Non-fiction: The End of Economic Man

Overview
Peter Drucker's The End of Economic Man (1939) investigates why fascism and other totalitarian movements gained mass legitimacy in interwar Europe. He argues that the nineteenth-century belief that society can be organized primarily around the rational, self-interested "economic man" collapsed under the shocks of World War I, hyperinflation, and the Great Depression. That collapse shattered status, trust, and the legitimacy of existing institutions. Into the vacuum stepped movements that offered belonging, meaning, and certitude, not through economic improvement but through political myth, ritual, and coercion. The book is both diagnosis and warning: a society cannot sustain freedom on economic rationality alone; it needs institutions that provide function, status, and a shared moral framework.

The failure of "economic man"
Drucker contends that liberal capitalism weakened older sources of authority, tradition, church, estate, without creating new ones capable of binding individuals into a coherent polity. Market success became the measure of worth; when the market ceased to reward, millions lost not only income but social identity. Unemployment, inflation, and class erosion produced atomized individuals who no longer believed in the promises of progress. The economic interpretation of society, held by both laissez-faire liberals and orthodox Marxists, proved inadequate because it ignored non-economic needs for meaning, status, and community.

How totalitarianism filled the vacuum
Fascism, in Drucker's account, is not a continuation of capitalism nor a form of socialism. It is a post-liberal mass movement that rejects the premise that free economic choices can organize society. It creates an ersatz community by abolishing pluralism, destroying autonomous institutions, and demanding unconditional loyalty. Its economy is political theatre: corporatist councils, controlled unions, and managed prices exist to assert the supremacy of the state rather than to solve economic problems. The movement functions as a secular religion, offering mythic enemies and redemptive struggle in place of policy. Anti-Semitism, for example, is analyzed as a unifying device that supplies a total, ever-present enemy, thereby stabilizing the movement’s inner contradictions and mobilizing faithful obedience.

Politics over economics
Totalitarian regimes turn economic life into an instrument of power. Planning, rearmament, and public works are not designed to raise living standards sustainably but to command mobilization, reward loyalty, and eliminate independent centers of decision. Law becomes administrative fiat; property exists at the pleasure of the regime; civil society is absorbed by party and state. By liquidating spontaneity and competition, fascism also undermines the adaptive capacities of a modern economy, ensuring eventual stagnation masked by propaganda and expansionism.

Crisis of legitimacy in liberalism and Marxism
Drucker criticizes liberalism for mistaking market coordination for social integration and for treating political freedom as a by-product of economic freedom. He also faults Marxism for its deterministic confidence that class forces alone would deliver a just order. Both visions reduce the human being to economic motives. When catastrophe struck, neither could satisfy existential needs. The revolt against economic man was thus a revolt against a narrow anthropology.

Toward a new social settlement
The remedy, Drucker insists, is neither a return to the old laissez-faire nor capitulation to collectivism. A free society must reconstruct legitimacy on non-economic grounds by building institutions that confer status, responsibility, and community. He points to the necessity of intermediate bodies, self-governing professional and industrial institutions, a rule-bound state, and a constitutional order that limits power and protects pluralism. Economic policy matters, but it must be embedded in a framework that acknowledges the whole person as worker, citizen, and moral agent.

Significance
Written on the eve of war, the book reframes the rise of fascism as a social-psychological and institutional crisis, not a mere economic breakdown. Its enduring claim is that political freedom rests on institutions that meet human needs beyond the calculus of gain, and that when those needs are neglected, the door opens to movements that promise meaning at the price of liberty.