Wanted: an economic model that doesn't ignore people and marketing
Rory Sutherland explores schools of economics that are much friendlier to marketing than the neoclassical model that dominates today's thinking.
Those of you who are, like me, only dimly familiar with the writings of Peter Drucker will at least know one of his most famous pronouncements: "There are only two things in a business that make money – innovation and marketing. Everything else is a cost."
I have probably quoted this assertion once or twice but, to be frank, I had never used it very confidently. It always seemed so contrary to the prevailing business culture (where the highest end of business seems to be cost cutting) that it seemed more like a deliberate provocation than a seriously held point of view. But, as I shall explain, it is a serious claim.
I had lazily assumed Drucker was German or Swiss. He was, in fact, Austrian. The distinction is important here. For Drucker grew up in the Vienna most famous for Freud and Klimt, but which was also home to a remarkable dissident tradition in economics. One of Drucker's father's best friends (and former pupils) was the Austrian economist Joseph Schumpeter. This helps explain why Drucker spoke out so confidently in favour of marketing.