OLD BOOKS, Part II: Small Is Beautiful: Economics as if People Mattered, by E. F. Schumacher

Confession: I have never studied economics—until now. 

E. F. Schumacher’s Small Is Beautiful: Economics as if People Mattered (1973) ought to be a required text, not just for those studying economics, but for students of all disciplines, teachers, ecologists, politicians and policy makers, religious leaders, laypeople, and basically anyone who cares about humans and life on this planet. (Does Small Is Beautiful appear on any syllabi anymore? If any of you assign it or had to read it for a course, I’d love to know.)

Another confession: I am only about halfway through this book. I had intended on writing about a different book for this post, but kept coming back to this one. I already have pages and pages of notes. (I may have to return to this book at the end of the series, for a Small Is Beautiful, Part 2—but no promises.)

In this series on Old Books, I’m choosing books with these questions in mind:

What questions do they answer?

What problems do they correctly diagnose?

What wisdom do they provide that is lacking in today’s discourse?

What metaphysics do they propose or expose?

In light of these questions, Small Is Beautiful is more relevant today than when it was first published. It speaks to why—with the whole world at our fingertips and luxuries that have become “necessities” all around us—we are more depressed, anxious, and isolated than ever. It explains why we are suffocating in information, entertainment, complexity, and technology, all while we are driving the earth itself toward an existential cliff. It correctly diagnoses some of the problems—especially meta-issues such as how globalization and “technocracy” are dehumanizing us. It reveals how beneath it all lie metaphysical assumptions that lead to actionable value judgments with far-reaching consequences. It provides wise, to-scale models of human society that can actually lead to flourishing of human life and the environment. And it insists that undergirding everything—even economics—are metaphysical questions and concerns that can no longer be ignored.

Economists generally don’t appreciate this being pointed out. They prefer to think of their field as a “neutral” science. It isn’t. Schumacher says, “Economists…normally suffer from a kind of metaphysical blindness, assuming theirs is a science of absolute and invariable truths, without any presuppositions.” As an illustration, he contrasts modern Western economists’ measuring “standard of living” by the amount of annual consumption with the Buddhist view that equates a good standard of living with maximizing well-being and minimizing consumption. These are value judgments.

Schumacher argues we need a reorientation toward the guiding values of health, beauty, and permanence, all of which have at their center of consideration actual human beings: our lived reality, our happiness, our environment, and healthy societies.

Schumacher says things out loud that still make many people—particularly Western economists and politicians—squirm.

Quotes from the Book

On dehumanizing work

“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 the 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.” 

On Production

“To say the least—which is already very much—we must thoroughly understand the problem and begin to see the possibility of evolving a new life-style, with new methods of production and new patterns of consumption: a life-style designed for permanence.”

On Peace and Wisdom

“An attitude to life which seeks fulfillment in the single-minded pursuit of wealth—in short, materialism—does not fit into this world, because it contains within itself no limiting principle, while the environment in which it is placed is strictly limited.”

“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 roundedness 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.”

“No one is really working for peace unless he is working primarily for the restoration of wisdom.” 

“Wisdom demands a new orientation of science and technology towards the organic, the gentle, the non-violent, the elegant and the beautiful.”

On Buddhist Economics

            (Schumacher stated that his choice of Buddhism was incidental; that “the teachings of Christianity, Islam, or Judaism could have been used just as well as those of any other of the great Eastern traditions.”)

Western economists’ view of labor: “From the point of view of the employer, it is in any case simply an item of cost, to be reduced to a minimum if it cannot be eliminated altogether, say, by automation. From the point of view of the workman, it is a ‘disutility’; to work is to make a sacrifice of one’s leisure and comfort, and wages are a kind of compensation for the sacrifice.” 

Versus a Buddhist point of view: “[T]o organize work in such a manner that it becomes meaningless, boring, stultifying, or nerve-wracking for the worker would be little short of criminal; it would indicate a greater concern with goods than with people, an evil lack of compassion and a soul-destroying degree of attachment to the most primitive side of this worldly existence.”

On the Role of Economics

            (Schumacher argues that economics should not be the primary consideration in measuring national or civic health and prosperity or in determining policy.)

“If greed were not the master of modern man…. [h]ow could we explain the almost universal refusal on the part of the rulers of the rich societies—whether organized along the private enterprise or collectivist enterprise lines—to work towards the humanisation of work?”

“Call a thing immoral or ugly, soul-destroying or a degradation of man, a peril to the peace of the world or to the wellbeing of future generations; as long as you have not shown it to be ‘uneconomic,’ you have not really questioned its right to exist, grow, and prosper.”

