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Small Is Beautiful: Economics as if People Mattered

Small Is Beautiful: Economics as if People Mattered - E.F. Schumacher “A Study of Economics as if People Mattered” is the tagline for Small is Beautiful but don’t think this is a boring book on supply and demand. Schumacher doesn’t focus on economics as we traditionally think of the subject, but rather, on how we think about economics, business, and what is right. He challenges the assumption that bigger is always better on a multitude of levels and has made such logical and persuasive arguments as to propel this work to the status of a classic.

So what exactly does Schumacher have to say about our economic, social, and political systems? First of all, he believes that size is everything because, the larger the size of any private enterprise, the greater impersonality, insensitivity to human needs, and reach for even greater power. As an alternative, small systems allow for freedom, creativity, sustainability, and even morality. The modern world measures progress by a simplistic and unrealistic one-dimensional meter. Profit is the only factor used to gauge success, without any attention paid to human and environmental costs, morality, truth, social factors, and more. His main belief is that “[man] is small, and, therefore, small is beautiful. To go for giantism is to go for self-destruction.” This pattern of self-destruction on the road to what appears bigger and better repeats itself over and over in Schumacher’s discussion of everything from business to the environment to international aid.

Schumacher directs plenty of attention to our consumption of non-renewable resources. We fail to wisely categorize capital into two sets of camps: natural vs. man-made and renewable vs. non-renewable. In failing to do so, we mistakenly assign profit value to natural resources instead of capital value. We treat these resources, particularly fossil fuels, as though they were a limitless creation at the hands of man. Schumacher argues that, were we to conceptualize these as the natural capital items they are, we would do everything in our power to conserve them, irreplaceable as they are. Instead, we rely on them more and more with each coming year and have set ourselves on a collision course for disaster, as there will inevitably come the day when we have sucked all of our non-renewables completely dry and we’re unable to maintain our methods of feeding ourselves, housing ourselves, and simply living our lives. Schumacher argues that we need to recognize the dangers of this future now but, more importantly, we have to stop talking and start acting now. We can’t afford to start employing sustainable lifestyles once our fossil fuels are eliminated – we need to change our lifestyles today.

Small is Beautiful also looks at our conceptions of peace, its origins and its attainability. Greed and envy drive men today in such a way as to make peace virtually impossible. Vice blinds us to the most essential of human problems, while driving up those one-dimensional measures of success, like Gross National Product (GNP). We think that simply increasing government involvement, doing more research, and employing more complicated technologies will all, eventually, cure social ills. Schumacher argues that greed, envy, an the expansion of needs are all destructive to the very foundations of peace, namely happiness, intelligence, and serenity. Universal prosperity will not yield peace as so many of us like to believe. Peace will only be discovered when man decides to search for wisdom, to seek goodness and virtue. And this is where Schumacher’s argument against one-dimensional economics really shines. Without an eye to wisdom, spirituality, and truth, economics, science, and technology will fail to create fruitful, appropriate, and lasting solutions to the reality of our world’s very human problems. “Systems are never more or less than incarnations of man’s most basic attitudes.” Without changing our attitudes, ending our idolization of material goods, avoiding greed and envy, and valuing peace, charity, and kindness, we cannot hope to create a peaceful and fair system, economic or otherwise.

I could draft dozens of posts on Schumacher’s work and still not cover all the wise, innovative, and inspiring arguments that he brings to the table in favor of downsizing. Instead, I’ll offer a brief listing of all the topics touched upon in this dense 3128-page volume.

The benefits of small-scale enterprise
Buddhist economics
The irreconcilability of infinite material progress within a finite world
The limitations of science as a producer of ideas by which to live
The essential differences between agriculture and industry that make the two incompatible
The need to move away from mass production in lieu of production by the (currently unemployed) masses
The need to direct aid toward education, knowledge, experience, and other sustainable, intellectual goods
How to combat the disintegration of rural life and mass migration to poverty-stricken metropolitan districts

Even though Schumacher recognizes that final solutions do not exist to curing the ills of our economic system. We need to find balance in our day to day life between our need for material goods and the immobility of life completely absent consumption. A compromise involving our desire for progress and our narrow profit-driven definitions of it must be reached. The problems which face our society, in terms of our economic structure, are vast and varied. But they are also rooted in a few sole principles and values that need be challenged. Schumacher lays out the framework that allows us to envision a new economy, one that values truth and wisdom, that takes account of the human factor, that believes small is beautiful.