Our Favorite Quotes from E. F. Schumacher’s Small is Beautiful: Economics as if People Mattered: 25 Years Later … with Commentaries
Chapter 1: The Problem of Production
One of the most fateful errors of our age is the belief that “the problem of production” has been solved.
The arising of this error, so egregious and so firmly rooted, is closely connected with the philosophical, not to say religious, changes during the last three or four centuries in man’s attitude to nature…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.
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. Every economist and businessman is familiar with the distinction, and applies it conscientiously and with considerable subtlety to all economic affairs – except where it really matters: namely, the irreplaceable capital which man has not made, but simply found, and without which he can do nothing.
…we are estranged from reality and inclined to treat as valueless everything that we have not made ourselves.
…we have indeed labored to make some of the capital which today helps us to produce – a large fund of scientific, technological, and other knowledge; an elaborate physical infrastructure; innumerable types of sophisticated capital equipment, etc. – but all this is but a small part of the total capital we are using. Far larger is the capital provided by nature and not by man – and we do not even recognize it as such. This larger part is now being used up at an alarming rate, and that is why it is an absurd and suicidal error to believe, and act on the belief, that the problem of production has been solved.
Is it not evident that our current methods of production are already eating into the very substance of industrial man?
The substance of man cannot be measured by Gross National Product.
Statistics never prove anything.
…one of the most fateful errors of our age is the belief that the problem of production has been solved. The illusion…is mainly due to our inability to recognize that the modern industrial system, with all its intellectual sophistication, consumes the very basis on which it has been erected. To use the language of the economist, it lives on irreplaceable capital which it cheerfully treats as income.
And what is my case? Simply that our most important task is to get off our present collision course. And who is there to tackle such a task? I think every one of us, whether old or young, powerful or powerless, rich or poor, influential or un-influential.
To talk about the future is useful only if it leads to action now.
We still have to learn how to live peacefully, not only with our fellow men but also with nature and, above all, with those Higher Powers which have made nature and have made us; for, assuredly, we have not come about by accident and certainly have not made ourselves.
Now that man has acquired the physical means of self-obliteration, the question of peace obviously looms larger than ever before in human history. And how could peace be built without some assurance of permanence with regard to our economic life?
Chapter 2: Peace and Permanence
It is clear that the “rich” are in the process of stripping the world of its once-for-all endowment of relatively cheap and simple fuels. It is their continuing economic growth which produces ever more exorbitant demands, with the result that the world’s cheap and simple fuels could easily become dear and scarce long before the poor countries had acquired the wealth, education, industrial sophistication, and power of capital accumulation needed for the application of alternative fuels on any significant scale.
…that economic growth, which viewed from the point of view of economics, physics, chemistry, and technology, has no discernable limit must necessary run into decisive bottlenecks when viewed from the point of view of the environmental sciences. An attitude to life which seeks fulfillment in the single-minded pursuit of wealth – in short, materialism – does not fit into this world, because it contains within itself no limiting principle, while the environment in which it is placed is strictly limited.
The modern economy is propelled by a frenzy of greed and indulges in an orgy of envy, and these are not accidental features but the very causes of its expansionist success. The question is whethe such causes can be effective for long or whether they carry within themselves the seeds of destruction.
If human vices such as greed and envy are systematically cultivated, the inevitable result is nothing less than a collapse of intelligence. A man driven by greed or envy loses the power of seeing things as they really are, of seeing things in their roundness and wholeness, and his very successes become failures. If whole societies become infected by these vices, they may indeed achieve astonishing things but they become increasingly incapable of solving the most elementary problems of everyday existence.
…the foundations of peace cannot be laid by universal prosperity, in the modern sense, because such prosperity, if attainable at all, is attainable only by cultivating such drives of human nature as greed and envy, which destroy intelligence, happiness, serenity, and thereby the peacefulness of man.
No one is really working for peace unless he is working primarily for the restoration of wisdom.
