It’s been a really slow month for reading, but I did make it through the 1973 “unorthodox economics classic” Small is Beautiful by E.F. Schumacker. The subtitle of the book is “Economics as if People Mattered”. Great title.
This was a pretty interesting work and felt in many ways like a companion piece (or possibly a bibliographic footnote) to Wendell Berry’s The Unsettling of America, published a decade later. Schumacker deals more directly and narrowly with abstract economic theories and their dehumanizing effect while Barry deals with a wide range of cultural phenomenon. I appreciated that Schumacker has traveled widely and was influenced by the poverty and non-western culture of Africa and east Asia. A lot of the topics he deals with (such as questioning the holy cow of GDP growth) have been bothering me a lot this past year.
Overall, like with Berry’s works, I found the book to be full of wisdom, but also pretty depressing. It was written 40 years ago and the bulk of the things he worries about in the book are far worse today with no end in sight. A surprising handful of things are better though; his forecasts were sometimes amiss.
Schumacker was an interesting character in that he was originally a close personal disciple of Keynes, the man responsible for our toxic lets-print-unlimited-money-to-boost-the-economy practice today. He later did a 180 degree turn on many issues and eventually became a Christian too and highly interested in the Distributivist model advocated by Chesterton and Belloc.
I met an old hippie-type a few weeks ago that was excited when he saw I was carrying this book around. After reading it though, I find little in the book a liberal would enjoy except for the occasionally direct attacks on capitalism. Schumacker was ultimately advocating a sort of conservatism so conservative that it would make modern-day conservatives squirm.
I could blog a lot about the book, but I feel I want to move on to other things. Therefore, I’m just going to dump my highlighted excerpts here with a few brief comments. Boldface is mine.
On how economics is not a proper science.
“The great majority of economists,” Schumacher laments, “are still pursuing the absurd ideal of making their ‘science’ as scientific and precise and physics, as if there were no qualitative difference between mindless atoms and men made in the image of God.” He reminds us that economics has only become scientific by becoming statistical. But at the bottom of its statistics, sunk well out of sight, are so many sweeping assumptions about people like you and me – about our needs and motivations and the purpose we have given our lives. Again and again Schumacher insists that economics as it is practiced today – whether it is socialist or capitalist economics – is a “derived body of thought.” It is derived from dubious, “meta-economics” preconceptions regarding man and nature that are never questions, that dare not be questioned if economic science is to be the science it purports to be rather than (as it should be) a humanistic social wisdom that trusts to experienced intuitions, plays by ear, and risks a moral exhortation or two.
p.8, from the Introduction by Theodore Roszak
The idea of unlimited economic growth, more and more until everybody is saturated with wealth, needs to be seriously questions on at least two counts: the availability of basic resources and, alternatively or additionally, the capacity of the environment to cope with the degree of interference implied.
This is one of the real money quotes from the book. Fantastic.
The modern economy is propelled by a frenzy of greed and indulges in an orgy of envy, and these are not accidental features but the very causes of its expansionist success. The question is whether such causes can be effective for long or whether they carry within themselves the seeds of destruction. If Keynes says that ‘foul is useful and fair is not,’ he propounds a statement of fact which may be true or false; or it may look true in the short run and turn out to be false in the longer run. Which is it?
I should think that there is now enough evidence to demonstrate that the statement is false in a very direct, practical sense. If human vices such as greed and envy are systematically cultivated, the inevitable result is nothing less than a collapse of intelligence. A man driven by greed or envy loses the power of seeing things in their roundness and wholeness, and his very successes become failures. If whole societies become infected by these vices, they may indeed achieve astonishing things but they become increasingly incapable of solving the most elementary problems of everyday existence. The Gross National Product may rise rapidly: as measured by statisticians but not as experienced by actual people, who find themselves oppressed by increasing frustration, alienation, insecurity, and so forth. After a while, even the GNP refuses to rise any further, not because of scientific or technological failure, but because of a creeping paralysis of non-cooperation, as expressed in various types of escapism on the part, not only of the oppressed and exploited, but even of highly privileged groups.
