The reason for including a discussion on predictability in this volume is that it represents one of the most important metaphysical – and therefore practical – problems with which we are faced. There have never been so many futurologists, planners, forecasters, and model-builders as there are today, and the most intriguing product of technological progress, the computer, seems to offer untold new possibilities.
— E. F. Schumacher, opening lines of Ch. 15
As this century draws to a close, we are living in a time when technology dominates our relationship with the domestic environment, work environment, and even nature. It has a powerful influence in most of our decision-making. So we need to question whether we are using technology just for the sake of using it.
— Professor Avi Friedman, co-founder of the Affordable Homes Program at the McGill School of Architecture, the 25th anniversary edition (1999)
Like the great social thinkers that came before him — Buber, Gandhi, Kropotkin, Tagore, Tolstoy — Schumacher understood that economic renewal is tied inextricably to cultural, social, and ecological renewal. His library, housed at the E.F. Schumacher Society [now the Schumacher Center for a New Economics] in Great Barrington, Massachusetts, reflects this understanding. The economics books are far outnumbered by books on philosophy, religious thinking of all traditions, psychology, social history, art, gardening, technology, and the environment. This integration of concerns most closely mirrors the human experience of community, and yields in Schumacher’s work an economic theory profoundly moral in nature.”
— Susan Witt, Schumacher Center for the New Economics, 25th anniversary edition (1999)
This chapter was taken from a talk Schumacher gave to the first British conference on the social and economic effects of automation in Harrogate in Yorkshire, back in June 1961.
As with the other sections, he starts with a broad introduction to his point of view – starting from the point of view about the missing metaphysical angle on modern life.
What the chapter says…
“The fact remains,” writes Schumacher, “that a machine to foretell the future is based on metaphysical assumptions of a very definite kind. It is based on the implicit assumption that ‘the future is already here’, that it exists already in a determinate form, so that it requires merely good instruments and good techniques to get it into focus and make it visible.”
He says that this is “a most extraordinary assumption which seems to go against all direct personal experience”:
“It implies that human freedom does not exist or, in any case, that it cannot alter the predetermined course of events. We cannot shut our eyes to the fact, on which I have been insisting throughout this book. that such an assumption, like all metaphysical theses, whether explicit or implicit, has decisive practical consequences. The question is simply: is it true or is it untrue?”
Schumacher them takes a moment to think about God’s creation of the universe and decides that he could not have gone for either option – making everything either predictable 0r completely random – because neither would allow any scope for human freedom of choice. Thus was also the conclusion of the 20th century philosopher Karl Popper in his celebrated 1966 essay, ‘Of clouds and clocks’.
The key question for us is whether we have the wisdom to tell the difference. In fact, Schumacher says, there are at least eight categories:
- Act Past Certain
- Act Future Certain
- Act Past Uncertain
- Act Future Uncertain
- Event Past Certain
- Event Future Certain
- Event Past Uncertain
- Event Future Uncertain
“Endless confusion results from the semantic muddle in which we find ourselves today,” he writes. “As mentioned before, ‘plans’ are put forward which upon inspection turn out to relate to events totally outside the control of the planner. ‘Forecasts’ are offered which upon inspection turn out to be conditional sentences, in other words, exploratory calculations. The latter are misinterpreted as if they were forecasts or predictions. ‘Estimates’ are put forward which upon inspection turn out to be plans. And so on and so forth. Our academic teachers would perform a most necessary and really helpful task if they taught their students to make the distinctions discussed above and developed a terminology which fixed them in words.”
For some reason, as he says, many people these days “seem to use their freedom only for the purpose of denying its existence:”
“A great shout of triumph goes up whenever anybody has found some further evidence – in physiology or psychology or sociology or economics or politics – of unfreedom, some further indication that people cannot help being what they are and doing what they are doing, no matter how inhuman their actions might be.”
That explains, says Schumacher, (1) the ‘semantic confusion’ he referred to at the start pf the chapter, and (2) it explains why he believes “we shall soon have a machine to foretell the future.”
From there it is a short step to the ‘underdevelopment of economics’. “Our own science,” says Professor Sir Henry Phelps Brown who lectured on that subject in 1970 at his presidential address of the Royal Economic Society, “has hardly yet reached its seventeenth century.”
Believing that economics is metaphysically the same as physics, Phelps Brown quoted another economist, Professor Oskar Morgenstern – the game theory pioneer – approvingly as follows:
“The decisive break which came in physics in the seventeenth century, specifically in the field of mechanics, was possible only because of previous developments in astronomy. It was backed by several millennia of systematic, scientific. astronomical observation…. Nothing of this sort has occurred in economic science. It would have been absurd in physics to have expected Kepler and Newton without Tycho – and there is no reason to hope for an easier development in economics.”
Professor Phelps Brown concludes therefore that we need many, many more years of observations of behavior: “Until then, our mathematization is premature.”
