Book Break: Small Is Beautiful: Economic As If People Mattered

One of my regrets from my college days is not taking any courses in economics. I received a relatively unstructured liberal arts education: aside from a few specific prerequisite courses for my undergraduate degree, all class were divided into four groups, and we had to take a certain number from each group. Math and physical sciences were grouped together, so the classes and labs I took in chemistry meant I didn’t have to take math. I heard only complaints from my friends in economics classes, and since I had so many other interesting classes in the social sciences to choose from, I skipped it.

This teenage shortsightedness bothers me still today, since our news and politics revolve around the economy. E. F. Schumacher’s Small Is Beautiful: Economics As If People Mattered recognized this utter domination of economics over all, warned against it, and proposed specific antidotes. Written in 1973—a year before I was born—and recommended to me by a former boss, it strikes me as a book that was likely read, loved, and then neglected by many in the last 40 years as they were swept along by currents too strong to swim against.

With no economic background of my own with which to offer a proper review or critique, I will instead offer a couple of objections and a few ideas I loved from the book.

The most obvious grounds for dismissal of Schumacher’s book for many will be that the alarms he sounded in 1973 were, in retrospect, too shrill—the gloom and doom he predicted, especially in terms of natural resource shortfalls and environmental crises, have not yet come to pass. For some readers, this alone will “prove” that the author obviously didn’t know what he was talking about. Schumacher himself, a Rhodes Scholar and economic advisor with the British Control Commission and the British National Coal Board, warned against trying to predict the future. Common sense told him that finite resources can’t last forever, and exploratory calculations suggested that, at the rates of consumption and growth he was seeing in the 1970s, we were living on borrowed time. He acknowledged it was possible that we would find new sources of fossil fuels and other rapidly consumed resources—his point was, to what end? Unless we change our habits, eventually we will suffer.

The second objection was, for me, the more difficult: at this point in his career, Schumacher had strong opinions about what was wrong in the world and what needed to be done about it, and his blunt negative assessments of markets, economists, and motivations in his day leave little room for compromise or evangelization. I found myself nodding in agreement with three-quarters of his writing, only to run against passages about which I thought, surely not everyone in capitalist society is solely motivated by relentless profit-taking?

On the other hand, Schumacher does an excellent job of drawing our attention to the underlying problems with an economic approach to everything. Early in the book  he quotes his fellow British economist (and an early benefactor of sorts) John Maynard Keynes from 1930: “For at least another hundred years we must pretend to ourselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight.”

Is this not contrary to the Christian ideal and common sense? Can fallen man use sin to achieve virtue? Of course not—but he can use his fellow man to achieve personal prosperity.

Schumacher goes on to write, “This was written forty years ago and since then, of course, things have speeded up considerably. Maybe we do not even have to wait for another sixty years until universal plenty will be attained. In any case, the Keynesian message is clear enough: Beware! Ethical considerations are not merely irrelevant, they are an actual hindrance, ‘for foul is useful and fair is not.’ The time for fairness is not yet. The road to heaven is paved with bad intentions.”

Lest you think of Schumacher as a naïve idealist imagining utopia, consider that two simple, practical ideas he advocated in his writings were the continuation of coal development and reducing energy consumption. He recognized that mankind is notorious for developing new problem-solving technologies that create new problems; that turning one’s back on an entire energy source on the belief that we could replace it entirely with oil or nuclear energy and meet rapidly growing worldwide demand, was foolish, even if it turned out to be true; and that wasting resources we cannot, ourselves, replace never makes sense.

This, to me, is (at least in part) what conservatism ought to be: maintaining the tried and true even as we explore new possibilities and conserving, even when a crisis is not looming, because it’s the sensible and moral thing to do.

Am I good at it? Not very—but getting better.

His biggest idea, however, was the concept of intermediate technologies for developing countries. Schumacher traveled the world and saw that most economic development supported by wealthy nations not only replicated the patterns of economic dysfunction he was in the developed world, but deepened the economic problems in the developing country for all but a fortunate few.

One example he uses (which I will paraphrase and expand on) is that of a large earthwork project that needs to be done in a developing country. You have a range of options you may employ for accomplishing this work, from people using their hands to scrabble and scrape away at the earth to the most modern and powerful earth-moving machinery. The former approach would cost almost nothing and “employ” a lot of people for a long time at menial and nearly impossible work; the latter would employ relatively few people for a relatively short time, unless the expensive equipment broke down and needed repairs—in which case there would be no parts or expertise locally to fix it. In the middle, however, are a range of intermediate technologies, however, that could put people to work, providing income for their families, value for their time, and dignity for themselves. For example, equipping a hundred men with well-built shovels and wheelbarrows would put those men to work—plus many more making and repairing shovels and wheelbarrows using local materials. The money earned by all those people (instead of just a few heavy-equipment operators) could be used to support other local industries—because what good is producing food or consumer goods if no one has any money to buy them?

There is much to love in this book, including Schumacher’s very Catholic views on the dignity of work and the human person. He speaks against an all-pervasive economic approach to efficiency, which quantifies and assigns value to the incalculable and invaluable. When everything is assigned a value, the sacred (such as human life) is diminished and no longer sacred. He speaks against an approach to labor and productivity that reduces work to individually pointless tasks without freedom or creativity and fails to employ large segments of society that, because they see no value in their time and effort, quickly devalue themselves. And he speaks against the underlying assumption that one who works less and consumes more is better off than one who works more and consumes less.
It is a thought-provoking read, and I highly recommend it. 



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