From an economic point of view, the central concept of wisdom is permanence. We must study an economics of permanence.
The exclusion of wisdom from economics, science and technology was something which we could perhaps get away with for a little while, as long as we were relatively unsuccessful; but now that we have become very successful, the problem of spiritual and moral truth moves into the central position.
The cultivation and expansion of needs is the antithesis of wisdom. It is also the antithesis of freedom and peace. Every increase in needs tends to increase one’s dependence on outside forces over which one cannot have control, and therefore increases existential fear. Only by a reduction of needs can one promote a genuine reduction in those tensions which are the ultimate causes of strife and war.
Wisdom demands a new orientation of science and technology towards the organic, the gentle, the non-violent, the elegant and beautiful. Peace, as has often been said, is indivisible – how then could peace be built on a foundation of reckless science and violent technology?
That soul-destroying, meaningless, mechanical, monotonous, moronic work is an insult to human nature which must necessarily and inevitably produce either escapism or aggression, and that no amount of “bread and circuses” can compensate for the damage done – these are facts which are neither denied nor acknowledged but are met with an unbreakable conspiracy of silence – because to deny them would be too obviously absurd and to acknowledge them would condemn the central preoccupation of modern society as a crime against humanity.
The neglect, indeed the rejection, of wisdom has gone so far that most of our intellectuals have not even the faintest idea what the term could mean. As a result, they always tend to try and cure a disease by intensifying its causes. The disease having been caused by allowing cleverness to displace wisdom, no amount of clever research is likely to produce a cure. But what is wisdom? Where can it be found? Here we come to the crux of the matter: it can be read about in numerous publications but it can be found only inside oneself.
[The insights of wisdom]…enable us to see the hollowness and fundamental unsatisfactoriness of a life devoted primarily to the pursuit of material ends, to the neglect of the spiritual. Such a life necessarily sets man against man and national against nation, because man’s needs are infinite and infinitude can be achieved only in the spiritual realm, never in the material.
How can we disarm greed and envy? Perhaps by being much less greedy and envious ourselves; perhaps by resisting the temptation of letting our luxuries become needs; and perhaps by even scrutinizing our needs to see if they cannot be simplified and reduced.
An ounce of practice is generally worth more than a ton of theory.
Chapter 3: The Role of Economics
Economics…deals with goods in accordance with their market value and not in accordance with what they really are. The same rules and criteria are applied to primary goods, which man has to win from nature, and secondary goods, which presuppose the existence of primary goods, and are manufactured from them. All goods are treated the same, because the point of view is fundamentally that of private profit-making, and this means that it is inherent in the methodology of economics to ignore man’s dependence on the natural world.
The market…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 institutionalization of individualism and non-responsibility. Neither buyer nor seller is responsible for anything but himself.
…the reign of quantity celebrates its greatest triumphs in “the Market.” Everything is equated with everything else. To equate things means to give them a price and thus to make them exchangeable. To the extent that economic thinking is based on the market, it takes the sacredness out of life, because there can be nothing sacred in something that has a price.
To press non-economic values into the framework of the economic calculus, economists use the method of cost/benefit analysis. This is generally thought to be an enlightened and progressive development, as it is at least an attempt to take account of costs and benefits which might otherwise be disregarded altogether. In fact, however, it is a procedure by which the higher is reduced to the level of the lower and the priceless is given a price. It can therefore never serve to clarify the situation and lead to an enlightened decision. All it can do is lead to self-deception or the deception of others; all one has to do to obtain the desired results is to impute suitable values to the immeasurable costs and benefits. The logical absurdity, however, is not the greatest fault of the undertaking: with is worse, and destructive of civilization, is the pretense that everything has a price or, in other words, that money is the highest of all values.
An expansion of man’s ability to bring forth secondary products is useless unless preceded by an expansion of his ability to win primary products from the earth; for man is not a producer but only a converter, and for every job of conversion he needs primary products.
…the effort needed to sustain a way of life which seeks to attain the optimal pattern of consumption is likely to be much smaller than the effort needed to sustain a drive for maximum consumption.
