Small is Beautiful: A Study of Economics As If People Mattered by E.F. Schumacher, 1973

Though the economy is ever-present in news and politics, we rarely examine its fundamentals – and never with nuance. In this collection of essays published over 40 years ago, Schumacher shines a light on our systems, remarkably similar then, questioning the mythologies we’ve adopted and offering alternative approaches.

Capitalism is taken as a given in our society, as reality. Anyone whose focus meanders away from maximizing income, profits or growth is often advised to “face reality”. However, Schumacher starts out by outlining how reductive and divorced from reality capitalism really is. Core variables like the source and quality of finite natural resources or physical and emotional human needs are left out of the equation entirely. Of these needs, Schumacher often speaks of the desire for meaningful work and elaborates on how human beings enjoy “nothing more than to be creatively, usefully, productively engaged with both his hands and his brains”. Increasingly, work processes are broken up among different people and machines for efficiency and standardization. Humans, like nature, are often seen as a necessary evil – a messy, unpredictable, inefficient factor of production. Cut off from collaborative process and the end-product, labor is extracted painfully via the carrot and the stick. No longer a source of pride or tied to our own drives, talents or interest – work merely becomes a method to fund the escape from itself. Those unable or unwilling to play the game just drop out. We get further cut off from craft as physical work is devalued. Managers, middlemen, salesmen and theorists get the better titles, salaries and more direction over underlings and outcomes. He makes special mention of the decline of rural agricultural work and how that in particular makes us further cut off from nature and life’s fundamentals.

Schumacher believes spirituality and a humanist education provide us the meaning and judgment we need to find a way out. He feels “the small, mean, calculating attitude to life which is rationalised in the economic calculus” fills the void left by the absence of these forces. Without a clear vision or value system many take on a wishy-washy ethical relativism or cynicism that doesn’t adequately put boundaries on what’s acceptable.

Though himself Christian, he speaks admiringly of what he refers to as “Buddhist Economics” – approaches he found in Burma which include happiness in the measurement of success. He also notes “Right Livelihood” as one part of the Eightfold Path to enlightenment and as such recognizes a spiritual dimension and moral obligation in the work ones takes on. There is also a theme throughout the book of balance and finding “the middle way”, another core idea of Buddhism. Whether it’s finding the right mix of freedom and order, public and private, individualism and the collective commons, labor and capital, his answers often come from strategically mixing different approaches and avoiding dogmatic extremes as expressions of ego and delusion.

True to the title, he speaks of how much of this can be achieved by keeping the scale of systems smaller and transitioning to publicly controlled structures when companies get too big. He explains how once a city gets beyond about 500,000 people the returns diminish. The connection and balance with rural areas on the outskirts breaks down. People abandon rural areas to find jobs in the city, but employment can’t keep up with the demand and competition is fierce. The same is true for housing and infrastructure. Income inequality becomes stark and quality of life goes down for most. As a lifelong resident of Los Angeles, I have seen dramatic change with density in recent years (as do many recent émigrés) and see how “everywhere life tends to become intolerable for anyone except the very rich.”

With smaller ecosystems, local economies can serve local needs and there can be greater diversity in employment and income. There is no real need to compete globally or to use the latest, capital-intensive technology. This idea extends to the developing world. Insisting on only using the latest and greatest can result in unrealistic maintenance demands in terms of skills and cost or be out of sync with local culture and ultimately be unsustainable. 

In the end Schumacher’s hybrid solutions feel modern and iterative. Instead of calling for revolution, he concludes by outlining management and governance restructuring that share similarities with contemporary co-op movements. Though perhaps less sexy, this attention to practical implementation makes his vision feel more actionable and real. Whether today’s consumers are willing to forfeit cheap and easy for fulfilling and sustainable remains to be seen. As workers, can we make do with less material comforts and check back in to our workplaces to create more equity and meaning in our lives? Will we come to terms with the latency and unintended consequences of virtual tech solutions applied to a physical world of *imperfect* humans and change course? Who knows, but perhaps we can start small.

Caveats

There is a paragraph or so about how “Women, on the whole, do not need an ‘outside’ job…”  which assumes all women are mothers who have child-rearing to do. I’m not sure if Schumacher was speaking for himself or on behalf of “simpler” Buddhist cultures, but for any women reading and relating to other ideas in the book it really takes you aback. Personally, I partly wrote this off as anachronistic but also extrapolated this as a recognition that childrearing is real, valuable “work” pursued by any gender who feels its calling and not to be ignored or seen inferior to paid work outside the household.

On a minor note, the Kindle edition of this book is truly awful. It was clearly scanned by an OCR without human worker oversight (ironically) and contains many distracting errors. I recommend a print edition – preferably an older one from your local used bookseller with a groovier cover.

RESOURCES & INSPIRATION…

Book References

Case Study: The Scott Bader Commonwealth
A chemical company started in 1921, ethically restructured in 1951 and still thriving today.

Practical Action (fka. ITDG)
A charity co-founded by Schumacher in 1966 promoting realistic, sustainable technologies for the developing world co-created with the communities they serve.

Quotes

“We always need both freedom and order.”

“Real life consists of the tensions produced by the incompatibility of opposites, each of which is needed.”

