Small is Beautiful… But is it still relevant?

Summer 2023 #42
written by
Dan Gregory, Tim Crabtree, Bronwen Morgan, Peter North, Fernanda Vidal & Juliana Diniz
illustration by
Lauren Thorley

E.F. Schumacher’s hugely influential work Small is Beautiful: A Study of Economics As If People Mattered was published in 1973, weaving together philosophy, environmentalism and economics to propose a human-scale economics. But what does ‘small’ mean today in the context of hyperconnectivity, rampant consumer capitalism, dehumanised economic systems, and ecological crisis? How might we find ways of being that meet the needs of all living things? Was Schumacher’s work an idealistic vision from a bygone era or have we not yet gleaned all we can from it?

In recognition of the book’s 50th anniversary, we invited a selection of writers and practitioners to reflect upon its continuing influence, and where they see its limitations today.

Dan Gregory—Director at Social Enterprise UK and Independent Advisor for Common Capital

For 50 years, the seductive title of Small is Beautiful has bewitched thousands of well-meaning folks in independent-spirited market towns, and beyond. Yet the book itself, while somewhat rambling, has much more to offer than its headline. It includes some very credible arguments about the limits of framing the world in purely economic terms, the market mechanism, and the commodification of everything. It was ahead of its time on the prospect of unhealthy growth, on land, and fossil fuels. Yet it also contains much on education and Buddhism which may not be for everyone, and discussion of nuclear power which predates the revolutionary advances of wind and solar in more recent times.

But the title has been heard around the world, as well as in Totnes and Stroud, and it’s dangerously misleading. In fact, much of the book is about international development and overseas aid. There’s a lot about urban expansion and mass migration into cities that some of us may remember from geography lessons in the 1970s or 1980s. But when Schumacher finally gets to the issue of size, he actually spends a lot of time outlining the case for both big and small, and advocating for balance:

“What I wish to emphasise is the duality of the human requirement when it comes to the question of size: there is no single answer... For every activity there is a certain appropriate scale... 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 coordination.”

The kicker is that the book ends on the issue of ownership, not size. Schumacher regrets the dichotomy of public vs private ownership, pointing out that: “Reality, thank God, is more imaginative”. He discusses new and alternative patterns of ownership instead, worker control, and collective models. Ownership can be beautiful!

It is a shame the headline has distracted us for so long. Of course, small can be beautiful and scale is often overrated, which Schumacher calls “the idolatry of gigantism”. Yes, we must strive for a better balance. But there are also dangers in the idea that small is intrinsically beautiful, and that buying local is automatically virtuous. Small and local may be the best in many circumstances, especially with an environmental lens, but not always. Local beef may be less environmentally friendly than Greek halloumi. British tomatoes can be more carbon intensive than Dutch alternatives. Food miles are only one part of the equation. Buy green – yes! But buy local? Maybe. It’s a clumsy proxy.

Schumacher was actually trying to break down the assumption that big has to be bad, which he calls a failure of the imagination and of observation. Why have Schumacher’s seemingly fondest fans – localists in the relatively wealthy market towns of Frome and Hebden Bridge – focused so much on local currencies, short supply chains, local markets, and self-sufficiency, when Schumacher was asking us to conceive of a big that could also be just? This is a failure of ambition and a real tragedy of the commons. Why aren’t the chutney artisans and foragepreneurs of Bridport and Hay-on-Wye interested in the large-scale common ownership pioneers of Glas Cymru, Kenyan co-ops, building societies, Danish housing mutuals, Mondragon, German regional banks and Zen-Noh, the giant Japanese co-operative federation? Small can be beautiful, sure, but let’s think big too.

Tim Crabtree—Director of Wessex Community Assets

I first read Small is Beautiful in 1980, and was struck in particular by the two final chapters which focus on democratic ownership. Later the same year, I learned about the Mondragon co-operatives from a BBC documentary. Taken together, the book and the film convinced me that “another way is possible”, in contrast to Thatcher’s chilling warning that “there is no alternative” to free market capitalism.

E.F. Schumacher wrote:

“The modern private enterprise system ingeniously employs the human urges of greed and envy as its motive power ... Can such a system conceivably deal with the problems we are now having to face?"

Pointing to the way in which self-interest, greed, and envy fuel a demand for limitless economic growth on a finite planet, Schumacher argues that new forms of enterprise are required. He was not against private ownership in small scale enterprises, but criticises “the passive owner who lives parasitically on the work of others”. He provides an example of a medium scale company – Scott Bader – that evolved a structure of “commonwealth” ownership and suggests that larger companies could either be nationalised or forced to issue duplicate shares, when raising equity finance, that are held by the government – with dividends replacing tax.

My first job in the UK was at the New Economics Foundation, whose founding was inspired in large part by the work of E.F. Schumacher. I worked with George McRobie who wrote a sequel to Small is Beautiful called Small is Possible (1981). He worked with Schumacher to develop the concept and practice of intermediate technology. McRobie wrote:

“... if the urgent tasks of industrialised countries are to find ways of humanizing industry, protecting the physical environment and conserving natural resources, is not a new kind of technology required – smaller, less rapacious, capital and energy saving?"