Since there is now increasing evidence of environmental deterioration, particularly in living nature, the entire outlook and methodology of economics is being called into question. The study of economics is too narrow and too fragmentary to lead to valid insights, unless complemented and completed by a study of meta-economics.
Chapter 4: Buddhist Economics
Economists themselves, like most specialists, normally suffer from a kind of metaphysical blindness, assuming that theirs is a science of absolute and invariable truths, without any presuppositions.
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 ego-centredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence.
It is clear, therefore, that Buddhist economics must be very different from the economics of modern materialism, since the Buddhist sees the essence of civilisation not in a multiplication of wants but in the purification of human character.
From a Buddhist point of view, this is standing the truth on its head by considering goods as more important than people and consumption as more important than creative activity.
The keynote of Buddhist economics, therefore, is simplicity and non-violence. From an economist’s point of view, the marvel of the Buddhist way of life is the utter rationality of its pattern—amazingly small means leading to extraordinarily satisfactory results.
The ownership and the consumption of goods is a means to an end, and Buddhist economics is the systematic study of how to attain given ends with the minimum means.
From the point of view of Buddhist economics, therefore, production from local resources for local needs is the most rational way of economic life, while dependence on imports from afar and the consequent need to produce for export to unknown and distant peoples is highly uneconomic and justifiable only in exceptional cases and on a small scale.
Modern economics does not distinguish between renewable and non-renewable materials, as its very method is to equalize and quantify everything by means of a money price.
Non-renewable goods must be used only if they are indispensable, and then only with the greatest care and the most meticulous concern for conservation. To use them heedlessly or extravagantly is an act of violence, and while complete non-violence may not be attainable on this earth, there is nonetheless an ineluctable duty on man to aim at the ideal of non-violence in all he does.
As the world’s resources of non-renewable fuels—coal, oil, and natural gas—are exceedingly unevenly distributed over the globe and undoubtedly limited in quantity, it is clear that their exploitation at an ever-increasing rate is an act of violence against nature which must almost inevitably lead to violence between men.
Before they dismiss Buddhist economics as nothing better than a nostalgic dream, they might wish to consider whether the path of economic development outlined by modern economics is likely to lead them to places where they really want to be.
It is a question of finding the right path of development, the Middle Way between materialist heedlessness and traditionalist immobility, in short, of finding “Right Livelihood.”
Chapter 5: A Question of Size
Even today, we are generally told that gigantic organizations are inescapably necessary; but when we look closely we can notice that as soon as great size has been created there is often a strenuous attempt to attain smallness within bigness.
…it is true that all men are brothers, but it is also true that in our active personal relationships we can, in fact, be brothers to only a few of them, and we are called upon to show more brotherliness to them than we could possibly show to the whole of mankind.
Economics, which Lord Keynes had hoped would settle down as a modest occupation similar to dentistry, suddenly becomes the most important subject of all.
There is no such thing as the viability of states or of nations, there is only a problem of viability of people: people, actual persons like you and me, are viable when they can stand on their own feet and earn their keep. You do not make non-viable people viable by putting large numbers of them into one huge community, and you do not make viable people non-viable by splitting a large community into a number of smaller, more intimate, more coherent and more manageable groups.
The economic calculus, as applied by present-day economics, forces the industrialist to eliminate the human factor because machines do not make mistakes, which people do. Hence the enormous effort at automation and the drive for ever-larger units. This means that those who have nothing to sell but their labor remain in the weakest possible bargaining position.
The conventional wisdom of what is now taught as economics bypasses the poor, the very people for whom development is really needed. The economics of giantism and automation is a leftover of nineteenth-century conditions and nineteenth-century thinking and it is totally incapable of solving any of the real problems of today. An entirely new system of thought is needed, a system based on attention to people, and not primarily attention to goods—(the goods will look after themselves!). It could be summed up in the phrase, “production by the masses, rather than mass production.”
