The most striking thing about modern industry is that it requires so much and accomplishes so little. Modern industry seems to be inefficient to a degree that surpasses one’s ordinary powers of imagination. Its inefficiency therefore remains unnoticed.
— E. F. Schumacher, Small is Beautiful, the opening lines of Ch. 8
What Schumacher missed is that petroleum may be replaceable by renewables such as hydrogen fuel cells, and that water is probably more limiting than oil in any economic model. Water is the future natural capital of most import and does not appear in his book.
— Peter Warshall, biologist, anthropologist and former editor of Whole Earth Review, 25th anniversary book, Hartley & Marks, 1999
This topic had clearly been irritating Schumacher for ages, since the chapter was taken from a report he had written for the National Coal Board, back in 1961.
Schumacher had worked as economic advisor to the nationalized coal industry in the UK for about 20 years before Small is Beautiful. Given that mining has now died out almost completely in the UK, some of this might make this chapter seem a little bit out of date. Margaret Thatcher’s government took on the mining unions in 1984 – and after showing extraordinary courage and sense of community, the mineworkers went back to work. Except that most mining has stopped for most of them in the years that followed.
This might go some way to explaining why Schumacher is so keen on burning coal in this book – because nobody really understood global warming when he was writing.
What the chapter says…
Schumacher talks about materials for American industry. The mid-1970s must have been the high tide of American imports compared with their competitors. Then he wrote:
“All the same, the industrial system of the United States cannot subsist on internal resources alone and has therefore had to extend its tentacles right around the globe to secure its raw material supplies. For the 5-6 per cent of the world population which live in the United States require something of the order of forty per cent of the world’s primary resources to keep going. Whenever estimates are produced which relate to the next ten, twenty, or thirty years, the message that emerges is one of ever-increasing dependence of the United States economy on raw material and fuel supplies from outside the country. The National Petroleum Council, for instance, calculates that by 1985 the United States will have to cover fifty-seven percent of its total oil requirements from imports, which would then greatly exceed – at 800 million tons – the total oil imports which Western Europe and Japan currently obtain from the Middle East and Africa.”
Nor does he mince words about American lifestyles:
“An industrial system which uses forty per cent of the world’s primary resources to supply less than six per cent of the world’s population could be called efficient only if it obtained strikingly successful results in terms of human happiness, well-being, culture, peace, and harmony. I do not need to dwell on the fact that the American system fails to do this, or that there are not the slightest prospects that it could do so if only it achieved a higher rate of growth of production, associated, as it must be, with an even greater call upon the world’s finite resources…”
In the chapters in this section, his technique mainly just reaches for a hapless scientist or economist to demonstrate what we’re up against. In this case, it is Professor Walter Heller, who Schumacher describes, somewhat patronizingly, as a former chairman of the President’s Council of Aluminium Economic Advisers – but he was in fact a leading economist in the early 60s – he invented the Johnson administration’s ‘War on Poverty’. Heller says:
“I cannot conceive a successful economy without growth.”
Then Schumacher goes for the jugular:
“But if the United States’ economy cannot conceivably be successful without further rapid growth, and if that growth depends on being able to draw ever-increasing resources from the rest of the world, what about the other 94-4 per cent of mankind which are so far ‘behind’ America?”
This is a terrifying vicious circle. So that:
“If a high-growth economy is needed to fight the battle against pollution, which itself appears to be the result of high growth, what hope is there of ever breaking out of this extraordinary circle?”
Especially given that, every time the circle goes around, you find there are fewer resources and raw materials to distribute.
For example, Schumacher quotes the figures in the recent Club of Rome report Limits to Growth. US consumption as % of World Total’. The figures are as follows:
- Aluminium 42%
- Chromium 19%
- Coal 44%
- Cobalt 32%
- Copper 33%
- Gold 26 %
- Iron 28 %
- Lead 25 %
- Manganese 14%
- Mercury 24 %
- Molybdenum 40%
- Natural Gas 63%
- Nickel 38 %
- Petroleum 33 %
- Platinum Group 31%
- Silver 26%
- Tin 24%
- Tungsten 22%
- Zinc 26%
As an aside, he also pokes fun at the team at MIT who did most of the calculations for the Club of Rome:
“It was perhaps useful, but hardly essential, for the MIT group to make so many elaborate and hypothetical calculations. In the end, the group’s conclusions derive from its assumptions, and it does not require more than a simple act of insight to realize that infinite growth of material consumption in a finite world is an impossibility. Nor does it require the study of large numbers of commodities, of trends, feedback loops, system dynamics, and so forth, to come to the conclusion that time is short. Maybe it was useful to employ a computer for obtaining results which any intelligent person can reach with the help of a few calculations on the back of an envelope, because the modern world believes in computers and masses of facts, and it abhors simplicity. But it is always dangerous and normally self-defeating to try and cast out devils by Beelzebub, the prince of the devils.”
But Schumacher wants to concentrate on one element alone. As he puts it: “If energy fails, everything fails.”