The assertion that ‘foul is useful and fair is not’ is the antithesis of wisdom. The hope that the pursuit of goodness and virtue can be postponed until we have attained universal prosperity and that by the single-minded pursuit of wealth, without bothering our heads about spiritual and moral questions, we could establish peace on earth, is an unrealistic, unscientific, and irrational hope.”
What is it that we really require from the scientists and technologists? I should answer: we need methods and equipment which are:
– cheap enough so that they are accessible to virtually everyone;
– suitable for small-scale application; and
– compatible with man’s need for creativity.
Here, he presents a really interesting theory that the amount of capital required to start a business should never exceed one-year’s worth of wages to be paid by the new business.
I have myself come to the conclusion that the upper limit for the average amount of capital investment per workplace is probably given by the annual earnings of an able and ambitious industrial worker. That is to say, if such a man can normally earn, say, $5000 a year, the aver cost of establishing his workplace should on no account be in excess of $5000.
On the recovery of work as a ‘good’ thing!
Above anything else there is a need for a proper philosophy of work which understands work not as that which it has indeed become, an inhuman chore as soon as possible to be abolished by automation, but as something ‘decreed by Providence for the good of man’s body and soul’. Next to the family, it is work and the relationships establish by work that are the true foundations of society.
Here, Schumacker gets bonus points from me for quoting Sayers. Heck yeah.
War is a judgement that overtakes societies when they have been living upon ideas that conflict too violently with the laws governing the universe.
-Dorothy Sayers, Creed or Chaos
The previous quote and this passage both discuss the root cause of war. Girard would give a slightly different answer, but envy would still be the centerpiece. Hence I think Schumacker’s take on it must in line with reality.
Man assuredly needs to rise above this humdrum ‘world’; wisdom shows him the way to do it; without wisdom, he is driven to build up a monster economy, which destroys the world, and to seek fantastic satisfactions, like landing a man on the moon. Instead of overcoming the ‘world’ by moving towards saintliness, he tries to overcome it by gaining preeminence in wealth, power, science, or indeed any imaginable ‘sport’.
These are the real causes of war, and it is chimerical to try to lay the foundations of peace without removing them first. It is doubly chimerical to build peace on economic foundations which, in turn, rest on the systematic cultivations of greed and envy, the very forces which drive men into conflict.
Excelled passage questioning the religion of the rise of GDP. (or GNP).
Having established by his purely quantitative methods that the Gross National Product of a country has risen by, say, five per cent, the economist turned econometrician is unwilling, and generally unable, to face the questions of whether this is to be taken as a good thing or a bad thing. He would lose all his certainties if he even entertained such a question: Growth of GNP must be a good thing, irrespective of what has grown and who, if anyone, has benefited. The idea that there could be pathological growth, unhealthy growth, disruptive or destructive growth is to him a perverse idea which must not be allowed to surface.
Economists themselves, like most specialists, normally suffer from a kind of metaphysical blindness, assuming that theirs is a science of absolute and invariable truths, without any presuppositions. Some go as far as to claim that economic laws are a free from ‘metaphysics’ or ‘values’ as the law of gravitation.
Hahahahaha! Too true, and they aren’t the only ones.
Feminists might not like this section, but I think it should be considered by them anyway. It’s a provocative questions.
Women, on the whole, do not need an ‘outside’ job, and the large-scale employment of women in offices or factories would be considered a sign of serious economic failure. In particular, to let mothers of young children work in factories while the children run wild would be as uneconomic as the employment of a skilled worker as a soldier in the eyes of a modern economist.
On the dead-end of materialist secularism:
Never has science been more triumphant; never has man’s power over his environment been more complete nor his progress faster. It cannot be a lack of know-how that causes the despair not only of religious thinkers like Kierkegaard but also of leading mathematicians and scientists like Russell and Hoyle. We know how to do many things, but do we know WHAT to do?
