Small Is Beautiful: Economics as if People Mattered

Small Is Beautiful: Economics as if People Mattered

by E. F. Schumacher


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Small Is Beautiful is Oxford-trained economist E. F. Schumacher’s classic call for the end of excessive consumption. Schumacher inspired such movements as “Buy Locally” and “Fair Trade,” while voicing strong opposition to “casino capitalism” and wasteful corporate behemoths. Named one of the Times Literary Supplement’s 100 Most Influential Books Since World War II, Small Is Beautiful presents eminently logical arguments for building our economies around the needs of communities, not corporations.

Product Details

ISBN-13: 9780061997761
Publisher: HarperCollins Publishers
Publication date: 10/19/2010
Series: Harper Perennial Modern Thought
Pages: 324
Sales rank: 109,954
Product dimensions: 6.88(w) x 11.32(h) x 0.84(d)
Lexile: 1330L (what's this?)

About the Author

Born in Germany, Dr. E. F. Schumacher (1911–1977) fled to England after the rise of Nazism and, with the help of John Maynard Keynes, taught economics at Oxford University. He is the author of Small Is Beautiful, the book that "changed the way many people think about bigness and its human cost" (New York Times).

Read an Excerpt

Chapter One

The Problem of Production

One of the most fateful errors of our age is the belief that "the problem of production" has been solved. Not only is this belief firmly held by people remote from production and therefore professionally unacquainted with the facts -it is held by virtually all the experts, the captains of industry, the economic managers in the governments of the world, the academic and not-so-academic economists, not to mention the economic journalists. They may disagree on many things but they all agree that the problem of production has been solved; that mankind has at last come of age. For the rich countries, they say, the most important task now is "education for leisure" and, for the poor countries, the "transfer of technology."

That things are not going as well as they ought to be going must be due to human wickedness. We must therefore construct a political system so perfect that human wickedness disappears and everybody behaves well, no matter how much wickedness there may be in him or her. In fact, it is widely held that everybody is born good; if one turns into a criminal or an exploiter, this is the fault of "the system." No doubt "the system" is in many ways bad and must be changed. One of the main reasons why it is bad and why it can still survive in spite of its badness, is this erroneous view that the "problem of production" has been solved. As this error pervades all present-day systems there is at present not much to choose between them.

The arising of this error, so egregious and so firmly rooted, is closely connected with the philosophical, not to say religious, changes during the last threeor four centuries in man's attitude to nature. I should perhaps say: Western man's attitude to nature, but since the whole world is now in a process of westernisation, the more generalised statement appears to be justified. Modern man does not experience himself as a part of nature but as anoutside force destined to dominate and conquer it. He even talks of a battle with nature, forgetting that, if he won the battle, he would find himself on the losing side.Until quite recently, the battle seemed to go well enoughto give him the illusion of unlimited powers, but not so well, as to bring the possibility of total victory into view.This has now come into view, and many people, albeit only a minority, are beginning to realise what this meansfor the continued existence of humanity.

The illusion of unlimited powers, nourished by astonishing scientific and technological achievements, has produced the concurrent illusion of having solved the problem of production. The latter illusion is based on the failure to distinguish between income and capital where this distinction matters most. Every economist and businessman is familiar with the distinction, and applies it conscientiously and with considerable subtlety to all economic affairs-except where it really matters: namely, the irreplaceable capital which man has not made, but simply found, and without which he can do nothing.

A businessman would not consider a firm to have solved its problems of production and to have achieved viability if he saw that it was rapidly consuming its capital. How, then, could we overlook this vital fact when it comes to that very big firm, the economy of Spaceship Earth and, in particular, the economies of its rich passengers?