“As far as the oil importing countries are concerned, the problem is obviously most serious for western Europe and Japan. These two areas are in danger of becoming the ‘residuary legatees’ for oil imports. No elaborate computer studies are required to establish this stark fact. Until quite recently, western Europe lived in the comfortable illusion that ‘we are entering the age of limit-less, cheap energy’…”
This provides him with a hook to quote a report he happens to agree with:
“Five years later, all that needs to be said is that Britain is more dependent on imported oil than ever before. A report presented to the Secretary of State for the Environment in February 1972, introduces its chapter on energy with the words: ‘There is deep-seated unease revealed by the evidence sent to us about the future energy resources, both for this country and for the world as a whole. Assessments vary about the length of time that will elapse before fossil fuels are exhausted, but it is increasingly recognized that their life is limited and satisfactory alternatives must be found. The huge incipient needs of developing countries, the increases in population, the rate at which some sources of energy are being used up without much apparent thought of the consequences, the belief that future resources will be available only at ever-increasing economic cost and the hazards which nuclear power may bring in its train are all factors which contribute to the growing concern.’ ”
He comments on the irony of this advice:
“It is a pity that the ‘growing concern’ did not show itself in the 1960s, during which nearly half the British coal industry was abandoned as ‘uneconomic’ – and, once abandoned, it is virtually lost for ever — and it is astonishing that, despite ‘growing concern’, there is continuing pressure from highly influential quarters to go on with pit closures for ‘economic’ reasons.”
What happened next?
The first thing we need to understand was that Schumacher was writing in 1961 and revising in 1973 – both of which was before the identification of global warming led to a worldwide struggle to wean mankind off fossil fuels, like coal. It is why he has no compunction about arguing for coal, and against nuclear and oil, as the major source of energy in the future. He had, after all, been working for the nationalized National Coal Board for 20 years.
We might even be quite glad that Margaret Thatcher took on the miners and then closed down the UK pits in 1984-5 because, otherwise, the political left would feel they should support miners now, and might have found it very hard to act against fossil fuel and carbon emissions from the UK.
Still, we can’t speculate about what Schumacher would be saying now, if he knew what we know.
What we do need to look at is some of his figures – and especially the table of American percentages – and bring them up to date:
| US % of global markets | 1970 (40%) |
2020 (13%) |
| Aluminium | 42 | 27 |
| Chromium | 19 | 4 |
| Coal | 44 | 23 |
| Cobalt | 32 | 18 (China now has 32%) |
| Copper | 33 | 19 |
| Gold | 26 | 13 (China is now on 45%) |
| Iron | 28 | 16+ |
| Lead | 25 | 12 (90% of lead is now recycled in the USA). |
| Natural gas | 63 | 23 |
| Petroleum | 33 | 33 |
| Tungsten | 22 | 11 |
It may be unfair to single out the USA, and we might be pleased that the percentages are so much lower than they were. Only, think about it for a moment, and we realize that since – in most cases American consumption has not gone down – the lower figures show how much other countries have grown their consumption as a proportion of what we all consume around the globe.
Despite this, we should remember just how profligate Americans have been in using and abusing natural resources. Between 1900 and 1989, the US population tripled, while its use of raw materials grew by a factor of 17. With less than 5 percent of world population, the USA still used a quarter of the world’s oil, and 23 percent of the coal. That is because, per capita use of energy, metals, minerals, forest products, fish, grains, meat, and even freshwater in the USA, dwarfs those of people living in the developing world.
American fossil fuel consumption is double that of the average resident of the UK and two and a half times that of the average Japanese. Americans also create half of the globe’s solid waste.
The world’s energy consumption dipped by 4.5 per cent during the first lockdown in 2020, but it then rebounded by 5 per cent in 2021.
Part of the problem is that the USA is still using coal to provide itself with power. The US Energy Information Administration has forecast that the capacity of their coal-fired power plants will only halve from 2022 levels by 2050 – which is when the world is supposed, under the Paris Agreement, to have reached net zero emissions.
What Schumacher says in the chapter about needing more than one planet – if more of this planet were to reach American lifestyles – has since been pinpointed more precisely. That figure is now 4.4 planets, like this one – an impossible request to fulfill.
This is a newer technique developed by Mathis Wackernagel formerly of Redefining Progress (see Chapter 3) and William Rees. They called it ‘Footprints’. ‘Earth Overshoot Day’ is a spin off from that idea. It means the date when we stop using the resources from one planet and start using the resources of another one. This year, it’s on August 1.
Every year since 1970, when this was first measured, humans have used more ecological resources than the planet can regenerate. We do this through overfishing, over-harvesting forests, and emitting more carbon dioxide into the atmosphere than ecosystems can absorb. The August 1 date means we are using 1.7 Earths. That’s like spending 170 percent of our paycheck, month after month.
If everyone in the world had the American standard of living, it would take 4.4 planets and nor is America the worst offender these days. If we had Bahrain’s standard of living, that would take up six planets worth of resources.
Most controversially, have been the attempts to imagine what a no-growth economy would look like, given that it is the growth in the money supply that allows us to fund schools and hospitals.
There is still no consensus about it. Mainstream politicians cling to the idea of growth because they fear having no answers to people’s questions, even though Schumacher’s arguments may well be unanswerable.
One of the twists in the argument comes from British economist Tim Morgan, who argues that growth is over because of the rising energy cost of generating power. Compared, even to 20 years ago, this is now prohibitive – the rise in costs, which Schumacher predicted because oil was becoming scarce, may not be obvious when measured in money, but – if you look at how much energy it now takes to generate more – it is clear that we are in some difficulties.
Then you begin to understand why economic life now seems so hard. In other words, we have no control over the end of growth – it is happening anyway. What we have to do is to make sure our leaders understand it and take evasive action.
Questions for discussion…
- Why are politicians still so wedded to the idea of growth on both sides of the Atlantic?
- If growth is automatically over – and there is nothing we can do about it – how might we reshape society to survive?
- What can we do for ourselves if national politicians won’t play ball?
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