On the motivation for education, and it’s different kinds.
If a man seeks education because he feels estranged and bewildered, because his life seems to him empty and meaningless, he cannot get what he is seeking by studying any of the natural science, i.e. by acquiring ‘know-how’. That study has its own value which I am not included to belittle; it tells him a great deal about how things work in nature or in engineering: but it tells him nothing about the meaning of life and can in no way cure his estrangement and secret despair.
So where do you turn? To the humanities. And to the fear of the Lord.
Political thinking must necessarily become confused and end in ‘double-talk’ if there is a continued refusal to admit the serious study of the metaphysical and ethical problems involved. The confusion is already so great that it is legitimate to doubt the educational value of studying many of the so-called humanistic subjects. I say ‘so-called because a subject that does not make explicit its view of human nature can hardly be called humanistic.
SOOOOOO many disciplines today refuse to disclose or articulate their underlying philosphy or metaphysical theory. So what it is? Defacto concealed secularism of course.
Interesting take on education and not dividing it into hedgehogs and foxes.
Education can help us only if it produces ‘whole men’. The truly education man is not a man who knows a bit of everything, not even the man who knows all the details of all subjects (if such a thing were possible): the ‘whole man’, in fact, may have little detailed knowledge of facts and theories, he may treasure the Encyclopedia Britannica because ‘she knows and he needn’t’, but he will be truly in touch with the centre. He will not be in doubt about his basic convictions, about his view on the meaning and purpose of his life. He may not be able to explain these matters in words, but the conduct of his life will show a certain sureness of touch which stems from his inner clarity.
Worth considering for anyone trying to westernize the rest of the world:
An industrial system which uses forty per cent of the world’s primary resources to supply less than six per cent of the world’s population could be called efficient only if it obtained strikingly successful results in terms of human happiness, well-being, culture, peace, and harmony. I do not need to dwell on the fact that the American system fails to do this, or that there are not the slightest prospects that it could do so if only it achieved a higher rate of growth of production, associated, as it must be, with an even greater call upon the world’s finite resources.
Man cannot live without science and technology any more than he can live against nature. What needs the most careful consideration, however, is the DIRECTION of scientific research. We cannot leave this to the scientists alone. 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 [their] research.
Schumacker is saying here that you can’t trust specialists to look at the big picture. They may resent that statement, but I think he’s pretty much correct.
When I first began to travel the world, visiting rich and poor countries alike, I was tempted to formulate the first law of economics as follows: ‘the amount of real leisure a society enjoys tends to be in inverse proportion to the amount of labour-saving machinery it employs. However, the evidence is strongly in the other direction. If you go from easy-going England to, say, Germany or the United States, you find that people there live under much more stain than here. And if you move to a country like Burma, which is very near to the bottom of the league table of industrial progress, you find that people have an enormous amount of leisure really to enjoy themselves. Of course, as there is so much less labour-saving machinery to help them, the ‘accomplish’ much less than we do,; but that is a different point. The fact remains that the burden of living rests much more lightly on their shoulders than on ours.
This definitely makes me think of “Africa time”!
A friend of mine at work often annoys administrators by asking “when can I turn it off?” whenever any new project or service or technology is proposed to be implemented. Seriously though, this question MUST be asked and rarely is. Think about it.
Any activity which fails to recognize a self-limiting principle is of the devil. In our work with the developing countries we are at least forced to recognize the limitations of poverty, and this work can therefore be a wholesome school for all of us in which, while genuinely trying to help others, we may also gain knowledge and experience how to help ourselves.
It takes a good deal of courage to say ‘no’ to the fashions and fascinations of the age and to question the presuppositions of a civilization which appears destined to conquer the whole world; the requisite strength can be derived only from deep convictions. If it were derived from nothing more than fear of the future, it would be likely to disappear at the decisive moment.
This is the key problem with the “believe in yourself” motivation we spoon-feed our kids. It only gets you so far. At some point, before adulthood, you are going to have to believe in something very much outside of yourself.
