Small is Beautiful, by E.F. Schumacher


Small is Beautiful, by E.F. Schumacher

Postby admin » Tue Jan 05, 2016 1:24 am

Small is Beautiful
by E.F. Schumacher



Table of Contents:

• Introduction
• Part One: The Modern World
o One: The Problem of Production
o Two: Peace and Permanence
o Three: The Role of Economics
o Four: Buddhist Economics
• Part Two: Resources
o Six: The Greatest Resource - Education
o Seven: The Proper Use of Land
o Eight: Resources for Industry
o Nine: Nuclear Energy - Salvation or Damnation?
o Ten: Technology With a Human Face
• Part Three: The Third World
o Eleven: Development
o Twelve: Social and Economic Problems Calling for the Development of Intermediate Technology
 Introduction
 The Need for Intermediate Technology
 The Condition of the Poor
 Help to Those who Need it Most
 The Nature of the Task
 The Regional or District Approach
 The Need for an Appropriate Technology
 Definition of Intermediate Technology
 Objections Raised and Discussed
 Applicability of Intermediate Technology
o Thirteen: Two Million Villages
o Fourteen: The Problem of Unemployment in India
 A Talk to the India Development Group in London
• Part Four: Organisation and Ownership
o Fifteen: A Machine to Foretell the Future?
 Need for Semantics
 Predictability
 Short-Term Forecasts
 Planning
 Long-Term Forecasts and Feasibility Studies
 Unpredictability and Freedom
 Conclusion
o Sixteen: Towards a Theory of Large-Scale Organisation
o Seventeen: Socialism
o Eighteen: Ownership
o Nineteen: New Patterns of Ownership
 The Scott Bader Commonwealth
 New Methods of Socialisation
o Epilogue
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Re: Small is Beautiful, by E.F. Schumacher

Postby admin » Tue Jan 05, 2016 1:25 am


Few can contemplate without a sense of exhilaration the splendid achievements of practical energy and technical skill, which, from the latter part of the seventeenth century, were transforming the face of material civilisation, and of which England was the daring, if not too scrupulous, pioneer. if however, economic ambitions are good servants, they are bad masters.


-- R. H. Tawney, Religion and the Rise of Capitalism


-- Aldo Leopold, A Sand County Almanac
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Re: Small is Beautiful, by E.F. Schumacher

Postby admin » Tue Jan 05, 2016 1:26 am


One: The Problem of Production

One of the most fateful errors of our age is the belief that 'the problem of production' has been solved. Not only is this belief firmly held by people remote from production and therefore professionally unacquainted with the facts - it is held by virtually all the experts, the captains of industry, the economic managers in the governments of the world, the academic and notso- academic economists, not to mention the economic journalists. They may disagree on many things but they all agree that the problem of production has been solved; that mankind has at last come of age. For the rich countries, they say, the most important task now is 'education for leisure' and, for the poor countries. the 'transfer of technology'.

That things are not going as well as they ought to be going must be due to human wickedness. We must therefore construct a political system so perfect that human wickedness disappears and everybody behaves well, no matter how much wickedness there may be in him or her. In fact, it is widely held that everybody is born good; if one turns into a criminal or an exploiter, this is the fault of 'the system'. No doubt 'the system' is in many ways bad and must be changed. One of the main reasons why it is bad and why it can still survive in spite of its badness, is this erroneous view that the 'problem of production' has been solved. As this · error pervades all present-day systems there is at present not much to choose between them.

The arising of this error, so egregious and so firmly rooted. is closely connected with the philosophical, not to say religious, changes during the last three or four centuries in man's attitude to nature. I should perhaps say: western man's attitude to nature, but since the whole world is now in a process of westernisation, the more generalised statement appears to be justified. Modern man does not experience himself as a part of nature but as an outside force destined to dominate and conquer it. He even talks of a battle with nature, forgetting that, if he won the battle, he would find himself on the losing side. Until quite recently, the battle seemed to go well enough to give him the illusion of unlimited powers, but not so well as to bring the possibility of total victory into view. This has now come into view, and many people, albeit only a minority, are beginning to realise what this means for the continued existence of humanity.

The illusion of unlimited power, nourished by astonishing scientific and technological achievements, has produced the concurrent illusion of having solved the problem of production. The latter illusion is based on the failure to distinguish between income and capital where this distinction matters most. Every economist and businessman is familiar with the distinction, and applies it conscientiously and with considerable subtlety to all economic affairs - except where it really matters - namely, the irreplaceable capital which man had not made, but simply found, and without which he can do nothing.


One reason for overlooking this vital fact is that we are estranged from reality and inclined to treat as valueless everything that we have not made ourselves. Even the great Dr Marx fell into this devastating error when he formulated the so-called 'labour theory of value'. Now, we have indeed laboured to make some of the capital which today helps us to produce - a large fund of scientific, technological, and other knowledge; an elaborate physical infrastructure; innumerable types of sophisticated capital equipment, etc. - but all this is but a small part of the total capital we are using. Far larger is the capital provided by nature and not by man - and we do not even recognise it as such. This larger part is now being used up at an alarming rate, and that is why it is an absurd and suicidal error to believe, and act on the belief, that the problem of production has been solved.

Let us take a closer look at this 'natural capital'. First of all, and most obviously, there are the fossil fuels. No-one, I am sure, will deny that we are treating them as income items although they are undeniably capital items. If we treated them as capital items, we should be concerned with conservation: we should do everything in our power to try and minimise their current rate of use; we might be saying, for instance, that the money obtained from the realisation of these assets - these irreplaceable assets - must be placed into ii special fund to be devoted exclusively to the evolution of production methods and patterns of living which do not depend on fossil fuels at all or depend on them only to a very slight extent. These and many other things we should be doing if we treated fossil fuels as capital and not as income. And we do not do any of them, but the exact contrary of every one of them: we are not in the least concerned with conservation: we are maximising, instead of minimising the current rates of else; and, far from being interested in studying the possibilities of alternative methods of production and patterns of living - so as to get off the collision course on which we are moving with ever-increasing speed - we happily talk of unlimited progress along the beaten track of 'education for leisure' in the rich countries, and of 'the transfer of technology' to the poor countries.

The liquidation of these capital assets is proceeding so rapidly that even in the allegedly richest country in the world, the United States of America, there are many worried men, right up to the White House, calling for the massive conversion of coal into oh and gas, demanding ever more gigantic efforts to search for and exploit the remaining treasures of the earth. Look at the figures that are being put forward under the heading 'World Fuel Requirements in the Year 2000'. If we are now using something like 7,000 million tons of coal equivalent, the need in twenty-eight years' time will be three times as large - around 20,000 million tons! What are twenty-eight years? Looking backwards, they take us roughly to the end of World War II, and, of course, since then fuel consumption has trebled; but the trebling involved an increase of less than 5,000 million tons of coal equivalent. Now we are calmly talking about an increase three times as large.

People ask: can it be done? And the answer comes back: it must be done and therefore it shall be done. One might say (with apologies to John Kenneth Galbraith) that it is a case of the bland leading the blind. But why cast aspersions? The question itself is wrong-headed, because it carries the implicit assumption that we are dealing with income and not with capital. What is so special about the year 2000? What about the year 2028, when little children running about today will be planning for their retirement? Another trebling by then? All these questions and answers are seen to be absurd the moment we realise that we are dealing with capital and not with income: fossil fuels are not made by men; they cannot be recycled. Once they are gone they are gone for ever. But what - it will be asked - about the income fuels? Yes, indeed, what about them? Currently, they contribute (reckoned in calories) less than four per cent to the world total. In the foreseeable future they will have to contribute seventy, eighty, ninety per cent. To do something on a small scale is one thing: to do it on a gigantic scale is quite another, and to make an impact on the world fuel problem, contributions have to be truly gigantic. Who will say that the problem of production has been solved when it comes to income fuels required on a truly gigantic scale?

Fossil fuels are merely a part of the 'natural capital' which we steadfastly insist on treating as expendable, as if it were income, and by no means the most' important part. If we squander our fossil fuels, we threaten civilisation; but if we squander the capital represented by living nature around us, we threaten life itself People are waking up to this threat, and they demand that pollution must stop. They think of pollution as a rather nasty habit indulged in by careless or greedy people who, as it were, throw their rubbish over the fence into the neighbour's garden. A more civilised behaviour, they realise, would incur some extra cost, and therefore we need a faster rate of economic growth to be able to pay for it. From now on, they say, we should use at least some of the fruits of our ever-increasing productivity to improve 'the quality of life' and not merely to increase the quantity of consumption. All this is fair enough, but it touches only the outer fringe of the problem.


The explanation is not difficult to find. As with fossil fuels, we have indeed been living on the capital of living nature for some time, but at a fairly modest rate. It is only since the end of World War II that we have succeeded in increasing this rate to alarming proportions. In comparison with what is going on now and what has been going on progressively, during the last quarter of a century, all the industrial activities of mankind up to, and including, World War II are as nothing. The next four or five years are likely to see more industrial production, taking the world as a whole, than all of mankind accomplished up to 1945. In other words, quite recently that most of us have hardly yet become conscious of it – there has been a unique quantitative jump in industrial production.