When human freedom and responsibility barges its way into economics, it becomes metaphysically different from physics and makes human affairs largely unpredictable:
“In principle, everything which is immune to the intrusion of human freedom, like the movements of the stars, is predictable, and everything subject to this intrusion is unpredictable. Does that mean that all human actions are unpredictable? No, because most people, most of the time, make no use of their freedom and act purely mechanically. Experience shows that when we are dealing with large numbers of people many aspects of their behaviour are indeed predictable; for out of a large number, at any one time, only a tiny minority are using their power of freedom, and they often do not significantly affect the total outcome. Yet all really important innovations and changes normally start from tiny minorities of people who do use their creative freedom.”
It is true, he concedes, that statistics about social phenomena “acquire a certain steadiness and predictability from the non-use of freedom, which means that the great majority of people responds to a given situation in a way that does not alter greatly in time.”
That means there are actually four different possibilities when it comes to predicting the future:
- Full predictability, “which exists only in the absence of human freedom”.
- Relative predictability, which “exists with regard to the behaviour pattern of very large numbers of people doing ‘normal’ things.”
- Relatively full predictability, which covers “human actions controlled by a plan which eliminates freedom” – like a railway timetable.
- Individual decisions by individuals which “are in principle unpredictable”.
“I suggest that for the detection of such clear, strong and persistent patterns the non-electronic human brain is normally cheaper, faster, and more reliable than its electronic rival. Or to put it the other way round: if it is really necessary to apply such highly refined methods of mathematical analysis for the detection of a pattern that one needs an electronic computer, the pattern is too weak and too obscure to be a suitable basis for extrapolation in real life.”
Long-term forecasting.
Because things change over time. long-term forecasts are even less predictable than the short-term ones, says Schumacher:
“In fact, all long-term forecasting is somewhat presumptuous and absurd, unless it is of so general a kind that it merely states the obvious.”
Again, he distinguishes between forecasts and feasibility studies on the other:
“In the one case I assert that this or that will be the position in, say, twenty years’ time. In the other case I merely explore the long-term effect of certain assumed tendencies. It is unfortunately true that in macro-economics feasibility studies are very rarely carried beyond the most rudimentary beginnings. People are content to rely on general forecasts which are rarely worth the paper they are written on.”
“A long-term forecast, as L said, is presumptuous; but a long- term feasibility study is a piece of humble and unpretentious work which we shall neglect at our peril.”
At this point, Schumacher anticipates a great deal of the very current debate about AI. It is fair to say that he is sceptical about what he calls the “electronic computer”:
“It seems to me that the endless multiplication of mechanical aids in fields which require judgment more than anything else is one of the chief dynamic forces behind Parkinson’s Law. Of course, an electronic computer can work out a vast number of permutations, employing varying assumptions, within a few seconds or minutes, while it might take the non electronic brain as many months to do the same job. But the point is that the non-electronic brain need never attempt to do that job. By the power of judgment it can concentrate on a few decisive parameters which are quite sufficient to outline the ranges of reasonable probability. Some people imagine that it would be possible and helpful to set up a machine for long-range forecasting into which current ‘news’ could be fed continuously and which, in response, would produce continual revisions of some long-term forecasts. No doubt, this would be possible; but would it be helpful! Each item of ‘news- has to be judged for its long-term relevance, and a sound judgment is generally not possible immediately. Nor can I see any value in the continual revision of long-term forecasts, as a matter of mechanical routine.”
Then finally he sets out a vision for his own profession, though he can’t resist a sideswipe at Dr Colin Clark, a leading Keynesian:
“Economics, and even more so applied economics, is not an exact science: it is in fact, or ought to be, something much greater: a branch of wisdom. Mr Colin Clark once claimed: ‘that long-period world economic equilibrium develop themselves in their own peculiar manner, entirely independently of political and social changes.’
Next he unpacks why Clark got it wrong:
“On the strength of this metaphysical heresy he wrote a book, in 1941, entitled The Economics of 1960. It would be unjust to say that the picture he drew bears no resemblance to what actually came to pass; there is, indeed, the kind of resemblance which simply stems from the fact that man uses his freedom within an unchanged setting of physical laws of nature. But the lesson from Mr Clark’s book is that his metaphysical assumption is untrue; that, in fact, world economic equilibria, even in the longer run, are highly dependent on political and social changes; and that the sophisticated and ingenious methods of forecasting employed by Mr Clark merely served to produce a work of spurious verisimilitude.”
Finally, he draws some conclusions:
“In his urgent attempt to obtain reliable knowledge about his essentially indeterminate future, the modern man of action may surround himself by ever-growing armies of forecasters, by ever-growing mountains of factual data to be digested by ever more wonderful mechanical contrivances: I fear that the result is little more than a huge game of make-believe and an ever more marvellous vindication of Parkinson’s Law. The best decisions will still be based on the judgments of mature non-electronic brains possessed by men who have looked steadily and calmly at the situation and seen it whole. ‘Stop, look, and listen’ is a better motto than ‘Look it up in the forecasts’.”
