 - 02:34 | 3411361 Cardinal Fang
Cardinal Fang's picture

"In the Country of the Blind the One-Eyed Man is King"

Fri, 04/05/2013 - 06:45 | 3411544 Monedas
Monedas's picture

"In the country of the starving .... fat boy is King !" .... Korean Kronicles

Fri, 04/05/2013 - 03:37 | 3411401 mkkby
mkkby's picture

The knowlege economy concept is pure bullshit, but Drucker can sell a few books to suckers, I guess.

Let's take facebook as an example.  Who owns the code/product/patents?  Is it Zuckerberg and a few bankers, or is it the fucking workers who are easily replaced by cheap Indian and Chinese immigrants? 

The product may be bits and bytes, but it still depends on the same thing it always did -- capital, banking and legal barriers to entry.

Knowlege actually has very little value in the workers hands, because with the internet, all knowlege is basically free to anyone who wishes it.  Drucker has mistaken a new product class for a new social stucture.  Silly.

Fri, 04/05/2013 - 04:24 | 3411451 autonomos
autonomos's picture

The argument is sound.

But you may also consider open-source knowledge.

Facebook does not play the game but many others do.

Fri, 04/05/2013 - 03:46 | 3411409 ebworthen
ebworthen's picture

Love your stuff Charles, thank you.  Wasn't knowledge what started this mess?

The danger of our current transformation is that never before have so many billions been so far removed from, and ignorant of, subsistence agriculture.

If the machines and technology don't keep running, a mass extinction and dark ages could be nigh.

Three days of food in most major cities, and if the water stops running, two days to a week before collapse.

We have built a very fancy and complex house of cards, but a house of cards it is.

Too many people - heads filled with knowledge - but unable to apply it.

Fri, 04/05/2013 - 07:31 | 3411585 RSBriggs
RSBriggs's picture

The only "industry" with any true value is agriculture and the only true thing of value is food.  People must eat or they die.  Everything else in society has been built on the back of the farmer, money, industry, government, everything.  Every other function in society is only as productive as it supports agriculture. 

These days, people seem to think that knowledge is "big data" - obtained via "data mining" - digging into millions of web clicks to see what people do and where people go after buying something, digging into cash register receipts and invoices to see what product X people generally purchase along with product Y so the shelves can be re-arranged to put those products closer together.  Knowledge is considered to be something that supports consumerism - a new way of getting the sheep to buy the latest gadgets.

I call bullshit on both the "service economy" and the "knowledge industries".  Trying to build an economy around flipping burgers, greeting people as they enter a WalMart, delivering pizza, and cranking out college students that can barely even read doesn't bode will for the future - it's all become utter and complete bullshit.  "Education" these days indoctrinates, it doesn't teach, in fact it actually supresses, critical thinking.

Learn to grow stuff, pass that one true knowledge along down through the generations, and you'll make it.  Hundreds of millions - perhaps billions of others that have lost that knowledge and ability won't...

Fri, 04/05/2013 - 12:46 | 3413291 Implicit simplicit
Implicit simplicit's picture

   Good points that I agree with; however, the tertiary tentacles extending out from the primal need of food have created a complex web of survival for growing populations. In this sense, calling bs on the knowledge based  hypothesis is not totally true. Trade for other luxuarys beyond survival will likeley last for a long time after the shit hits the fan.

   The sub-categories of farming branch encompass many areas. This allows farmers to trade with others that have knowledge that the farmer might not posses. There are clothes and meat from skins, mechanical needs for machines and power, power rquirementts in itself, water etc.. It is hard to be totally self reliant and off the grid, and trade and knowledge acquisition might be the only way to survive for the large majority of people.

Fri, 04/05/2013 - 07:49 | 3411641 Ckierst1
Ckierst1's picture

Arguably, it was the failure to implement knowledge (proper economics) that caused the mess and nothing fails at this like government in its quest to preserve its  status quo command and control.  The only correct knowledge is that which increases its power.

Fri, 04/05/2013 - 04:49 | 3411471 Atticus Finch
Atticus Finch's picture

The whole time I read the article, I thought of 3D printers.

Fri, 04/05/2013 - 09:52 | 3412377 Abrick
Abrick's picture

And everyone of us has the knowledge and skill to manufacture one of those by ourselves.

Fri, 04/05/2013 - 06:15 | 3411524 Coldfire
Coldfire's picture

What a pantload. Drucker is from the greatest generation "management" gurus that provided intellectual cover, wittingly or more likely not, for the de-industrialization of America. Good job, toolbag.

Sat, 04/06/2013 - 06:48 | 3415734 Dr. Sandi
Dr. Sandi's picture


Oooh, I kinda like that little epithet. Think I'll steal it.

