Small Is Beautiful: A Study of Economics as if People Mattered (Vintage classics)

by Ernst F. Schumacher

To be relieved of all responsibility except to oneself, means of course an enormous simplification of business.

If a buyer refused a good bargain because he suspected that the cheapness of the goods in question stemmed from exploitation or other despicable practices (except theft), he would be open to criticism of behaving ‘uneconomically’, which is viewed as nothing less than a fall from grace.

The religion of economics has its own code of ethics, and the First Commandment is to behave ‘economically’ – in any case when you are producing, selling or buying.

if economic thinking pervades the whole of society, even simple non-economic values like beauty, health, or cleanliness can survive only if they prove to be ‘economic’.

The logical absurdity, however, is not the greatest fault of the undertaking: what is worse, and destructive of civilisation, is the pretence that everything has a price or, in other words, that money is the highest of all values.

If the economist fails to study meta-economics, or, even worse, if he remains unaware of the fact that there are boundaries to the applicability of the economic calculus, he is likely to fall into a similar kind of error to that of certain medieval theologians who tried to settle questions of physics by means of biblical quotations.

Every science is beneficial within its proper limits, but becomes evil and destructive as soon as it transgresses them.

we may expect that economics must derive its aims and objectives from a study of man, and that it must derive at least a large part of its methodology from a study of nature.

Once any goods, whatever their meta-economic character, have appeared on the market, they are treated the same, as objects for sale, and economics is primarily concerned with theorising on the bargain hunting activities of the purchaser.

An expansion of man’s ability to bring forth secondary products is useless unless preceded by an expansion of his ability to win primary products from the earth, for man is not a producer but only a converter, and for every job of conversion he needs primary products.

We thus arrive at a minimum of four categories, each of which is essentially different from each of the three others. The market knows nothing of these distinctions. It provides a price tag for all goods and thereby enables us to pretend that they are all of equal significance.

The study of economics is too narrow and too fragmentary to lead to valid insights, unless complemented and completed by a study of meta-economics.

The trouble about valuing means above ends – which, as confirmed by Keynes, is the attitude of modern economics – is that it destroys man’s freedom and power to choose the ends he really favours;

‘RIGHT LIVELIHOOD’ IS one of the requirements of the Buddha’s Noble Eightfold Path. It is clear, therefore, that there must be such a thing as Buddhist economics.

RIGHT LIVELIHOOD’ IS one of the requirements of the Buddha’s Noble Eightfold Path. It is clear, therefore, that there must be such a thing as Buddhist economics.

No-one seems to think that a Buddhist way of life would call for Buddhist economics, just as the modern materialist way of life has brought forth modern economics.

There is universal agreement that a fundamental source of wealth is human labour. Now, the modern economist has been brought up to consider ‘labour’ or work as little more than a necessary evil. From the point of view of the employer, it is in any case simply an item of cost, to be reduced to a minimum if it cannot be eliminated altogether, say, by automation.

Hence the ideal from the point of view of the employer is to have output without employees, and the ideal from the point of view of the employee is to have income without employment.

The Buddhist point of view takes the function of work to be at least threefold: to give a man a chance to utilise and develop his faculties; to enable him to overcome his egocentredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence.

to strive for leisure as an alternative to work would be considered a complete misunderstanding of one of the basic truths of human existence, namely that work and leisure are complementary parts of the same living process and cannot be separated without destroying the joy of work and the bliss of leisure.

Buddhist economics must be very different from the economics of modern materialism, since the Buddhist sees the essence of civilisation not in a multiplication of wants but in the purification of human character.

‘If the nature of the work is properly appreciated and applied, it will stand in the same relation to the higher faculties as food is to the physical body. It nourishes and enlivens the higher man and urges him to produce the best he is capable of.

to let mothers of young children work in factories while the children run wild would be as uneconomic in the eyes of a Buddhist economist as the employment of a skilled worker as a soldier in the eyes of a modern economist.

For the modern economist this is very difficult to understand. He 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.

if the purpose of clothing is a certain amount of temperature comfort and an attractive appearance, the task is to attain this purpose with the smallest possible effort, that is, with the smallest annual destruction of cloth and with the help of designs that involve the smallest possible input of toil.

The ownership and the consumption of goods is a means to an end,

Modern economics, on the other hand, considers consumption to be the sole end and purpose of all economic acitivity, taking the factors of production – land, labour, and capital – as the means.

Simplicity and non-violence are obviously closely related.

people who live in highly self-sufficient local communities are less likely to get involved in large-scale violence than people whose existence depends on world-wide systems of trade.

As the world is ruled from towns where men are cut off from any form of life other than human, the feeling of belonging to an ecosystem is not revived.

Much of the economic decay of south-east Asia (as of many other parts of the world) is undoubtedly due to a heedless and shameful neglect of trees.

Modern economics does not distinguish between renewable and non-renewable materials, as its very method is to equalise and quantify everything by means of a money price.

Non-renewable goods must be used only if they are indispensable, and then only with the greatest care and the most meticulous concern for conservation.

the Buddhist economist would insist that a population basing its economic life on non-renewable fuels is living parasitically, on capital instead of income.

As the world’s resources of non-renewable fuels – coal, oil and natural gas – are exceedingly unevenly distributed over the globe and undoubtedly limited in quantity, it is clear that their exploitation at an ever-increasing rate is an act of violence against nature which must almost inevitably lead to violence between men.

We always need both freedom and order. We need the freedom of lots and lots of small, autonomous units, and, at the same time, the orderliness of large-scale, possibly global, unity and co-ordination.

When it comes to action, we obviously need small units, because action is a highly personal affair, and one cannot be in touch with more than a very limited number of persons at any one time.

For every activity there is a certain appropriate scale, and the more active and intimate the activity, the smaller the number of people that can take part, the greater is the number of such relationship arrangements that need to be established.

Philosophy, the arts and religion cost very, very little money. Other types of what claims to be ‘high culture’ – space research or ultra-modern physics – cost a lot of money, but are somewhat remote from the real needs of men.

The idolatry of giantism that I have talked about is possibly one the causes and certainly one of the effects of modern technology, particularly in matters of transport and communications. A highly developed transport and communications system has one immensely powerful effect: it makes people footloose.

The factor of footlooseness is, therefore, the more serious, the bigger the country. Its destructive effects can be traced both in the rich and poor countries. In the rich countries such as the United States of America, it produces, as already mentioned, ‘megalopolis’. It also produces a rapidly increasing and ever more intractable problem of ‘drop-outs’, of people, who, having become footloose, cannot find a place anywhere in society.

people, actual persons like you and me, are viable when they can stand on their own feet and earn their keep.

You do not make non-viable people viable by putting large numbers of them into one huge community, and you do not make viable people non-viable people by splitting a large community into a number of smaller, more intimate, more coherent and more manageable groups.

The conventional wisdom of what is now taught as economics by-passes the poor, the very people for whom development is really needed.

The economics of giantism and automation is a left-over of nineteenth-century conditions and nineteenth-century thinking and it is totally incapable of solving any of the real problems of today.

An entirely new system of thought is needed, a system based on attention to people, and not p...

What is the meaning of democracy, freedom, human dignity, standard of living, self-realisation, fulfilment? Is it a matter of goods, or of people? Of course it is a matter of people. But people can be themselves only in small comprehensible groups.

Are there not indeed enough ‘signs of the times’ to indicate a new start is needed?

In a very real sense, therefore, we can say that education is the most vital of all resources.

If western civilisation is in a state of permanent crisis, it is not far-fetched to suggest that there may be something wrong with its education.