Publications / Responsibility in Economics and Business Conference

Informed by Place, Guided by Wisdom, A New Economy is Emerging

The following remarks were made for the conference “Responsibility in Economics and Business: The Legacy of E. F. Schumacher” convened by the European Spirituality in Economics and Society Forum.

It was the 1960s, and a German-born British economist, Fritz Schumacher, could have remained comfortably respected as a smart but conventional economist.  But he started having concerns.  He saw lorries loaded with Scottish biscuits travelling the roads and using precious fossil fuels to deliver their packages to English shops.  And he saw lorries travelling back loaded with English biscuits for Scotland.

He saw villages in India and Burma where the gross national product, the accepted measure of economic success for nation-states, failed to measure the degree to which these villages were producing and trading within the local economy.  The GNP also failed to measure the degree of security and well-being that such “mutual aid” gave to its inhabitants.

He saw a brick factory in India, designed on the scale of Western industries, sitting empty because there had been no thought given to the need for roads suitable for transporting the bricks from the factory to the villages where they would be used.  And he watched, instead, how a simple technology was used to build bricks on site from local materials in the very villages that would have been customers of the brick factory.

Schumacher knew he must take responsibility for what he saw.  He could no longer speak for an old economics but must help shape a new economics that advanced the concepts of appropriate scale, right livelihood, complexity, diversity, ecological integrity, fair wages, and what he termed “intermediate technology.”

He was an economist, yes.  And his arguments for a new economics are economic arguments, but he was also a universal thinker.  His library of books and papers, entrusted to the care of the Schumacher Center for a New Economics by his family, is not a library of economic texts but rather a library of the great works of all the world’s religious and philosophical traditions.  Notes in the margins of each book indicate favorite passages or posed questions.

It was the reading of these stories that grow from the wisdom of the ages, these lasting texts, texts that address questions about the meaning of life and the role of conscious beings on— it was the reading of these books that led him to take responsibility for what he saw in his own countryside and in the villages of developing countries which he visited.  He took responsibility to articulate what he saw as the need for a new economics, an economics as if people mattered.

This was a risk, certainly.  There were no jobs for a new economist, no journals for which to write, no academic posts.  He had both an old and a new family to support, but they loved him in part for his vision, for his capacity to translate universal concepts into examples from daily life and experience.  They supported him in his mission to develop a responsible economics.

He wrote about what he saw in a series of essays that found publication in a small British magazine, Resurgence, then edited by John Papworth, and in the equally small Manas Journal in the United States.  Those who read the essays heard a new voice—not just a voice of criticism but a voice creating the image of an economics embedded with values, embedded with our best hopes for the earth and one another.

Amongst his readers was Robert Swann—a carpenter, a war resister, and out of necessity and self-training a community economist.  Bob recognized that if we were to build a world at peace, then our global commons—our land, air, water, minerals— could not be commodities traded on the market to the highest bidder, breeding conflict over access.  A new tenure allocation system must be found.  He knew that the power of issuing currencies should not reside in nation states, which could then issue indiscriminately to support the waging of war, the tyranny of ideas, and the bloating of bureaucracy.

Land reform and monetary reform were only two parts of a bigger economy of peace. How to weave them into a fuller vision that could be implemented? Bob found in Schumacher’s essays the framework he was seeking and invited Schumacher to the states for the now famous 1974 trip to promote Small Is Beautiful, a book of his collected essays.

It was the oil crisis of 1974.  Many young persons seeking solutions to a newly perceived environmental crisis and growing economic crisis came to hear him speak. It wouldn’t happen immediately, this forging of a new economy, but a seed was planted by those talks.

Planted in people like Will Raap, who, after hearing an address by Schumacher, left his graduate work in economics at Berkeley to form a company that would provide tools and education for people to grow their own food — encouraging better nutrition and building community economic resilience. That company is Gardener’s Supply, now an employee-owned enterprise.

At work in his community in Vermont, Will saw things that needed doing.  He had an image of what was possible to make the land more productive, to train a generation of new farmers, to educate citizens about the value of food grown locally and responsibly, to build renewable energy systems for powering its production, to create affordable housing for those who worked the land, to create financing vehicles that connect consumers and producers in relationships of mutual trust and respect. But the image alone would not have led to the doing, just as the image of a new economics alone would not have made Schumacher a tireless advocate for its implementation.

