On Hernando De Soto, a mechanical economist, and Douglas McGregor, a humanist at work

On Hernando De Soto, a mechanical economist,
and Douglas McGregor, a humanist at work

Nipawin - January 1, 2001 - by: Mario deSantis

differential thinking
Yesterday I read the book "Douglas McGregor Revisited⁽¹⁾' and this early morning I read the

article "Why the invisible hand has failed the Third World⁽²⁾." What a contrast of imagination

is included in these two writings and what kind of differential thinking is expressed by the two

people in question: Douglas McGregor, a management scientist, and Hernando De Soto, a

Peruvian economist.

Theory X
and
Theory Y
Douglas McGregor formulated the well known Theory X and Theory Y related to the

management and motivation of workers/employees in the work place⁽³⁾. McGregor presented

these theories to open a public dialogue on understanding the basic assumptions of our human

nature so that people's work could be designed to be closer to our human nature and aspiration.

In a nutshell, Theory X assumes that people are inherently 'lazy' and must have external

prodding to do anything, that is waving the dollar sign in front of their noses; instead,

Theory Y assumes that people are inherently cooperative, imaginative and creative. There is

no doubt where McGregor stood about these two theories, and when asked repetitiously the

question of how you would motivate people he would respond "You don't, Man is by nature

motivated." Therefore, the challenge lies not in motivating people but in building an

environment in which motivated people are willing to make a maximum contribution

[Heil/Bennis/Stephens page 87], for themselves, for their organizations and for their

communities⁽⁴⁾.

property
rights
Hernando De Soto⁽⁵⁾ has written the book "The Mystery of Capital: Why Capitalism

Triumphs in the West and Fails Everywhere Else". In this book, De Soto sees the world as

made up of poor and rich countries. De Soto observes that after the fall of Communism with

the disintegration of the Soviet Union, capitalism has not provided new wealth to the former

communist countries and to the third world. He believes that capitalism has not been

successful in these countries because of the lack of well defined property rights.

experts
I am very puzzled by this economist's observation, however I am getting used to the

widespread BS coming out of the mouths of our outstanding leaders, be politicians,

academicians, businessmen or some other experts of human nature and affairs.

Human
Rights
Now that we don't have communism anymore, what do we have? Capitalism? And what is

Capitalism? If capitalism is free enterprise I ask myself where is it⁽⁶⁾? If capitalism is the

free market envisioned by Adam Smith⁽⁷⁾, I ask myself where is it⁽⁸⁾? My contention is that

there is no point of exporting Capitalism to the third world as there was no point of exporting

Democracy to Vietnam in the 60s and 70s. Under this overall political and economic

misunderstanding, to blame the failure of Capitalism in the third world countries to the lack

of well defined property right⁽⁹⁾ is not only absurd, but void of any social intelligence. I am

just wondering, instead, if the failure of Capitalism in the former communist and third world

countries could be due to the lack of Human Rights in these countries.

------------------Notes/References:

Quote by Donella Meadows "challenging a paradigm is not a part-time job. It is not sufficient to make your point once and then blame the world for not getting it. The world has a vested interest in, a commitment to, not getting it. The point has to be made patiently and repeatedly, day after day after day" ftp://sysdyn.mit.edu/ftp/sdep/Roadmaps/RM1/D-4143-1.pdf The Global Citizen, http://www.tidepool.org/gc/

List of relevant social articles http://www.ftlcomm.com/ensign

1.
-
-
-
-
Douglas McGregor, Revisited: Managing the Human Side of the Enterprise, by Gary Heil, Warren Bennis, Deborah C. Stephens, John Wiley & Sons, Inc. 2000. ISBN 0-471-31462-5. Gary Heil and Deborah C. Stephens are coufounders of the Center for Innovative Leadership http://www.cfil.com/ And Warren Bennis is Distinguished Professor of Business Administration at the University of Southern California http://behavior.net/column/bennis/bio.html

2.
-
Why the invisible hand has failed the Third World, Lorne Gunter, December 30, 2000, The Edmonton Journal

3.
Business Open Learning Archive. Douglas McGregor - Theory X and Y

4.
-
Living Systems: Principles of Organization and Building Sustainable Human Communities, by Mario deSantis, September 12, 1998

5.
Hernando De Soto. Interviewed by Dario Fernandez-Morera

6.
The assembly line economics is obsolete, by Mario deSantis, December 26, 2000

7.
-
-
-
-
-
-
-
Biography of Adam Smith (1723-1790), Adam Smith wrote "The Wealth of Nations." He is most often recognized for the expression "the invisible hand," which he used to demonstrate how self-interest guides the most efficient use of resources in a nation's economy, with public welfare coming as a by-product. However, Smith's belief in the invisible hand was questioned when at the time of his death on July 17, 1790, it was discovered that Smith had devoted a considerable part of his income to numerous secret acts of charity. Yet, our conventional economists identify Adam Smith as the true believer of "The Invisible Hand," that is capitalism, whatever capitalism is for our conventional economists.