Partly as a cause and also as an effect, there has also been a unique qualitative jump. Our scientists and technologists have learned to compound substances unknown to nature, against many of them, nature is virtually defenceless. There are no natural agents to attack and break them down. It is as if aborigines were suddenly attacked with machine-gun fire: their bows and arrows are of no avail. These substances, unknown to nature, owe their almost magical effectiveness precisely to nature's defencelessness - and that accounts also for their dangerous ecological impact. It is only in the last twenty years or so that they have made their appearance in bulk. Because they have no natural enemies, they tend to accumulate, and the long-term consequences of this accumulation are in many cases known to be extremely dangerous, and in other Gases totally unpredictable.

In other words, the changes of the last twenty-five years, both in the quantity and in the quality of man's industrial processes, have produced an entirely new situation - a situation resulting not from our failures but from what we thought were our greatest successes. And this has come so suddenly that we hardly noticed the fact that we were very rapidly using up a certain kind of irreplaceable capital asset, namely the tolerance margins which benign nature always provides.

Now let me return to the question of 'income fuels' with which I had previously dealt in a somewhat cavalier manner. No one is suggesting that the world-wide industrial system which is being envisaged to operate in !he year 2000, a generation ahead, would be sustained primarily by water or wind power. No, we are told that we are moving rapidly into the nuclear age. Of course, this has been the story for quite some time, for over twenty years, and yet. the contribution of nuclear energy to man's total fuel and energy requirements is still minute. In 1970. it amounted to 27 per cent in Britain; 0·6 per cent in the European Community; and 0·3 per cent in the United States, to mention only the countries that have gone the furthest. Perhaps we can assume that nature's tolerance margins will be able to cope with such small impositions, although there are many people even today who are deeply worried, and Dr Edward D. David, President Nixon's Science Adviser, talking about the storage of radioactive wastes, says that 'one has a queasy feeling about something that has to stay underground and be pretty well sealed off for 25,000 years before it is harmless'.

However that may be, the point I am making is a very simple one: the proposition to replace thousands of millions of tons of fossil fuels, every year, by nuclear energy means to 'solve' the fuel problem by creating an environmental and ecological problem of such a monstrous magnitude that Dr David will not be the only one to have 'a queasy feeling'. It means solving one problem by shifting it to another sphere - there to create an infinitely bigger problem.

Having said this, I am sure that I shall be confronted with another, even more daring proposition: namely, that future scientists and technologists will be able to devise safety rules and precautions of such perfection that the using, transporting, processing and storing of radioactive materials in ever-increasing quantities will be made entirely safe; also that it will be the task of politicians and social scientists to create a world society in which wars or civil disturbances can never happen. Again, it is a proposition to solve one problem simply by shifting it to another sphere, the sphere of everyday human behaviour. And this takes us to the third category of 'natural capital' which wt: are recklessly squandering because we treat it as if it were income: as if it were something we had made ourselves and could easily replace out of our much-vaunted and rapidly rising productivity.

Is it not evident that our current methods of production are already eating into the very substance of industrial man? To many people this is not at all evident. Now that we have solved the problem of production, they say, have we ever had it so good? Are we not better fed, better clothed, and better housed than ever before - and better educated! Of course we are: most, but by no means ail. of us: in the rich countries. But this is not what I mean by 'substance'. The substance of man cannot be measured by Gross National Product. Perhaps it cannot be measured at all. except for certain symptoms of loss. However, this is not the place to go into the statistics of these symptoms, such as crime. drug addiction, vandalism, mental breakdown, rebellion, and so forth. Statistics never prove anything.


And what is my case? Simply that our most important task is to get oh our present collision course. And who is there to tackle such a task? I think every one of us, whether old or young, powerful or powerless, rich or poor, influential or uninfluential. To talk about the future is useful only if it leads to action now. And what can we do now, while we are still in the position of 'never having had it so good'? To say the least - which is already very much - we must thoroughly understand the problem and begin to see the possibility of evolving a new life-style, with new methods of production and new patterns of consumption: a life-style designed for permanence. To give only three preliminary examples: in agriculture and horticulture, we can interest ourselves in the perfection of production methods which are biologically sound, build up soil fertility, and produce health, beauty and permanence. Productivity will then look after itself. In industry, we can interest ourselves in the evolution of small-scale technology, relatively non-violent technology, 'technology with a human face', so that people have a chance to enjoy themselves while they art: working, instead of working solely for their pay packet and hoping, usually forlornly, for enjoyment solely during their leisure time. In industry. again - and, surely, industry is the pace-setter of modern life - we can interest ourselves in new forms of partnership between management and men, even forms of common ownership.

We often hear it said that we are entering the era of 'the Learning Society'. Let us hope this is true. We still have to learn how to live peacefully, not only with our fellow men but also with nature and. above all. with those Higher Powers which have made nature and have made us; for, assuredly, we have not come about by accident and certainly have not made ourselves.

The themes which have been merely touched upon in this chapter will have to be further elaborated as we go along. Few people will be easily convinced that the challenge to man's future cannot be met by making marginal adjustments here or there, or, possibly, by changing the political system.

The following chapter is an attempt to look at the whole situation again, from the angle of peace and permanence. Now that man has acquired the physical means of self-obliteration, the question of peace obviously looms larger than ever before in human history. And how could peace be built without some assurance of permanence with regard to our economic life?
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Re: Small is Beautiful, by E.F. Schumacher

Postby admin » Tue Jan 05, 2016 1:42 am

Two: Peace and Permanence

The dominant modern belief is that the soundest foundation of peace would be universal prosperity. One may look in vain for historical evidence that the rich have regularly been more peaceful than the poor, but then it can be argued that they have never felt secure against the poor: that their aggressiveness stemmed from fear; and that the situation would be quite different if everybody were rich. Why should a rich man go to war? He has nothing to gain. Are not the poor, the exploited the oppressed most likely to do so, as they have nothing to lose but their chains? The road to peace, it is argued, is to follow the road to riches.

This dominant modern belief has an almost irresistible attraction as it suggests that the faster you get one desirable thing the more securely do you attain another. It is doubly attractive because it completely by-passes the whole question of ethics: there is no need for renunciation or sacrifice: on the contrary! We have science and technology to help us along the road to peace and plenty, and all that is needed is that we should not behave stupidly, irrationally, cutting into our own flesh. The message to the poor and discontented is that they must not impatiently upset or kill the goose that will assuredly, in due course, lay golden eggs also for them. And the message to the rich is that they must be intelligent enough from time to time to help the poor, because this is the way by which they will become richer still.

Gandhi used to talk disparagingly of 'dreaming of systems so perfect that no-one will need to be good'. But is it not precisely this dream which we can now implement in reality with our marvellous powers of science and technology? Why ask for virtues, which man may never acquire, when scientific rationality and technical competence are all that is needed?

Instead of listening to Gandhi, are we not more inclined to listen to on of the most influential economists of our century, the great Lord Keynes? In 1930, during the world-wide economic depression, he felt moved to speculate on the ‘economic possibilities of our grandchildren’ and concluded that the day might not be far off when everybody would be rich. We shall then, he said, ‘once more value ends above means and prefer the good to the useful.’

“But beware!’ he continued. ‘The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to every one that fair is foul and foul is fair,; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight.’

This was written forty years ago and since then, of course, things have speeded up considerably. Maybe we do not even have to wait for another sixty years until universal plenty will, be attained. In any case, the Keynesian message is clear enough: Beware! Ethical considerations are not merely irrelevant, they are an actual hindrance, 'for foul is useful and fair is not'. The time for fairness is no; yet. The road to heaven is paved with bad intentions.


First: that universal prosperity is possible;

Second: that its attainment is possible on the basis of the materialist philosophy of 'enrich yourselves';

Third: that this is the road to peace.

The question with which to start my investigation is obviously this: Is there enough to go round? Immediately we encounter a serious difficulty: What is 'enough'? Who can tell us? Certainly not the economist who pursues 'economic growth' as the highest of all values, and therefore has no concept of 'enough'. There are poor societies which have too little: but where is the rich society that says: 'Halt! We have enough'? There is none.

Perhaps we can forget about 'enough' and content ourselves with exploring the growth of demand upon the world's resources which arises when everybody simply strives hard to have 'more'.

As we cannot study all resources, I propose to focus attention on one type of resource which is in a somewhat central position - fuel. More prosperity means a greater use of fuel - there can be no doubt about that. At present, the prosperity gap between the poor of this world and the rich is very wide indeed and this is clearly shown in their respective fuel consumption. Let us decline as 'rich' all populations in countries with an average fuel consumption - in 1966 - of more than one metric ton of coal equivalent (abbreviated: c.e.) per head and as 'poor' all those below this level. On these definitions we can draw up the following table (using United Nations figures throughout):

TABLE 1 (1966)
Rich (%)/ Poor (%) / World (%)
POPULATION (millions)
1,060 (31) / 2,284 (69) / 3384 (100)
FUEL CONSUMPTION (million tons c.e.)
4,788 (87) / 721(13) / 5509 (100)
4.52 / 0.32 / 1.65

The average fuel consumption per head of the 'poor' is only 0·32 tons - roughly one-fourteenth of that of the 'rich', and there are very many 'poor' people in the world - on these definitions nearly seven-tenths of the world population. If the 'poor' suddenly used as much fuel as the 'rich', world fuel consumption would treble right away.

