A Guide for the Perplexed

(Literary Masterpieces, Volume 18)

Anyone who collects evidence to prove that great achievements can come late in life needs to consider the case of E. F. Schumacher. Born in 1911 in Bonn, Germany, Ernst Friedrich Schumacher intended to become an economics professor like his father. To that end, he studied at Bonn, Berlin, Oxford, and Columbia University in New York. He began teaching at Columbia, but the intense thirst for practical work which marked his whole career made him increasingly discontented with academic life. Repulsed by Hitler’s Germany, he settled in England in 1937 and went into business. When war broke out, Schumacher—like most German-born subjects—was interned; the government required him to labor on a Northhamptonshire farm for two pounds a week. But he soon gained release and worked both as a journalist and an associate of Lord Beveridge, a principal architect of the British welfare state. Following the war, “Fritz” Schumacher returned to Germany as an economic adviser to the British Control Commission. In 1950 the Labour government named him an economics adviser to the National Coal Board, which operates Britian’s nationalized coal mines; he eventually became head of planning.

Schumacher remained in this post for twenty years, all the time contributing editorials for The Times, The Observer, and The Economist. His position with the Coal Board provided him with a variety of important challenges. He found himself embroiled in a portentious debate on the future of energy resources; his unorthodox analyses led him to predict a petroleum crisis, and he thus opposed those economists who in the late 1950’s were calling for the closing of the mines. Schumacher also observed the tendencies of a key large-scale nationalized organization. Accepting the NCB’s right to exist, Schumacher nevertheless supported efforts to decentralize the coal industry, devolve decision-making, and strengthen viable low-level organizational forms. Some of Schumacher’s inspiration here came from the British Guild Socialist tradition—especially R. H. Tawney—and Roman Catholic social thought. (Schumacher converted to Catholicism and associated himself with such left-wing Thomists as Jacques Maritain and Etienne Gilson.) The Coal Board also sent Schumacher on numerous missions to Third World nations, and he became increasingly preoccupied with the question of the relevance of Western models for economic development. In 1965 he established the Intermediate Technology Development Group, a private company which assists developing nations to create the sort of technologies appropriate to their abundant-labor, low-capital situation.

Had Schumacher singlemindedly channeled his efforts into the Intermediate Technology Group, his influence outside the narrow world of “development economics” probably would have been negligible. But in 1973 Schumacher assembled a series of his papers, lectures, and essays; these he published in England and America under the odd title Small Is Beautiful: Economics as if People Mattered. While the book caused some excitement in Britain, American reviewers largely shunned it. Three years later, as the nation—stunned by the Vietnam defeat, an oil pricing crisis, and a general erosion of institutional authority—began to seek new perspectives, Schumacher’s book was rediscovered. Elliot Richardson, Ralph Nader, Governor Jerry Brown, and other luminaries testified to the book’s brilliance. By mid-1976 some ten thousand copies a month were being sold; ultimately the book, translated into fifteen languages, became a world bestseller. Said Peter Barnes in The New Republic, “I had never heard of E. F. Schumacher before reading this book. After reading it I am ready to nominate him for the Nobel Prize in economics.” Many noneconomists echoed similar sentiment, for the work possessed an extraordinary cross-disciplinary relevance.

What was Schumacher’s message? In fact, to those who listened closely there were two quite distinct messages, one socioeconomic and the other moral-philosophic. The first of these took the form of trend-identification and analysis. Schumacher often called attention to four closely related tendencies, the first of which is the ever-increasing size of everything in industrial society: organizations, machines, transport and communication systems, cities. “We suffer,” he wrote, “from an almost universal idolatry of giantism.” Nearly lost is the wisdom that for every activity there is an appropriate scale, and that for psychological vitality a society needs a rich variety of small, personalistic groups. The second tendency is the victory of complexity over simplicity in most spheres of existence. Is it written, asked Schumacher, that machines and organizations must be sources of bewilderment for their beneficiaries? Can’t some of the ingenuity expended in their making go towards rendering them intelligible? Like social theorist Ivan Illich (whose ideas resemble those of Schumacher in a number of ways), Schumacher frequently pointed to the maddeningly complex and quite uneconomic structure of modern food transportation networks to illustrate this point. A third trend is the high capital intensity of most productive undertakings. To enter any significant area of production one must control a vast amount of capital. This requirement consigns energetic persons of modest means to the role of subservient “job holders,” unable to exert their creative powers. Lamentably, this trend is increasingly evident even in Third World areas, where indigenous capital is in short supply and small labor-intensive enterprises are desperately needed. And finally, Schumacher pointed out the escalating violence of man’s technologies. Epitomized by long half-life pesticides, the proliferation of nuclear power plants, and the adaptation of agriculture to machine imperatives, such violence begets equally violent “ecological...

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(Literary Masterpieces, Volume 18)

Christian Century. XCIV, October 12, 1977, p. 925.

Christian Science Monitor. LXIX, September 28, 1977, p. 23.

Economist. CCLXV, October 1, 1977, p. 129.

Kirkus Reviews. XLV, July 1, 1977, p. 717.

New Statesman. XCIV, October 7, 1977, p. 481.