Intermediate (also called “alternative” or “appropriate”) technology was developed prior to the adoption of the internet but at its heart was an ethos of sharing designs and experience across territories. So although there was an emphasis on “small” and “local”, it did also seek to be “open” and “connected” (SLOC). It was therefore a precursor of more recent open source approaches to the sharing of both software code and physical hardware designs, and was one of the inspirations for Ezio Manzini’s descriptions of a set of emerging socio-technical SLOC systems in the digital age:

“... a distributed production and consumption system in which the global is a network of locals – a mesh of connected local systems, the small scale of which makes them comprehensible and controllable by individuals and communities."

The small and local is understood as the focus for identity and relationship, but with the rise of the internet the local can be connected through peer-to-peer networks and open source distribution. The local can be a node within a wider, potentially global, network.

There has been increasing interest in the development of distributed computing, re-distributed manufacturing, open source construction systems, and decentralised energy systems, made up of autonomous but connected elements. Schumacher’s message lives on, in ways he might not have imagined, but with results he would have delighted in.

In this way, “small” is much less about size than it is about qualitative shifts in the understanding of human needs, potential, and meaningful work.

Fernanda Vidal—Escola Schumacher Brasil & Juliana Diniz—Instituto Desenvolvimento Regenerativo

It is the 50th anniversary of Small is Beautiful, and the book (and the paradigm it represents) might seem, more than ever, out of fashion. In an era of mega projects, companies with larger GDPs than countries, global supply chains, and social projects evaluated by their replicability, scalability, and capacity for expansion, big – and bigger – is synonymous with beautiful, desirable, and inevitable. What value can still be found in the writings of E.F. Schumacher, an economist that inspired so much of the New Economics movement, but is hardly known outside niche cultures nowadays?

Countries such as Brazil have succumbed, for many reasons, to the growthist mentality. However, alternative perspectives for development are still alive, resisting, and fighting for a truly beautiful future. Rooted in other ontologies, Latin American traditional ways of life, practised by rural communities and social movements related to agrarian reform and agroecology, embody human lives that are centred in a conviviality with other forms of life, in reciprocity and balance. These approaches reflect the emphasis that Schumacher put on social and ecological well-being:

“An attitude to life which seeks fulfillment in the single-minded pursuit of wealth – in short, materialism – does not fit into this world, because it contains within itself no limiting principle, while the environment in which it is placed is strictly limited."

Despite the singularities inherent to each culture and community, there are common points of a certain way of life that can be highlighted and that, again, are very close to what Schumacher defended. For example, Alberto Acosta writes:

“The appropriate scale of human activity and the need for local connection is one of those lessons. The “good life”, Buen Vivir, how the Andean peoples teach, happens at human scale, in a community based way, with autonomous production relations."

By remaining connected to life-supporting systems, they suggest a concept of development that is, itself, alive. The flourishing of life, the unfolding of each living being’s essence, and a growth in vitality and resilience are goals of different qualities from those expressed by GDP. In this way, “small” is much less about size than it is about qualitative shifts in the understanding of human needs, potential, and meaningful work. This is what lies at the core of our collective future: not a discussion of quantities (how much economic growth is still required for the Global South?) but a total reorientation of our energy. As Schumacher points out, so keenly pertinent to the current debates on our ecological future and so close to Amerindians’ and traditional populations’ ways of life in Brazil, what we need is wisdom:

“Ever bigger machines, entailing ever-bigger concentrations of economic power and exerting ever- greater violence against the environment do not represent progress: they are a denial of wisdom. Wisdom demands a new orientation of science and technology towards the organic, the gentle, the non-violent, the elegant and the beautiful."

Peter North—Professor of Alternative Economies at University of Liverpool, and member of Community Economies Institute

Community Economies Institute scholars are inspired by the work of feminist geographers Katherine Gibson and Julie Graham who wrote under the collective authorship of JK Gibson-Graham. As a contribution to this issue I both pay tribute to Schumacher’s work and show how community economies thinkers share a few of his assumptions. This suggests his ideas are neither utopian nor out of date: they inspire our work today.

Firstly, we share an optimistic worldview that emphasises the importance of focusing on small-scale changes that can be found everywhere if one looks closely enough. Spending excessive time dwelling on what is wrong with the world risks diverting energy towards oppression and exploitation instead of directing it towards better alternatives.

Secondly, we share the belief that the economy is diverse, extending beyond paid work for capitalist employers. People sustain their livelihoods through myriad ways that often go unrecognised when we narrowly think of everything in terms of capitalism.

Thirdly, we share a scepticism about large-scale, perhaps utopian plans for social progress, and technologically sophisticated solutions developed by large organisations in favour of a preference for smaller-scale intermediate technology. Building on Schumacher’s work, we look to find, chronicle, promote and proliferate examples of how we can live ‘well’ within planetary limits. The fact that we find such examples everywhere today suggests that Schumacher was on the right track.