What is the meaning of democracy, freedom, human dignity, standard of living, self-realization, fulfillment? Is it a matter of goods, or of people? Of course it is a matter of people. But people can be themselves only in small comprehensible groups.
Chapter 6: The Great Resource – Education
All history – as well as all current experience – points to the fact that it is man, not nature, who provides the primary resource: that the key factor of all economic development comes out of the mind of man.
At present, there can be little doubt that the whole of mankind is in mortal danger, not because we are short of scientific and technological know-how, but because we tend to use it destructively, without wisdom. More education can help us only if produces more wisdom.
On the basis of experience and conscious thought small ideas may easily be dislodged, but when it comes to bigger, more universal, or more subtle ideas it may not be so easy to change them. Indeed, it is often difficult to become aware of them, as they are the instruments and not the results of our thinking—just as you can see what is outside you, but cannot easily see that with which you see, the eye itself.
The way in which we experience and interpret the world obviously depends very much indeed on the kind of ideas that fill our minds.
The essence of education…is the transmission of values, but values do not help us to pick our way through life unless they have become our own, a part, so to say, of our mental make-up. This means that they are more than mere formulae or dogmatic assertions: that we think and feel with them, that they are the very instruments through which we look at, interpret, and experience the world.
When people ask for education…I think what they are really looking for is ideas that would make the world, and their own lives, intelligible to them. When a thing is intelligible you have a sense of participation; when a thing is unintelligible you have a sense of estrangement.
What is at fault is no specialization, but the lack of depth with which the subjects are usually presented, and the absence of metaphysical awareness.
We have become confused to what our convictions really are. The great ideas of the nineteenth century may fill our minds in one way or another, but our hearts do not believe in them all the same. Mind and heart are at war with one another, not, as is commonly asserted, reason and faith. Our reason has become so beclouded by an extraordinary, blind, and unreasonable faith in a set of fantastic and life-destroying ideas inherited from the nineteenth century. It is the foremost task of our reason to recover a truer faith than that.
The typical problems of life are insoluble on the level of being on which we normally find ourselves. How can one reconcile the demands of freedom and discipline in education? Countless mothers and teachers, in fact, do it, but no one can write down a solution. They do it by bringing into the situation a force that belongs to a higher level where opposites are transcended—the power of love.
It is only when we can see the world as a ladder, and when we can see man’s position on the ladder, that we can recognize a meaningful task for man’s life on earth.
The true problems of living…are always problems of overcoming or reconciling opposites. They are divergent problems and have no solution in the ordinary sense of the word. They demand of man not merely the employment of his reasoning powers but the commitment of his whole personality.
…ideas are the most powerful things on earth…
What is to take the place of the soul and life-destroying metaphysics inherited from the nineteenth century? The task of our generation, I have no doubt, is one of metaphysical reconstruction… Our task – and the task of all education – is to understand the present world, the world in which we live and make our choices.
Chapter 7: The Proper Use of Land
There are always some things which we do for their own sakes, and there are other things which we do for some other purpose. One of the most important tasks for any society is to distinguish between ends and means-to-ends, and to have some sort of cohesive view and argument about this.
We can say that man’s management of the land must be primarily orientated towards three goals – health, beauty, and permanence. The fourth goal – the only once accepted by the experts – productivity, will then be attained almost as a by-product.
…we should be searching for policies to reconstruct rural culture, to open the land for the gainful occupation to larger numbers of people, whether it be on a full-time or a part-time bases, and to orientate all our actions on the land towards the threefold ideal of health, beauty and permanence.
We know too much about ecology today to have any excuse for the many abuses that are currently going on in the management of the land, in the management of animals, in food storage, food processing, and in heedless urbanization. If we permit them, this is not due to poverty, as if we could not afford to stop them; it is due to the fact that, as a society, we have no firm basis of belief in any meta-economic values, and when there is no such belief the economic calculus takes over.
