Developed by the German-born British economist and businessman ERNST SCHUMACHER (1911-1977), who advocated ‘intermediate’ and alternative technologies.
The principle challenged the tradition of large organizations, which Schumacher claimed were inefficient and a danger to the environment. He proposed small working units, communal ownership, and the use of local labor and resources. He placed the emphasis on people rather than the product.
E F Schumacher, Small is Beautiful: A Study of Economics as if People Mattered (London, 1973)
The book is divided into four parts: “The Modern World”, “Resources”, “The Third World”, and “Organization and Ownership”.
Part I summarizes the Economic world of the early 1970s from Schumacher’s perspective. In the first chapter, “The Problem of Production”, Schumacher argues that the modern economy is unsustainable. Natural resources (like fossil fuels), are treated as expendable income, when in fact they should be treated as capital, since they are not renewable, and thus subject to eventual depletion. He further argues that nature’s resistance to pollution is limited as well. He concludes that government effort must be concentrated on sustainable development, because relatively minor improvements, for example, technology transfer to Third World countries, will not solve the underlying problem of an unsustainable economy. Schumacher’s philosophy is one of “enoughness”, appreciating both human needs and limitations, and appropriate use of technology. It grew out of his study of village-based economics, which he later termed Buddhist economics, which is the subject of the book’s fourth chapter.
Part II casts Education as the greatest resource, and discusses Land, Industry, Nuclear Energy and the human impact of Technology.
Part III discusses the gap between the center of the World System and the developing world as it existed then, with a focus on village culture and unemployment in India.
Part IV presents a sketch of a Theory of Large Scale Organization, refutes and exposes some commonplace and false platitudes about capitalism as a social order and discusses alternatives. Chapter 3 of this part concludes with advice to socialists (who presumably are at the commanding heights):
“Socialists should insist on using the nationalised industries not simply to out-capitalise the capitalists – an attempt in which they may or may not succeed – but to evolve a more democratic and dignified system of industrial administration, a more humane employment of machinery, and a more intelligent utilization of the fruits of human ingenuity and effort. If they can do this, they have the future in their hands. If they cannot, they have nothing to offer that is worthy of the sweat of free-born men.”
- A Guide for the Perplexed
- Anti-globalisation movement
- Appropriate technology
- Green growth
- Humanistic economics
- Moderately prosperous society (literally small abundance/well being society AKA “The Chinese Dream”)
- Renewable energy
- Renewable resource
- Simple living
- Dr. Leopold Kohr, 84; Backed Smaller States, New York Times obituary, 28 February 1994.
- Compare: Statistical usage of the term ‘globalization’
- The Times Literary Supplement, October 6, 1995, p. 39
- Schumacher, E. F.; Small Is Beautiful: Economics As If People Mattered : 25 Years Later…With Commentaries (1999). Hartley & Marks Publishers ISBN 0-88179-169-5
- p. 261 1975 Paperback Edition SBN 06-080352-5
- Full Text of Small is Beautiful at ditext.com
- The Schumacher Institute for Sustainable Systems home page