Fri, 04/05/2013 - 06:39 | 3411539 icanhasbailout
icanhasbailout's picture

Knowledge isn't very useful without the tools and resources to do something with it. Until we lose the need to actually manufacture things, hold off on proclaiming the coronation of the "knowledge worker".

Fri, 04/05/2013 - 07:22 | 3411600 RSBriggs
RSBriggs's picture


Fri, 04/05/2013 - 06:42 | 3411542 Monedas
Monedas's picture

Walt Disney was a Capitalist .... this new Disney crowd .... are Post Capitalists .... anyone who uses the word Capitalist .... in anything but loving terms .... is a sick SOB !

Fri, 04/05/2013 - 07:07 | 3411566 GCT
GCT's picture

Wasn't it the experts that got us to this financial mess in the first place ? 

Fri, 04/05/2013 - 07:59 | 3411603 razorthin
razorthin's picture

...highly centralized sectors of the economy, from finance to government, will be disrupted by a rapidly evolving, decentralized “society of organizations.”

e.g., bitcoin

Borrowing from Jurassic Park, "life will find a way".

Fri, 04/05/2013 - 08:20 | 3411718 My Days Are Get...
My Days Are Getting Fewer's picture

"I've always believed that the mind is the best weapon."


Yes, we are all John Rambos.  I didn't need a long-winded discourse to teach me that.


Everyone, who reads this website, has sufficient knowledge to get what he needs.


Fri, 04/05/2013 - 08:25 | 3411746 IamtheREALmario
IamtheREALmario's picture

This B/S about a knowledge economy assumes that the knowedge worker has something of equal value to trade with the guy who grows food, builds roads, produces furnature and drives a truck. My guess is that the average person can do without the knowledge worker (and without lawyers, insurance executives, politicians and brokers) but cannot do without the others.

Odd how the pay scales are inverted, no? Those who create and distribute money (and those dependent on them) decide who earns how much and not the needs.

Fri, 04/05/2013 - 08:41 | 3411850 Pseudo Anonym
Pseudo Anonym's picture

can anyone here confirm (because i cannot) that the nation-state is no longer indispensable to today's knowledge economy, and as a result, we are moving from the neo-feudal construct to a new social structure that would arise and co-exist with the nation-state?

Sat, 04/06/2013 - 06:50 | 3415737 Dr. Sandi
Dr. Sandi's picture

We are moving toward a thick brick wall at moderate but unwavering speed. The social structure and the nation-state will soon be mingled with us and those bricks.

Fri, 04/05/2013 - 08:47 | 3411891 shovelhead
shovelhead's picture

Maybe Drucker has a point.

My clothesdryer quit working and I need to pay someone with more knowledge than I have to fix it.

100 years ago if my clothesdryer quit working, I would just have to beat her with a stick to get her back to the clothesline.

Complex systems require more specialized knowledge to be effective.

Which is just as well, as I'm not very fast these days.

Sat, 04/06/2013 - 07:09 | 3415739 Dr. Sandi
Dr. Sandi's picture

That's the point, in both respects. The further we get from being able to do it ourselves, the closer we are to crash and burn.

And even though the lonely old Maytag repairman may actually have the knowledge to fix your clothesdryer, he still needs the parts to complete the job. And somebody with or without much knowledge probably has to push a button that drops the forge that forms the widget that fits in the the spot where the Maytag repairman is pointing.

A life of ease is lovely. Until the appliances start to gang up on you.

Fri, 04/05/2013 - 09:10 | 3412065 Sandmann
Sandmann's picture

Funnily enough Drucker's illusionary world requires more Electricity than ever to run servers. It is for most people hardly a battle-hardened system resilient to shocks. Few countries have a robust Internet with good bandwidth or reliability and the main hubs out of Asia are congested and those in the UK are oversold and under-invested. The mobile networks are similarly over-hyped and under-resourced. Just one more example of media hype outpacing engineering redundancy

Fri, 04/05/2013 - 09:39 | 3412283 thisandthat
thisandthat's picture


In a knowledge economy, the primary asset knowledgeis “owned” by the worker and cannot be taken from him/her.

Is this what he's trying to call a post-capitalist society? The concept of ownership (no matter by whom) is the very definition of capitalism - where the "owner" of such knowledge then becomes a capitalist by means of capitalizing (duh) on "his" knowledge!

That's precisely the problem with it, because knowledge, in and by itself, is not and cannot ever be owned, since it's the natural outcome of an instinctive realization of your  intellectual potential, which happens whenever necessary conditions are met (and thus should better be named acknowledgment), reason why it may happen at multiple places and multiple times independently.

A true knowledge society can only happen when knowledge itself is released from the shackles of the capitalist notion of profit through ownership, when you'll be able to put your acquired knowledge into practice and benefit from it without preventing others (who may have acquired it at the same time) from doing the same or preventing them from improving on it.