Nature, it has been said, abhors a vacuum, and when the available “spiritual space” is not filled by some higher motivation, then it will necessarily be filled by something lower – by the small, mean, calculating attitude to life which is rationalized in the economic calculus.
In the simple question of how we treat the land, next to people our most precious resource, our entire way of live is involved, and before our policies with regard to the land will really be changed, there will have to be a great deal of philosophical, not to say religious, change. It is not a question of what we can afford but of what we choose to spend our money on. If we could return to a generous recognition of meta-economic values, our landscapes would become healthy and beautiful again and our people would regain the dignity of man…
Chapter 8: Resources for Industry
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.
It might be said that energy is for the mechanical world what consciousness is for the human world. If energy fails, everything fails.
Chapter 9: Nuclear Energy – Salvation or Damnation?
Even an economist might well ask: what is the point of economic progress, a so-called higher standard of living, when the earth, the only earth we have, is being contaminated by substances which may cause malformations in our children or grandchildren?
To mention these things, no doubt, means laying oneself open to the charge of being against science, technology, and progress. Let me therefore, in conclusion, add a few words about future scientific research. Man cannot live without science and technology any more than he can live against nature.
[Scientists] must work on public opinion, so that the politicians, depending on public opinion, will free themselves from the thralldom of economism and attend to the things that really matter. What matters, as I said, is the direction of research, that the direction should be towards non-violence rather than violence; towards an harmonious cooperation 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.
Chapter 10: Technology with a Human Face
If technology is felt to be becoming more and more inhuman, we might do well to consider whether it is possible to have something better – a technology with a human face.
Nature always…knows where and when to stop. Greater even than the mystery of natural growth is the mystery of the natural cessation of growth. There is measure in all natural things – in their size, speed, or violence. As a result, the system of nature, of which man is a part, tends to be self-balancing, self-adjusting, self-cleansing.
There is nothing in the experience of the last twenty-five years to suggest that modern technology, as we know it, can really help us to alleviate world poverty, not to mention the problem of unemployment… we had better face the question of technology – what does it do and what should it do? Can we develop a technology which really helps us to solve our problems – a technology with a human face?
We may say, therefore, that modern technology has deprived man of the kind of work that he enjoys most, creative, useful work with hands and brains, and given him plenty of work of a fragmented kind, most of which he does not enjoy at all…we might do well to take stock and reconsider our goals.
Taking stock, we can say that we possess a vast accumulation of new knowledge, splendid scientific techniques to increase it further and immense experience in its application. All this is truth of a kind. This truthful knowledge, as such, does not commit us to a technology of giantism, supersonic speed, violence, and the destruction of human work-enjoyment. The use we have made of our knowledge is only one of its possible uses and, as is now becoming ever more apparent, often an unwise and destructive use.
What we have today, in modern industrial society, is not romantic and certainly not utopian…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 threefold crisis of which I have spoken will not go away if we simply carry on as before. It will become worse and end in disaster, until or unless we develop a new life-style which is compatible with the real needs of human nature, with the health of living nature around us, and with the resource endowment of the world.
…the present consumer society is like a drug addict who, no matter how miserable he may fell, 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.
..the poverty of the poor makes it in any case impossible for them successfully to adopt our technology. Of course, they often try to do so, and then have to bear the most dire consequences in terms of mass unemployment, mass migration into cities, rural decay, and intolerable social tensions. They need, in fact, the very thing I am talking about, which we also need: a different kind of technology, a technology with a human face, which, instead of making human hands and brains redundant, helps them to become far more productive than they ever have been before.
Although we are in possession of all requisite knowledge, it still requires a systematic, creative effort to bring this technology into active existence and make it generally visible and available. It is my experience that it is rather more difficult to recapture directness and simplicity than to advance in the direction of ever more sophistication and complexity.
…it takes a certain flair of real insight to make things simple again. And this insight does not come easily to people who have allowed themselves to become alienated from real, productive work and from the self-balancing system of nature, which never fails to recognize measure and limitation.
