Thinkers before their time 2: Fritz Schumacher

Virginia Isaac loooks at the legacy of the author of Small is Beautiful

Virginia Isaac is the second daughter of E. F. Schumacher. Until recently she was a Director of UCAS (the Universities and Colleges Admissions Service). She now runs Alter Via Ltd, a company that promotes public sector entrepreneurship. She spends half her time in Wales and is a governor of Trinity Saint David University. This article appears in the current issue of the IWA’s journal Agenda.

This year sees the centenary of the birth of E. F. (Fritz) Schumacher (1911-1977). Often seen as ‘a prophet who stood against the tide’ Schumacher pioneered the ideas of environmental awareness, sustainable development, and human scale organisation and technology  in the 1960s and 1970s.

Schumacher was an economist  and philosopher who rose to fame with his ground breaking 1973 publication Small is Beautiful – a study of economics as if people mattered. Schumacher’s warnings regarding rampant consumerism and the ever increasing rate of global consumption made a strong impression  on world leaders and counter culture activists alike. However, despite widespread acclaim at the time, his thinking never became part of the mainstream or was translated into significant political action.

Thinkers before their time

Tomorrow we publish Old Wine, an essay by Leopold Kohr on political leadership.

In the first instance Schumacher was mainly known for his philosophy – encapsulated in a piece that he wrote called Buddhist Economics – on helping developing nations. A key interest was how to help developing countries ‘help themselves’ rather than being massively reliant on overseas aid. Influenced by Professor Leopold Kohr, when he was at the University of Aberystwyth (known for his publication The Breakdown of Nations), Schumacher promoted the concept of human scale and appropriate technology as both healthy and viable economic alternatives to the aid philosophy of the time. He set up a world-wide charity- The Intermediate Technology Development Group, now named  Practical Action, and argued that simply transferring large scale western technology to poorer nations stifled local initiative and participation.

While not against ‘large scale’ as such, Schumacher was against the assumption that ‘big is better’. He advocated that large organisations often needed to be broken down into smaller, human scale units, in order to function in the most effective way. He argued, quite simply, that when political, economic or social organisations were too large, they often became inefficient as a result of being impersonal and unresponsive to human needs and aspirations. Individuals who felt alienated and powerless became less engaged and less productive, with direct economic consequences.

As Schumacher  advanced his ideas on development economics he saw that this thinking applied as much, if not more so, to western economies. He questioned the obsession with GDP and the logic – and sustainability – of the continuous pursuit of growth, not least in a world of finite resources. He supported the diminution of centralised political and economic structures in favour of local responsibility and control.

If Schumacher was at all political he leaned, certainly in his early years, towards democratic socialism. But as his thinking developed he took a far more holistic approach. In his view big government was not the answer. Equally, the pursuit of greed and private profit encouraged by free market capitalism was not necessarily the most economic way of doing things. Certainly, it did little to contribute to the sum of human happiness or well being. Schumacher recognised the vital importance of putting people first and that it was not only activity that could be measured in financial terms that had a value. As he wrote in Small is Beautiful:

“The modern economist is used to measuring the standard of living by the amount of annual consumption, assuming all the time that a man who consumes more is ‘better off’ than a man who consumes less … [But] it is now reasonable to believe that despite the abundance of man made goods produced by continued economic growth, its net effect on human health and happiness could be adverse and possibly disastrous”.

As we approach the much heralded ‘age of austerity’, Schumacher’s ideas  are taking on a new resonance and are more relevant than ever. Global warming, the financial crash and the recognition that oil (upon which so much of modern civilisation depends ) is a finite resource, have made people, many for the first time, question the way society is organising itself.

It  may seem ironic to many on the left that much of Schumacher’s thinking – on localism, employee ownership, the importance of non renewable resources, alternative energy and micro-generation – now appears to form part of the UK government’s  ‘Big Society’  and ‘Wellbeing’ agendas.  It is important, though, to consider these initiatives for what they are, what they are trying to achieve, and to assess them without party political prejudice.

A new focus is being given to the importance of valuing things that cannot be measured in financial terms, for instance the input of ‘stay at home’ parents, the importance of education and skills, and of family and friends. It is recognised that far more credit should be given for involvement in the community as well as the whole host of activities and hobbies that do not feature in GDP but that nevertheless improve the quality of life. For the first time sectors of society are beginning to  explore the concept of ‘enoughness’ – recognising that we do not continually need more and that there are limits on what money can deliver and the ultimate satisfaction it can bring.

Initiatives that are taking place in Wales both reflect this philosophy and are ahead of the curve. Smaller structures enable greater ownership and self determination with demonstrable rewards in terms of satisfaction and wellbeing as a result. The decision to continue to help fund students embarking on university life underlines the belief that matters such as the education of young people are too important be left to market forces.  Developments in higher and further education – not least the imaginative dual sector approach (bringing together the vocational and the academic) now being pioneered by the new Trinity Saint David University – are indicating a far more holistic approach to post secondary learning.

It is hoped that activities planned around Schumacher’s centenary year will help to give a greater focus to the importance of the ideas promulgated all those years ago but which now seem more pertinent than ever.  His books, including A Guide for the Perplexed, are being republished with updated forewords referencing the modern context. Events and conferences celebrating his thinking are being planned by many organisations throughout the UK and overseas. Above all, it is hoped that young people across the globe are made aware of Schumacher’s ideas and that they can have the opportunity to reflect and incorporate them in the world in which we live today.

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