“It is a strange phenomenon indeed that the conventional wisdom of present-day economics can do nothing to help the poor.”

On Education

 “The leading ideas of the nineteenth century [see below], which claimed to do away with metaphysics, are themselves a bad, vicious, life-destroying type of metaphysics. We are suffering from them as from a fatal disease….The errors are not in science but in the philosophy put forward in the name of science.”

Six big ideas in education today, from 19th Century:

  • Evolution—now applied to all aspects of reality, not just animal kingdom
  • Natural selection / Survival of the Fittest
  • Marxism—whole of human history is class struggle
  • Freud—all of human interaction is reduced to ego/id/sex obsessions/repressions
  • Relativism—denial of all absolutes
  • Positivism—only valid knowledge is obtained through natural sciences (observable facts)

All Six Ideas have in common:

  • Non-empirical, metaphysical narrative
  • All previously assumed “higher order” is nothing but subtle manifestation of lower

Re: desire to “rebuild” other disciplines after pattern of physical sciences: “As a consequence, metaphysics and ethics had to be either ignored or, at the least, replaced by new positive sciences; in either case, they would be eliminated. A very dangerous move indeed, which accounts for the perilous position in which western culture finds itself.” (Etienne Gilson, quoted in Schumacher)

“The most powerful ideas of the nineteenth century, as we have seen, have denied or at least obscured the whole concept of ‘levels of being’ and the idea that some things are higher than others”; this has led, therefore, to the destruction of ethics (or, more to the point, to a bad metaphysics and “appalling ethics”). 

“If they are not true to reality, the adherence to such a set of ideas must lead inevitably to a disaster.”

On Proper Use of Land

“Conversely, where people imagined that they could not ‘afford’ to take care of the soil and work with nature, instead of against it, the resultant sickness of the soil has invariably imparted sickness to all the other factors of civilisation.” 

Three tasks of agriculture:

  1. Keep man in touch with living nature (of which he is a highly vulnerable part)
  2. Humanize & ennoble man’s wider habitat
  3. Bring forth foodstuffs and other materials needed for “a becoming life”

“[L]arge-scale mechanisation and heavy chemicalisation…[make] it impossible to keep man in real touch with living nature; in fact, it supports all the most dangerous modern tendencies of violence, alienation, and environmental destruction. Health, beauty, and permanence are hardly even respectable subjects for discussion, and this is yet another example of the disregard of human values—and this means a disregard of man—which inevitably results from the idolatry of economism.”

“All this is being done because man-as-producer cannot afford ‘the luxury of not acting economically’, and therefore cannot produce the very necessary ‘luxuries’—like health, beauty, and permanence—which man-as-consumer desires more than anything else.”

“In fact, any society can afford to look after its land and keep it healthy and beautiful in perpetuity. There are no technical difficulties and there is no lack of relevant knowledge.”

“Since there is now increasing evidence of environmental deterioration, particularly in living nature, the entire outlook and methodology of economics is being called into question. The study of economics is too narrow and too fragmentary to lead to valid insights, unless complemented and completed by a study of meta-economics.”

My Response

I find myself drawn to writers and thinkers who ask neglected questions. Small Is Beautiful took the world by storm when it was first published because it dared to ask questions the world, to its peril, was ignoring. And its author had the credentials (see linked bio below), common sense, and wisdom to ensure he could not be ignored.

Schumacher writes that economists (among other leaders) have been unwilling or unable to ask, let alone attempt to answer, questions like, “Is this GDP growth good or bad, and for whom?” or to consider whether economic growth can actually be pathological, unhealthy, and destructive. He exposes the bare value judgment that economic growth is always good. And he skillfully demonstrates that it is not. 

He forces us not to look away from the reality we’ve created, asking “Is this really the life we want for humanity?” and “How long can we avoid catastrophe if we pretend that finite resources are infinite?” and “What can we do about it?” 

Kamrad Mofid writes, “The remedy he proposed—a holistic approach to human society, which stressed small-scale, localised solutions—flew in the face of economic orthodoxies of the time: ‘I have no doubt that it is possible to give a new direction to technological development, a direction that shall lead it back to the needs of man, and that also means: to the actual size of man. Man is small, and, therefore, small is beautiful.’”

Schumacher explains that he does not deny a place for large-scale operations, but he rightly diagnosed that “gigantism”—economics, development, and technology applied at too large of a scale—has become the order of things and is not conducive for the actual scale and health of individual human lives and the smaller societies in which we live.