In our work with the developing countries we are at least forced to recognize the limitations of poverty, and this work can therefore be a wholesome school for all of us in which, while generally trying to help others, we may also gain knowledge and experience of how to help ourselves.
…it takes a good deal of courage to say “no” to the fashions and fascinations of the age and to question the presuppositions of a civilization which appears destined to conquer the whole world; the requisite strength can be derived only from deep convictions. If it were derived from nothing more than fear of the future, it would be likely to disappear at the decisive moment.
The power of ordinary people, who today tend to feel utterly powerless, does not lie in starting new lines of action, but in placing their sympathy and support with minority groups which have already started.
…the modern tendency is to see and become conscious of only the visible and to forget the invisible things that are making the visible possible and keep it going.
…a technology with a human face, is in fact possible; that it is viable; and that it re-integrates the human being, with his skillful hands and creative brain, into the productive process. It serves production by the masses instead of mass production.
Chapter 11: Development
…we tend to think of development, not in terms of evolution, but in terms of creation.
That the developing countries cannot do without a modern sector, particularly when they are in direct contact with the rich countries, is hardly open to doubt. What needs to be questioned is the implicit assumption that the modern sector can be expanded to absorb virtually the entire population and that this can be done fairly quickly.
Development does not start with goods; it starts with people and their education, organization, and discipline. Without these three, all resources remain latent, untapped, potential.
If aid is given to introduce certain new economic activities, these will be beneficial and viable only if they can be sustained by the already existing educational level of fairly broad groups of people, and they will be truly valuable only if they promote and spread advances in educations, organization, and discipline…It follow from this that development is not primarily a problem for economists, least of all for economists whose expertise is founded on a crudely materialistic philosophy.
Chapter 12: Social and Economic Problems Calling for the Development of Intermediate Technology
I am concerned here exclusively with the problem of helping people in the non-modern sector…[because] all successes in the modern sector are likely to be illusory unless there is also a healthy growth—or at least a healthy condition of stability—among the very great numbers of people today whose life is characterized not only by dire poverty but also by hopelessness.
It is necessary, therefore, that at least an important part of the development effort should by-pass the big cities and be directly concerned with the creation of an “agro-industrial structure” in the rural and small-town areas.
The task, then, is to bring into existence millions of new workplaces in the rural areas and small towns. That modern industry, as it has arisen in the developed countries, cannot possibly fulfill this task should be perfectly obvious. It has arisen in societies which are rich in capital and short of labor and therefore cannot possibly be appropriate for societies short of capital and rich in labor.
The bigger the country, the greater is the need for internal “structure” and for a decentralized approach to development. If this need is neglected, there is no hope for the poor.
I believe, therefore, that the best way to make contact with the essential problem is by speaking of technology: economic development in poverty-stricken areas can be fruitful only on the basis of what I have called “intermediate technology.” In the end, intermediate technology will be “labor-intensive” and will lend itself to the use of small-scale establishments
I say, therefore, that the dynamic approach to development, which treats the choice of appropriate, intermediate technologies as the central issue, opens up avenues of constructive action, which the static, econometric approach totally fails to recognize.
The poor can be helped to help themselves, but only by making available to them a technology that recognizes the economic boundaries and limitations of poverty—an intermediate technology.
Chapter 13: Two Million Villages
Social cohesion, cooperation, mutual respect, and above all, self-respect, courage in the face of adversity, and the ability to bear hardship—all this and much else disintegrates and disappears when these “psychological structures” are gravely damaged. A man is destroyed by the inner conviction of uselessness. No amount of economic growth can compensate for such losses—though this may be an idle reflection, since economic growth is normally inhibited by them.
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 neo-colonialism.
Methods of production, standards of consumption, criteria of success or failure, systems of values, and behavior patterns establish themselves in poor countries which, being (doubtfully) appropriate only to conditions of affluence already achieved, fix the poor countries ever more inescapably in a condition of utter dependence on the rich.
