We continue our chapter-by-
Having made in earlier chapters a thorough critique of conventional economics in theory and in practical application, Schumacher in Chapter 15 returns to the metaphysical root of the issues. Dealing with weighty questions of truth, future forecasting, and the character of economics as a field of knowledge, our guide David Boyle notes how “Schumacher anticipates a great deal of the very current debate about AI.”
In Fritz’ own words: “Economics, and even more so applied economics, is not an exact science: it is… or ought to be, something much greater: a branch of wisdom.”
ACCESS THE GUIDE
Excerpt from the Guide to Chapter 15
“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. People talk freely about ‘machines to foretell the future’. Are not such machines just what we have been waiting for? Ah men at all times have been wanting to know the future.”
— E. F. Schumacher, opening lines of Ch. 15
“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 Center for a New Economics… reflects this understanding. The economic 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 with talk of a “machine to foretell the future” to make a point about modern life’s missing metaphysical perspective.
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 calls this “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?”
Staying on the theme of free will in the universe, Schumacher takes a moment to ponder the question in theological terms, considering God’s creation of the universe. He concludes that neither making everything predictable, nor completely random, would allow any scope for human freedom of choice.
The key question for us is whether we have the wisdom to tell the difference.
“Endless confusion results from the semantic muddle in which we find ourselves today. 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 of the chapter, and (2) 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’.
“They know how to do a few big things in big towns; but do they know how to do thousands of small things in rural areas? They know how to do things with lots of capital: but do they know how to do them with lots of labour — initially untrained labour at that? On the whole, they do not know; but there are many experienced people who do know, each of them in their own limited field of experience. In other words, the necessary knowledge, by and large, exists; but it does not exist in an organized, readily accessible form. It is scattered, unsystematic, unorganized and no doubt also incomplete.”
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.”
At this point, Schumacher anticipates a great deal of the very current debate about AI. It is fair to say that he is skeptical 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 and draws some conclusions.
“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.”
“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’.”
CONTINUE TO ‘WHAT HAPPENED NEXT?’
In the second part of this chapter guide, David Boyle dives into the question of why so few thinkers have followed Schumacher into as thorough a condemnation of the impulse to quantify social problem-solving. Has the world “become obsessed with measurement, or blips on a computer screen” he asks, “that it is simply too serious for anyone to step out of line?”
In Community,
Staff of the Schumacher Center