We continue our look, chapter by chapter, into our new study guide, “Small is Beautiful Revisited…50 Years On,” which revisits Schumacher’s 1973 landmark of ecological economics.
The guide makes for generative discussions, and is making its way into college classrooms, workplaces, and places of worship. All chapter guides are available on our site (plus a downloadable PDF).
As author David Boyle tells us, Chapter 2 breaks down how economists measure success, and “how their measurements are leading the world into great peril.” This pivotal insight has regretfully been obscured; today, the world is increasingly waking up to these profound implications.
Excerpts from Guide to Chapter
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… the peacefulness of man.
It could well be that rich people treasure peace more highly than poor people, but only if they feel utterly secure – and this is a contradiction in terms. Their wealth depends on making inordinately large demands on limited world resources and thus puts them on an unavoidable collision course… ”
— E . F. Schumacher, Small is Beautiful, Chapter 2
These days, Schumacher says at the start of the second chapter, everyone believes that increasing prosperity is the path to peace. On the contrary, he says:
One may look in vain for historical evidence that the rich have regularly been more peaceful than the poor, but then it can be argued that they have never felt secure against the poor: that their aggressiveness stemmed from fear; and that the situation would be quite different if everybody were rich.
Why should a rich man go to war? He has nothing to gain. Are not the poor, the exploited the oppressed most likely to do so, as they have nothing to lose but their chains? The road to peace, it is argued, is to follow the road to riches.
The problem is that there are so many comfortable reasons for believing it – it isn’t exactly that we don’t want peace – but just that it isn’t hard to accept a little more prosperity too.
The issue, says Schumacher, is that it requires nothing more from us – nothing purifying or accepting, in fact it requires no moral effort at all: “Gandhi used to talk disparagingly of ‘dreaming of systems so perfect that no-one will need to be good’. But is it not precisely this dream which we can now implement in reality with our marvellous powers of science and technology? Why ask for virtues, which man may never acquire, when scientific rationality and technical competence are all that is needed?”
He then talks about his former colleague – the man who rescued him from detention as an enemy alien in 1942 – the great economist John Maynard Keynes, and the famous essay he had written a decade earlier in the 1930s called ‘Economic possibilities for our grandchildren’. Keynes warned that the time when we can relax into our economic future isn’t yet – and that, for at least another century, we need to “pretend for a while that foul is useful and fair is not”. Or as Schumacher puts it: “The road to heaven is paved with bad intentions.”
Next, he talks about fuel requirements in 1966, and his own calculations about what the situation might look like in 2000 (this chapter was taken from an article he had written for Resurgence magazine in 1970). The chapter borrows from some of the conclusions of the previous chapter:
Exploratory calculations, of course, do not prove anything. A proof about the future is in any case impossible, and it has been sagely remarked that all predictions are unreliable, particularly those about the future. What is required is judgment and exploratory calculations can at least help to inform our judgment In any case, our calculations in a most important respect understate the magnitude of the problem. It is not realistic to treat the world as a unit. Fuel resources are very unevenly distributed, and any short- age of supplies, no matter how slight, would immediately divide the world into ‘haves’ and ‘have-nets’ along entirely novel lines. The specially favoured areas, such as the Middle East and North Africa, would attract envious attention on a scale scarcely imaginable today, while some high consumption areas, such as Western Europe and Japan, would move into the unenviable position of residual legatees. Here is a source of conflict if ever there was one…
No country can just keep on growing and growing, Schumacher concludes:
We find, therefore, that the idea of unlimited economic growth, more and more until everybody is saturated with wealth, needs to be seriously questioned on at least two counts: the availability of basic resources and, alternatively or additionally, the capacity of the environment to cope with the degree of interference implied.
Schumacher uses the term GNP, whereas, mainly these days, most authorities use GDP – as they have done since 1991. The main difference between the two is that GNP (gross national product) measures everything (sometimes more than once!) and GDP (gross domestic product) measures the value of the total output of the national economy, but not – for example – the value of citizens living abroad and their businesses:
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 Gross National Product may rise rapidly: as measured by statisticians but not as experienced by actual people, who find themselves oppressed by increasing frustration, alienation, insecurity, and so forth. After a while. even the Gross National Product refuses to rise any further, not because of scientific or technological failure, but because of a creeping paralysis of non-co-operation, as expressed in various types of escapism on the part, not only of the oppressed and exploited, but even of highly privileged groups.
Then he concentrates on the non-materials elements of his argument.
Because Keynes said that universal prosperity isn’t attainable unless we keep our idealism muted, because“foul is useful”, then how can prosperity lead to peace, he asks?
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.”
That means, says Schumacher, that we have to study the “economics of permanence”. We need to“re-orientate around wisdom”: “There can be growth towards limited objectives, but there can’t be unlimited, generalized growth.”
So, what do we need from scientists and technologists, asks Schumacher? His answer is that we need methods and equipment which are:
- Cheap enough so that they are accessible to virtually everyone.
- Suitable for small-scale application; and
- Compatible with man’s need for creativity.
The final one on this list may be the most interesting because it is so reminiscent of the Victorian art critic John Ruskin who, in his book Unto This Last, famously named the opposite of wealth as ‘illth’, and warned that there were circumstances – even in 1860, when it could overwhelm wealth. Needless to say, illth is not a term modern economists use.
Ruskin is said to have influenced Catholic Social Doctrine – via Cardinal Manning and Pope Leo XIII – so we should not be surprised at this point to find Schumacher quoting Leo’s successor, Pope Pius XI, about the critical importance of meaningful work (more on this in Chapter 4):
How could we explain the almost universal refusal on the part of the rulers of the rich societies – whether organized along private enterprise or collectivist enterprise lines – to work towards the humanization of work? It is only necessary to assert that something would reduce the ‘standard of living’, and every debate is instantly closed. 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.
Then he finishes: “Only by a reduction of needs can one promote a genuine reduction in those tensions which are the ultimate causes of strife and war.”
Schumacher then draws his conclusion, which is to find the permanent aspects of ourselves, and to build on them:
They 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 nation against nation, because man’s needs are infinite and infinitude can be achieved only in the spiritual realm, never in the material. Man assuredly needs to rise above this humdrum ‘world’; wisdom shows him the way to do it; without wisdom, he is driven to build up a monster economy, which destroys the world, and to seek fantastic satisfactions, like landing a man on the moon. Instead of overcoming the ‘world’ by moving towards saintliness, he tries to overcome it by gaining pre-eminence in wealth, power, science, or indeed any imaginable ‘sport’…
“I think Gandhi has given the answer: ‘There must be recognition of the existence of the soul apart from the body, and of its permanent nature, and this recognition must amount to a living faith… in the last resort, nonviolence does not avail those who do not possess a living faith…