“I have no doubt that a callous attitude to the land and to the animals thereon is connected with, and symptomatic of, a great many other attitudes, such as those producing a fanaticism of rapid change and a fascination with novelties technical, organisational, chemical, biological, and so forth which insists on their application long before their longterm consequences are even remotely understood.”

“Anything so complicated as a planet, inhabited by more than a million and a half species of plants and animals, all of them living together in a more or less balanced equilibrium in which they continuously use and reuse the same molecules of the soil and air, cannot be improved by aimless and uninformed tinkering.”

“What is quite clear is that a way of life that bases itself on materialism, i.e. on permanent, limitless expansionism in a finite environment, cannot last long, and that its life expectation is the shorter the more successfully it pursues its, expansionist objectives.”

“The amount of real leisure a society enjoys tends to be in inverse proportion to the amount of labour saving machinery it employs.”

“The prestige carried by people in modern industrial society varies in inverse proportion to their closeness to actual production.”

“Now, it might be said that this is a romantic, a utopian, vision. True enough. What we have today, in modern industrial society, is not romantic and certainly not utopian, as we have it right here. But it is in very deep trouble and holds no promise of survival. We jolly well have to have the courage to dream if we want to survive and give our children a chance of survival.”

“…the present consumer society is like a drug addict, no matter how miserable he may feel, finds it extremely difficult to get off the hook. The problem children of the world—from this point of view and in spite of many other considerations that could be adduced—are the rich societies and not the poor.”

“Why care for people? Because people are the primary and ultimate source of any wealth whatsoever. If they are left out, if they are pushed around by selfstyled experts and highhanded planners, then nothing can ever yield real fruit.”

“Here lies the reason why development cannot be an act of creation. why it cannot be ordered, bought, comprehensively planned: why it requires a process of evolution. Education does not ‘jump’; it is a gradual process of great subtlety.”

“The common criterion of success, namely the growth of GNP, is utterly misleading and, in fact, must of necessity lead to phenomena which can only be described as neocolonialism.”

“The all pervading disease of the modern world is the total imbalance between city and countryside, an imbalance in terms of wealth. power, culture, attraction, and hope.”

“It cannot be ‘produced’ by skillful grafting operations carried out by foreign technicians or an indigenous elite that has lost contact with the ordinary people. It can succeed only if it is carried forward as a broad, popular ‘movement of reconstruction’ with primary emphasis on the full utilisation of the drive, enthusiasm, intelligence, and labour power of everyone. Success cannot be obtained by some form of magic produced by scientists, technicians, or economic planners. It can come only through a process of growth involving the education, organisation, and discipline of the whole population. Anything less than this must end in failure.”

“In a developing country it is difficult enough to get Henry Fords, at the 1903 level. To get Henry superFords, to move from practically nowhere on to the 1963 level, is virtually impossible.”

“The basic things of life have been needed and produced since Adam left Paradise.”

“The privileged minority will wish to be educated in a manner that sets them apart and will inevitably learn and teach the wrong things, that is to say, things that do set them apart, with a contempt for manual labour, a contempt for primary production, a contempt for rural life, etc.”

“The really helpful things will not be done from the centre; they cannot be done by big organisations; but they can be done by the people themselves. If we can recover the sense that it is the most natural thing for every person born into this world to use his hands in a productive way and that it is not beyond the wit of man to make this possible, then I think the problem of unemployment will disappear and we shall soon be asking ourselves how we can get all the work done that needs to be done.”

“It is no accident that successful businessmen are often astonishingly primitive; they live in a world made primitive by this process of reduction. They fit into this simplified version of the world and are satisfied with it.”

“Again, it is not a question of mitigating the opposition of these two needs by some halfhearted compromise that satisfies neither of them, but to recognise them both.”

“There is something natural and healthy about the former the private property of the working proprietor; and there is something unnatural and unhealthy about the latter the private property of the passive owner who lives parasitically on the work of others.”

“Man cannot live without science and technology any more than he can live against nature. What needs the most careful consideration, however, is the direction of scientific research. We cannot leave this to the scientists alone. As Einstein himself said ‘almost all scientists are economically completely dependent’ and ‘the number of scientists who possess a sense of social responsibility is so small’ that they cannot determine the direction of research. The latter dictum applies, no doubt, to all specialists, and the task therefore falls to the intelligent layman…”

Cited Quotes

“I sit on a man’s back, choking him, and making him carry me, and yet assure myself and others that I am very sorry for him and wish to ease his lot by any means possible, except getting off his back.” – Leo Tolstoy

“Much will be expected of the man to whom much has been given. More will be asked of him because he was entrusted with more.” – St. Luke

“I see us free, therefore, to return to some of the most sure and certain principles of religion and traditional virtue – that avarice is a vice, that the exaction of usury is a misdemeanour, and the love of money is detestable, that those walk most truly in the paths of virtue and sane wisdom who take least thought for the morrow. We shall once more value ends above means and prefer the good to the useful. We shall honour those who can teach us how to pluck the hour and the day virtuously and well, the delightful people who are capable of taking direct enjoyment in things, the lilies of the field who toil not, neither do they spin. 

But beware! The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight.” – John Maynard Keynes from “Economic Possibilities for our Grandchildren”, 1930 (quoted for its misguided but influential rationalization of capitalism)

originally posted on thenewconstructivist.org