No doubt, a price has to be paid for anything worth while: to redirect technology so that it serves man instead of destroying him requires primarily an effort of the imagination and an abandonment of fear.
We’re not just talking about SkyNet and the Terminator folks. This stuff is real. This sort of thing is really the most hopeful part of the book. What is the way forward? Expand the imagination and cast out fear. I know something (someone) that does that.
The modern tendency is to see and become conscious of only the visible and to forget the invisible things that are making the visible possible and keep it going.
Gosh, this passage sure makes me think of Hebrews 11.
By faith we understand that the worlds were framed by the word of God, so that the things which are seen were not made of things which are visible.
Time alone will not be the healer [of our economic development problems]. On the contrary, the dual economy [rich and poor], unless consciously counteracted, produces what I have called a ‘process of mutual poisoning’, whereby successful industrial development in the cities destroys the economic structure of the hinterland, and the hinterland takes its revenge by mass migration into the cities, poisoning them and making them utterly unmanageable.
You see this all over the world now. The prosperity of the city is short lived as more of the poor move there and overload the infrastructure. Simultaneously, the rural agriculture is messed up by the migration.
The first need is to start work of some kind that brings some reward, however small; it is only when they experience that their time and labour is of value that they can become interested in making it more valuable. It is therefore more important that EVERYBODY should produce something than that a few people should each produce a great deal, and this remains true even if in some exceptional cases the total output under the former arrangement should be smaller than it would be under the latter arrangement. It will not remain smaller, because this is a dynamic situation capable of generating growth.
An unemployed man is a desperate man.
I confess that I have spent the bulk of my life thinking about work and accomplishments in terms of “what actually gets done”. No-brainer, right? But this will always dehumanize eventually and that is completely unsustainable. Man’s basic need for meaningful existence need to be taken into account from the beginning or your work will fail.
It is too often assumed that the achievement of western science, pure and applied, lies mainly in the apparatus and machinery that have been developed from it, and that a rejection of the apparatus and machinery would be tantamount to a rejection of science. This is an excessively superficial view. The real achievement lies in the accumulation of precise knowledge, and this knowledge can be applied in a great variety of ways, of which the current application in modern industry is only one.
The poor can be helped to help themselves, but only by making available to them a technology that recognizes the economic boundaries and limitations of poverty – an intermediate technology.
The aid-givers – rich, educationed, town-based – know how to do things their own way; but do they know how to assist self-help among two million villages, among two thousand million villagers, – poor, uneducated, country-based? They know how to do a few big things in big towns; but do they know how to do thousands of small things in rural areas? They know how to do things with lots of capital; but do they know how to do them with lots of labour – initially untrained labour at that?
(This screams parallels to religious missions too!)
The beginning of wisdom is the admission of one’s own lack of knowledge. 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. This has been the main failure of aid to date.
But of course, people do not live by exporting, and what they produce for themselves and for each other is of infinitely greater importance to them than what the produce for foreigners.
Everything sounds very difficult and in a sense it is very difficult if it is done FOR the people, instead of BY the people. But let us not think that development or employment is anything but the most natural thing in the world. It occurs in every healthy person’s life. There comes a point when he simply sets to work In a sense this is much easier to do now that it has ever been in human history. Why? Because there is so much more knowledge. There is so much better communications, You can tap all this knowledge. So let’s not mesmerize ourselves by the difficulties, but recover the commonsense view that to work is the most natural thing in the world.
Only one must not be blocked by being too damn clever about it. We are always having all sorts of clever ideas about optimizing something before it even exists. I think the stupid man who says ‘something is better than nothing’ is much ore intelligent than the clever chap who will not touch anything unless it is optimal.
This sounds almost exactly like the great adage of computer programming: “Premature optimization is the root of all kinds of evil.”
