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Small is beautiful

Some incomplete notes from Ed.


Schumacher claims that one of the major problems of our society is that humans believe that they have solved 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.

"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 three or four centuries in man's attitude to nature. Ishould 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." (2-3)


"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." (4)

"Fossil fuels are not made by men and they can not be recycled. Once they are gone they are gone for ever." (5)

"Fossil fuels are merely part of the 'natural capital' which we steadfastly insist on treating as expendable, as if it were income, and by no means the most important part. If we squander our fossil fuels, we threaten civilisation; but if we squander the capital represented by living nature around us we threaten life itself." (5)

"we must thoroughly understand the problem and begin to see the possibility of evolving a new life-style, with new methods of production and new patterns of consumption: a life-style designed for agriculture and horticulture, we can interest ourselves in the perfection of production methods which are biologically sound, build up soil fertility, and produce health, beauty and permanence." (9)

"economic growth, which viewed from the point of view of economics, physics, chemistry and technology, has no discernible limit, must necessarily run into decisive bottlenecks when viewed from the point of view of the environmental sciences. An attitude to life which seeks fulfilment in the single-mided pursuit of wealth - in short, materialism - does not fit into this world, because it contains within itself no limiting principle, while the environment in which it is placed is strictly limited."

The Rich

"It is clear that the 'rich' are in the process of stripping the world of its once-for-all endowment of elatively cheap and simple uels. It is their continuing economic growth which produces ever more exorbitant demands, with the result that the world's cheap and simple fuels could easily become dear and scarc long before the poor countries had acquired the wealth, education, industrial sophistication, and the power of capital accumulation needed for the application of alternative fuels on any significant scale." (15)

"Economic progress, [Keynes] counselled, is obtainable only if we employ those powerful human drives of selfishness, which religion and traditional wisdom universally call upon us to resist. 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." (18)

"I suggest that the foundations of peace cannot be laid by universal prosperity, in the modern sense, because such prosperity, if attainable at all, is attainable only by cultivating such drives of human nature as greed and envy, which destroy intelligence, happiness, serenity, and thereby the peacefulness of man. It could well be that rich people treasure peace more highly than poor people, but only if they feel utterly secure - and this is a contradiction in terms. Their wealth depnds on making inordinately large demands on limited world resources and thus puts them on an unavoidable collision course - not primarily with the poor (who are weak and defenceless) but with otehr rich people." (19)



"Fuel resources are very unevenly distributed, and any shortage of supplies, no matter how slight, would immediately divide the world into 'haves' and 'have-nots' along entirely novel lines. The specially favoured areas, such as the Middle east and North Africa, would attract envious attention on a scale scarcely imaginable today, while some high consumption areas, such as Western Europe and Japan, would move into the unenviabl position of residual legatees. Here is a source of conflict if ever there was one." (15-16)

Underlying values and ideas

"Ideas...form the very instruments by which thought and observation proceed. On the basis of experience and conscious thought small ideas may easily be dislodged, but when it comes to bigger, more universal, or more subtle ideas it may not be so easy to change them. Indeed, it is often difficult to become aware of them, as they are the instruments and not the results of our thinking - just as you can see what is outside you, but cannot easily see that with which you see, the eye itself. And even when one has become aware of them it is often impossible to jusge them on the basis of ordinary experience.

"We often notice the existence of more or less fixed ideas in other people's minds - ideas with which they think without being aware of doing so. We then call them prejudices, which is logically quite correct because they have merely seeped into the mind and are in no way the result of a judgement. But the word prejudice is generally applied to ideas that are patently erroneous and recognisable as such by anyone except the prejudiced man. Most of the ideas with which we think are not that kind at all. To some of them, like those incorporated in words and grammar, the notions of truth or error cannot even be applied; others are quite definitely not prejudices but the result of a judgement; others again are tacit assumptions or presuppositions which may be very difficult to recognise.

"I say, therefore, that we think with or through ideas and that what we call thinking is generally the application of pre-existing ideas to a given situation or set of facts. When we think about, say, the political situation we apply to that situation our political ideas, more or less systematically, and attempt to make that situation 'intelligible' to ourselves by means of these ideas. Similarly everywhere else. Some of the ideas are ideas of value, that is to say, we evaluate the situation in the light of our value ideas."

"The way in which we experience and interpret the world obviously depends very much indeed on the kinds of ideas that fill our minds." (63-64)