But this cannot happen as everything takes time. And in time both the 'rich' and the 'poor' are growing in desires and in numbers. So let us make an exploratory calculation. If the "rich' populations grow at the rate of 14 per cent and the 'poor' at the rate of 2.5 per cent a year, world population will grow to about 6,900 million by 2000 AD - a figure not very different from the most authoritative current forecasts. If at the same time the fuel consumption per head of the 'rich· population grows by 23 per cent, while that of the 'poor' grows by 4f per cent a year, the following figures will emerge for the year 2000 AD:

TABLE II (2000 AD)
Rich (%) Poor (%) World (%)
POPULATION (millions)
1,617 (23) / 5,292 (77) / 6,909 (100)
FUEL CONSUMPTION (million tons c.e.)
15,588 (67) / 7,568 (33) / 23,156 (100)
9.64 / 1.43 / 3.35

The total result on world fuel consumption would be a growth from 5·5 milliard tons c.e. in 1966 to 232 milliard in the year 2000 - an increase by a factor of more than four, half of which would be attributable to population increase and half to increased consumption per head.

This half-and-half split is interesting enough. But the split between the 'rich' and the 'poor' is even more interesting. Of the total increase in world fuel consumption from 5·5 milliard to 23·2 milliard tons c.e., i.e. an increase by 17·7 milliard tons, the 'rich' would account for nearly two-thirds and the 'poor' for only a little over one-third. Over the whole thirty-four-year period, the world would use 425 milliard tons of coal equivalent, with the 'rich' using 321 milliards or seventy-five per cent and the 'poor', 104 milliards.

Now, does not this put a very interesting light on the total situation? These figures are not, of course, predictions: they are what might be called 'exploratory calculations'. I have assumed a very modest population growth on the part of the 'rich'; and a population growth rate twice as high on the part of the 'poor'; yet it is the 'rich' and not the 'poor' who do by far the greatest part of the damage - if 'damage' it may be called. Even if the populations classified as 'poor' grew only at the rate assumed for the 'rich', the effect on total world fuel requirements would be hardly significant - a reduction of just over ten per cent. But if the 'rich' decided - and I am not saying that this is likely - that their present pm capital fuel consumption was really high enough and that they should not allow it to grow any further, considering that it is already fourteen times as high as that of the 'poor' - now that would make a difference: in spite of the assumed rise in the 'rich' populations, it would cut total world fuel, requirements in the year 2000 by over one-third.

The most important comment, however, is a question: Is it plausible to assume that world fuel consumption could grow to anything like 23,000 million tons c.e. a year by the year 2000, using 425,000 million tons c.e. during the thirty-four years in question? In the light of our present knowledge of fossil fuel re serves this is an implausible figure, even if we assume that one quarter or one-third of the world total would come from nuclear fission.


Exploratory calculations, of course, do not prove anything. A proof about the future is in any case impossible, and it has been sagely remarked that all predictions are unreliable, particularly those about the future. What is required is judgment and exploratory calculations can at least help to inform our judgment In any case, our calculations in a most important respect understate the magnitude of the problem. It is not realistic to treat the world as a unit. Fuel resources are very unevenly distributed, and any short- age of supplies, no matter how slight, would immediately divide the world into 'haves' and 'have-nets' along entirely novel lines. The specially favoured areas, such as the Middle East and North Africa, would attract envious attention on a scale scarcely imaginable today, while some high consumption areas, such as Western Europe and Japan, would move into the unenviable position of residual legatees. Here is a source of conflict if ever there was one.

As nothing can be proved about the future - not even about the relatively short-term future of the next thirty years - it is always possible to dismiss even the most threatening problems with the suggestion that something will turn up. There could be simply enormous and altogether unheard-of discoveries of new reserves of oil, natural gas, or even coal. And why should nuclear energy be confined to supplying one-quarter or one-third of total requirements? The problem can thus be shifted to another plane, but it refuses to go away. For the consumption of fuel on the indicated scale - assuming no insurmountable difficulties of fuel supply - would produce environmental hazards of an unprecedented kind.

Take nuclear energy. Some people say that the world's re sources of relatively concentrated uranium are insufficient to sustain a really large nuclear programme - large enough to have a significant impact on the world fuel situation, where we have to reckon with thousands of millions, not simply with millions, of tons of coal equivalent. But assume that these people are wrong. Enough uranium will be found; it will be gathered together from the remotest corners of the earth, brought into the main centres of population, and made highly radioactive. It is hard to imagine a greater biological threat, not to mention the political danger that someone might use a tiny bit of this terrible substance for purposes not altogether peaceful.

On the other hand, if fantastic new discoveries of fossil fuels should make it unnecessary to force the pace of nuclear energy, there would be a problem of thermal pollution on quite a different scale from anything encountered hitherto.

Whatever the fuel, increases in fuel consumption by a factor of four and then five and then six... there is no plausible answer to the problem of pollution.

I have taken fuel merely as an example to illustrate a very simple thesis: that economic growth, which viewed from the point of view of economics, physics, chemistry and technology, has no discernible limit. must necessarily run into decisive bottlenecks when viewed from the point of view of the environmental sciences. An attitude to life which seeks fulfilment 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. Already, the environment is trying to tell us that certain stresses are be coming excessive. As one problem is being 'solved'. ten new problems arise as a result of the first 'solution'. As Professor Barry Commoner emphasises, the new problems are not the consequences of incidental failure but of technological success.

Here again, however, many people will insist on discussing these matters solely in terms of optimism and pessimism, taking pride in their own optimism that 'science will find a way out'. They could be right only, I suggest, if there is a conscious and fundamental change in the direction of scientific effort The developments of science and technology over the last hundred years have been such that the dangers have grown even faster than the opportunities. About this, I shall have more to say later.

Already, there is overwhelming evidence that the great self- balancing system of nature is becoming increasingly unbalanced in particular respects and at specific points. It would take us too far if I attempted to assemble the evidence here. The condition of Lake Erie, to which Professor Barry Commoner, among others, has drawn attention, should serve as a sufficient warning. Another decade or two, and all the inland water systems of the United Stats may be in a similar condition. In other words, the condition of unbalance may then no longer apply to specific points but have become generalised. The further this process is allowed to go, the more difficult it will be to reverse it, if indeed the point of no return has not been passed already.

We find, therefore, that the idea of unlimited economic growth, more and more until everybody is saturated with wealth, needs to be seriously questioned on at least two counts: the availability of basic resources and, alternatively or additionally, the capacity of the environment to cope with the degree of interference implied. So much about the physical-material aspect of the matter. Let us now turn to certain non-material aspects.

There can be no doubt that the idea of personal enrichment has a very strong appeal to human nature. Keynes, in the essay from which I have quoted already, advised us that the time was not yet for a 'return to some of the most sure and certain principles of religion and traditional virtue - that avarice is a vice, that the exaction of usury is a misdemeanour, and the love of money is detestable'.

Economic progress, he counselled, is obtainable only if we employ those powerful human drives of selfishness, which religion and traditional wisdom universally call upon us to resist. The modern economy is propelled by a frenzy of greed and indulges in an orgy of envy, and these are not accidental features but the very causes of its expansionist success. The question is whether such causes can be effective for long or whether they carry within themselves the seeds of destruction. If Keynes says that 'foul is useful and fair is net', he propounds a statement of fact which may be true or false; or it may look true in the short run and turn out to be false in the longer run. Which is it?

I should think that there is now enough evidence to demonstrate that the statement is false ill a very direct, practical sense. If human vices: such as greed and envy are systematically cultivated, the inevitable result is nothing less than a collapse of intelligence. A man driven by greed or envy loses the power of seeing things as they really are, of seeing things in their roundness and wholeness, and his very successes become failures. If whole societies become infected by these vices, they may indeed achieve astonishing things but they become increasingly incapable of solving the most elementary problems of everyday existence. The Gross National Product may rise rapidly: as measured by statisticians but not as experienced by actual people, who find themselves oppressed by increasing frustration, alienation, insecurity, and so forth. After a while. even the Gross National Product refuses to rise any further, not because of scientific or technological failure, but because of a creeping paralysis of non-co-operation, as expressed in various types of escapism on the part, not only of the oppressed and exploited, but even of highly privileged groups.

One can go on for a long time deploring the irrationality and stupidity of men and women in high positions or low - 'if only people would realise where their real interests lie!' But why do they not realise this? Either because their intelligence has been dimmed by greed and envy, or because in their heart of hearts they understand that their real interests lie somewhere quite different, There is a revolutionary saying that 'Man shall not live by bread alone but by every word of God'.