As the twentieth century transitioned into the twenty-first, community economies researchers have further developed these ideas. Small is Beautiful was published in 1973, well before the fall of communism and the mistaken notion of the 'end of history,' which wrongly assumed a consensus around free markets and Western-style democracy. During a period when globally hegemonic notions of growth, globalisation, and neoliberalism prevailed, Schumacher's ideas were momentarily unfashionable. A more recent understanding of the dangers of climate catastrophe suggests that Schumacher’s critique of ‘endless growth’, of the problems of living off our fossil fuel ‘capital’ rather than our solar and wind ‘income’, is an idea whose time has come.

Perhaps after the financial crash more people are receptive to envisioning a life beyond capitalism. Community economies scholars continue to develop our understanding of these actually-existing postcapitalist spaces, based on what we find ‘out there’ when we take the time to look. We paint rich pictures of what the ‘substantive’ economy really encompasses: the contributions of unpaid labour and mutual aid, the invaluable offerings of the natural world and other species, how to maintain and develop the commons, and how people in the global south envisage their futures. Our narratives are constructed with a commitment to thick description, a willingness not to claim to know too much, and embracing possibility rather than identifying barriers. I think Schumacher would have approved of these endeavours.

As I write from the UK I personally believe that there is also merit in learning from Schumacher’s thinking and the world in which he lived. He was famously an economist for the British National Coal Board at a time when the British economy was a mixed one with significant levels of state ownership. While of course now we should be leaving coal in the ground, and feminists rightly critiqued the patriarchal assumptions of those times, the mixed economy had many benefits now lost. Education was free. Affordable housing was provided by local councils and homes were homes, not unaffordable for some, money boxes for others. We had decent pensions and welfare. It might be fruitful to think about how the principles of ‘small is beautiful’ could shape community economies when underpinned by a post-austerity social democratic state, as opposed to a neoliberal one where people are too often expected to fend for themselves.

Bronwen Morgan —The University of New South Wales

Is small still beautiful? I would answer yes, no, and ‘yes and no’, according to whether small is interpreted as trivial, tiny, or terrestrial. While that may sound a little like a Buddhist koan (and not forgetting that Schumacher actually draws on Buddhist economics), it unfolds into an argument that the book is relevant to our times as an articulation of insights and values that are more, not less, important than in the 1970s, yet which demand new forms of institutional imagination to remain salient.

Small can be interpreted as trivial if we assume that economic activity and organisations must be large to make any meaningful contribution to society. Schumacher combatted this assumption by questioning the link between ideologies of growth and notions of progress. The critique of economic growth as extractive and damaging, and the articulation of the genuine conviviality and appeal of moving beyond rampant consumerism, are both facets of Small is Beautiful that are more important than ever. Even though concerns about extractive growth and corrosive consumerism are perhaps more widely held today, they have still made very little headway into the systems and institutional routines of how most economies are designed and managed. And precisely because Schumacher’s book links appealing values with a lively and accessible institutional imagination, disillusioned professionals working at the interface of cultural and technocratic change can read it now and feel a sense of ‘Yes! This path is attractive, important, and practical.’

Despite this, it is not inconceivable that said professionals might be concerned if this path unfolds at a small scale, in the quantitative sense of ensuring that the magnitude and extent of institutions, practices, and relationships is kept tiny. Given the crises facing society, from ecology to health to security, an impulse towards scale is understandable. Still, tiny actions can be scaled ‘out’ and not ‘up’, replicated by interlinking mass numbers of them to create powerful, distributed federalism. Yet, if this is one exciting implication of this 1970s classic, the sober challenge of contemporary times is the way in which ‘big tech’ has become adept at superficially providing distributed federalism. Too many platforms seem to support distributed small-scale replication yet in fact disfigure it through infiltrated algorithmic standardisation and control. Schumacher’s ideas about appropriate technology in this context do seem anachronistic – but does this turn ‘yes’ into an irreversible ‘no’?

Not so, because the third – and crucially qualitative – facet of smallness offers a qualified response. If small is not so much tiny as terrestrial, then a sense of what matters is less about size and more about a tactile and sensory understanding of place and locality. This dimension of how life is lived is captured beautifully in Schumacher’s book. Not only does this help readers to connect abstract values to concrete paths of action, but it also opens up ways of linking human and non-human interests. A textured sense of terrestrial identity need not descend into parochial localism, but can provide a meaningful and embodied pathway to new kinds of universalism: translocal networks that can scale out to planetary or even galactic dimensions.

What sutures these three terrains is in the end the importance of beauty. Part of what makes it possible to see a way forward with the tools provided by Schumacher’s book is less the analytical detail and more the felt sense that he constructs a vision which pulls the reader towards it with the pleasure of desire and energy. If we can bring to bear institutional imagination on systems thinking, with a fresh take on appropriate technology in ways that respond to a grasping towards beauty, then Schumacher’s book could remain a bible for our times.

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Summer 2023 #42

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