New Economy Emerging

Fritz at his desk in 1974, from “The Other Way” by John M. Mansfield

In September of 2011 the European Spirituality in Economics and Society Forum convened “Responsibility in Economics and Business: The Legacy of E. F. Schumacher” in Antwerp, Belgium—one of many events marking the Centennial of Schumacher’s birth. We have posted keynote talks by Simon Trace, Barbara Wood, Susan Witt, and Stewart Wallis on our website.

SIMON TRACE, Executive Director of Practical Action, spoke on “Responsibility in Technology.”

Schumacher’s essay ‘Buddhist Economics’ was, I would argue, fundamentally about two things: Firstly it was about putting human wellbeing and not growth as the central concern of development.  Secondly it was about finding a path to a new equilibrium—a rebalance of our efforts at technological innovation away from meeting the ‘wants’ of consumerism towards meeting the basic needs of the two billion people in this world who still live in abject poverty as well as a better recognition of the rights of future generations alongside those of our own.

Those ideas have stood the test of time and are as relevant today as they were 40 years ago. Our responsibility to current and future generations must be to put human well-being back as the central purpose of economics and development. But in doing this we need to heed Schumacher’s challenge to create an economics that makes contact with the human realities of poverty, frustration, alienation, and despair.  We therefore need to make sure that our definition of well-being goes beyond people’s material concerns (for food, shelter, access to basic services such as water and energy, education and health, and an income to pay for all of this) and includes also critical relational aspects of well-being (a sense that you as an individual have a degree of control and power over your own life, that you can be a part of decisions that have a major impact on the way you live, that you can live in dignity, that you have the respect of your fellow citizens, and that you can live in peace with your neighbors).

SUSAN WITT, Executive Director of the Schumacher Center for a New Economics, addressed the topic, “Informed by Place, Guided by Wisdom: A New Economy is Emerging.”

The new economy that Schumacher took responsibility for promoting is visible today in towns and villages around the world, spearheaded by citizen groups determined to build vibrant, sustainable, local economies.  They recognize that change is inevitable.  They wish their communities to be resilient in the face of climate change and global financial collapse.  They are taking steps to forge alliances of producers and consumers working together to shape a common future . . . .

Those organizing the annual BerkShares Bike-a-Thon have a message for their city, their country, and for the Congress of Nations that will gather in Rio in June. It is a message first spoken by the man we are honoring today, who planted its seeds:  ‘It is time to change our priorities and forge a new economy that will slow environmental degradation, provide a living wage to workers, and foster greater well-being for all.’

The farmer working with neighbors to restore the integrity of her fields at the Intervale following the devastating rains of the recent hurricane shares in that appeal. The residents of the Ninth Ward in New Orleans, building their homes on land now a permanent part of the community, add their support. Those who have found new jobs in Bridgeport, with their Westport friends standing beside them, raise their held hands in affirmation.

Their voices will be heard, joined in chorus.  A new economy, a next economy, a green economy, a responsible economy, is emerging.

STEWART WALLIS, Executive Director of the New Economics Foundation (NEF) spoke on “A Great Transition: Why there is an urgent need to transform economic thinking and practice and our responsibility to lead this transformation.”

About five years ago we [NEF] calculated how much the global economy would need to go up if those who are now living on one dollar a day were to have an additional dollar. You need to raise the GDP of the whole world by $166 xxxx a day to in order to add one more dollar for each person now earning one dollar a day. It’s ecologically impossible to keep doing that. If you want to have everybody on the planet earning $1000 a year, which is $3 a day, and you keep global income distribution as it is and keep the resource intensity of output as it is, you need fifteen planets’ worth of resources in order for everybody in the world to make $1000 a year. We haven’t got fifteen planets. So the need for transition is overwhelmingly clear when you start looking at these simple facts that can be figured out on a slip of paper.

BARBARA WOOD, daughter of Fritz Schumacher and his biographer, spoke of the transition in her father’s thinking in her talk, “In Honour of E. F. Schumacher.”

He started to ask new questions: What is man? What is the purpose of life? How does economics help in fulfilling that purpose? These were not easy questions for him to answer. For the first half of his life he had dismissed such philosophical questions as irrational and unscientific. Honesty now required that he gave them attention.

The final moment I want to mention is his visit to Burma in 1955 as an economic adviser with the UN. Again he observed carefully and reflected on what he saw and experienced. The Burmese seemed to be so happy. (It was a very different place from the Burma of today). There he saw that western economics was not adding to the happiness of the Burmese, but rather the reverse. It was making them want things they did not need. It dawned upon him that economics was not a science independent of values: what the economist believes to be the meaning and purpose of life is also relevant because it determines the kind of economics he or she will pursue. He wrote: ‘I came to Burma a thirsty wanderer and there I found living water.