Here again, nothing can be 'proved'. But does it still look probable or plausible that the grave social diseases infecting many rich societies today are merely passing phenomena which an able government - if only we could get a really able government! - could eradicate by simply making faster use of science and technology or a more radical use of the penal system?

I suggest that the foundations of peace cannot be laid by universal prosperity, in the modem sense. because such prosperity, if attainable at all. is attainable only by cultivating such drives of human nature as greed and envy, which destroy intelligence, happiness, serenity, and thereby the peacefulness of man. It could well be that rich people treasure peace more highly than poor people. but only if they feel utterly secure - and this is a contradiction in terms. Their wealth depends on making inordinately large demands on limited world resources and thus puts them on an unavoidable collision course - not primarily with the poor (who are weak and defenceless) but with other rich people.

In short we can say today that man is far too clever to be able to survive without wisdom. No-one is really working for peace unless he is working primarily for the restoration of wisdom. The assertion that 'foul is useful and fair is not' is the antithesis of wisdom. The hope that the pursuit of goodness and virtue can be postponed until we have attained universal prosperity and that by the single minded pursuit of wealth, without bothering our heeds about spiritual and moral questions. we could establish peace on earth is an unrealistic, unscientific. and irrational hope, The exclusion of wisdom from economics, science. and technology was something which we could perhaps get away with for a little while. as long as we were relatively unsuccessful; but now that we have become very successful. the problem of spiritual and moral truth moves into the central position.

From an economic point of view, the central concept of wisdom is permanence. We must study the economics of permanence. Nothing makes economic sense unless its continuance for a long time can be projected without running into absurdities. There can be 'growth' towards a limited objective. but there cannot be unlimited. generalised growth. It is more than likely, as Gandhi said, that 'Earth provides enough to satisfy~ every man's need, but not for every man's greed'. Permanence is incompatible with a predatory attitude which rejoices in the fact that 'what were luxuries for our fathers have become necessities for us'.

The cultivation and expansion of needs is the antithesis of wisdom. It is also the antithesis of freedom and peace, Every increase of needs tends to increase one's dependence on outside forces over which one cannot have control, and therefore increases existential fear. Only by a reduction of needs can one promote a genuine reduction in those tensions which are the ultimate causes of strife and war.

The economics of permanence implies a profound reorientation of science and technology, which have to open their doors to wisdom and, in fact, have to incorporate wisdom into their very structure. Scientific or technological 'solutions' which poison the environment or degrade the social structure and man himself are of no benefit, no matter how brilliantly conceived or how great their superficial attraction. 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 beautiful. Peace, as has often been said, is indivisible - how then could peace be built on a foundation of reckless science and violent technology? We must look for a revolution in technology to give us inventions and machines which reverse the destructive trends now threatening us all.


cheap enough so that they are accessible to virtually everyone;

suitable for small-scale application; and

compatible with man's need for creativity.

Out of these three characteristics is tom non-violence and a relationship of man to nature which guarantees permanence. If only one of these three is neglected, things are bound to go wrong. Let us look at them one by one.

Methods and machines cheap enough to be accessible to virtually everyone - why should we assume that our scientists and technologists are unable to develop then? This was a primary concern of Gandhi: 'I want the dumb millions of our land to be healthy and happy, acid I want them to grow spiritually.... If we feel the need of machine, we certainly will have them. Every machine that helps every individual has a place,' he said, ‘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 not make them unemployed.'

Suppose it becomes the acknowledged purpose of inventors and engineers, observed Aldous Huxley, to provide ordinary people with the means of 'doing profitable and intrinsically significant work, of helping men and women to achieve independence from bosses, so that they may become their own employers, or members of a self-governing, co-operative group working for subsistence and a local market ... this differently orientated technological progress (would result in) a progressive decentralisation of population, of accessibility of land, of ownership of the means of production, of political and economic power'. Other advantages, said Huxley, would be 'a more humanly satisfying life for more people, a greater measure of genuine self-governing democracy and a blessed freedom from the silly or pernicious adult education provided by the mass producers of consumer goods through the medium of advertisements'.'

If methods and machines are to be cheap enough to be generally accessible, this means that their cost must stand in some definable relationship to the level of incomes in the society in which they are to be used. I have myself come to the conclusion that the upper limit for the average amount of capital investment per workplace is probably given by the annual earnings of an able and ambitious industrial worker. That is to say, if such a man can normally earn, say, 5,000 a year, the average cost of establishing his workplace should on no account be in excess of $5,000. If the cost is significantly higher, the society in question is likely to run into serious troubles, such as an undue concentration of wealth and power among the privileged few: an increasing problem of 'drop-outs' who cannot be integrated into society and constitute an ever-growing threat; 'structural' unemployment: maldistribution of the population due to excessive urbanisation; and general frustration and alienation, with soaring crime rates. and so forth.

The second requirement is suitability for small-scale application. On the problem of 'scale', Professor Leopold Kohr has written brilliantly and convincingly; its relevance to the economics of permanence is obvious. Small-scale operations. no matter how numerous, are always less likely to be harmful to the natural environment than large-scale ones, simply because their individual force is small in relation to the recuperative forces of nature. There is wisdom in smallness if only on account of the smallness and patchiness of human knowledge, which relies on experiment far more than on understanding. The greatest danger invariably arises from the ruthless application, on a vast scale, of partial knowledge such as we are currently witnessing in the application of nuclear energy, of the new chemistry in agriculture. of transportation technology, and countless other things.

Although even small communities are sometimes guilty of causing serious erosion, generally as a result of ignorance, this is trifling in comparison with the devastations caused by gigantic groups motivated by greed, envy, and the lust for power. It is moreover obvious that men organised in small units will take better care of their bit of land or other natural resources than anonymous companies or megalomaniac governments which pre- tend to themselves that the whole universe is their legitimate quarry.

The third requirement is perhaps the most important of all - that methods and equipment should be such as to leave ample room for human creativity. Over the last hundred years no-one has spoken more insistently and warningly on this subject than have the Roman pontiffs. What becomes of man if the process of production 'takes away from work any hint of humanity, making of it a merely mechanical activity'? The worker himself is turned into a perversion of a free being.

'And so bodily labour (said Plus XI) which even after original sin was decreed by Providence for the good of man's body and soul, is in many instances changed into an instrument of perversion; for from the factory dead matter goes out improved. whereas men there are corrupted and degraded.'

Again, the subject is so large that I cannot do more than touch upon it. Above anything else there is need for a proper philosophy of work which understands work not as that which it has indeed become, an inhuman chore as soon as possible to be abolished by automation, but as something 'decreed by Providence for the good of man's body and soul'. Next to the family, it is work and the relationships established by work that are the true foundations of society. If the foundations are unsound, how could society be sound? And if society is sick, how could it fail to be a danger to peace?

'War is a judgment,' said Dorothy I,. Sayers, 'that overtakes societies when they have been living upon ideas that conflict too violently with the laws governing the universe., Never think that wars are irrational catastrophes: they happen when wrong ways of thinking and living bring about intolerable situations. ‘Economically, our wrong living consists primarily in systematically cultivating greed and envy and thus building up a vast array of totally unwarrantable wants. It is the sin of greed that has delivered us over into the power of the machine. If greed were not the master of modern man - ably assisted by envy - how could it be that the frenzy of economism does not abate as higher 'standards of living' are attained, and that it is precisely the richest societies which pursue their economic advantage with the greatest ruthlessness? How could we explain the almost universal refusal on the part of the rulers of the rich societies - whether organised along private enterprise or collectivist enterprise lines - to work towards the humanisation of work? It is only necessary to assert that something would reduce the 'standard of living', and every debate is instantly closed. That soul-destroying, meaningless, mechanical, monotonous, moronic work is an insult to human nature which must necessarily and inevitably produce either escapism or aggression, and that no amount of 'bread and circuses' can compensate for the damage done - these are facts which are neither denied nor acknowledged but are met with an unbreakable conspiracy of silence - because to deny them would be too obviously absurd and to acknowledge them would condemn the central preoccupation of modern society as a crime against humanity.

The neglect, indeed the rejection, of wisdom has gone so far that most of our intellectuals have not even the faintest idea what the term could mean. As a result, they always tend to try and cure a disease by intensifying its causes. The disease having been caused by allowing cleverness to displace wisdom, no amount of clever research is likely to produce a cure. Rut what is wisdom? Where can it be found? Here we come to the crux of the matter: it can be read about in numerous publications but it can be found only inside oneself, To be able to find it, one has first to liberate oneself from such masters as greed and envy. The stillness following liberation - even if only momentary - produces the insights of wisdom which are obtainable in no other way.

They enable us to see the hollowness and fundamental unsatisfactoriness of a life devoted primarily to the pursuit of material ends, to the neglect of the spiritual. Such a life necessarily sets man against man and nation against nation, because man's needs are infinite and infinitude can be achieved only in the spiritual realm, never in the material. Man assuredly needs to rise above this humdrum 'world'; wisdom shows him the way to do it; without wisdom, he is driven to build up a monster economy, which destroys the world, and to seek fantastic satisfactions, like landing a man on the moon. Instead of overcoming the 'world' by moving towards saintliness, he tries to overcome it by gaining pre eminence in wealth, power, science, or indeed any imaginable 'sport'.

