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A prophet speaks...
on 4 October 2011
Published back in 1973 this book will seem to some readers the very embodiment of a hippy -style , green tinged , mixed market style of economic thinking. In some quarters `Small is Beautiful' will be either seen as laughably idealistic or decidedly 'old hat'. His views on nationalization and state intervention in business will have many on the right, aghast at the idea of state extending its control or influence over 'big' businesses- a policy process that they would say helped the UK towards its industrial melt down in the 1960's and 70's. Others might see this book as part of the economics counter-culture, up holding the idea that while markets and output are important, society and the environment are more so. Some of Schumacher's notions have been taken more seriously especially by the 'green' movement: boycotting the products of errant firms, working and buying local and reducing personal waste for example.
But this slim volume has value and is well worth reading whether you agree with the overall tone and philosophical direction of travel or not. For in this era of globalised 'free' markets where governments and society are at the beck and call of financial markets and institutions ,individuals feeling that they are mere cogs in an industrial machine that sees them either as consumers or 'inputs'. Schumacher reminds us that it doesn't have to be this way...... his is a message of hope and encouragement: yours to accept or not!
'Small is Beautiful' was written in an era when the mantra was very much economic growth is 'good'. If economic growth creates a wider quantity and choice of goods and services that people can consume , adding to their general well being and happiness, then growth is to be encouraged. Growth could be engineered by allowing businesses to get on and do business. The more growth the better: end of argument.
So what's the problem?
Schumacher wants us to see the economy and economic activity as being the servant of mankind and not the other way around. For him, the market with its obsession with short profit seeking has no particular logic other then to cater to particular individual needs regardless of the wider social costs and benefits of doing so. We as consumers, employees, employers, voters or general citizens should think about the issues and act upon our consciences. Its our world and if we make a mess of it, it can only be our fault. 'Small is Beautiful' argues that economics focused to much on quantitative issues - growth, incomes and employment and not enough on the quality of life. For Schumacher 'quality' is about the social and natural environment rather then consumption as an end itself. Quality is about 'freedom' - meaningful work, local decision making, applying appropriate technical solutions to particular local problems or conditions. Quality is about 'bottom up' community action rather then 'top down' imposed decisions. Economics and its obsession with markets is just too 'narrow' in its perspective, as he says his book is 'a study of economics as if people mattered'.
SIB is an enjoyable read. A period piece in some respects but in others, such as the chapters on economic development his ideas on community based enterprise and appropriate use of (intermediate) technology and aid are very useful. His views on the nuclear debate and the role of education also are thought provoking and as relevant today as when he first put pen to paper. My only problem with Shumacher is that he neglects to mention all the body of economic theory on development, environment and welfare that looks at issues way beyond markets and their behaviour, suggesting by this limiting of the argument that economics lacks the tools or ideas to assist individuals and decision makers in shaping society for the better in future.
Topics covered: business organization and the role of the individual, the role of the state in business and the markets, appropriate development policies and environment issues. The style is discursive and can tend towards the woolly. He is happy to high the problems of current economic and business thinking but is a little too keen to brush over some of the knock -on effects that some of his policies might engender if put into practice.
Why read: Students of economics, business and politics would gain from reading parts or all of this book. As the chapter headings clearly signal the topic under discussion, it is easy to select the content the reader might wish to focus on. At just over 240 pages long it's a fairly quick read but an interesting and challenging one all the same. It's possible to enjoy and benefit from reading 'Small is Beautiful' even if it is in the final analysis it is hopelessly optimistic and under developed in places. Schmacher for all his faults dares us to 'think'...now how about that for an idea?.....