We continue our chapter-by-chapter look at our refreshed study guide, “Small is Beautiful Revisited…50 Years On,” reexamining Schumacher’s 1973 landmark of ecological economics in light of our own time. The guide has been sparking generative discussions in college classrooms, workplaces, and circles of contemplation. (Each chapter guide is available on our site in addition to a full downloadable PDF.)
Chapter 8 concerns economic growth, and limits to growth on a finite planet. Schumacher deals first and foremost with oil, shortages of which dominated the headlines of the day. He takes the U.S. model of development to task for its unrestrained consumption and plundering of the world’s finite resources. Our guide David Boyle considers where this line of critique has arrived in our present moment, when the limits of growth appear to strain the global economy as never before.
Excerpt from the Guide to Chapter 8
“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.”
— E. F. Schumacher, Small is Beautiful, the opening lines of Ch. 8
“What Schumacher missed is that petroleum may be replaceable by renewables such as hydrogen fuel cells, and that water is probably more limiting than oil in any economic model. Water is the future natural capital of most import and does not appear in his book.”
— Peter Warshall, biologist, anthropologist and former editor of Whole Earth Review, 25th anniversary book, Hartley & Marks, 1999
This topic had clearly been irritating Schumacher for ages, since the chapter was taken from a report he had written for the National Coal Board, back in 1961.
Schumacher had worked as economic advisor to the nationalized coal industry in the UK for about 20 years before Small is Beautiful. Given that mining has now died out almost completely in the UK, some of this might make this chapter seem a little bit out of date. Margaret Thatcher’s government took on the mining unions in 1984 – and after showing extraordinary courage and sense of community, the mineworkers went back to work. Except that most mining has stopped for most of them in the years that followed.
This might go some way to explaining why Schumacher is so keen on burning coal in this book – because nobody really understood global warming when he was writing.
What the Chapter Says
Schumacher talks about materials needed for American industry. The mid-1970s must have been the high tide of American imports, as it was the predominant destination of global trade. Then he wrote:
“All the same, the industrial system of the United States cannot subsist on internal resources alone and has therefore had to extend its tentacles right around the globe to secure its raw material supplies. For the 5-6% of the world population which live in the United States require something of the order of 40% of the world’s primary resources to keep going.
Whenever estimates are produced which relate to the next 10, 20, or 30 years, the message that emerges is one of ever-increasing dependence of the United States economy on raw material and fuel supplies from outside the country. The National Petroleum Council, for instance, calculates that by 1985 the United States will have to cover 57% of its total oil requirements from imports, which would then greatly exceed – at 800 million tons – the total oil imports which Western Europe and Japan currently obtain from the Middle East and Africa.”
Nor does he mince words about American lifestyles:
“An industrial system which uses forty per cent of the world’s primary resources to supply less than six per cent of the world’s population could be called efficient only if it obtained strikingly successful results in terms of human happiness, well-being, culture, peace, and harmony. I do not need to dwell on the fact that the American system fails to do this, or that there are not the slightest prospects that it could do so if only it achieved a higher rate of growth of production, associated, as it must be, with an even greater call upon the world’s finite resources…”
In the chapters in this section, his technique mainly just reaches for a hapless scientist or economist to demonstrate what we’re up against. In this case, it is Professor Walter Heller, who Schumacher describes, somewhat patronizingly, as a former chairman of the President’s Council of Aluminium Economic Advisers – but he was in fact a leading economist in the early 60s – he invented the Johnson administration’s ‘War on Poverty’. Heller says:
“I cannot conceive a successful economy without growth.”
Then Schumacher cuts to the essence:
“But if the United States’ economy cannot conceivably be successful without further rapid growth, and if that growth depends on being able to draw ever-increasing resources from the rest of the world, what about the other 94 per cent of mankind which are so far ‘behind’ America?”
This is a terrifying vicious circle. So that:
“If a high-growth economy is needed to fight the battle against pollution, which itself appears to be the result of high growth, what hope is there of ever breaking out of this extraordinary circle?”
Especially given that, every time the circle goes around, you find there are fewer resources and raw materials to distribute.
Continue to Guide to Chapter 8
To explore beyond the writing of E.F. Schumacher, visit our new Decentralism File: featuring 120+ heuristic selections of decentralist thought spanning 2,500 years.