[.ca] Small Is Beautiful: Economics As If People Mattered (ISBN 0060916303)

Not Only Beautiful, But Also Practical:
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.

Many important thoughts:
"The whole point is to determine what constitutes progress." Fritz Schumacher published Small is Beautiful in 1973, but the vast majority of his text is still relevant today, if not more so. This book can be read as a response to the Washington Consensus and Chicago school economist perspectives of metric-based laissez faire economics driven by efficiency, often at the expense of class polarization and increasing inequality, that pervade the shallow "common-sense" understandings of amateur economists and the general United States population: "...growth of GNP must be a good thing, irrespective of what has grown and who, if anyone, has benefited." Schumacher recognizes that "...economists, for all their purported objectivity, are the most narrowly ethnocentric of people. ...since their world view is a cultural by-product of industrialism, they automatically endorse the ecological stupidity of industrial man and his love affair with the terrible simplicities of quantification." Schumacher responds with a broad, big-picture discussion of our economic culture, noting that sustainability is an impossibility when ever growing demands for increased production, "assuming all the time that a man who consumers more is 'better off' than a man who consumes less", expend an environment with finite resources. He notes that lasting peace is threatened by extraordinarily unequal distributions of power and access to resources, "what else could be the result but an intense struggle for oil supplies, even a violent struggle," and echoes Gandhi's disapproval of "dreaming of systems so perfect that no one will need to be good." Schumacher criticizes trump card economic judgments, arguing that "society, or a group or an individual within society, may decide to hang on to an activity or asset for non-economic reasons - social, aesthetic, moral, or political," and further noting that the judgment of modern economics is a fragmentary judgment, caring only "whether a thing yields a money profit to those who undertake it or not.... It is a great error to assume, for instance, that the methodology of economics is normally applied to determine whether an activity carried on by a group within society yields profit to society as a whole." The market, he argues, "is the institutionalization of individualism and non-responsibility.... To be relieved of all responsibility except to oneself means of course an enormous simplification of business. We can recognize that it is practical and need not be surprised that it is highly popular among businessmen." Commenting on this culture of self-interest, he quotes Tolstoy: "I sit on a man's back, choking him, and making him carry me, and yet assure myself and others that I am very sorry for him and wish to ease his lot by any means possible, except getting off his back." While economics teaches us that "the ideal from the point of view of the employer is to have output without employees, and the ideal from the point of view of the employee is to have income without employment," Schumacher believes this perspective fails to understand that a persons acts both as a producer and consumer: "If man-as-producer travels first-class or uses a luxurious car, this is called a waste of money; but if the same man in his other incarnation of man-as-consumer does the same, this is called a sign of a high standard of life." Furthermore, "to strive for leisure as an alternative to work would be considered a complete misunderstanding of one of the basic truths of human existence, namely that work and leisure are complementary parts of the same living process and cannot be separated without destroying the joy of work and the bliss of leisure." Schumacher also comments on science and a set of nineteenth century scientific ideas which have become the lenses through which we have learned to interpret the world. He argues for care in selecting the direction of scientific research, since, "as Einstein himself said, 'almost all scientists are economically completely dependent' and 'the number of scientists who possess a sense of social responsibility is so small' that they cannot determine the direction of research." In Part III, Schumacher explores third-world economic development. He notes the power dynamic inherent in the non-democratic system of free trade as it exists today: "It is a strange phenomenon indeed that the conventional wisdom of present-day economics can do nothing to help the poor. Invariably it proves that only such policies are viable as have in fact the result of making those already rich and powerful, richer and more powerful." He explores models for third world development, focusing on appropriate technology that can avoid creating a dual-economy, which affects the power structure and causes systemic migration: "It is always possible to create small ultra-modern islands in a pre-industrial society. But such islands will then have to be defended, like fortresses, and provisioned, as it were, by helicopter from far away." He argues instead for distribution of development resources to non-capital-intensive human-scale projects that can be maintained by local people, maximizing the level of useful employment rather than productivity per person. He emphasizes that appropriateness can be assessed only through learning local culture and working with and through local people: "As long as we think we know, when in fact we do not, we shall continue to go to the poor and demonstrate to them all the marvelous things they could do if they were already rich." He also warns against crippling dependence on foreign powers for supply or demand: "the role of the poor is to be gap-fillers fin the requirements of the rich," and focuses instead on small-scale development of local focus. Overall, while I cannot agree with all of Schumacher's assessments, I doubt that "small is beautiful" can be a true universal claim, I question his assumptions of gender roles and his naïveté about realpolitik, and I also feel that his periodic appeal to religious rhetoric and "beauty" somewhat obstructs his message, I do feel that he makes a great many strong points and encourages the reader to question conventional economic wisdom and look for a deeper understanding of the world.

