EF Schumacher: Small is Beautiful

Biography

Born in Germany in 1911, EF “Fritz” Schumacher studied in the UK and USA. Interned during the second world war in a work camp, he became enchanted with the benefits of organic farming over factory farming. After the war became a British citizen and rose to the post of Chief Economic Advisor of the National Coal Board, a role he held for two decades.

In 1955 Schumacher went to Burma where he despaired of the impacts of globalisation on a Buddhist country. As a result, he wrote ‘Buddhist Economics’ which became one of the essays in his key publication ‘Small Is Beautiful’. In 1965, he set up the Intermediate Technology Development Group (now called Practical Action), to develop “intermediate” or “appropriate” technologies for developing countries. Small is Beautiful was published in 1973.

Schumacher died in 1977 in Switzerland while on a lecture tour. His legacy lives on in the ‘Schumacher Circle’ of organisations including the Schumacher Institute, Schumacher College, Practical Action, the Soil Association and the New Economics Foundation.

Contribution

Small is Beautiful was compiled from a number of speeches and essays written over a decade and then cobbled together to form a narrative. As such, there is a gentle repetition of ideas by their application in a number of contexts rather than a linear narrative. The book is highly philosophical, arguing that the metaphysical context of scientific and economic analysis is lacking, ie why we assume that economic growth is always good, and that our inherent assumptions about many of our economic policies are misaligned with societal and environmental concerns.

A key theme of Small is Beautiful is to bring spiritual elements to economics, whether that is from Schumacher’s own Christianity or the Buddhist philosophy he encountered in his time in Burma. Most notably he proposes that the Buddhist principle of non-violence should be a guiding light – non-violence in terms of the impact of activities on society or the environment. For example, he argues that industrialisation of agriculture is a violent act on rural populations (by causing unemployment and migration to cities) and the natural world.

“Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius – and a lot of courage – to move in the opposite direction.”

The major environmental economics point Schumacher makes is that we are treating natural resources as income rather than capital. Capital is depleted as it is used whereas income is renewable. He continued by attacking the assumptions that Gross National Product (GNP) as a measure of well-being and that economic growth is always good. He despairs of the lack of questioning of traditional economists and politicians:

“We assume that having more material goods will make us happier. Economists never take it upon themselves to challenge that assumption.”

He points out that not all economic activity is equal. Voluntary good works do not get counted in economic activity while ‘bads’ like having to clean up pollution do contribute to GNP. He applies this qualitative approach to employment as well stating that work should not just be about exchanging time for money, but must be spiritually fulfilling. He laments the deskilling in much of industry and in particular agriculture.

He sees nuclear power, in particular burdening future generations with the risks of nuclear waste storage, as the most violent act, in his words “…infinitely more serious than any crime ever perpetrated by man. The idea that civilisation could sustain itself on the basis of such a transgression is an ethical, spiritual and metaphysical monstrosity.”

Schumacher’s solution to these problems is Intermediate or Appropriate technology. This involves small(ish)-scale businesses producing high quality goods from local resources using labour intensive and highly skilled methods. Schumacher particularly proposes this for third world development, and suggests that in the developed world, large businesses should be discouraged or part-nationalised to ensure they meet the needs of society.

The timing of Small of Beautiful was appropriate as it coincided with the 1973 oil crisis. The 1970s was a time of concern that natural resources were running out fast and Schumacher’s arguments chimed with that thinking.

“Nature knows when to stop. We haven’t learned that yet.”

However by the 1990s, predictions of resource depletion had not materialised, shifting environmentalists’ attention from resource consumption to pollution. The pendulum has swung back recently with current concerns over peak oil, peak plutonium, peak fish and peak pretty much everything else. So Schumacher’s ‘depletion of capital’ argument has become very relevant once again.

As with all such controversial and groundbreaking contributions, there was a backlash from mainstream economists, including a 1996 book entitled “Small is Stupid” which made the case for economies of scale and economic growth.

One issue with any book of this era is that the impacts of information revolution had not been anticipated. PK Prahalad has demonstrated that providing mobile phones and internet access to very poor third world farmers and businessmen can allow them to compete more effectively by allowing them access to vital information such commodity prices and weather reports. Whether information technology is a type of appropriate technology or a violent technology destroying local culture is an interesting question, but one which can never be considered by the man himself.

In terms of impact, Schumacher’s work is enormously influential. Small is Beautiful ranks alongside Rachel Carson’s Silent Spring in the modern environmental canon. The reflective, metaphysical nature of his thinking can make the book difficult to penetrate and does tend to appeal to the deep ecology end of the green spectrum. Despite this, Schumacher Circle organisations such as the Soil Association and the New Economics Foundation are influential players in mainstream politics, and Small is Beautiful has been an influence on major figures such as Jonathon Porritt who wrote a foreword to the 1993 edition.

Strangely for a book this influential in green thinking, only about a third of Small is Beautiful directly concerns environmental issues. The remainder considers the influence of size on communities, third world development and organisations. Schumacher’s other books, a Guide for the Perplexed and Good Work, do not address the environment significantly, but focus on science and humanity. So it is in those few pages of a relatively short book that Fritz Schumacher made his mark on the green movement.

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