E. F. Schumacher

E. F. Schumacher
Photograph of Schumacher from the cover ofSmall Is Beautiful,1973
Born	Ernst Friedrich Schumacher (1911-08-16)16 August 1911 Bonn,German Empire
Died	4 September 1977(1977-09-04)(aged 66) Switzerland
Nationality	British
Academic career
Institution	University of Oxford Columbia University
Alma mater	University of Bonn University of Berlin New College, Oxford Columbia University
Contributions	Appropriate technology Buddhist economics

Ernst Friedrich SchumacherCBE(16 August 1911 – 4 September 1977) was a Britishstatisticianandeconomistwho is best known for his proposals for human-scale,decentralisedandappropriate technologies.He served as Chief Economic Advisor to the BritishNational Coal Boardfrom 1950 to 1970, and founded the Intermediate Technology Development Group (now known asPractical Action) in 1966.

In 1995, his 1973 bookSmall Is Beautiful: A Study of Economics As If People Matteredwas ranked byThe Times Literary Supplementas one of the 100 most influential books published since World War II.In 1977 he publishedA Guide for the Perplexedas a critique ofmaterialisticscientismand as an exploration of the nature and organisation ofknowledge.

Early life

Schumacher was born inBonn,Germany in 1911. His father was a professor ofpolitical economy.The younger Schumacher studied in Bonn andBerlin,then from 1930 in England as aRhodes ScholaratNew College, Oxford,and later atColumbia UniversityinNew York City,earning a diploma in economics. He then worked in business, farming and journalism.His sister, Elizabeth, was the wife of the physicistWerner Heisenberg.

Economist

Protégé of Keynes

Schumacher moved back to England prior to the outbreak ofWorld War II.For a period during the war, he wasinternedon an isolated English farm as an "enemy alien". In these years, Schumacher captured the attention ofJohn Maynard Keyneswith a paper entitled "Multilateral Clearing"that he had written between sessions working in the fields of the internment camp. Keynes recognised the young German's understanding and abilities, and he was able to have Schumacher released from internment. Schumacher helped theBritish governmentmobilise economically and financially during World War II, and Keynes found a position for him atOxford University.

According toLeopold Kohr's obituary for Schumacher, when "Multilateral Clearing" "was published in the spring of 1943 inEconomica,it caused some embarrassment to Keynes who, instead of arranging for its separate publication, had incorporated the text almost verbatim in his famous "Plan for an International Clearing Union",which the British government issued as aWhite Papera few weeks later. "

Adviser to the Coal Board

After the war, Schumacher worked as an economic advisor to, and later Chief Statistician for, theBritish Control Commission,which was charged with rebuilding theGerman economy.From 1950 to 1970 he was Chief Economic Adviser to theNational Coal Board,one of the world's largest organisations, with 800,000 employees. In this position, he argued that coal, not petroleum, should be used to supply the energy needs of the world's population. He saw oil as afinite resource,fearing its depletion and eventually prohibitiveprice,and viewed with alarm the reality that "the richest and cheapest reserves are located in some of the world's most unstable countries".

His position on the Coal Board was often mentioned later by those introducing Schumacher or his ideas. It is generally thought that his farsighted planning contributed to Britain's post-war economic recovery. Schumacher predicted the rise ofOPECand many of the problems ofnuclear power.

Thinking outside the box

In 1955 Schumacher travelled toBurmaas an economic consultant. While there, he developed the set of principles he called "Buddhist economics",based on the belief that individuals need good work for properhuman development.He also proclaimed that "production from local resources for local needs is the most rational way of economic life." He travelled throughout manyThird Worldcountries, encouraging local governments to createself-reliant economies.Schumacher's experience led him to become a pioneer of what is now calledappropriate technology:user-friendlyandecologicallysuitable technology applicable to the scale of the community; a concept very close toIvan Illich's conviviality. He founded the Intermediate Technology Development Group (nowPractical Action) in 1966. His theories of development have been summed up for many in catch phrases such as "intermediate size",and"intermediate technology".He was atrusteeofScott Bader Commonwealthand in 1970 the president of theSoil Association.

E. F. Schumacher was greatly influenced byMahatma GandhiandJ. C. Kumarappaand Gandhi's concepts of "economy of permanence" and appropriate technology. While delivering the Gandhi Memorial Lecture at the Gandhian Institute of Studies atVaranasi(India) in 1973, Schumacher described Gandhi as the greatest "people's economist" whose economic thinking was compatible with spirituality as opposed to materialism.