Economists have ascertained that in order to put a man to work you need on average so much electricity, so much cement, and so much steel This is absurd. I should like to remind you that a hundred years ago electricity, cement and steel did not even exist in any significant quantity at all. I should like to remind you that the Taj Mahal was built without electricity, cement and steel and that all the cathedrals of Europe were built without them as well. It is a fixation in the mind, that unless you can have the latest you can’t do anything at all, and this is the thing that has to be overcome.
What sort of an education is one that prevents us from thinking of things ready to be done immediately? What makes us think we need electricity, cement, and steel before we can do anything at all? If we can recover the sense that it is the most natural thing for every person born into this world to use his hands in a productive way and that it is not beyond the wit of man to make this possible, then I think the problem of unemployment will disappear and we shall soon be asking ourselves how we can get all the work done that needs to be done.
Here, urban and economic “planning” gets smacked around.
The distinction between acts and events is as basic as that between active and passive or between ‘within my control’ or ‘outside my control’. To apply the world ‘planning’ to matters outside the planner’s control is absurd. Events, as far as the planner is concerned, simply happen. He may be able to forecast them and this may well influence his plan; but they cannot possible be part of the plan.
Once a large organization has come into being, it normally goes through alternating phases of centralising and decentralising, like swings of a pendulum. Whenever one encounters such opposites, each of them with persuasive arguments in its favour, it is worth looking into the depth of the problem for something more than compromise, more than a half and half solution. Maybe what we really need is not either-or but the-one-and-the-other-at-the-same-time.
Cast off the tyranny of the either/or and embrace the and!
Intellectual confusion exacts its price. We preach the virtues of hard work and restraint while painting utopian pictures of unlimited consumption without either work or restraint. We complain when an appeal for greater effort meets with the ungracious reply: ‘I couldn’t care less’, while promoting dreams about automation to do away with manual work, and about the computer relieving men from the burden of using their brains.
The real strength of the theory of private enterprise [modern capitalism] lies in this ruthless simplification, which fits so admirably also into the mental patterns created by the phenomenal successes of science. The strength of science, too, derives from a ‘reduction’ of reality to one or the other of its many aspects, primarily the reduction of quality to quantity. But just as the powerful concentration of nineteenth-century science on the mechanical aspects of reality had to be abandoned because their was too much of reality that simply did not fit, so the powerful concentration of business life on the aspect of ‘profits’ has had to be modified because it failed to do justice to the real needs of man.
Socialism that is just government-run capitalism is bad news.
There is therefore really not strong case for public ownership if the objectives to be pursued by nationalized industry are to be just as narrow, just as limited as those of capitalist production: profitability and nothing else.
Can the [Keynesian] system conceivable deal with the problems we are now having to face? The answer is self-evident: greed and envy demand continuous and limitless economic growth of a material kind, without proper regard for conservation, and this type of growth cannot possibly fit into a finite environment.
Remuneration for work within the organization shall not vary, as between the lowest paid and the highest paid, irrespective of age, sex, function or experience, beyond a range of 1:7, before tax.
This put the brakes on envy. Back when the factory worker made $20k and the CEO made $200k, we were closer to this more healthy ideal. Now the factory worker makes $40k and the CEO makes $40 million. They might as well live on different planets too.
The chance of mitigating the rate of resource depletion or of bringing harmony into the relationships between those in possession of wealth and power and those without is non-existent as long as there is no idea anywhere of enough being good and more-than-enough being of evil.
Easier for a camel to go through the eye of a needle than for a rich man to enter the Kingdom of God.
Mankind has indeed a certain freedom of choice,: it is not bound by trends, by the ‘logic of production’, or by any other fragmentary logic. But it is bound by truth. Only in the service of truth is perfect freedom, and even those who today ask us “to free our imagination from bondage to the existing system” fail to point the way to the recognition of truth.
This sounds very much like some recent commentary from Slovaj Zizek where he proposes the thought experiment of trying to imagine a world without capitalism. We discover that we just can’t do it. I’m curious as to whether Aquinas would think we SHOULD be able to. The Sermon on the Mount sounds like it’s from another world sometimes.