These are the real causes of war, and it is chimerical to try to lay the foundations of peace without removing them first. It is doubly chimerical to build peace on economic foundations which, in turn, rest on the systematic cultivation of greed and envy, the very forces which drive men into conflict.

How could we even begin to disarm greed and envy? Perhaps by being much less greedy and envious ourselves; perhaps by resisting the temptation of letting our luxuries become needs; and perhaps by even scrutinising our needs to see if they cannot be simplified and reduced. If we do not have the strength to do any of this, could we perhaps stop applauding the type of economic 'progress' which palpably lacks the basis of permanence and give what modest support we can to those who, unafraid of being denounced as cranks, work for non-violence: as conservationists, ecologists, protectors of wildlife, promoters of organic agriculture, distributists, cottage producers, and so forth? An ounce of practice is generally worth more than a ton of theory.

It will need many ounces, however, to lay the economic foundations of peace. Where can one find the strength to go on working against such obviously appalling odds? What is more: where Can one find the strength to overcome the violence of greed, envy, hate and lust within oneself?

I think Gandhi has given the answer: 'There must be recognition of the existence of the soul apart from the body, and of its permanent nature, and this recognition must amount to a living faith; and, in the last resort, nonviolence does not avail those who do not possess a living faith in the God of Love.'
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Re: Small is Beautiful, by E.F. Schumacher

Postby admin » Tue Jan 05, 2016 1:50 am

Three: The Role of Economics

To say that our economic future is being determined by the economists would be an exaggeration; but that their influence, or in any case the influence of economics, is far-reaching can hardly be doubted. Economics plays a central role in shaping the activities of the modern world, inasmuch as it supplies the criteria of what is 'economic' and what is 'uneconomic', and there is no other set of criteria that exercises a greater influence over the actions of individuals and groups as well as over those of governments. It may be thought, therefore, that we should look to the economists for advice on how to overcome the dangers and difficulties in which the modern world finds itself, and how to achieve economic arrangements that vouchsafe peace and permanence.

How does economics relate to the problems discussed in the previous chapters? When the economist delivers a verdict that this or that activity is 'economically sound' or 'uneconomic', two important and closely related questions arise: first, what does this verdict mean? And, second, is the verdict conclusive in the sense that practical action can reasonably be based on it?

Going back into history we may recall that when there was talk about founding a professorship for political economy at Oxford 150 years ago, many people were by no means happy about the prospect. Edward Copleston, the great Provost of Oriel College, did not want to admit into the University's curriculum a science 'so prone to usurp the rest'; even Henry Drummond of Albury Park, who endowed the professorship in 1825, felt it necessary to make it clear that he expected the University to keep the new study 'in its proper place'. The first professor, Nassau Senior, was certainly not to be kept in an inferior place, Immediately, in his inaugural lecture, he predicted that the new science 'will rank in public estimation among the first of moral sciences in interest and in utility' and claimed that 'the pursuit of wealth ... is, to the mass of mankind, the great source of moral improvement'. Not all economists, to be sure, have staked their claims quite so high. John Stuart Mill (1806-73) looked upon political economy 'not as a thing by itself, but as a fragment of a greater whole; a branch of social philosophy, so interlinked with all the other branches that its conclusions, even in its own peculiar province, are only true conditionally, subject to interference and counteraction from causes not directly within its scope'. And even Keynes, in contradiction to his own advice (already quoted) that 'avarice and usury and precaution must be our gods for a little longer still', admonished us not to 'overestimate the importance of the economic problem, or sacrifice to its supposed necessities other matters of greater and more permanent significance'.

Such voices, however, are but seldom heard today. It is hardly an exaggeration to say that, with increasing affluence, economics has moved into the very centre of public concern, and economic performance, economic growth, economic expansion, and so forth have become the abiding interest, if not the obsession, of all modern societies. In the current vocabulary of condemnation there are few words as final and conclusive as the word 'uneconomic'. If an activity has been branded as uneconomic, its right to existence is not merely questioned but energetically denied. Anything that is found to be an impediment to economic growth is a shameful thing, and if people cling to it, they are thought of as either saboteurs or fools. Call a thing immoral or ugly, soul- destroying or a degradation of man, a peril to the peace of the world or to the well-being of future generations: as long as you have not shown it to be 'uneconomic' you have not really questioned its right to exist, grow, and prosper.

But what does it mean when we say something is uneconomic? I am not asking what most people mean when they say this: because that is clear enough. They simply mean that it is like an illness: you are better off without it. The economist is supposed to be able to diagnose the illness and then, with luck and skill, remove it. Admittedly, economists often disagree among each other about the diagnosis and, even more frequently, about the cure: but that merely proves that the subject matter is uncommonly difficult and economists, like other humans, are fallible.

No. 1 am asking what ii means, what sort of meaning the method of economics actually produces. And the answer to this question cannot be in doubt: something is uneconomic when it fails to earn an adequate profit in terms of money. The method of economics does not, and cannot, produce any other meaning. Numerous attempts have been made to obscure this fact, and they have caused a very great deal of confusion: but the fact remains. Society, or a group or an individual within society, may decide to hang on to an activity or asset for non-economic reasons - social, aesthetic, moral, or political - but this does in no way alter its uneconomic character. The judgment of economics, in other words, is an extremely fragmentary judgment: out of the large number of aspects which in real life have to be 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.

Do not overlook the words 'to those who undertake it'. It is a great error to assume, for instance, that the methodology of economics is normally applied to determine whether an activity carried on by a group within society yields a profit to society as a whole. Even nationalised industries are not considered from this more comprehensive point of view. Every one of them is given a financial target - which is, in fact, an obligation - and is expected to pursue this target without regard to any damage it might be inflicting on other parts of the economy. In fact, the prevailing creed, held with equal fervour by all political parties, is that the common good will necessarily be maximised if everybody, every industry and trade, whether nationalised or not, strives to earn an acceptable 'return' on the capital employed. Not even Adam Smith had a more implicit faith in the 'hidden hand' to ensure that 'what is good for General Motors is good for the United States'.

However that may be, about the fragmentary nature of the judgments of economics there can be no doubt whatever. Even within the narrow compass of the economic calculus, these judgments are necessarily and methodically narrow. For one thing, they give vastly more weight to the short than to the long term. because in the long tem~. as Keynes put it with cheerful brutality. we are all dead. And then, second, they are based on a definition of cost which excludes all 'free goods'. that is to say, the entire God-given environment, except for those parts of it that have been privately appropriated. This means that an activity can be economic although it plays hell with the environment, and that a competing activity, if at some cost it protects and conserves the environment, will be uneconomic.



The market therefore represents only the surface of society and its significance relate to the momentary situation as it exists there and then. There is no probing into the depths of things, into the natural or social facts that lie behind them. In a sense, the market is the institutionalisation of individualism and non-responsibility. Neither buyer nor seller is responsible for anything but himself. It would be 'uneconomic' for a wealthy seller to reduce his prices to poor customers merely because they are in need, or for a wealthy buyer to pay an extra price merely because the supplier is poor. Equally, it would be 'uneconomic' for a buyer to give preference to home-produced goods if imported goods are cheaper. He does not, and is not expected to, accept responsibility for the country's balance of payments.

As regards the buyer's non-responsibility, there is, significantly, one exception: the buyer must be careful not to buy stolen goods. This is a rule against which neither ignorance nor innocence counts as a defence and which can produce extraordinarily unjust and annoying results. It is nevertheless required by the sanctity of private property, to which it testifies.

To be relieved of all responsibility except to oneself, means of course an enormous simplification of business, We can recognise that it is practical and need not be surprised that it is highly popular among businessmen. What may cause surprise is that it is also considered virtuous to make the maximum use of this freedom from responsibility. If a buyer refused a good bargain because he suspected that the cheapness of the goods in question stemmed from exploitation or other despicable practices (except theft), he would be open to the criticism of behaving 'uneconomically'. which is viewed as nothing less than a fall from grace. Economists and others are wont to treat such eccentric behaviour with derision if not indignation. The religion of economics has its own code of ethics, and the First Commandment is to behave 'economically' - many case when you are producing, selling, or buying. It is only when the bargain hunter has gone home and becomes a consumer that the First Commandment no longer applies: he is then encouraged to 'enjoy himself' in any way he pleases. As far as the religion of economics is concerned, the consumer is extraterritorial. This strange and significant feature of the modern world warrants more discussion than it has yet received.



Economics operates legitimately and usefully within a 'given' framework which lies altogether outside the economic calculus. We might say that economics does not stand on its own feet, or that it is a 'derived' body of thought - derived from meta- economics. If the economist fails to study meta-economics, or, even worse. If he remains unaware of the fact that there are boundaries to the applicability of the economic calculus, he is likely to fall into a similar kind of error to that of certain medieval theologians who tried to settle questions of physics by means of biblical quotations. Every science is beneficial within its proper limits but becomes evil and destructive as soon as it transgresses them.