Schumacher’s economic ideas are placed within the context of greater meta-questions, such as What is Education? What is Wisdom? What actually makes us happy and leads to our well-being? What kind of life can we actually sustain on this earth? If it seems odd to you that he would tackle those questions in a book “about economics,” all I can say is, read the book! He understood that considering these questions was crucial for our historical moment. The Center for New Economics explains Schumacher’s understanding of our context this way:

 “Historically, he noted, we are at the end of three distinct eras—first a Descartian informed world view which valued what was known through the senses above spiritual knowledge and encouraged an accumulation of things as a path to happiness; second a sociological system shaped by the industrial revolution’s division of labor which led to the degradation of the human being; and third an economic system driven by a belief in infinite resources and quick technological fixes, resulting in a ravaged eco-system.

As these old eras draw to a close, bankrupt, he went on, we need to regain a traditional understanding of what is good, true, and beautiful and so inform our actions to build a new era that acknowledges the wholeness of life. It is not a single-issue crisis that we face—not just an energy crisis, not just a nuclear crisis, not just an ecological crisis or sociological or political or cultural—our whole way of life is at stake and solutions must be developed and implemented simultaneously at many levels. He calls on the audience to first work to foster a new world view in themselves, diagnose what can be done, see if others are already engaged in that rebuilding work and support them, and then act themselves, if even in a small way.”

Though Schumacher’s work was pivotal in the rise of the environmental movement and in new thinking about development and global justice issues, I fear we haven’t fully reckoned with the truths he made us see. And one of those primary truths is that the current Western understanding of economics enslaves and dehumanizes us. Pope Francis addressed an aspect of this and imagined a different way forward when he said:

“Labour is not merely a factor in production that, as such, has to adapt to the needs of the production process to increase its efficiency. On the contrary, it is the production process that must be organized in such a way as to enable the human growth of people and harmony between time for family and working life.” 

(From “Towards a Participatory Society: New Roads to Social and Cultural Integration”, 28 April – 2 May 2017)

Author and thinker Sohrab Ahmari writes about “epochal” mistakes, encouraging us to begin to imagine how we might go about correcting those mistakes by changing our worldview, by rediscovering “new” old ways of being in the world (The Unbroken Thread: Discovering the Wisdom of Tradition in an Age of Chaos, Convergent Books, 2021).

Wendell Berry, a thinker and writer very much in accord with Schumacher’s vision, says we need to be reminded that as human beings we are “neither beasts nor gods”—that we need to understand our position in the wider “chain of being,” reckoning with the disastrous consequences that arise when we see ourselves as either gods or beasts (from Standing by Words: Essays, a book I will be discussing in another post in this series). 

A world in which economics is the primary factor of consideration in determining progress and human flourishing is pathological, according to Schumacher. Living as if our foundational truth is the maxim “It’s the economy, stupid!” literally makes us stupid. It leads to a flattening of human lives, souls, and society and a reduction in our understanding of the dimensions in which humans live.

Small Is Beautiful was initially published to great acclaim, becoming an international best-seller. Written in a spirit of hope and against despair, it is eminently practical. Schumacher’s head was not in the clouds. What would happen if millions of human beings around the world read this book and began working toward a new path forward, a path designed around human beings and the scale at which we can actually live healthy lives? 

Upon his death (1977), his friend Barbara Ward wrote the following in a tribute published in The Times (London): “To very few people, it is given to begin to change, drastically and creatively, the direction of human thought. Dr. Schumacher belongs to this intensely creative minority and his death is an incalculable loss to the whole international community.”

I’ll give Schumacher the final word: 

“If [economic thinking] cannot get beyond its vast abstractions, the national income, the rate of growth, capital/output ratio, input-output analysis, labour mobility, capital accumulation; if it cannot get beyond all this and make contact with the human realities of poverty, frustration, alienation, despair, breakdown, crime, escapism, stress, congestion, ugliness, and spiritual death, then let us scrap economics and start afresh.”

Others on Schumacher and Small Is Beautiful:

Brief bio of Schumacher.

For a summary of key ideas in the book, click here. (But I beg you, DON’T let this summary make you satisfied with skipping the book. I hope you will encounter Schumacher’s practical sense, examples, wisdom, and scope and depth for yourself.)

The Guardian on Small Is Beautiful.

Sustainable Review article on Small Is Beautiful.

Go to OLD BOOKS Part III: Standing by Words, by Wendell Berry

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