Fritz Schumacher published Small is Beautiful – Economics as if People Mattered in 1973. According to The Times Literary Supplement, it is among the 100 most influential books published since World War II, and rightfully so.
For the last 60 years or so our way of life has been based on the premise that so long as there is demand there will always be supply. Schumacher wisely challenges these assumptions when he writes that sustainability is an impossibility when we are, “assuming all the time that a man who consumes more is ‘better off’ than a man who consumes less”, in an environment with finite resources.
E. F. Schumacher is clear about what economics can do and what it can’t do. Mainstream economists divide humans into producers and consumers. As consumers, consuming more will always be in our self-interest. As producers, efficiency is to be desired above all else. This breaks down, Schumacher says, as soon as we realize that producers and consumers are the same people with the same desires.
Schumacher criticizes what he calls the fragmentary judgment of economics, 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.” For example, work does not need to be unenjoyable. Work that involves creativity and freedom can be a good thing even if it is not the most efficient method to produce a product or service. His economics as if people mattered doesn’t mindlessly praise efficiency as a means of eliminating work.
In Part III, Schumacher explores third-world economic development. Business, philanthropic and government leaders have initiated countless programs to assist the world’s poor, but success has been elusive. Schumacher proposes a truly wise policy, focusing not on remaking poor countries in our own image, but rather on assisting them with improving the way of life they already have.
Schumacher argues for the distribution of development resources to non-capital-intensive, human-scale projects that can be maintained by local people. The beauty in his smaller, human-scale technology is that it maximizes the level of useful employment rather than productivity per person. He also emphasizes that the appropriateness of technology can be assessed only through understanding the local culture and working with and through local people.
Small is Beautiful is thought-provoking and eye-opening. While clearly dated in its view of gender roles and incorrect in a number of its predictions, Small is Beautiful is as relevant to the problems the world is struggling with today as it was in 1973. Perhaps more so.
Ellis Carter is a nonprofit lawyer with Caritas Law Group, P.C. licensed to practice in Washington and Arizona. Ellis advises nonprofit and socially responsible businesses on corporate, tax, and fundraising regulations nationwide. Ellis also advises donors with regard to major gifts. To schedule a consultation with Ellis, call 602-456-0071 or email us through our contact form.
Small is Beautiful – Economics as if People Mattered
E. F. Schumacher