The science of economics is 'so prone to usurp the rest' - even more so today than it was 150 years ago, when Edward Copleston pointed to this danger - because it relates to certain very strong drives of human nature, such as envy and greed. All the greater is the duty of its experts, the economists, to understand and clarify its limitations, that is to say, to understand meta-economics.

What, then, is meta-economics? As economics deals with man in his environment, we may expect that meta-economics consists of two parts - one dealing with man and the other dealing with the environment. In other words, We may expect that economics must derive its aims and objectives from a study of man, and that it must derive at least a large part of ifs methodology from a study of nature.

In the next chapter, I shall attempt to show how the conclusions and prescriptions of economics change as the underlying picture of man and his purpose on earth changes. In this chapter, I confine myself to a discussion of the second part of meta- economics, i.e. the way in which a vital part of the methodology of economics has to be derived from a study of nature. As I have emphasised already, on the market all goods are treated the same, because the market is essentially an institution for unlimited bar- gain hunting, and this means that it is inherent in the methodology of modern economics, which is so largely market-oriented, to ignore man's dependence on the natural world. Professor E.H. Phelps Brown, in his Presidential Address to the Royal Economic Society on 'The Underdevelopment of Economics', talked about 'the smallness of the contribution that the most conspicuous developments of economics in the last quarter of a century have made to the solution of the most pressing problems of the times', and among these problems he lists 'checking the ad- verse effects on the environment and the quality of life of industrialism, population growth and urbanism'.

As a matter of fact, to talk of 'the smallness of the contribution' is to employ an euphemism, as there is no contribution at all; on the contrary, it would not be unfair to say that economics, as currently constituted and practised, acts as a most effective barrier against the understanding of these problems, owing to its addiction to purely quantitative analysis and its timorous refusal to look into the real nature of things.

Economics deals with a virtually limitless variety of goods and services, produced and consumed by an equally limitless variety of people. It would obviously be impossible to develop any economic theory at all, unless one were prepared to disregard a vast array of qualitative distinctions. But it should be just as obvious that the total suppression of qualitative distinctions, while it makes theorising easy, at the same time makes it totally sterile. Most of the 'conspicuous developments of economics in the last quarter of a century' (referred to by Professor Phelps Brown) are in the direction of quantification, at the expense of the understanding of qualitative differences. Indeed, one might say that economics has become increasingly intolerant of the latter, be cause they do not fit into its method and make demands on the practical understanding and the power of insight of economists, which they are unwilling or unable to fulfil. For example, having established by his purely quantitative methods that the gross National Product of a country has risen by, say, five per cent, the economist-turned-econometrician is unwilling, and generally unable, to face the question of whether this is to be taken as a good thing or a bad thing. He would lose all his certainties if he even entertained such a question: growth of GNP must be a good thing, irrespective of what has grown and who, if anyone, has benefited. The idea that there could be pathological growth, unhealthy growth. disruptive or destructive growth is to him a perverse idea which must not be allowed to surface. A small minority of economists is at present beginning to question how much further 'growth' will be possible, since infinite growth in a finite environment is an obvious impossibility: but even they cannot get away from the purely quantitative growth concept, Instead of insisting on the primacy of qualitative distinctions, they simply substitute non-growth for growth, that is to say, one emptiness for another.

It is of course true that quality is much more difficult to 'handle' than quantity, just as the exercise of judgment is a higher function than the ability to count and calculate. Quantitative differences can be more easily grasped and certainly more essay defined than qualitative differences: their concreteness is beguiling and gives them the appearance of scientific precision, even when this precision has been purchased by the suppression of Vital differences of quality. The great majority of economists are still pursuing the absurd ideal of making their 'science' as scientific and precise as physics. as if there were no qualitative difference between mindless atoms and men made in the image of God.

The main subject matter of economics is 'goods'. Economists make some rudimentary distinctions between categories of goods from the point of view of the purchaser, such as the distinction between consumers' goods and producers' goods; but there is virtually no attempt to take cognisance of what such goods actually are; for instance, whether they are man-made or God-given, whether they are freely reproducible or not. Once any goods, whatever their meta-economic character, have appeared on the market, they are treated the same, as objects for sale, and economics is primarily concerned with theorising on the bargain hunting activities of the purchaser.

It is a fact, however, that there are fundamental and vital differences between various categories of 'goods' which cannot be disregarded without losing touch with reality.

There could hardly be a more important distinction, to start with. than that between primary and secondary goods, because the latter presuppose the availability of the former. An expansion of man's ability to bring forth secondary products is useless unless preceded by an expansion of his ability to win primary products from the earth. for man is not a producer but only a converter, and for every job of conversion he needs primary products. In particular, his power to convert depends on primary energy, which immediately points to the need for a vital distinction within the field of primary goods, that between non-renewable and renewable. As far as secondary goods are concerned, there is an obvious and basic distinction between manufactures and services. We thus arrive at a minimum of four categories, each of which is essentially different from each of the three others.

The market knows nothing of these distinctions. It provides a price tag for all goods and thereby enables us to pretend that they are all of equal significance. Five pounds' worth of oil (category 1) equals five pounds' worth of wheat (category 2), which equals five pounds' worth of shoes (category 3) or Eve pounds' worth of hotel accommodation (category 4). The sole criterion to determine the relative importance of these different goods is the rate of profit that can be obtained by providing them. If categories 3 and 4 yield higher profits than categories 1 and 2, this is taken as a 'signal' that it is 'rational' to put additional resources into the former and withdraw resources from the latter.

I am not here concerned with discussing the reliability or rationality of the market mechanism, of what economists call the 'invisible hand'. This has endlessly been discussed, but invariably without attention to the baric incommensurability of the four categories detailed above. It has remained unnoticed, for instance - or if not unnoticed, it has never been taken seriously in the formulation of economic theory - that the concept of 'cost' is essentially different as between renewable and non-renewable goods, as also between manufactures and services. In fact, without going into any further details, it can be said that economics, as currently constituted, fully applies only to manufactures (category 3), but it is being applied without discrimination to all goods and services, because an appreciation of the essential, qualitative differences between the four categories is entirely lacking.

These differences may be called meta-economic, inasmuch as they have to be recognised before economic analysis begins. Even more important is the recognition of the existence of 'goods' which never appear on the market, because they cannot be, or have not been, privately appropriated, but are nonetheless an essential precondition of all human activity, such as air, water, the soil, and in fact the whole framework of living nature.

Until fairly recently the economists have felt entitled, with tolerably good reason, to treat the entire framework within which economic activity takes place as given, that is to say. as permanent and indestructible. It was no part of their job and, indeed, of their professional competence, to study the effects of economic activity upon the framework. Since there is now increasing evidence of environmental deterioration, particularly in living nature, the entire outlook and methodology of economics is being called into question. The study of economics is too narrow and too fragmentary to lead to valid insights, unless complemented and completed by a study of meta-economics.

The trouble about valuing means above ends - which, as confirmed by Keynes, is the attitude of modern economics - is that it destroys man's freedom and power to choose the ends he really favours; the development of means, as it were, dictates the choice of ends. Obvious examples are the pursuit of supersonic transport speeds and the immense efforts made to land men on the moon. The conception of these aims was not the result of any insight into real human needs and aspirations, which technology is meant to serve, but solely of the fact that the necessary technical means appeared to be available.

As we have seen, economics is a 'derived' science which accepts instructions from what I call meta-economics. As the instructions are changed, so changes the content of economics. In the following chapter, we shall explore what economic laws and what definitions of the concepts 'economic' and 'uneconomic' result, when the meta-economic basis of western materialism is abandoned and the teaching of Buddhism is put in its place. The choice of Buddhism for this purpose is purely incidental; the teachings of Christianity, Islam, or Judaism could have been used just as well as those of any other of the great Eastern traditions.
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Re: Small is Beautiful, by E.F. Schumacher

Postby admin » Tue Jan 05, 2016 1:53 am

Four: Buddhist Economics


Buddhist countries have often stated that they wish to remain faithful to their heritage. So Burma: 'The New Burma sea no conflict between religious values and economic progress. Spiritual health and material wellbeing are not enemies: they are natural allies.'' Or: 'We can blend successfully the religious and spiritual values of our heritage with the benefits of modern technology.'' Or: 'We Burmese have a sacred duty to conform both our dreams and our acts to our faith. This we shall ever do.'"


Economists themselves, like most specialists, normally suffer from a kind of metaphysical blindness, assuming that theirs is a science of absolute and invariable truths, without any presuppositions. Some go as far as to claim that economic laws are as free from 'metaphysics' or 'values' as the law of gravitation. We need not, however, get involved in arguments of methodology. Instead, let us take some fundamentals and see what they look like when viewed by a modern economist and a Buddhist economist.


The consequences of these attitudes both in theory and in practice are, of course, extremely far-reaching. If the ideal with regard to work is to get rid of it, every method that 'reduces the work load' is a good thing. The most potent method, short of automation, is the so-called 'division of labour' and the classical example is the pin factory eulogised in Adam Smith's Wealth of Nations.' Here it is not a matter of ordinary specialisation, which mankind has practised from time immemorial, but of dividing up every complete process of production into minute parts, so that the final product can be produced at great speed without anyone having had to contribute more than a totally insignificant and, in most cases, unskilled movement of his limbs.