8.
THE BETRAYAL OF ADAM SMITH, David C. Korten (When Corporations Rule the World)

9.
-
Securing Property Rights: The Foundation of Markets. An interview with Hernando de Soto, by the Center for International Private Enterprise

On Hernando De Soto, a mechanical economist, and Douglas McGregor, a humanist at work

Nipawin - January 1, 2001 - by: Mario deSantis

differential thinking	Yesterday I read the book "Douglas McGregor Revisited⁽¹⁾' and this early morning I read the
	article "Why the invisible hand has failed the Third World⁽²⁾." What a contrast of imagination
	is included in these two writings and what kind of differential thinking is expressed by the two
	people in question: Douglas McGregor, a management scientist, and Hernando De Soto, a
	Peruvian economist.

Theory X and Theory Y	Douglas McGregor formulated the well known Theory X and Theory Y related to the
	management and motivation of workers/employees in the work place⁽³⁾. McGregor presented
	these theories to open a public dialogue on understanding the basic assumptions of our human
	nature so that people's work could be designed to be closer to our human nature and aspiration.
	In a nutshell, Theory X assumes that people are inherently 'lazy' and must have external
	prodding to do anything, that is waving the dollar sign in front of their noses; instead,
	Theory Y assumes that people are inherently cooperative, imaginative and creative. There is
	no doubt where McGregor stood about these two theories, and when asked repetitiously the
	question of how you would motivate people he would respond "You don't, Man is by nature
	motivated." Therefore, the challenge lies not in motivating people but in building an
	environment in which motivated people are willing to make a maximum contribution
	[Heil/Bennis/Stephens page 87], for themselves, for their organizations and for their
	communities⁽⁴⁾.

property rights	Hernando De Soto⁽⁵⁾ has written the book "The Mystery of Capital: Why Capitalism
	Triumphs in the West and Fails Everywhere Else". In this book, De Soto sees the world as
	made up of poor and rich countries. De Soto observes that after the fall of Communism with
	the disintegration of the Soviet Union, capitalism has not provided new wealth to the former
	communist countries and to the third world. He believes that capitalism has not been
	successful in these countries because of the lack of well defined property rights.

experts	I am very puzzled by this economist's observation, however I am getting used to the
	widespread BS coming out of the mouths of our outstanding leaders, be politicians,
	academicians, businessmen or some other experts of human nature and affairs.

Human Rights	Now that we don't have communism anymore, what do we have? Capitalism? And what is
	Capitalism? If capitalism is free enterprise I ask myself where is it⁽⁶⁾? If capitalism is the
	free market envisioned by Adam Smith⁽⁷⁾, I ask myself where is it⁽⁸⁾? My contention is that
	there is no point of exporting Capitalism to the third world as there was no point of exporting
	Democracy to Vietnam in the 60s and 70s. Under this overall political and economic
	misunderstanding, to blame the failure of Capitalism in the third world countries to the lack
	of well defined property right⁽⁹⁾ is not only absurd, but void of any social intelligence. I am
	just wondering, instead, if the failure of Capitalism in the former communist and third world
	countries could be due to the lack of Human Rights in these countries.

------------------Notes/References:

	Quote by Donella Meadows "challenging a paradigm is not a part-time job. It is not sufficient to make your point once and then blame the world for not getting it. The world has a vested interest in, a commitment to, not getting it. The point has to be made patiently and repeatedly, day after day after day" ftp://sysdyn.mit.edu/ftp/sdep/Roadmaps/RM1/D-4143-1.pdf The Global Citizen, http://www.tidepool.org/gc/

	List of relevant social articles http://www.ftlcomm.com/ensign

1. - - - -	Douglas McGregor, Revisited: Managing the Human Side of the Enterprise, by Gary Heil, Warren Bennis, Deborah C. Stephens, John Wiley & Sons, Inc. 2000. ISBN 0-471-31462-5. Gary Heil and Deborah C. Stephens are coufounders of the Center for Innovative Leadership http://www.cfil.com/ And Warren Bennis is Distinguished Professor of Business Administration at the University of Southern California http://behavior.net/column/bennis/bio.html

2. -	Why the invisible hand has failed the Third World, Lorne Gunter, December 30, 2000, The Edmonton Journal

3.	Business Open Learning Archive. Douglas McGregor - Theory X and Y

4. -	Living Systems: Principles of Organization and Building Sustainable Human Communities, by Mario deSantis, September 12, 1998

5.	Hernando De Soto. Interviewed by Dario Fernandez-Morera

6.	The assembly line economics is obsolete, by Mario deSantis, December 26, 2000

7. - - - - - - -	Biography of Adam Smith (1723-1790), Adam Smith wrote "The Wealth of Nations." He is most often recognized for the expression "the invisible hand," which he used to demonstrate how self-interest guides the most efficient use of resources in a nation's economy, with public welfare coming as a by-product. However, Smith's belief in the invisible hand was questioned when at the time of his death on July 17, 1790, it was discovered that Smith had devoted a considerable part of his income to numerous secret acts of charity. Yet, our conventional economists identify Adam Smith as the true believer of "The Invisible Hand," that is capitalism, whatever capitalism is for our conventional economists.

8.	THE BETRAYAL OF ADAM SMITH, David C. Korten (When Corporations Rule the World)

9. -	Securing Property Rights: The Foundation of Markets. An interview with Hernando de Soto, by the Center for International Private Enterprise