THE Times Literary Supplement in 1995 ranked Small
is Beautiful: A study of economics as if people mattered by Dr
E. F. (Ernst Friedrich) Schumacher among the 100 most influential
books produced since the Second World War. Published 40 years ago
next month, on 30 June 1973, the book's vision of a world in which
the economy serves people, instead of people's serving the economy,
struck a chord with those concerned about environmental degradation
and inhumane working conditions.
Dr Schumacher's warning over reliance on scarce resources such
as oil was almost immediately vindicated by the oil crisis three
months later. Now, 40 years on, the book still needs to be read and
its message received. Many decisions - by governments, churches,
and even in our homes - are still based on economics as if people
did not matter.
Small is Beautiful was the fruit of insights gained by
Dr Schumacher when working for the British Government during and
after the Second World War, and for 20 years as the chief economic
adviser to the National Coal Board, as well as through extensive
observation and economic consultancy in developing countries. He
was also interested in comparative religion, and was eventually
received into the Roman Catholic Church.
Some of the book is inevitably dated, as Dr Schumacher was
writing in the very early days of computers ("the most intriguing
product of technological progress"), and his views on the place of
women could most charitably be described as "traditional".
Yet there is still much of value in the areas of economic
decision-making, industry and technology, work, education, aid, and
ownership. Here are some of Dr Schumacher's arguments - and a
highly subjective modern report-card.
1973: Economics is at the centre of public
concern, and modern societies are obsessed with economic
performance and growth. No rich society is saying "We have enough."
Economics even dictates foreign policy; a country's human-rights
record may be terrible, but we will ignore that if we need its
credit, export market, or oil.
2013: GDP growth remains an obsession. The UK
sells arms to Saudi Arabia, and goes to war in oil-rich Iraq, but
tolerates repression in Syria.
1973: Economic judgement is extremely
fragmentary. An activity deemed "uneconomic" has its existence not
only questioned but denied. But "uneconomic" means only that it
fails to earn enough profit for the participants, even though the
activity may benefit wider society or have social, moral,
aesthetic, or political benefits.
2013: In an increasingly privatised NHS, care will
be further overridden by cost. We need to take care if we apply
economic arguments to the parish system.
1973: There is a right scale for every
activity, but we suffer from an idolatry of giantism.
2013: We have banks that are "too big to fail".
The BBC's economics editor, Stephanie Flanders, wonders whether the
UK would be better off without London.
1973: The buyer in a market seeks value for
money, and does not care where or how the goods are produced. The
seller does not reduce prices to the poor. Both have responsibility
only to themselves, and must never behave "uneconomically".
Conversely, consumers are duty-bound to spend, in order to keep
money circulating in the economy, whether or not they can afford
2013: There is horse meat in our elongated
food-supply chains, and advertising has moved up a gear in
manipulating our desires and emotional responses. On the other
hand, the local-food and social-enterprise movements bring
SO WE have made some progress, but there is far to go. It is a
journey towards peace and wisdom, which is the most powerful aspect
of Small is Beautiful. As Dr Schumacher argues, seeking
material prosperity leads to clashes over limited world resources,
not peace. Peace instead starts with wisdom, and the central
concept of economic wisdom is: "Nothing makes economic sense unless
its continuance for a long time can be projected without running
In nature, there are limits to growth. Insect populations may
flare up, but then crash when they run out of food. We do not
continue to grow taller as we get older, but we have not grasped
the absurdity of continual infinite economic growth on a finite
On the last pages of Small is Beautiful, Dr Schumacher
writes: "Everywhere people ask: 'What can I actually do?' . . . we
can, each of us, work to put our own inner house in order."
Dr Schumacher had already founded the Intermediate Techno-logy
Development Group (now Practical Action) to promote village-scale
technology, and his vision inspired the foundation of the Centre
for Alternative Technology in 1974. These and other groups,
including the Soil Association and the New Economics Foundation,
are now members of the Schumacher Circle, which provides a
practical expression of his joined-up think-ing.
I believe that all this is a matter of seeking peace and
pursuing it (1 Peter 3.11). Get wisdom; get insight (Proverbs 4.5).
Challenge the prevailing economic "wisdom" in government, church
affairs, and home life. Sign up to the New Economics Foundation's
series of briefings, which are designed to help non-economists and
the public to identify misguided economic arguments, and join in
Read Small is Beautiful, and engage with economics.
Decisions should not be based on fragmentary judgement and narrow
methodology. Otherwise, we will have 40 more years of economics as
if people did not matter.
Clare Bryden is an Hon. Research Fellow at the University of
Visit www.schumachercollege.org.uk for information
about the Schumacher Circle organisations;
www.neweconomics.org for the New Economics Foundation; and
www.impossiblehamster.org for running into