The subtitle of this book, Economics As If People Mattered, is more indicative of its content than is the title, for Schumacher is deeply concerned with the human condition. Modern science, with all the gains that it has brought the world, is often thought to be humanity’s greatest accomplishment. Modern capitalist economies, because of their application of science to the technology of industrial production and their emphasis on motivating economic activity through individual self-interest, are held by specialists to have brought about the greatest material comfort and individual freedom ever. In Schumacher’s view, however, the proponents of these claims have never really looked at what is happening to the people in those societies that have made the most progress. If they did look closely, they would find a different result:In the excitement over the unfolding of his scientific and technical powers, modern man has built a system of production that ravishes nature and a type of society that mutilates man. If only there were more and more wealth, everything else, it is thought, would fall into place. . . . The development of production and the acquisition of wealth have thus become the highest goals of the modern world in relation to which all other goals, no matter how much lip-service may still be paid to them, have come to take second place.
Schumacher is concerned with showing that these goals are unhealthy for both human beings and the world as a whole.
He begins by debunking the notion that modern advanced societies have solved the problem of production through technological development. Because they have removed human beings from direct contact with nature, industrial methods of mass production also have negative side effects. When nature is thought of as something outside human activity, humans become careless about how they treat it. As a result, resources tend to be considered, to use economic terms, as an income (a flow of services) rather than as capital (a stock of goods). Resources such as petroleum and other forms of energy and minerals are used as quickly as possible in the creation of wealth instead of being thought of as something that should be conserved. This carelessness also applies to the environment, which is being polluted by the rapid use of material resources, and to the treatment of human beings, who are reduced to little more than appendages to the machinery they service in factories.
While science has abetted these deplorable conditions, Schumacher places most of the fault on economics. He finds that most current economic thinking is based on greed as manifested in the efforts of business to maximize profits. Economists who believe in the ability of markets to lead to sound social decisions place profits at the center of their philosophy because businesses can make profits only by serving the needs of the public. Because of the centrality of profits in economics, Schumacher finds it to be not a science but a religion, although a very influential one.
The canons of economics do not serve society well according to Schumacher. Individual consumers become bargain hunters who have no concern for what was needed to produce those bargains in terms of using resources, despoiling the environment, or harming workers. Schumacher finds shortsighted the idea that the profits of individual businesses can serve society as a guide to what is needed and what is not. Under that system, neither business nor the consumer has a larger responsibility beyond...
(The entire section is 1439 words.)
The advanced economies of the West have had nearly a century of experience with industrialization and economic growth. During that time, the standard of living in those countries has risen dramatically. Along with this improved economic well-being has come a host of problems—social, political, and environmental. For most of this period, economists have extolled the successes and ignored the problems. Even when they have recognized the problems, they have maintained that science and technology would be able to solve them. In holding to this view they have argued that they, too, were dispassionately applying a science.
According to Schumacher, these economists are espousing a religion: Their theory that greed and profits will secure the best social decisions has no scientific basis. Although he mounts a strong attack on these presumptions, Schumacher is really seeking to attain balance in economic thinking. Economic decisions do need some measure of their worth, and profits serve this function well. Nevertheless, economic decisions that are not made within the context of a larger system of values become meaningless. Schumacher wants to incorporate into economics a system of values that combines Christian and Buddhist teachings. As a result, he can be criticized for seeing his own economics as a religion. Yet his infusion of religious values into economics is conscious, whereas traditional economists rarely appreciate the element of religiosity in their...
(The entire section is 452 words.)