Small is Beautiful Revisited 50 Years On

Table of Contents          

(Click the links below for each chapter guide)          

Introduction | by David Boyle (below)

I. 1. What is Capital? | Chapter 1: The Problem of Production
I. 2. Growth | Chapter 2: Peace and Permanence
I. 3. Economics | Chapter 3: The Role of Economics
I. 4. Good Work | Chapter 4: Buddhist Economics
I. 5.  Scale | Chapter 5: A Question of Size

II. 1. Metaphysics | Chapter 6: The Greatest Resource — Education
II. 2. Agriculture | Chapter 7: The Proper Use of Land
II. 3. Growth | Chapter 8: Resources for Industry
II. 4. Energy | Chapter 9: Nuclear Energy — Salvation or Damnation?
II. 5. Human Beings | Chapter 10: Technology With a Human Face

III. 1. Development | Chapter 11: Development
III. 2. Technology | Chapter 12: Social and Economic Problems Calling for the Development of Intermediate Technology
III. 3. Development Aid | Chapter 13: Two Million Villages
III. 4. Unemployment and Productivity | Chapter 14: The Problem of Unemployment in India

IV. 1. Knowledge | Chapter 15: A Machine to Foretell the Future
IV. 2. Giantism | Chapter 16: Towards a Theory of Large-Scale Organization
IV. 3. The Religion of Socialism | Chapter 17: Socialism
IV. 4. Property | Chapter 18: Ownership
IV. 5. Mutualism | Chapter 19: New Patterns of Ownership

Epilogue

Introduction

by David Boyle

One of the most fateful errors of our age is the belief that ‘the problem of production’ has been solved. Not only is this belief firmly held by people remote from production and therefore professionally unacquainted with the facts — it is held by virtually all the experts, the captains of industry, the economic managers in the governments of the world, the academic and not-so-academic economists, not to mention the economic journalists. They may disagree on many things but they all agree that the problem of production has been solved; that mankind has at last come of age. For the rich countries, they say, the most important task now is ‘education for leisure’ and, for the poor countries. the ‘transfer of technology’…”

— E.F. Schumacher, Small is Beautiful (1973)

“Most of the environmental movement takes a utilitarian ecology approach, that we must protect the environment because it is useful and beneficial to human beings. Schumacher's approach was that we must take care of the environment out of our deep reverence for it. I call the Schumacherian approach to the environment ‘reverential ecology’. Reverential economy and ecology say that you must know your limits and learn to live within them. Then everything will be recycled and regenerated. Mahatma Gandhi said there is enough in the world for everyone's need, but not enough for anyone's greed. Our modern dinosaur society has become a greedy society and we don't know when enough is enough.”

— Satish Kumar, editor of Resurgence magazine (25th anniversary edition, Hartley & Marks, 1999)

The book Small is Beautiful is also the story of how one man managed to stand in the way of a juggernaut - the stultifying series of errors in economics that stemmed, according to the author, from scientific materialism. 

I accept, of course, that the juggernaut continues – but would we have made as much progress as we have against it without this short book of essays and lectures, pulled together by Dr Fritz Schumacher and published exactly 50 years ago this year?

The first chapter about production goes to the heart of the problem as Schumacher saw it – as first and foremost a spiritual mistake: 

“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…”

Background

When Small is Beautiful was published in May of 1973, Schumacher had long since completed the shift he had made from conventional Keynesianism to a radical scepticism – almost a maverick anti-economics position.

He could so easily have been dismissed as a crank. But then, as he said, a crank is “a small element in a machine that makes revolutions.” This was a man about whom Keynes had once said his mantle would fall – because Schumacher could really make the words “sing”.

He had become radicalized after a visit to Burma in 1955, when he saw suddenly how few of his conventional economic measures were relevant to an economy, where the main product was Buddhist monks and their prayers.

His journey continued via his foundation of the Intermediate Technology Development Group (now Practical Action) in 1966 (more about intermediate technology in Chapter 10). The philosopher Theodore Grosz wrote, in the foreword of the American edition of Small is Beautiful, about his first encounter with the author:

“The first example of Schumacher's work I came across was an informal talk he gave in the mid-sixties on the practicality of Gandhi's economic program in India. I was at the time editing a small pacifist weekly in London (Peace News) and was on the lookout for anything about Gandhi I could find. But here was a viewpoint I had never heard expounded even by ardent Gandhians, most of whom brushed over Gandhi's concern for village life and the spinning wheel as if it were the once regrettable folly of an otherwise great and important man. Not so of Schumacher. Step by step, he spelled out the essential good sense of a third world economic policy that rejected imitation of Western models: breakneck urbanization, heavy capital investments, mass production, centralized development planning, and advanced technology.