From the Buddhist point of view, there are therefore two types of mechanisation which must be clearly distinguished: one that enhances a man's skill and power and one that turns the work of man over to a mechanical slave, leaving man in a position of having to serve the slave. How to tell the one from the other? 'The craftsman himself.' says Ananda Coomaraswamy, a man equally competent to talk about the modem west as the ancient east, 'can always, if allowed to, draw the delicate distinction between the machine and the tool. The carpet loom is a tool, a contrivance for holding warp threads at a stretch for the pile to be woven round them by the craftsmen's fingers; but the power loom is a machine, and its significance as a destroyer of culture lies in the fact that it does the essentially human part of the work.'" It is clear, therefore. that Buddhist economics must be very different from the economics of modem materialism, since the Buddhist sees the essence of civilisation not in a multiplication of wants but in the purification of human character. Character, at the same time, is formed primarily by a man's work. And work, properly conducted in conditions of human dignity and freedom, blesses those who do it and equally their products. The Indian philosopher and economist J. C. Kumarappa sums the matter up as follows:


If a man has no chance of obtaining work he is in a desperate position, not simply because he lacks an income but because he lacks this nourishing and enlivening factor of disciplined work which nothing can replace. A modern economist may engage in highly sophisticated calculations on whether full employment 'pays' or whether it might be more 'economic' to run an economy at less than full employment so as to ensure a greater mobility of labour, a better stability of wages, and so forth, His fundamental criterion of success is simply the total quantity of goods produced during a given period of time. 'If the marginal urgency of goods is low,' says Professor Galbraith in The Affluent Society, 'then so is the urgency of employing the last man or the last million men in the labour force." And again: 'lf ... we can afford some unemployment in the interest of stability - a proposition, incidentally, of impeccably conservative antecedents - then we can afford to give those who are unemployed the goods that enable them to sustain their accustomed standard of living.'

From a Buddhist point of view, this is standing the truth on its head by considering goods as more important than people and consumption as more important than creative activity. It means shifting the emphasis from the worker to the product of work, that is, from the human to the sub-human, a surrender to the forces of evil. The very start of Buddhist economic planning would be a planning for full employment, and the primary purpose of this would in fact be employment for everyone who needs an 'outside' job: it would not be the maximisation of employment nor the maximisation of production. Women, on the whole, do not need an 'outside' job, and the large-scale ·employment of women in offices or factories would be considered a sign of serious economic failure. In particular, to let mothers of young children work in factories while the children run wild would be as uneconomic in the eyes of a Buddhist economist as the employment of a skilled worker as a soldier in the eyes of a modern economist.

While the materialist is mainly interested in goods, the Buddhist is mainly interested in liberation. But Buddhism is 'The Middle Way' and therefore in no way antagonistic to physical well-being. It is not wealth that stands in the way of liberation but the attachment to wealth; not the enjoyment of pleasurable things but the craving for them. The keynote of Buddhist economics, therefore, is simplicity and non-violence. From an economist's point of view, the marvel of the Buddhist way of life is the utter rationality of its pattern - amazingly small means leading to extraordinarily satisfactory results.


Modern economics, on the other hand, considers consumption to be the sole end and purpose of all economic activity, taking the factors of production - land, labour, and capital - as the means, The former, in short, tries to maximise human satisfactions by the optimal pattern of consumption, while the latter tries to maximise consumption by the optimal pattern of productive effort. It is easy to see that the effort needed to sustain a way of life which seeks to attain the optimal pattern of consumption is likely to be much smaller than the effort needed to sustain a drive for maximum consumption. 'We need not be surprised, therefore, that the pressure and strain of living is very much less in say, Burma than it is in the United States in spite of the fact that the amount of labour-saving machinery used in the former country is only a minute fraction of the amount used in the latter.


From the point of view of Buddhist economics, therefore, production from local resources for local needs is the most rational way of economic life, while dependence on imports from afar and the consequent need to produce for export to unknown and distant peoples is highly uneconomic and justifiable only in exceptional cases and on a small scale. Just as the modern economist would admit that a high rate of consumption of transport services between a man's home and his place of work signifies a misfortune and not a high standard of life, so the Buddhist economist would hold that to satisfy human wants from faraway sources rather than from sources nearby signifies failure rather than success. The former tends to take statistics showing an increase in the number of ton/miles per head of the population carried by a country's transport system as proof of economic progress, while to the latter - the Buddhist economist - the same statistics would indicate a highly undesirable deterioration in the pattern of consumption.

Another striking difference between modern economics and I Buddhist economics arises over the use of natural resources. Bertrand de Jouvenel, the eminent French political philosopher, has characterised 'western man' in words which may be taken as a fair description of the modern economist:

'He tends to count nothing as an expenditure, other than human effort; he does not seem to mind how much mineral matter he wastes and, far worse, how much living matter he destroys. He does not seem to realise at all that human life is a dependent part of -an ecosystem of many different forms of life. As the world is ruled from towns where men are cut off from any form of life other than human, the feeling of belonging to an ecosystem is not revived. This results in a harsh and improvident treatment of things upon which we ultimately depend, such as water and trees.)"



Just as a modem European economist would not consider it a great economic achievement if all European art treasures were sold to America at attractive prices, so the Buddhist economist would insist that a population basing its economic life on non- renewable fuels is living parasitically, on capital instead of income. Such a way of life could have no permanence and could therefore be justified only as a purely temporary expedient. As the world's resources of non-renewable fuels - coal, oil and natural gas - are exceedingly unevenly distributed over the globe and undoubtedly limited in quantity, it is clear that their exploitation at an ever-increasing rate is an act of violence against nature which must almost inevitably lead to violence between men.

This fact alone might give food for thought even to those people in Buddhist countries who care nothing for the religious and spiritual values of their heritage and ardently desire to embrace the materialism of modem economics at the fastest possible speed. Before they dismiss Buddhist economics as nothing better than a nostalgic dream, they might wish to consider whether the path of economic development outlined by modern economics is likely to lead them to places where they really want to be. Towards the end of his courageous book The Challenge of Man's Future, Professor Harrison Brown of the California Institute of Technology gives the following appraisal:

'Thus we see that, just as industrial society is fundamentally unstable and subject to reversion to agrarian existence, so within it the conditions which offer individual freedom are unstable in their ability to avoid the conditions which impose rigid organisation and totalitarian control. Indeed, when we examine all of the foreseeable difficulties which threaten the survival of industrial civilisation, it is difficult to see how the achievement of stability and the maintenance of individual liberty can be made compatible.’

Even if this were dismissed as a long-term view there is the immediate question of whether 'modernisation', as currently practised without regard to religious and spiritual values, is actually producing agreeable results. As far as the masses are concerned. the results appear to be disastrous - a collapse of the rural economy, a rising tide of unemployment in town and country, and the growth of a city proletariat without nourishment for either body or soul.

It is in the light of both immediate experience and long-term prospects that the study of Buddhist economics could be recommended even to those who believe that economic growth is more important than any spiritual or religious values. For it is not a question of choosing between 'modern growth' and 'traditional stagnation'. It is a question of finding the right path of development, the Middle Way between materialist heedlessness and traditionalist immobility, in short, of finding 'Right Livelihood'.
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Re: Small is Beautiful, by E.F. Schumacher

Postby admin » Tue Jan 05, 2016 1:57 am

Five: A Question of Size





























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Re: Small is Beautiful, by E.F. Schumacher

Postby admin » Tue Jan 05, 2016 2:06 am

Part Two: Resources

Six: The Greatest Resource - Education

Throughout history and in virtually every part of the earth men have lived and multiplied, and have created some form of culture. Always and everywhere they have found their means of subsistence and something to spare. Civilisations have been built up, have flourished, and, in most cases, have declined and perished. This is not the place to discuss why they have perished; but we can say: there must have been some failure of resources. In most instances new civilisations have arisen, on the same ground, which would be quite incomprehensible if a had been simply the material resources that had given out before. How could such resources have reconstituted themselves?

All history - as well as all current experience - points to the fact that it is man, not nature, who provides the primary resource: that the key factor of all economic development comes out of the mind of man. Suddenly, there is an outburst of daring, initiative, invention, constructive activity, not in one field alone, but in many fields all at once. No-one may be able to say where it came from in the first place: but we can see how it maintains and even strengthens itself: through various kinds of schools, in other words, through education. In a very real sense, therefore, we can say that education is the most vital of all resources.