The best aid to give is intellectual aid, a gift of useful knowledge. A gift of knowledge is infinitely preferable to a gift of material things.
Before we can talk about giving aid, we must have something to give. We do not have thousands of poverty-stricken villages in our country; so what do we know about effective methods of self-help in such circumstances?
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.
There is no answer to the evils of mass unemployment and mass migration into cities, unless the whole level of rural life can be raised, and this requires the development of an agro-industrial culture, so that each district, each community, can offer a colorful variety of occupations to its members.
Economic development is something much wider and deeper than economics, let alone econometrics. Its roots lie outside the economic sphere, in education, organization, discipline and, beyond that, in political independence and a national consciousness of self-reliance.
Chapter 14: The Problem of Unemployment in India
Can we establish an ideology, or whatever you like to call it, which insists that the educated have taken upon themselves an obligation and have not simply acquired a “passport to privilege”? …It is, you might well say, an elementary matter of justice.
As far as simple products are concerned—food, clothing, shelter, and culture—the greatest danger is that people should automatically assume that only the 1963 model is relevant and not the 1903 model; because the 1963 way of doing things is inaccessible to the poor, as it presupposes great wealth.
So let’s not mesmerize ourselves by the difficulties, but recover the common-sense view that to work is the most natural thing in the world. Only one must not be blocked by being too damn clever about it…It is a fixation in the mind, that unless you can have the latest you can’t do anything at all, and this is the thing that has to be overcome.
The really helpful things will not be done from the centre; they cannot be done by big organizations; but they can be done by the people themselves.
Chapter 15: A Machine to Foretell the Future?
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.
I thus come to the cheerful conclusion that life, including economic life, is still worth living because it is sufficiently unpredictable to be interesting.
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 marvelous 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.
Chapter 16: Towards a Theory of Large-Scale Organization
Undoubtedly this is all a problem of communications. But the only really effective communication is from man to man, face to face.
Nobody really likes large-scale organization; nobody likes to take orders from a superior who takes orders from a superior who takes orders…Even if the rules devised by bureaucracy are outstandingly humane, nobody likes to be ruled by rules, that is to say, by people whose answer to every complaint is: “I did not make the rules: I am merely applying them.”
Yet is seems, large-scale organization is here to stay. Therefore it is all the more necessary to think about it and to theorize about it. The stronger the current, the greater the need for skillful navigation.
The fundamental task is to achieve smallness within the large organization.
Ideals can rarely be attained in the real world, but they are none-the-less meaningful. They imply that any departure from the ideal has to be specially argued and justified.
Intellectual confusion exacts its price. We preach the virtues of hard work and restraint while painting utopian pictures of unlimited consumptions without either work or restraint.
If our intellectual leaders treat work as nothing but a necessary evil soon to be abolished as far as the majority is concerned, the urge to minimize it right away is hardly a surprising reaction, and the problem of motivation becomes insoluble.
Excellent! This is real life, full of antinomies and bigger than logic. Without order, planning, predictability, central control, accountancy, instructions to the underlings, obedience, discipline—without these, nothing fruitful can happen, because everything disintegrates. And yet—without the magnanimity of disorder, the happy abandon, the entrepreneurship venturing into the unknown and incalculable, without the risk and the gamble, the creative imagination rushing in where bureaucratic angels fear to tread—without this, life is a mockery and a disgrace.
Chapter 17: Socialism
Both theoretical considerations and practical experience have led me to the conclusion that socialism is of interest solely for its non-economic values and the possibility it creates for the overcoming of the religion of economics.
The strength of the idea of private enterprise lies in this terrifying simplicity. It suggests that the totality of life can be reduced to one aspect—profits.
In this respect, the idea of private enterprise fits exactly into the idea of The Market, which, in an earlier chapter, I called “the institutionalization of individualism and non-responsibility.”
[There exists a] modern trend towards total quantification at the expense of the appreciation of qualitative differences; for private enterprise is not concerned with what it produces but only with what it gains from production.