One reason for overlooking this vital fact is that we are estranged from reality and inclined to treat as valueless everything that we have not made ourselves. Even the great Dr. Marx fell into this devastating error when he formulated the so-called "labour theory of value." Now we have indeed laboured to make some of the capital which today helps us to produce--a large fund of scientific, technological, and other knowledge; an elaborate physical infrastructure; innumerable types of sophisticated capital equipment, etc.--but all this is but a small part of the total capital we are using. Far larger is the capital provided by nature and not by man-and we do not even recognize it as such. This larger part is now being used up at an alarming rate, and that is why it is an absurd and suicidal error to believe, and act on the belief, that the problem of production has been solved.

Let us take a closer look at this "natural capital." First of all, and most obviously, there are the fossil fuels. No one, I am sure, will deny that we are treating them as income items although they are undeniably capital items. If we treated them as capital items, we should be concerned with conservation; we should do everything in our power to try and minimize their current rate of use; we might be saying, for instance, that the money obtained from the realisation of these assets-these irreplaceable assetsmust be placed into a special fund to be devoted exclusively to the evolution of production methods and patterns of living which do not depend on fossil fuels at all or depend on them only to a very slight extent. These and many other things we should be doing if we treated fossil fuels as capital and not as income. And we do not do any of them, but the exact contrary of every one of them: we are not in the least concerned with conservation; we are maximising, instead of minimising, the current rates of use; and, far from being interested in studying the possibilities of alternative methods of production and patterns of living-so as to get off the collision course on which we are moving with ever-increasing speed-we happily talk of unlimited progress along the beaten track, of "education for leisure" in the rich countries, and of "the transfer of technology" to the poor countries.

The liquidation of these capital assets is proceeding so rapidly that even in the allegedly richest country in the world, the United States of America, there are many worried men, right up to the White House, calling for the massive...

Small Is Beautiful. Copyright © by E. F. Schumacher. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.

What People are Saying About This

Bill McKibben

“Embracing what Schumacher stood for—above all the idea of sensible scale—is the task for our time. Small is Beautiful could not be more relevant. It was first published in 1973, but it was written for our time.”

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Small Is Beautiful: Economics as if People Mattered 4.4 out of 5 based on 0 ratings. 5 reviews.
flydodofly on LibraryThing More than 1 year ago
Important, brilliant book everyone should read. Seriously.
abraxalito on LibraryThing More than 1 year ago
A book packed full of common sense in economic terms. Makes at least as good an argument as Monbiot's 'Heat' for why we shouldn't be consuming fossil fuels - that its consuming our capital. What's most interesting is that this book reads as though it was written very recently even though it dates back to 1973 - Schumaker was such a forward thinker. One minor area of disagreement I have with the author is on the private vs nationalised debate - he doesn't note that one problem of the nationalised institution is that its effectively immortal. Nevertheless, strongly recommended.
jorgearanda on LibraryThing More than 1 year ago
A very important book, and I'm surprised how relevant it still is, 35 years after its publication. There are many brilliant threads throughout the book, from the madness of burning our non-renewable sources of energy to a call for the restoration of the cardinal virtues for our personal guidance, rather than the principles of economics.There are a few off-key themes. For instance, Schumacher rejects much of science, particularly evolution and the relevance of the laws of thermodynamics, on seemingly religious grounds. But there is so much good stuff in the book, and it is so compellingly presented, that I can't help but overlook these negatives and add it to my list of favorites.
derekstaff on LibraryThing More than 1 year ago
The classic critique of the trends towards centralization, corporatism, and globalization, trends just becoming to become powerful at the time the book was written. Schumacher, a trained and highly experienced economist, addressed the unsustainable nature of the current economic models not only from an economic and environmental standpoint, but also from a spiritual perspective. Buddhism was a strong influence on the philosophy of the book. It promotes small-scale economic markets and systems, cooperatives and other business organizations, and greater decentralization. A Ground-breaking and highly influential work.
beau.p.laurence on LibraryThing More than 1 year ago
The stats are dated (1970s) but the politics and economics of the book continue to resonate. This book is the "Inconvenient Truth" from 35 years ago.