Many important ideas:
"The whole point is to determine what constitutes progress." Fritz Schumacher published Small is Beautiful in 1973, but the vast majority of his text is still relevant today, if not more so. This book can be read as a response to the Washington Consensus and Chicago school economist perspectives of metric-based laissez faire economics driven by efficiency, often at the expense of class polarization and increasing inequality, that pervade the shallow "common-sense" understandings of amateur economists and the general United States population: "...growth of GNP must be a good thing, irrespective of what has grown and who, if anyone, has benefited." Schumacher recognizes that "...economists, for all their purported objectivity, are the most narrowly ethnocentric of people. ...since their world view is a cultural by-product of industrialism, they automatically endorse the ecological stupidity of industrial man and his love affair with the terrible simplicities of quantification." Schumacher responds with a broad, big-picture discussion of our economic culture, noting that sustainability is an impossibility when ever growing demands for increased production, "assuming all the time that a man who consumers more is 'better off' than a man who consumes less", expend an environment with finite resources. He notes that lasting peace is threatened by extraordinarily unequal distributions of power and access to resources, "what else could be the result but an intense struggle for oil supplies, even a violent struggle," and echoes Gandhi's disapproval of "dreaming of systems so perfect that no one will need to be good." Schumacher criticizes trump card economic judgments, arguing that "society, or a group or an individual within society, may decide to hang on to an activity or asset for non-economic reasons - social, aesthetic, moral, or political," and further noting that the judgment of modern economics is a fragmentary judgment, caring only "whether a thing yields a money profit to those who undertake it or not.... It is a great error to assume, for instance, that the methodology of economics is normally applied to determine whether an activity carried on by a group within society yields profit to society as a whole." The market, he argues, "is the institutionalization of individualism and non-responsibility.... To be relieved of all responsibility except to oneself means of course an enormous simplification of business. We can recognize that it is practical and need not be surprised that it is highly popular among businessmen." Commenting on this culture of self-interest, he quotes Tolstoy: "I sit on a man's back, choking him, and making him carry me, and yet assure myself and others that I am very sorry for him and wish to ease his lot by any means possible, except getting off his back." While economics teaches us that "the ideal from the point of view of the employer is to have output without employees, and the ideal from the point of view of the employee is to have income without employment," Schumacher believes this perspective fails to understand that a persons acts both as a producer and consumer: "If man-as-producer travels first-class or uses a luxurious car, this is called a waste of money; but if the same man in his other incarnation of man-as-consumer does the same, this is called a sign of a high standard of life." Furthermore, "to strive for leisure as an alternative to work would be considered a complete misunderstanding of one of the basic truths of human existence, namely that work and leisure are complementary parts of the same living process and cannot be separated without destroying the joy of work and the bliss of leisure." Schumacher also comments on science and a set of nineteenth century scientific ideas which have become the lenses through which we have learned to interpret the world. He argues for care in selecting the direction of scientific research, since, "as Einstein himself said, 'almost all scientists are economically completely dependent' and 'the number of scientists who possess a sense of social responsibility is so small' that they cannot determine the direction of research." In Part III, Schumacher explores third-world economic development. He notes the power dynamic inherent in the non-democratic system of free trade as it exists today: "It is a strange phenomenon indeed that the conventional wisdom of present-day economics can do nothing to help the poor. Invariably it proves that only such policies are viable as have in fact the result of making those already rich and powerful, richer and more powerful." He explores models for third world development, focusing on appropriate technology that can avoid creating a dual-economy, which affects the power structure and causes systemic migration: "It is always possible to create small ultra-modern islands in a pre-industrial society. But such islands will then have to be defended, like fortresses, and provisioned, as it were, by helicopter from far away." He argues instead for distribution of development resources to non-capital-intensive human-scale projects that can be maintained by local people, maximizing the level of useful employment rather than productivity per person. He emphasizes that appropriateness can be assessed only through learning local culture and working with and through local people: "As long as we think we know, when in fact we do not, we shall continue to go to the poor and demonstrate to them all the marvelous things they could do if they were already rich." He also warns against crippling dependence on foreign powers for supply or demand: "the role of the poor is to be gap-fillers fin the requirements of the rich," and focuses instead on small-scale development of local focus. Overall, while I cannot agree with all of Schumacher's assessments, I doubt that "small is beautiful" can be a true universal claim, I question his assumptions of gender roles and his naïveté about realpolitik, and I also feel that his periodic appeal to religious rhetoric and "beauty" somewhat obstructs his message, I do feel that he makes a great many strong points and encourages the reader to question conventional economic wisdom and look for a deeper understanding of the world.

Buddhist Economics anyone?:
If you think for your self, you may have always suspected that economists do not understand anything of value. Schumacher is one of those rare economists who did. In this classic book, he elegantly dsposes of Lord Keynes' idea that for the present economic needs of mankind, fair is foul and foul fair, that is, ends justify the means. Ranging from the unique nature of land to our earth's fossil fuels, from education to buddhist economics, this book is the most important step you can take in thinking more deeply about economic issues. Deep, lovely, lonely reading; sometimes this book makes me cry.

A naive romanticization of the medieval lifestyle:
There was much here that I disagreed with. It is true that ultimately, we may all be forced by environmental limitations to go back to a medieval lifestyle of subsistence farming, village dwelling, minimal international trade, illiteracy, poverty, stagnation, immobility, and superstition, but I do not think, as Schumacher seems to, that this development would be something to be celebrated. I honestly think that people who like this book don't really understand the lifestyle that they are buying into. They want rustic village living, but with all the benefits of industrial society on demand.