Influence

Schumacher was influenced byRichard Henry Tawney,Mahatma Gandhi,Leopold Kohr,Gautama Buddha,Adam Smith,Karl Marx,John Maynard Keynes,A.T. Ariyaratne,John Ruskinand theCatholic Churchthroughout his life.He and his solutions to the great economic problems influence theSchumacher Center for a New Economics,The Arche, George McRobie, William Schweke, and many others.

Schumacher as writer

Schumacher wrote on economics for London'sThe Timesand became one of the paper's chiefeditorial writers.At this post he was assigned the task of compiling information for the obituary of John Maynard Keynes. He also wrote forThe EconomistandResurgence.He served as adviser to theIndia Planning Commission,as well as to the governments of Zambia and Burma – an experience that led to his much-read essay "Buddhist Economics".

The 1973 publication ofSmall Is Beautiful: A Study of Economics As If People Mattered,a collection of essays, finished in the house of his friend Leopold Kohr, brought his ideas to a wider audience. One of his main arguments inSmall Is Beautifulis that we cannot consider the problem of technological production solved if it requires that we recklessly erode our finitenatural capitaland deprive future generations of its benefits. Schumacher's work coincided with the growth of ecological concerns and with the birth of environmentalism, and he became a hero to many in theenvironmental movementandcommunity movement.

In 1976, he was awarded thePrix Européen de l'Essai Charles VeillonforSmall Is Beautiful.

His 1977 workA Guide for the Perplexedis both a critique ofmaterialisticscientismand an exploration of the nature and organisation of knowledge.

Question of size

Just like his mentor Leopold Kohr, Schumacher discusses the problems ofseparatismandregionalisminSmall Is Beautiful,which he called "the question of size".Just like Kohr, Schumacher calls for separatism and decentralisation of humanity into smaller nations and communities. However, instead of focusing on the cultural and social aspects of separatism, he discusses the economic perspective. He criticises the belief that history is based on unification – that tribes formed a nation, which then formed a union of nations, and that now one could look forward to aworld government.He notes that the opposite process is taking place as the number of countries worldwide is growing, as large nations break up into smaller ones, and states thatBalkanisationshould not have negative connotations. He questions the idea of "the bigger the better", arguing that in fact smaller nations perform better economically than bigger nations, and points out that German-speaking parts of Switzerland and Austria were able to become prosperous without the need to join Germany. According to Schumacher, the German unification was not responsible for German economical success, and most of the world's wealthiest nations on a per capita basis are small, while the largest countries are poor in comparison. He asserts that the smaller internal market area of a small country is not a hindrance, but rather the basis of great economic potential and development.

Schumacher then notes that the myth of "bigness" also appears in case of corporations, as it's "generally told that gigantic organisations are inescapably necessary".For Schumacher, however, as soon as an organisation of a great size is created, it inevitably entails "a strenuous attempt to attain smallness within bigness" in order to remain efficient; he argues that theGeneral Motorswas organised as a federation of medium-sized firms, and recalls his experience in the BritishNational Coal Board,which was decentralised into a "federation of numerous quasi-firms" underLord Robens.Schumacher asserts that while many still engage in "idolatry of large size", in practice nobody can deny the "convenience, humanity, and manageability of smallness". He repeats the arguments of Leopold Kohr – when any body grows too big, it also becomes unmanageable and highly dysfunctional, namingLondon,New York CityandTokyoexamples of overgrown cities, where "the millions do not add to the city's real value but merely create enormous problems and produce human degradation".

He also discussesglobalisation,identifying the "idolatry of gigantism" as a harmful belief steming from technological progress – the highly developed communications system greatly increasedlabor mobility,rendering people "footloose".He notes that everything needs a structure, and while before the advent of mass transport people were relatively immobile, one was still able to move, such as the Irish immigrants in the United States.Once everything has become extremely mobile, all structures are more vulnerable and threatened than ever. For him, fast transport ended up destroying freedom rather than providing it, given how it made every structure vulnerable and made actions that would mitigate the destructive effects of this technological development necessary.He argues that this problem affects both large and small countries, and that the now extremely high labour mobility might not only destroy social cohesion (resulting in alienation andanomie), but also cause instability:

The factor of footlooseness is, therefore, the more serious, the bigger the country. Its destructive effects can be traced both in the rich and in the 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. Directly connected with this, it produces an appalling problem of crime, alienation, stress, social breakdown, right down to the level of the family. In the poor countries, again most severely in the largest ones, it produces mass migration into cities, mass unemployment, and, as vitality is drained out of the rural areas, the threat of famine. The result is a 'dual society' without any inner cohesion, subject to a maximum of political instability.

