When I ask people if they have heard of E.F. Schumacher, nowadays the great majority of educated, aware people say they haven’t heard of him. But when I ask if they have heard of the expression ‘Small Is Beautiful’, everyone has heard of it.
I take this as a mark of real success. Even if Schumacher’s name is forgotten, his most important idea is remembered – and more importantly, I believe that people have a deep sense that it contains a vital truth.
Our institutions – governments, corporations, schools, hospitals and a host of others – are out of scale. Efficient they may be, in some rather narrow sense of that word; but because they are too big for everyone involved to be in proper communication with one another, they have had to be structured in ways that often produce perverse decisions that no single individual, in full possession of the relevant facts, would have made.
Big institutions have to be designed like a machine – there are rigid rules that prescribe how the institution will react to given circumstances, and the aims of the institution, also arrived at a in a mechanistic way, may themselves be deeply perverse at the point of application. Often the individuals operating by these principles may know perfectly well that their actions are far from optimal in terms of the needs of the people who are supposed to be the beneficiaries, but as the saying goes, ‘their hands are tied’.
Schumacher saw with enormous clarity how the catastrophic consequences of economic and social policy decisions are normally due not to the incompetence of particular politicians or economists, but to the unexamined assumptions that make up the background to our thinking on these issues.
In these pages I will be exploring some of his insights as they bear poignantly on our contemporary problems – in the meantime I urge you to re-read, or read for the first time, his great classic ‘Small Is Beautiful – Economics As If People Mattered’, and also to read his other, lesser-known books. Here are the titles – I hope you can find copies, they are all first-rate: