Small Is Beautiful: Economics as If People Mattered

The groovy thesis of "Small is Beautiful" by EF Schumacher is 'if the economic unit can stay small it'll tend to be democratic'. That sufficed at Woodstock, but that dont cut it in the University. EF refuses to show how an alternative "democratic and small" economy can stay small, how it can can survive, be sustained or maintained economically within the context of modern global economics. More fundamentally and to the point, he refuses to show how an economically small system will tend to be "beautiful", ie democratic, notwithstanding history, which is awash in petty undemocratic failed states and vicious little tyrannies, from the catty knitting circle smoldering around the corner to that nuclear stoked Empire called America. He's overall simplistic and simple minded. Maybe that is why he ended up in economics rather than history? If you want to think about this problem seriously, try Reinhold Niebuhr's "Moral Man and Immoral Society" (1932) which observes that anything larger than a town meeting has never been driven by democratic motives but rather by an amoral group psychology that was largely hostile to democracy. Niebuhr traces many examples from history showing that states -even small ones- tend not to be moral or committed to individual rights.

In my college days I struggled with economics and barely passed. My economic professors and the course material were dull, ambiguous, and non-stimulating. None of these adjectives could be used to describe Schumacher's Small is Beautiful: Economics as if People Mattered.Schumacher makes economics come alive with wit, humor, and practicality. His approach is qualitative, not quantitative. A recurring statement throughout the book epitomizes his philosophy, "Why use the computer if you can make the calculation on the back of an envelope"? He gives the science a personality when identifying the disparities between the rich and poor, the educated and uneducated, and the gap between city people and country-folk.Small is Beautiful created a humanistic economics movement. It's a wholistic approach containing ethical, ecological, and metaphysical components that are missing from the statistical models that solely measure GNP. Schumacher sounded the alarm regarding globalization when asking "how much further 'growth' will be possible, since infinate growth in a finite environment is an obvious impossibility". He was critical of a society that generates unbounded materialism, and motivated by greed and envy.Some of the more interesting of the 20 essays are: "Peace and Permanence", "The Role of Economics", "Buddhist Economics", "The Greatest Resource - Education", "Technology with a Human Face", "Development of Intermediate Technology", and "Two Million Villages".Although the book was written in 1973, it is as timely now as it was then. The 25th anniversary edition contains provocative updates provided as sidebars by contributors such as Hazel Henderson, Peter Warshall, Amory Lovins, Godric Bader, et al.

When I was a student at Brigham Young University in the early 80's, I was introduced by my macroeconomics professor to what many economists of the time considered to be the "great heresy of economic theory." - a copy of Small is Beautiful. He warned me that quoting it in research papers would be most unwise, as the BYU economics department was, and continues to be, a strong proponent of the current economic orthodoxy of infinite economic growth and prosperity that dominates economics even today. He finished by saying that "Schumacher was a radical, no doubt about it. However, he will also turn out to be right in the end." Truer words were never spoken. There are those who will point out detail errors in Schumacher's work. The book was, after all, written over 25 years ago, and Schumacher would never have considered himself a prophet. Yet the central theme of his work, that infinite economic growth is impossible within a finite system, and the inevitable consequences of ignoring this simple truth have been fully vindicated. Even the most orthodox economists are beginning to see the disasterous environmental and social consequences of their economic policies over the last 50+ years, which Schumacher describes in detail, and warn policy makers that major changes must be made. Schumacher also proposed a highly effective and practical method, Intermediate Technology, to help impoverished and developing nations make the best possible use of modern scientific and technological advances, without the vast (and for countless millions in the world impossible) financial investments and ecological/social consequences. In 1965 Schumacher and a few friends started the Intermediate Technology Development Group ...which continues to develop practical applications of his ideas in the developing world. Small is Beautiful - a Study of Economics as if People Mattered, along with his other two key books Good Work, which explores the question of the effects of modern economics on the individual and the very purpose of work itself, and A Guide for the Perplexed, which outlines the philosophical and spiritual underpinnings of Schumacher's work, provide a powerful and compelling alternative view of economics and our world - a view every bit as applicable today as it was in his lifetime. An earlier reviewer who seemed to have no grasp of economics or recent history (Gen Ne Win is no more a Buddhist than Hitler was a Jew - he in fact deliberately set out to destroy the cultural and economic system of Burma - including Buddhism itself. To use this example to "invalidate" the chapter "Buddhist Economics" totally destroys this reviewer's credibility) stated that "a wise world has ignored his bad advice & prospered." Far from it. In the end, a wiser world will be forced to look back on Schumacher's book and conclude that he was, in fact, right.

Few books can make you think in so profound and fundemenatal way than this one. I dont know whether it is a bit naive or we have already lost our innocence even to attempt to live by it..but one thing which really struck me was the utter simplicity and clarity in thought...Only thing which matters is 'we are human' and 'nothing is as important as human happiness'..there is no other virtue than the attempt at allievating suffering and optmising happiness of all around us....Only people matter...! be it economics, management,technology, science,..arts,...any human endeavour....and unfortunately we are surprised when someone reminds us so.... [email protected]

Challenging accepted economic theory, E. F. Schumacher calls on world leaders to take a fresh, new approach to economic policy by considering the cost to humanity. In his book, "Small is Beautiful - Economics as if Humans Mattered", he outlines a series of proposals intended to save the planet from economic and environmental collapse. He validates his propositions through quotations from a collage of political, economic, and religious gurus ranging from Mao Tse-tung to Mohandas Gandhi, Karl Marx to Milton Keynes, Buddha to Jesus. Schumacher makes a compelling case - though admittedly oversimplified -- for what he calls "Buddhist economics." He heralds an Aquarian Age of peace and human creativity through nationalization of strategic industries, environment-friendly policies, use of intermediate technology, decentralized worker cooperation, and full, satisfying employment. He successfully creates an economic mission statement for the future.