What happened next?
Schumacher uses Parkinson’s Law again here, and twice in one chapter (see chapter 10). It was published originally in 1956 so it was hardly new, though it must have felt exciting for his supporters to have him calling a non-economic ‘law’ – one formulated by a celebrated naval historian – in aid at the same time as he was dismissing all those economics laws.
Parkinson’s Law was that work tends to fill the time available to do it in. So when Schumacher looks at all the efforts to see into the future using computing power, he just sees something that fulfills the Law by being unnecessarily complicated and, therefore, faintly ridiculous.
Not many writers have followed him into condemning all quantitative efforts in quite the same way (though, in all modesty, I must mention my own effort, in the US, called The Sum of Our Discontent (Texere, 2002)).
We will need to speculate about why that might be. Perhaps the modern world has become obsessed with measurement, or blips on a computer screen – so much so that it is simply to serious for anyone to step out of line?
When I worked for the Cabinet Office in the UK, I used to sit opposite a man who described his job as “drawing graphs for the prime minister”. Because the PM was known to like graphs, he drew them – even when there was no data or numerical evidence at all, he would find something to put in some kind of line going up or down – whichever way gave the PM some relief!
What is more, the obsession with measurement which emerged in the late 1980s has now got considerably worse and more sclerotic – when every charity or small company seems to have become attached to numbers to characterize their achievements. But when those social enterprises and charities are dependent on money from official sources, it is increasingly linked to the numbers. This is an attempt to automate the economic system, but it certainly adds in extra complications which can only be tackled by the missing human element.
Still, it is forecasting that Schumacher has in his sights this time.
“Schumacher’s feasibility studies have become the ‘scenario’ industry, oddly championed by Shell Oil at the same time as his book appeared,” wrote the anthropologist and ecologist Peter Warshall in the 50th anniversary edition (Hartley & Marks, 1999).
“The World Business Council for Sustainable Development now has sustainability scenarios. Forecasting is improved in weather and gene-based diseases. But, as Schumacher says, it’s worse in everything else.”
In fact, we might ask those who contributed to the 1999 edition of Small is Beautiful how they felt about theses themes in the optimistic 1990s.
The Canadian wildlife painter Robert Bateman wrote: “The 1980s saw the culmination of the bigger-is-better, growth- and greed-philosophy. Based on the assumption that accelerating growth is desirable or even possible, large-scale borrowing became the watchword. Happy bankers with their eyes closed to reality doled out billions in loans, which now are impossible to repay and will remain as debts into future generations…
“It was really fun to borrow from our grandchildren during the 1980s,” he added bitterly.
For Amory Lovins, then chair and co-founder of the Rocky Mountain Institute, the 1990s was the time when the energy industry were beginning to take the lessons of Small is Beautiful to heart:
“In the 1970s, when new power plants were big enough to serve the average needs of nearly a million households or a hundred thousands commercial customers, suggestions that it might make more sense (and money) to match the plant’s size more closely to the size of their loads were ridiculed by the energy industries. But many utilities had financial near-death experiences as they defied Miss Piggy’s Fourth Law, ‘Never try to eat more than you can lift.’
“The giant-power-plant business soon collapsed: competitive economies simply stopped buying them because financial markets did not have a big enough appetite for risk. As smaller but better technologies emerged – combined-cycle gas plants, co- and tri-generation, renewables, and (cheapest of all) more efficient end-use – US orders for all fossil-fueled steam plants fell back to Victorian levels. The US generators being commissioned in the 1990s are back to the sizes that prevailed in the 1940s (megawatts to tens of megawatts), and within a few years will be at 1920s sizes (kilowatts to tens of kilowatts) – about a million-fold smaller than the 1980s behemoths, nicely matched to customers’ needs, and a far better buy.”
For Helena Norberg-Hodge – the founding director of Local Futures, writing in the same book – it is the narrow economic paradigm identified by Schumacher that is still causing trouble: “The fabric of industrial society is to a great extent determined by the interaction of science, technology, and a narrow economic paradigm – an interaction that is leading to ever-greater centralization and specialization…
“It is in robust, local-scale economies that we find genuinely ‘free’ markets – free of corporate manipulation, hidden subsidies, waste, and immense promotional costs that characterize today’s global market. Decentralization is a prerequisite for the rekindling of community in Western society. Mobility erodes community, but as we put down roots and feel attachment to a place, our human relationships deepen, become more secure, and – as they continue over time – more reliable.”
Questions for discussion…
- Why are we still at the stage of paying lip service to the idea of intermediate technology?
- How come, in some areas, there are many people with needs – and people able to fulfill them – but no money to bring them together?
- How do we make sure that time credits never suffer from the reputation as ‘poor people’s money’?
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