Small is Beautiful

When I was a young teenager I had an economics teacher that loved to point out the title of Schumacher's book Small is Beautiful. I don't exactly remember why she would say that, and I hope she didn't mean it in a paedophile sort of way.

For a whole year she gave me extra lessons on Saturday mornings to prepare for my GCSE Economics. Usually I was hung over during the lessons, yawning the whole time and doing my best to avoid falling asleep. Not that I didn't like the subject, or that she was particularly boring, but those "early career" Friday night's were so much fun.

Anyway, this title kept coming back to me these last few days because I work in a small firm, and I wondered: is this what he meant by Small is Beautiful? Easier communication? Better work environment? Less mechanical, more human? Quicker to adjust to market changes? Greater team spirit?

So I decided to become a little less ignorant and investigate Schumacher's thoughts(not the formula one guy, or the answer would have been "KILL SENNA").

Schumacher was born in Bonn, Germany, and he studied there in Bonn and Berlin where he finished his high school. He then went to Oxford and later on to Columbia where he earned his economics diploma. Instead of returning to Nazi Germany, he was interned on an English farm, but he kept writing papers. Keynes read one of his papers and it caught his attention to the point where prepared his release from internment and found him a position at Oxford University. Schumacher became known as Keynes protégé.

He had a strange but successful career, moving on from Chief Economic Adviser to the Coal Board in the UK to Economic Consultant in Burma (Burma?!?!), Adviser to the India Planning Commission, Zambia, etc. He was also a writer for The Times and The Economist.

The diversity of his life experience certainly gave him a wider perspective of economy and society, and this was probably behind his best-selling "Small is Beautiful". The Times considered this book one of the 100 most influential books published since World War II.

But what exactly was he on about? A lot of things because this book, written in 1973, was a collection of essays. For example, he focused on fossils fuels to state that our economy is unsustainable: these natural resources are subject to depletion and there is a limit to the amount of pollution we can bring to our planet. He was a radical visionary 30 years into the future, this is exactly what we have in the political agenda today. The way he talked about sustainable development and ecology turned him into a hero of the recently born environmentalism movement.

He proposed the idea that the large organization should be built in the spirit of a group of many small organizations, and that work should first be dignified and meaningful, and only then efficient. Both of these ideas work together to avoid labour dehumanization, and he later added a Buddhist perspective of Economics where he criticized the use of GDP as a measure of well-being.

I leave you with a few interesting quotes of his book:

"Man is small, and, therefore, small is beautiful"

"[A modern economist] is used to measuring the 'standard of living' by the amount of annual consumption, assuming all the time that a man who consumes more is 'better off' than a man who consumes less. A Buddhist economist would consider this approach excessively irrational: since consumption is merely a means to human well-being, the aim should be to obtain the maximum of well-being with the minimum of consumption. . . . The less toil there is, the more time and strength is left for artistic creativity. Modern economics, on the other hand, considers consumption to be the sole end and purpose of all economic activity."

"It is clear, therefore, that Buddhist economics must be very different from the economics of modern materialism, since the Buddhist sees the essence of civilization not in a multiplication of wants but in the purification of human character. Character, at the same time, is formed primarily by a man's work. And work, properly conducted in conditions of human dignity and freedom, blesses those who do it and equally their products."

"The most striking about modern industry is that it requires so much and accomplishes so little. Modern industry seems to be inefficient to a degree that surpasses one's ordinary powers of imagination. Its inefficiency therefore remains unnoticed."

"Ever bigger machines, entailing ever bigger concentrations of economic power and exerting ever greater violence against the environment, do not represent progress: they are a denial of wisdom. Wisdom demands a new orientation of science and technology towards the organic, the gentle, the non-violent, the elegant and beautiful."

"[N]o system or machinery or economic doctrine or theory stands on its own feet: it is invariably built on a metaphysical foundation, that is to say, upon man's basic outlook on life, its meaning and its purpose. I have talked about the religion of economics, the idol worship of material possessions, of consumption and the so-called standard of living, and the fateful propensity that rejoices in the fact that 'what were luxuries to our fathers have become necessities for us."

"Systems are never more no less than incarnations of man's most basic attitudes. . . . General evidence of material progress would suggest that the modern private enterprise system is--or has been--the most perfect instrument for the pursuit of personal enrichment. The modern private enterprise system ingeniously employs the human urges of greed and envy as its motive power, but manages to overcome the most blatant deficiencies of laissez-faire by means of Keynesian economic management, a bit of redistributive taxation, and the 'countervailing power' of the trade unions."

"Can such a system conceivably deal with the problems we are now having to face? The answer is self-evident: greed and envy demand continuous and limitless economic growth of a material kind, without proper regard for conservation, and this type of growth cannot possibly fit into a finite environment. We must therefore study the essential nature of the private enterprise system and the possibilities of evolving an alternative system which might fit the new situation."

"Education can help us only if it produces “whole men”. The truly educated man is not a man who knows a bit of everything, not even the man who knows all the details of all subjects (if such a thing were possible): the “whole man” in fact, may have little detailed knowledge of facts and theories, he may treasure the Encyclopædia Britannica because “she knows and he needn’t”, but he will be truly in touch with the centre."

I guess I agree with him… small is usually beautiful, and large is usually ugly.