The point is that the real strength of the theory of private enterprise lies in this ruthless simplification, which fits so admirably also into the mental patterns created by the phenomenal successes of science.
If [businessmen] themselves pursue objectives other than that of profit-making, they cannot very well argue that it becomes impossible to administer the nation’s means of production efficiently as soon as considerations other than those of profit-making are allowed to enter.
But while all fanaticism shows intellectual weakness, a fanaticism about the means to be employed for reaching quite uncertain objectives is sheer feeble mindedness.
What is at stake is not economics, but culture; not the standard of living but the quality of life. Economics and the standards of living can just as well be looked after by a capitalist system, moderated by a bit of planning and redistributive taxation. But culture and, generally, the quality of life, can now only be debased by such a system.
Socialists should insist on using the nationalized industries not simply to out-capitalize the capitalists—an attempt in which they may or may not succeed—but to evolve a more democratic and dignified system of industrial administration, a more humane employment of machinery, and a more intelligent utilization of the fruits of human ingenuity and effort.
Chapter 18: Ownership
I have argued all along, no system of machinery or economic doctrine or theory stands on its own feet: it is invariably built on a metaphysical foundation, that is to say, upon man’s basic outlook on life, its meaning and its purpose.
I have talked about the religion of economics, the idol worship of material possessions, of consumption and the so-called standard of living, and the fateful propensity that rejoices in the fact that “what were luxuries to our fathers have become necessities for us.”
The answer is self-evident: greed and envy demand continuous and limitless economic growth of a material kind, without proper regard for conservation, and this type of growth cannot possibly fit into a finite environment.
When we move from small-scale to medium-scale, the connection between ownership and work already becomes attenuated; private enterprise tends to become impersonal and also a significant social factor in the locality; it may even assume more than local significance.
In small-scale enterprise, private ownership is natural, fruitful, and just.
In large-scale enterprise, private ownership is a fiction for the purpose of enabling functionless owners to live parasitically on the labor of others. It is not only unjust but also an irrational element which distorts all relationships within the enterprise.
Chapter 19: New Patterns of Ownership
The truth is that a large part of the costs of private enterprise has been borne by the public authorities—because they pay for the infrastructure—and that the profits of private enterprise therefore greatly overstate its achievement.
Now, one does not have to be a believer in total equality, whatever that may mean, to be able to see that the existence of inordinately rich people in any society today is a very great evil.
In other words, everybody claims to achieve freedom by his own “system” and accuses every other “system” as inevitably entailing tyranny, totalitarianism, or anarchy leading to both.
All the indications are that the present structure of large-scale industrial enterprise, in spite of heavy taxation and an endless proliferation of legislation, is not conducive to the public welfare.
In the excitement over the unfolding of his scientific and technical powers, modern man has built a system of production that ravishes nature and a type of society that mutilates man.
There has never been a time, in any society in any part of the world, without its sages and teachers to challenge materialism and plead for a different order of priorities…Today, however, this message reaches us not solely from the sages and saints but from the actual course of physical events. It speaks to us in the language of terrorism, genocide, breakdown, pollution, exhaustion.
Needless to say, wealth, education, research and many other things are needed for any civilization, but what is most needed today is a revision of the ends which these means are meant to serve.
It is of little use trying to suppress terrorism if the production of deadly devices continues to be deemed a legitimate employment of man’s creative powers. Nor can the fight against pollution be successful if the patterns of production and consumption continue to be of a scale, a complexity, and a degree of violence which, as is becoming more and more apparent, do not fit into the laws of the universe, to which man is just as much subject as the rest of creation.
Pollution must be brought under control and mankind’s population and consumption of resources must be steered towards a permanent and sustainable equilibrium.
Everywhere people ask: “What can I actually do?” The answer is as simple as it is disconcerting: we can, each of us, work to put our own inner house in order. The guidance we need for this work cannot be found in science or technology, the value of which utterly depends on the ends they serve; but it can still be found in the traditional wisdom of mankind.