Schumacher then moves his attention to nation-states, which he also considers endangered by "bigness", defined as annexation or unification into larger states. He notes that Denmark or Belgium being annexed to Germany and France respectively would stunt their growth, cause their economic potential to be completely neglected, threaten their language and culture, and lastly cause their separatist cause to be dismissed by modern media and politicians:

Imagine that in 1864 Bismarck had annexed the whole of Denmark instead of only a small part of it, and that nothing had happened since. The Danes would be an ethnic minority in Germany, perhaps struggling to maintain their language by becoming bilingual, the official language of course being German. Only by thoroughly Germanising themselves could they avoid becoming second-class citizens. There would be an irresistible drift of the most ambitious and enterprising Danes, thoroughly Germanised, to the mainland in the south, and what then would be the status of Copenhagen? That of a remote provincial city. Or imagine Belgium as part of France. What would be the status of Brussels? Again, that of an unimportant provincial city. I don't have to enlarge on it. Imagine now that Denmark a part of Germany, and Belgium a part of France, suddenly turned what is now charmingly called 'nats' wanting independence. There would be endless, heated arguments that these 'non-countries' could not be economically viable, that their desire for independence was, to quote a famous political commentator, 'adolescent emotionalism, political naivety, phoney economics, and sheer bare-faced opportunism'.

Schumacher continues – nations and states are composed of people, and people are only "viable" when they "can stand on their own feet and earn their keep".He notes that people won't become viable when forced into one huge community, and that they likewise won't become "non-viable" when divided into smaller, more coherenent and manageable communities.He argues that separatism should be applauded rather than mocked, as it entails the desire to become a free and self-reliant region. He also mocks unionism, arguing that "if a country wishes to export all over the world, and import from all over the world, it has never been held that it had to annex the whole world in order to do so".He identifies the question of regionalism as the "most important problem", but stressed that regionalism does not mean combining states into free-trade systems, but rather developing all the regions within each country.

Schumacher calls separatism a "logical and rational response to the need for regional development" and argues that there is no hope for the poor communities beyond successful regional development.He states that most modern developments only result in widening the gap between the rich and the poor, as they almost exclusively focus on the capital or already wealthy areas instead, as these yield the most profit. Thus modern industrialists seek to make the already very profitable regions even richer, while the poor regions remain miserable.This keeps the poor in the "weakest possible bargaining position", as the impoverished regions see no development despite needing it the most. Schumacher considers the "economics of gigantism" to be "a left-over of nineteenth-century conditions and nineteenth-century thinking" which no longer applies to modern problems.He argues that modern technological and scientific potential must focus on fighting human degradation, in "intimate contact" with individuals and small groups rather than large states.For Schumacher, democracy is a matter of people, who can only "be themselves" in small and comprehensible groups. He argues that economic thinking is useless if it only engages in "vast abstractions" such as "the national income, the rate of growth, capital/output ratio, input-output analysis, labour mobility,capital accumulation"instead of addressing" the human realities of poverty, frustration, alienation, despair, breakdown, crime, escapism, stress, congestion, ugliness and spiritual death. "

Later life

As a young man, Schumacher was a dedicated atheist, but his later rejection of materialist, capitalist, agnostic modernity was paralleled by a growing fascination with religion.He developed an interest in Buddhism, but beginning in the late-1950s,Catholicismheavily influenced his thinking. He noted the similarities between his own economic views and the teaching of papalencyclicalson socio-economic issues, fromLeo XIII's "Rerum novarum"toPope John XXIII'sMater et magistra,as well as with thedistributismsupported by the Catholic thinkersG. K. Chesterton,Hilaire Belloc,andVincent McNabb.Philosophically, he absorbed much ofThomism,which provided an objective system in contrast to what he saw as the self-centeredsubjectivismandrelativismof modern philosophy and society.He also was greatly interested in the tradition ofChristian mysticismand read deeply such writers as St.Teresa of AvilaandThomas Merton.These were all interests that he shared with his friend, the Catholic writerChristopher Derrick.In 1971, he converted to Catholicism.

