I read this a number of years ago now, but still it surprised me that it should be written in 1973. Before I was born. I forget just how long Western white folks have known we were hurtling into climate crisis, though I know our indigenous kin have been voicing their warning since Europeans set foot in their ‘new world’ and began the first wave of extinctions and genocide.
This is a book critiquing economics as they are (still are, despite all good sense and years of warning) and providing a vision of economics as they could be. I feel that there are so many people rethinking economics now, writing for popular audiences with books splashed across Waterstones’ tables, that it is almost encouraging. But this analysis of the modern world as Schumacher sees it is still a good place to start, and I’ve been meaning to come back to it for a while.
He begins with the very European separation of man (because it was almost always man after all, and that was always a part of the problem) from nature.
The Problem of Production
Modern man does not experience himself as a part of nature but as an outside force destined to dominate and conquer it. He even talks of a battle with nature, forgetting that, if he won the battle, he would find himself on the losing side. Until quite recently, the battle seemed to go well enough to give him the illusion of unlimited powers, but not so well as to bring the possibility of total victory into view. This has now come into view, and many people, albeit only a minority, are beginning to realise what this means for the continued existence of humanity.
The illusion of unlimited powers, nourished by astonishing scientific and technological achievements, has produced the concurrent illusion of having solved the problem of production. The latter illusion is based on the failure to distinguish between income and capital where this distinction matters most. (11)
This is already sounding technical, but only because he is translating from the jargon of economics. Capital, by his definition, is easy enough to understand.
To use the language of the economist, it [the problem of production] lives on irreplaceable capital which it cheerfully treats as income. I specified three categories of such capital: fossil fuels, the tolerance margins of nature, and the human substance. Even if some readers should refuse to accept all three parts of my argument, I suggest that any one of them suffices to make my case.
And what is my case? Simply that our most important task is to get off our present collision course. (16)
I haven’t traced the whole of this arguments here. Only wish they had gotten off that collision course. But they did not. Instead economics continues to focus on short term profits, accelerating the collision instead.
From my own work and growth in the environmental justice movement, where we always spoke of thinking forward and working for the good of the next seven generations, this next bit resonates as a completely different way of thinking and being in the world:
From an economic point of view, the central concept of wisdom is permanence. We must study the economics of permanence. Nothing makes economic sense unless its continuance for a long time can be projected without running into absurdities. There can be ‘growth’ towards a limited objective, but there cannot be un limited, generalised growth. It is more than likely, as Gandhi said, that ‘Earth provides enough to satisfy every man’s need, but not for every man’s greed’. Permanence is incompatible with a predatory attitude which rejoices in the fact that ‘what were luxuries for our fathers have become necessities for us’.
The cultivation and expansion of needs is the antithesis of wisdom. It is also the antithesis of freedom and peace. (26)
And based on this analysis, Schumacher provides a short analysis and list of demands I rather like:
What is it that we really require from the scientists and technologists? I should answer: We need methods and equipment which are
– cheap enough so that they are accessible to virtually every one;
– suitable for small-scale application; and
– compatible with man’s need for creativity.
Out of these three characteristics is born non-violence and a relationship of man to nature which guarantees permanence. If only one of these three is neglected, things are bound to go wrong. (27)
And all of this within sustainable limits.
I think what I like most is the humility, the acknowledgment of so much that we do not know and must learn, as well as an acknowledgement of the time and the process of experimentation and reflection to develop that collective knowledge.
There is wisdom in smallness if only on account of the smallness and patchiness of human knowledge, which relies on experiment far more than on understanding. The greatest danger invariably arises from the ruthless application, on a vast scale, of partial knowledge such as we are currently witnessing in the application of nuclear energy, of the new chemistry in agriculture, of transportation technology, and countless other things.
Above anything else there is need for a proper philosophy of work which understands work not as that which it has indeed become, an inhuman chore as soon as possible to be abolished by automation, but as something ‘decreed by Providence for the good of man’s body and soul’. (29)
It is also a rejection of grandiose utopias and its technological dreamings, both socialist and capitalist alike.
The Role of Economics
Economics plays a central role in shaping the activities of the modern world, inasmuch as it supplies the criteria of what is ‘economic’ and what is ‘uneconomic’, and there is no other set of criteria that exercises a greater influence over the actions of indi viduals and groups as well as over those of governments. (33)
What else could have brought me to economics? The wall we always hit as activists, as Schumacher writes, anything found to impede economic growth is seen as shameful. He writes:
The market therefore represents only the surface of society and its significance relates to the momentary situation as it exists there and then. There is no probing into the depths of things, into the natural or social facts that lie behind them. In a sense, the market is the institutionalisation of individualism and non-responsibility. Neither buyer nor seller is responsible for anything but himself. (36)
And then critiques this:
To press non-economic values into the framework of the economic calculus, economists use the method of cost/benefit analysis. (37)
because profit always comes out ahead.