In contrast, Gandhi's scheme was to begin with the villages, to stabilize and enrich their traditional way of life by use of labour-intensive manufacture and handicrafts, and to keep the nation's economic decision making as decentralized as possible, even if this slowed the pace of urban and industrial growth to a crawl…”

Schumacher had by then attracted a number of supporters and followers, initially people who had worked with him during his two decades advising the National Coal Board, like George McRobie, Duncan Smith and John Davis, who would go on to launch the New Economics Foundation in London in 1986.

Another key colleague was Satish Kumar, a Jain monk, who was then editing the magazine Resurgence in Devon, which gave him a platform in the UK. Another of the international mavericks and radicals was Bob Swann, who had been reading Schumacher’s essays in MANAS, published by fellow World War II conscientious objector, Henry Geiger, and then in Resurgence. It was Bob Swann who organized Schumacher’s 1974 tour to America, during which Schumacher asked him to form a parallel organization to Intermediate Technology Development Group – but Bob was not ready to do so. 

It was 1980, when Satish Kumar, David Ehrenfeld, Ian Baldwin, John McClaughry, and Kirkpatrick Sale asked Bob Swann and Susan Witt to form the E. F. Schumacher Society (now Schumacher Center for a New Economics) in Western Massachusetts.

Even so, these were intellectual outliers. They were hardly a majority view. So it was an act of courage and imagination which led Anthony Blond of London publishers Blond & Briggs to ask Schumacher to put together a collection of essays. It was Blond who chose the title – a quotation from Leopold Kohr, the devolution pioneer and a key influence on Schumacher (who didn’t really like it).

He had planned to use the title Homecomers to reflect the spiritual theme – and because he had been received into the Roman Catholic church in 1971. He had always intended the famous subtitle ‘Economics as if people mattered’.

Conjunctions of events are hard to understand, but it so happened that the publication at the end of May coincided with the first so-called energy crisis. In October, the Opec group of Middle Eastern oil producers decided to hike the price of oil – mainly in response to those nations which had backed Israel in the Yom Kippur war. 

The price of oil leapt four times over within days. In the UK, this led to a miners’ strike and a three-day working week; in the USA it led to the emerging speed limit going down to 55 mph. It plunged the world into recession for the first time since the Second World War.

It was enough for people to start searching for other economic opinions and other kinds of solution – and they happened upon Small is Beautiful.

It seemed to synthesize and epitomize everything that people like Barbara Ward, and other 'experts', had been saying the previous year at the United Nations. It seemed to encapsulate the environmental anxieties of a whole generation. ‘Saving the world with small talk’ was the headline of an article on Schumacher by Victoria Brittain in The Times on 2 June 1973: “Schumacher ... believes that the Western world's loss of the classical/Christian ethics has left us impoverished devotees of the religion of economic growth, heading for every conceivable kind of world disaster.  His book is a polemic for smallness, and for what he calls metaeconomic values, in which people come before profits…”

Almost overnight Schumacher became famous throughout the world. He was idolized as a guru by the California counter-culture and by a rising generation of eco-warriors, yet at the same time, he was also recognized in the Queen's Honours List, being awarded a CBE in 1974. 

By 1977, his views had become so popular and so mainstream that he was invited by President Carter for a half-hour talk in the White House. Carter was keen to be photographed holding a copy of Small is Beautiful.

By the end of that year, he was dead – from exhaustion.

What Happened Next?

Schumacher died in Switzerland on 4 September 1977. Small is Beautiful is now a classic – picked in 1995 by the Times Literary Supplement as one of the 100 most influential books since 1945.

Nearly three months later, on 30 November, a requiem mass was celebrated for Schumacher at Westminster Cathedral. During the service, Jerry Brown, Governor of California and a friend and follower of his, described him as “a man of utter simplicity who moved large numbers by the force of his ideas and personality. He challenged the fundamental beliefs of modern society from the context of ancient wisdom”.

An address was also given by David Astor, a former editor of the Observer, and the High Commissioner for Zambia read a message from President Kaunda. Other dignitaries present included the High Commissioner for Botswana, the US Ambassador and members of both Houses of Parliament.

The next day, the Times described Schumacher as a “pioneer of post-capitalist, post-communist thought” and more than made up for its earlier alleged indifference by devoting its editorial to his work.

The trouble was that, without Schumacher to be the face and voice of a new economics, all these powerful people have been unable to stop the economics juggernaut.

But there were by then a number of people who were determined not to let his message die. And so there is now a whole circle of institutions that he either founded or inspired so much that they borrowed his name to make the case again. The former include the Soil Association (where he was the chair for many years) and ITDG (now Practical Action) which he founded.

In the latter category is the Schumacher Center for the New Economics in Massachusetts – which now houses his library – and Schumacher College in Devon, the New Economics Foundation thinktank, and a number of others.

It wasn’t always easy to keep going in those difficult years under Ronald Reagan and Margaret Thatcher, when – in reaction to the failures of the old Keynesian arrangements – it sometimes seemed like the world was going backwards rather than forwards.

But debates change, and there has been progress – as we will see…