Schumacher gave interviews and published articles for a wide readership in his later years. He also pursued one of the loves of his life: gardening. He died of aheart attackon 4 September 1977, on arrival at Billens hospital inRomont,Switzerland; after falling ill on a train in Zurich during alecture tour.

Legacy

Schumacher's personal collection of books and archives is held by theSchumacher Center for a New Economicslibrary inGreat Barrington, Massachusetts.The center continues the work of Schumacher by maintaining a research library, organising lectures and seminars, publishing papers, developing model economic programs, and providing technical assistance to groups all for the purpose of linking people, land, and community to build strong, diverse local economies.

Schumacher Circle

TheSchumacher Circleis a family of organisations which were founded in Schumacher's memory or were inspired by his work, and which co-operate to support each other. The circle includestheSchumacher CollegeinTotnes,Devon,Resurgence Magazine(nowResurgence & Ecologist), publishing company Green Books, international non-governmental organisationPractical Action,theNew Economics Foundationin the UK, theSchumacher Center for a New Economics(heir to the legacy programs of the former E. F. Schumacher Society) founded inNew England,theSoil Association,the educationalCentre for Alternative Technology(CAT) North Wales, the Jeevika Trust, and the research organisation the Schumacher Institute inBristol.

Dr. E. F. Schumacher Society

TheDr. E. F. Schumacher Society,commonly known asSchumacher UK, was founded in 1978 in Bristol, England.

Schumacher UK and the E. F. Schumacher Society in the USA both spread Schumacher's ideas.

Schumacher College

Schumacher College was founded in 1991.

Selected bibliography

• Small Is Beautiful: A Study of Economics As If People Mattered(1973,ISBN0-06-131778-0); a 25th anniversary edition was published (ISBN0-88179-169-5)
• A Guide for the Perplexed(1977,ISBN0-224-01496-X;still in paperback,ISBN0-06-090611-1)
• This I Believe and Other Essays(1977; reissued,ISBN1-870098-66-8)
• Good Work(1979,ISBN0-06-013857-2)

See also

• Community development
• Distributism
• Grameen Bank
• Kirkpatrick Sale
• Microcredit
• Social entrepreneurship
• Sustainable development
• Worldwatch Institute

Further reading

• Etherden, Peter,"The Schumacher Enigma",Fourth World Review,1999
• Kirk, Geoffrey, ed.Schumacher on Energy(London: Sphere Books, 1983)
• Pearce, Joseph,Small is Still Beautiful,(Wilmington: ISI Books, 2006)
• Wood, Barbara,E.F. Schumacher: His Life and Thought(New York: Harper & Row, 1984)

External links

• New Economy Coalition(following the merger of the New Economics Institute and New Economy Network)
• Schumacher Center for a New Economics(formerly The E.F. Schumacher Society) in Great Barrington, Massachusetts, which houses his personal library and archives.
• Schumacher pic.
• Intermediate Technology Development Group / Practical Action
• About E. F. Schumacher, from British Schumacher Society website
• The Schumacher Institute for Sustainable Systemsis an independent research organisation working to continue Schumacher's legacy.
• Essay on Buddhist Economics
• "The Education of E.F. Schumacher"
• Small is Still Beautiful an interviewwithJoseph Pearceby Angelo Matera,Godspy,2004
• Economics as if People Mattered, E. F. Schumacher observed
• Dialogue with E.F SchumacherandFritjof Capra
• E.F. Schumacher: A Retrospect and Reflection After September 11, 2001Archived17 February 2005 at theWayback Machine
• Interview with E. F. Schumacherpublished inManas Journal,May 19, 1976
• The world improvement plans of Fritz Schumacherby John Toye. Published inCambridge Journal of Economics,36,2: 387–403
• Fifty Possible Ways to Challenge Over-Commercialism
• Beyond Simplicity: Tough Issues For A New Eraby Albert J. Fritsch, SJ, PhD
• Introduction to Schumacher (MP3)
• Watch the documentarySmall Is Beautiful: Impressions of Fritz Schumacher
• ef-schumacher.orgsite set up by Schumacher's family to mark his centenary
• Ernst Friedrich "Fritz" SchumacheratFind a Grave