His solution. I do like Buddhism, but still it bothers me that despite all I love about it, as a major world religion it has been pressed into the service of war, killing, domination as have the others. I like what he has pulled out here:
The Buddhist point of view takes the function of work to be at least threefold: to give a man a chance to utilise and develop his faculties; to enable him to overcome his egocentredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence. (45)
I think perhaps a more secular model such as the Donut Model proposed by Kate Raworth is more useful in the end, but I like thinking through this kind of approach. I also greatly appreciate the final resources he provides in beginning to think through the obstacles to changing how we think, and the ways trasformation might take place. Above all is education:
Economics is being taught without any awareness of the view of human nature that underlies present-day economic theory. In fact, many economists are themselves unaware of the fact that such a view is implicit in their teaching and that nearly all their theories would have to change if that view changed. (77)
What is needed? Work around, and a rethinking of current logics, i the following areas. A great list of all that continues to be key to doing all we can now, at this late date in the face of catastrophe.
- The Proper Use of Land (I write way too much about this already, obviously the resonances with permaculture and work around land reform are multiple)
- Resources for Industry
I have already alluded to the energy problem in some of the earlier chapters. It is impossible to get away from it. It is impossible to overemphasise its centrality. It might be said that energy is for the mechanical world what consciousness is for the human world. If energy fails, everything fails. (101)
- Nuclear Energy
What matters, as I said, is the direction of research, that the direction should be towards non-violence rather than violence; towards an harmonious co-operation with nature rather than a warfare against nature; towards the noiseless, low-energy, elegant, and economical solutions normally applied in nature rather than the noisy, high energy, brutal, wasteful, and clumsy solutions of our present-day sciences. (119)
- Technology with a Human Face
As Gandhi said, the poor of the world cannot be helped by mass production, only by production by the masses. The system of mass production, based on sophisticated, highly capital. intensive, high energy-input dependent, and human labour-saving technology, presupposes that you are already rich, for a great deal of capital investment is needed to establish one single workplace. The system of production by the masses mobilises the priceless resources which are possessed by all human beings, their clever brains and skilful hands, and supports them with first-class tools. The technology of mass production is inherently violent, ecologically damaging, self-defeating in terms of non-renewable resources, and stultifying for the human person. The technology of production by the masses, making use of the best of modern knowledge and experience, is conducive to decentralisation, compatible with the laws of ecology, gentle in its use of scarce resources, and designed to serve the human person instead of making him the servant of machines. I have named it intermediate technology to signify that it is vastly superior to the primitive technology of bygone ages but at the same time much simpler. cheaper, and freer than the super-technology of the rich. One can also call it self-help technology, or democratic or people’s tech nology – a technology to which everybody can gain admittance and which is not reserved to those already rich and powerful. (128)
The whole point is to determine what constitutes progress. And the home-comers believe that the direction which modern technology has taken and is continuing to pursue – towards ever-greater size, ever-higher speeds, and ever increased violence, in defiance of all laws of natural harmony – is the opposite of progress. Hence the call for taking stock and finding a new orientation. The stocktaking indicates that we are destroying our very basis of existence, and the reorientation is based on remembering what human life is really about. (131)
- The Third World — Here it is clear we have come so far in post-colonial thought, particularly decolonialization, though implementing that is a different thing altogether. But de Sousa Santos and Escobar move us so much further along here, especially in thinking about:
- Development, and work on:
- Social and Economic Problems Calling for the Development of Intermediate Technology – prioritising help for the poor – to those who need it most. And, of course, understanding and improving the dynamics between urban and rural.
The all pervading disease of the modern world is the total imbalance be tween city and countryside, an imbalance in terms of wealth, power, culture, attraction, and hope. The former has become over-extended and the latter has atrophied. The city has become the universal magnet, while rural life has lost its savour. Yet it remains an unalterable truth that, just as a sound mind depends on a sound body, so the health of the cities depends on the health of the rural areas. The cities, with all their wealth, are merely secondary producers, while primary production, the precondition of all economic life, takes place in the countryside. The prevailing lack of balance, based on the age-old exploitation of countryman and raw material producer, today threatens all countries through out the world, the rich even more than the poor. To restore a proper balance between city and rural life is perhaps the greatest task in front of modern man. (170)
All requiring the development of new ways of theorising economics, building new forms of collective work and ownership.
- Organisation and ownership, socialism for its ‘non-economic values and the possibility it creates for the overcoming of the religion of economics‘ (212), private ownership of small-scale enterprise but not large and exploring new forms.
So much has been done since Small is Beautiful was written it is encouraging, each of these avenues has been much further explored and developed. And yet overall? His critique remains as current as ever, even as catastrophe looms.
Schumacher, E.F. ( 1989) Small is Beautiful: A Study of Economics as if People Mattered. London: Abacus.