Something else was needed for the vision to be translated into action; something else was needed to move from seeing a need to taking responsibility for addressing it.  For Schumacher it was, I believe, the combination of a deep commitment to recognized universal truths and compassion for the people he saw in the small villages he visited and in his hometown in Surrey, where he kept an organic garden and reflected.

For Will, I believe, although the universal wisdom was a powerful influence, the stronger voice was of the Vermont hills, the beauty of Lake Champlain, the open fields that run into the lake, the people he met daily in shops and banks and in the schoolyard waiting for their children.  Not sentimental —that would spoil it — but a clear-eyed seeing that serves as a mandate for action.

Others like him heard Schumacher speak during his travels.  They stored the ideas, reflected on them, built skills, worked in their own communities, and little by little the ideas re-emerge, informed by allegiance to place, and are transformed into actions.

That new economy that Schumacher took responsibility for promoting—though he would credit Leopold Kohr and J. C. Kumarrappa for articulating it before him—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.

In the United States the new economy is evident in the Berkshire region of Massachusetts, where a citizen-issued local currency is traded at 13 braches of five local banks.  Where 3.2 million BerkShares have gone out in circulation, supporting the small locally owned businesses that accept them for repairing driveways, pruning apple trees, filling out tax returns, straightening teeth, hosting a dinner, or arranging a funeral.  BerkShares are identifying where the leaks are in the economy so that new import-replacement businesses can get started.

It is seen at the Intervale in Burlington, Vermont, a 350-acre site, once home to a slaughterhouse, a pig farm, and multiple dairies, then abandoned and used as an illegal dump site.  In an initiative led by Will Raap, citizens removed trash, collected leaves and food stuffs, and created gigantic composting piles to restore the land. The Intervale is now home to multiple mini-farms where a new generation gains skills in growing food, shares equipment, and markets produce together. As a result of the Intervale and related projects, over 20 percent of Burlington’s fresh food is grown in Burlington.  Astonishing for a Northeast city.

The new economy is visible in New Orleans, where citizen-led community land trusts, first modelled by Bob Swann, are gathering land abandoned after the levees broke, saving it from speculators, and ensuring that it is leased back on affordable terms to folks who plan to build their own homes and be part of the permanent work force of the area.

It appears in Albuquerque, New Mexico, where La Montanita Food Coop realized it has to be part of the solution for supporting farmers and food processors and food storage facilities if the region is to become more food self-reliant.  So it created a fund to collateralize loans, based on likelihood of repayment, that the bank would not normally make.

And in the well-to-do town of Westport, Connecticut, where an equity fund manager, Dan Levinson, and a group of friends founded Green Village Initiative to install vegetable gardens at the public schools and give back to their community.  Inspiring broader action and greater participation, GVI then went on to save and restore a town farm, turning it into an environmental education center.  Enjoying their work together, confident now that they can make change, GVI members brought their ideas and financial skills to nearby Bridgeport, which has a different demographics and a struggling economy.  Partially through grants, partially through investment funds, they are starting new businesses that create jobs, build skills, and turn workers into owners.

Each one of these local projects that is taking responsibility for putting ideas into action sets a standard of possibility that others see.  In neighborhoods, communities, and regions around the world, tens of thousands of projects are in motion, winning respect and fostering replication. Together they are weaving the fabric of a new economy.

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—it will be had.  The nations of the world can stand by or can help by making it easier for communities to issue their own currencies, process their own foods, site their import replacement businesses.

A movement is building.  Not by chance.  Not by default.  But informed by love of place and guided by wisdom that spans ages, citizens are taking responsibility to put ideas into practical action.  A new economy is emerging.
Thank you.


Publication By

Susan Witt

Susan Witt is the Executive Director of the Schumacher Center for a New Economics, which she co-founded with Robert Swann in 1980. She has led the development of the Schumacher Center’s highly regarded publications, library, seminars, and other educational programs, which established the Center as a pioneering voice for an economics shaped by social and ecological principles. Deeply engaged … Continued

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