Sat, 04/06/2013 - 07:06 | 3415751 Dr. Sandi
Dr. Sandi's picture

Until pure knowledge frees us from the bonds of physicality, we will not have a 'knowledge society.'

Some amount of labor has to go into cleverly growing the food commodities, intelligently trucking them to the food squeezin' factory, then smartly transporting them to the warehouse where they're craftily sorted and thoughtfully driven to your supermarket. Then somebody has to wisely shop for the packages, cunningly load them into another vehicle, proficiently lug them into the house, then brilliantly put them on the shelves and into the fridge.

At dinner time, another knowledge worker has to wittily prep that raw food, knowingly cook it, then serve it to all the knowledge workers gathered around the table.

It seems that too much emphasis here is placed on 'knowledge' and not enough on 'worker.'

The obvious implication is that if you have enough knowledge, somebody else gets to do all the actual work.

However, until the race achieves 'singularity,' I don't see the knowledge society feeding our bellies or wiping our snotty little noses as we wallow in our own personal algorithms.

Sat, 04/06/2013 - 11:59 | 3416209 thisandthat
thisandthat's picture

So I guess I was just being too idiosyncratic, filling up napkins... still, funny how things are, with you describing to me a process I have first hand experience with...

Fri, 04/05/2013 - 09:54 | 3412382 Abrick
Abrick's picture

Personally I am waiting for the Strumpetocracy to gain power.

Fri, 04/05/2013 - 10:05 | 3412449 American Dissident
American Dissident's picture

Easy to be clairvoyant when ones privy to the big plan. Besides, US Inc. has been a "Mixed Market" since the Federal Reserve arrived on the seen.  Surprised more are not at the acceptance stage ... I mean really, the middle class is being replaced by a  proletariat class and they got big plans that seem obvious as hell.

Fri, 04/05/2013 - 10:30 | 3412623 jbvtme
jbvtme's picture

they are making it all seem so esoteric and complicated.  food, clothing, shelter and a local currency.  the rest is pedantic pablum.

Fri, 04/05/2013 - 11:14 | 3412855 Tunga
Tunga's picture

"The old industrial-era worldview of “labor versus capital” no longer describes the key social relations or realities of the knowledge economy." 

Mario planted his elbows on the desk and dropped his head into his hands. Looking down onto the keyboard of his laptop his eyes glazed over. "Why hadn't she come home last night? He wondered. She hadn't returned any of his texts. He unplugged the computer and put it into it's drawer. Slamming it shut he thought "God Damn you ZeroHedge!" a second later, after the echo from his violent outburst had just died down "FUCK YOU TOO TUNGA!". 
Just then his secretary burst into the room. "Is everything alright?" she asked. "NO! he shouted, "These god damned internet freaks know nothing of what we do here! NOTHING!"
"Oh..." she said sheepishly, "...what's a Tunga?" 
Fri, 04/05/2013 - 15:49 | 3413945 AnAnonymous
AnAnonymous's picture

You have to give it to 'americans'. They produce strong booze. In all forms.

Read some 'american' thinkers and it is booze effect.

'Americans' and 'american' economics are all about consumption.

This gives them the natural tendency to offset any obvious fact staring them in the face to spread their propaganda.

Knowledge and decentralization. That 'american' author knows so much that his readership's demand he will invent anything to conclude that decentralization is the way to go.

Somehow, that 'american' author manages to sell the idea that despite the huge centralization that knowledge has been undergoing under 'american' societies, it will end to decentralization.

A major centralization of knowledge like Facebook does not put him off. It will end to decentralization.

Take some 'american' booze.

Fri, 04/05/2013 - 17:13 | 3414318 Tunga
Tunga's picture

Did you want a side of freedom fries with that?
Twice the deal at half the price. Depending on your citizenizm of course.  

Fri, 04/05/2013 - 15:50 | 3413956 MedicalQuack
MedicalQuack's picture

Yes the entire community is tring to live on intangibles with selling and analyzing data.  We need a lot of data work for science of course but the greed game has changed and now along wiht banks we have others involved in the data selling schemes too.  I agree with the Australian bankers, that half of analytics purchased will be a waste and this is obvious as the data scientists don't know what they are doing with all of it either.

Those who are duped as waiting for the algorithm fairies to give them answers and they are not there.

Thiis is further seen by the Quants writing a code of ethics so they don't have to write dirty code and cheat to keep their jobs when they know the models are wrong.

CEOs and executives with an "illusion of understanding" other words write that code that makes big money...

(b) A data scientist shall rate the quality of data and disclose such rating to client to enable client to make informed decisions. The data scientist understands that bad or uncertain data quality may compromise data science professional practice and may communicate a false reality or promote an illusion of understanding. The data scientist shall take reasonable measures to protect the client from relying and making decisions based on bad or uncertain data quality.

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