Small is Beautiful: A Study of Economics as if People Mattered by E. F. Schumacher (1974)

I. The Problem of Production
We are "inclined to treat as valueless everything that we have not made ourselves" (11). Schumacher blames even Marx for falling into this trap in the labor theory of value.  Fossil fuels, "the tolerance margins of nature", and "the human substance" are the three categories of capital that Schumacher claims we "cheerfully treat as income" (16).

II. Peace and Permanence
Economic growth has "no discernible limit, and must necessarily run into decisive bottlenecks when viewed from the point of view of the environmental sciences" (23). Rather than growth, the central concept of wisdom within economics should be permanence. "The cultivation and expansion of needs is the antithesis of wisdom. It is also the antithesis of freedom and peace" (26). "Every machine that helps every individual has a place but there should be no place for machines that concentrate power in a few hands and turn the masses into mere machine minders, if indeed they do no make them unemployed" (28).

Small scale operations are less likely to be harmful to the natural environment. People will take better care of their land than anonymous companies that imagine the whole universe "is their legitimate quarry" (29).

III. The Role of Economics
The verdict of "uneconomic" kills many activities that should proceed. Fascinating history about the birth of the discipline of economics, and how many predicted that its separation from social philosophy. Sure enough, economics alone has moved into the center of public concern. Economic growth, expansion, performance have become an obsession of all modern societies. Activities branded as "uneconomic" are questioned about their right to even exist. The judgement of economics is "extremely fragmentary; out of the large number of aspects which in real life have been seen and judged together before a decision can be taken, economics supplies only one--whether a thing yields a money profit to those who undertake it or not" (35). The fragmentary nature gives undue weight to the short term over the long term, and is based on a definition of cost which excludes all 'free goods' or environmental capital (36). "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'" (37).

IV. Buddhist Economics
   Modern Western economics views labor as a necessary evil, simply a cost, to be reduced to a minimum if not eliminated. This view of economics also claims that work is a disutility for the worker, a sacrifice of leisure and comfort, and wages are a compensation for the sacrifice.
   The Buddhist point of view gives work at least 3 functions; a way to utilize faculties, a way to enable teamwork through common task, and a way to bring goods and services needed for a becoming existence (45). Work and leisure are complementary and cannot be separated without "destroying the joy of work and the bliss of nature".

V. A Question of Size
Rural to cities move explained. Those who have nothing to sell but labor remain in weakest bargaining position. Schumacher argues for "production by the masses rather than for the masses" (61).

VI. The Greatest Resouce -- Education
Humanities provides 6 main ideas that fail to overcome economic values because they lead to "an abyss of nothingness" (74).

1. evolution
2. competition
3. class struggles are based on economics
4. Freud
5. relativism
6. positivism which denies the possibility of objective knowledge about meaning and purpose of any kind.

Education is breaking down due to a lack of metaphysical training. There is no thought about the levels of being. We have abandoned the cardinal vurtues, the seven deadly sins, but "what new ideas have taken their place?" (83). How can one think about virtue, love, and temperance with the above 6 ideas?

VII. The Proper Use of Land
Agriculture should keep man in touch with living nature, humanize and ennoble man's wider habitat, and bring forth food and other materials which are needed for becoming life. Modern economics recognizes only the latter.

VIII. Resources for Industry
IX. Nuclear Energy -- Salvation or Damnation
X. Technology with a Human Face
The goal is to have enough time to make a good job out of any work, to enjoy oneself, to produce real quality, even to make things beautiful.
Schumacher calls for the use of "intermediate technology". Accessible, more advanced than primitive.

XI. Development
A dynamic approach is required because an economic approach fails to recognize the value of abandoning efficiency and maximal profits in favor of meaningful and human work.

XII. Social and Economic Problems Calling for the Development of Intermediate Technology

XIII. Two Million Villages
XIV. The Problem of Unemployment in India
What is education for? The specialization of tasks (and sacrifice in humanness of work that that implies) means that a college education requires 150 years of peasant work to supply. What what do the peasants get back for it? Therefore Schumacher's essential questions are: "is education to be a passport to privilege or is it something which people take upon themselves almost like a monastic vow, a sacred obligation to serve the people?" (173). "Can we establish an ideology that issists that the educated have taken upon themselves an obligation and have not simply acquired a passport to privilege" (173)? The presence or absence of this ideology affects the content of education. If the former view is taken, then education focuses on village life, manual labor, social justice, etc. But the latter suggests that you need electricity, cement, and steel before we can do anything at all.

XV. A Machine to Foretell the Future
A theoretical warning to not mix up events and acts, future and past, certain and uncertain. Predictions vs forecasts. Forecast vs feasibility study.

XVI. Towards a Theory of Large-Scale Organization
Achieve smallness within large organizations.

XVII. Socialism
Pure market economics are "an institutionalization of individualism and non-responsibility" (213).
Ownership is not a decisive question. "There is no case for public ownership if the objectives to be pursued by nationalized industry are to be just as narrow, just as limited as those of capitalist production: profitability and nothing else" (217).

XVIII. Ownership
XIX. New Patterns of Ownership
Middle road between privatization and capitalism. Points out that people hate being taxed and thus fight against public expenditure. "The need for public expenditure should thus be recognized in the structure of ownership of the means of production" (229).

"All the educational, medical, and research institutions in any society bestow incalculable benefits upon private enterprise -- benefits for which private enterprise does not pay directly as a matter of course, but only indirectly by way of taxes, which are resisted, resented, campaigned against, and often skilfully avoided...It is illogical that payments for benefits obtained by private enterprise from the infrastructure cannot be exacted by the public authorities by direct participation in profits but only after private appropriation of profits has taken place. Private enterprise claims that its profits are being earned by its own efforts, and that a substantial part of them is then taxed away by public authorities. This is not a correct reflection of the truth. A large part of the costs of private enterprise has been borne by the public authorities -- because they pay for the infrastructure" (229)

Schumacher goes on to propose three spectrum on which decisions could be made
Freedom--Totalitarianism
Market Economy -- Planning
Private ownership -- Collectivized ownership
In the simplest interpretation, this gives 8 combinations.

He suggests a middle road on all three spectrums. First that the 'public hand' should receive 1/2 of distributed profits of large-scale private enterprise by means of 50% ownership of the equity of such enterprises" (239). Public shares wouldn't have voting rights normally, but woul dhave the right to information and observation.


Epilogue
The idea of economy, work, and technology that sustains "the human substance" continuously reappears in this book. Work that takes away any hint of humanity, becoming a merely mechanical activity, turns the worker himself into "a perversion of a free being" (29). The "humanization" of work would lower GDP, decrease profits, and decrease the way that the current "standard of living" is calculated. Schumacher argues that the calculation leaves out key factors that would be wise to include.

Wisdom is also thrown around quite casually, with what seems to me a lack of theoretical and philosophical underpinning. Schumacher suggests that we need a revision of the ends which economic means are meant to serve.