If western civilisation is in a state of permanent crisis, it is not far-fetched to suggest that there may be something wrong with its education. No civilisation, I am sure, has ever devoted more energy and resources to organised education, and if we believe in nothing else, we certainly believe that education is, or should be, the key to everything. In fact, the belief in education is so strong that we treat it as the residual legatee of all our problems. If the nuclear age brings new dangers; if the advance of genetic engineering opens the doors to new abuses; if commercialism brings new temptations - the answer must be more and better education. The modern way of life is becoming ever more complex: this means that everybody must become more highly educated. 'By 1984.' it was said recently, 'it will be desirable that the most ordinary of men is not embarrassed by the use of a logarithm table, the elementary concepts of the calculus, and by the definitions and uses of such words as electron, coulomb, and volt. He should further have become able not only to handle a pen. pencil, and ruler but also a magnetic tape, valve, and transistor. The improvement of communications between individuals and groups depends on it.' Most of all, it appears, the international situation calls for prodigious educational efforts. The classical statement on this point was delivered by Sir Charles (now Lord) Snow in his 'Rede Lecture' some years ago: 'To say that we must educate ourselves or perish, is a little more melodramatic than the facts warrant. To say, we have to educate ourselves or watch a steep decline in our lifetime, is about right.' According to Lord Snow, the Russians are apparently doing much better than anyone else and will 'have a clear edge', 'unless and until the Americans and we educate our- selves both sensibly and imaginatively'.

Lord Snow, it will be recalled, talked about 'The Two Cultures and the Scientific Revolution' and expressed his concern that 'the intellectual life of the whole of western society is increasingly being split into two polar groups.... At one pole we have the literary intellectuals ... at the other the scientists.' He deplores the 'gulf of mutual incomprehension' between these two groups and wants it bridged. It is quite clear how he thinks this 'bridging· operation is to be done; the aims of his educational policy would be, first, to get as many 'alpha-plus scientists as the country can throw up': second, to train 'a much larger stratum of alpha professionals' to do the supporting research, high-class design and development; third, to train 'thousands upon thousands' of other scientists and engineers; and finally, to train 'politicians, administrators, an entire community, who know enough science to have a sense of what the scientists are talking about'. If this fourth and last group can at ]east be educated enough to 'have a sense' of what the real people, the scientists and engineers, are talking about, so Lord Snow seems to suggest, the gulf of mutual incomprehension between the 'Two Cultures' may be bridged.

These ideas on education, which are by no means unrepresentative of our times, leave one with the uncomfortable feeling that ordinary people, including politicians, administrators, and so forth, are really not much use; they have failed to make the grade: but, at least, they should be educated enough to have a sense of what is going on, and to know what the scientists mean when they talk - to quote Lord Snow's example - about the Second Law of Thermodynamics. It is an uncomfortable feeling, because the scientists never tire of telling us that the fruits of their labours are 'neutral': whether they enrich humanity or destroy it depends on how they are used. And who is to decide how they are used? There is nothing in the training of scientists and engineers to enable them to take such decisions, or else, what becomes of the neutrality of science?

If so much reliance is today being placed in the power of education to enable ordinary people to cope with the problems thrown up by scientific and technological progress, then there must be something more to education than Lord Snow suggests. Science and engineering produce 'know-how'; but 'know-how' is nothing by itself; it is a means without an end, a mere potentiality, an unfinished sentence. 'Know-how' is no more a culture than a piano is music. Can education help us to finish the sentence, to turn the potentiality into a reality to the benefit of man?

To do so, the task of education would be, first and foremost, the transmission of ideas of value, of what to do with our lives. There is no doubt also the need to transmit know-how but this must take second place, for it is obviously somewhat foolhardy to put great powers into the hands of people without making sure that they have a reasonable idea of what to do with them. At present, there can be little doubt that the whole of mankind is in mortal danger, not because we are short of scientific and technological know how, but because we tend to use it destructively, without wisdom. More education can help us only if it produces more wisdom.



All philosophers - and others - have always paid a great deal of attention to ideas seen as the result of thought and observation; but in modern times all too little attention has been paid to the study of the ideas which form the very instruments by which thought and observation proceed. On the basis of experience and conscious thought small ideas may easily be dislodged, but when it comes to bigger. more universal, or more subtle ideas it may not be so easy to change them. Indeed, it is often difficult to become aware of them, as they are the instruments and not the results of our thinking - just as you can see what is outside you, but cannot easily see that with which you see, the eye itself. And even when one has become aware of them it is often impossible to judge them on the basis of ordinary experience.

We often notice the existence of more or less fixed ideas in other people's minds - ideas with· which they think without being aware of doing so. We then call them prejudices, which is logically quite correct because they have merely seeped into the mind and are in no way the result of a judgment. But the word prejudice is generally applied to ideas that are patently erroneous and recognisable as such by anyone except the prejudiced man. Most of the ideas with which we think are not of that kind at all. To some of them, like those incorporated in words and grammar, the notions of truth or error cannot even be applied; others are quite definitely not prejudices but the result of a judgment; others again are tacit assumptions or presuppositions which may be very difficult to recognise.




All traditional philosophy is an attempt to create an orderly system of ideas by which to live and to interpret the world. 'Philosophy as the Greeks conceived it,' writes Professor Kuhn, 'is one single effort of the human mind to interpret the system of signs and so to relate man to the world as a comprehensive order within which a place is assigned to him.' The classical- Christian culture of the late Middle Ages supplied man with a very complete and astonishingly coherent interpretation of signs, i.e. a system of vital ideas giving a most detailed picture of man, the universe. and man's place in the universe. This system, however, has been shattered and fragmented, and the result is bewilderment and estrangement, never more dramatically put than by Kierkegaard in the middle of last century:

'One sticks one's finger into the soil to tell by the smell in what land one is: I stick my finger into existence - it smells of nothing. Where am I? Who am I? How came I here? What is this thing called the world? What does this world mean? Who is it that has lured me into this thing and now leaves me there?.... How did I come into the world? Why was I not consulted …. but was thrust into the ranks as though I had been bought of a kidnapper, a dealer in souls? How did I obtain an interest in this big enterprise they call reality? Why should I have an interest in it? Is it not a voluntary concern? And if I am compelled to take part in it, where is the director? ….Whither shall I turn with my complaint?'

Perhaps there is not even a director. Bertrand Russell said that the whole universe is simply 'the outcome of accidental collocations of atoms' and claimed that the scientific theories leading to this conclusion 'if not quite beyond dispute, are yet so nearly certain, that no philosophy that rejects them can hope to stand.... Only on the firm foundation of unyielding despair can the soul's habitation henceforth be safely built.' Sir Fred Hoyle, the astronomer. talks of 'the truly dreadful situation in which we find ourselves. Here we are in this wholly fantastic universe with scarcely a clue as to whether our existence has any real significance.'

Estrangement breeds loneliness and despair. the 'encounter with nothingness', cynicism, empty gestures of defiance, as we can see in the greater part of existentialist philosophy and general literature today. Or it suddenly turns - as I have mentioned before - into the ardent adoption of a fanatical teaching which, by a monstrous simplification of reality, pretends to answer all questions. So, what is the cause of estrangement? Never has science been more triumphant; never has man's power over his environment been more complete nor his progress faster. It cannot be a lack of know-how that causes the despair not only of religious thinkers like Kierkegaard but also of leading mathematicians and scientists like Russell and Hoyle. We know how to do many things, but do we know what to do? Ortega y Gasset put it succinctly: 'We cannot live on the human level without ideas. Upon them depends what we do. Living is nothing more or less than doing one thing instead of another.' What, then, is education? It is the transmission of ideas which enable man to choose between one thing and another, or, to quote Ortega again, 'to live a life which is something above meaningless tragedy or inward disgrace'.

How could for instance a knowledge of the Second Law of Thermodynamics help us in this? Lord Snow tells us that when educated people deplore the 'illiteracy of scientists' he sometimes asks 'How many of them could describe the Second Law of Thermodynamics?' The response, he reports, is usually cold and negative. 'Yet,' he says, 'I was asking something which is about the scientific equivalent of: have you read a work of Shakespeare's?' Such a statement challenges the entire basis of our civilisation. What matters is the tool-box of ideas with which, by which, through which, we experience and interpret the world. The Second Law of Thermodynamics is nothing more than a working hypothesis suitable for various types of scientific research. On the other hand - a work by Shakespeare: teeming with the most vital ideas about the inner development of man, showing the whole grandeur and misery of a human existence. How could these two things be equivalent? What do I miss, as a human being, if I have never heard of the Second Law of Thermodynamics? The answer is: nothing.' And what do I miss by not knowing Shakespeare? Unless I get my understanding from another source, I simply miss my life. Shall we tell our children that one thing is as good as another - here a bit of knowledge of physics, and there a bit of knowledge of literature? If we do so the sins of the fathers will be visited upon the children unto the third and fourth generation, because that normally is the time it takes from the birth of an idea to its full maturity when it fills the minds of a new generation and makes them think by it.


Where, then, shall he turn? Maybe, in spite of all that he hears about the scientific revolution and ours being an age of science, he turns to the so-called humanities. Here indeed he can find, if he is lucky, great and vital ideas to NI his mind, ideas with which to think and through which to make the world, society, and his own life intelligible. Let us see what are the main ideas he is likely to find today, I cannot attempt to make a complete list; so I shall confine myself to the enumeration of six leading ideas, all stemming from the nineteenth century, which still dominate, as far as I can see, the minds of 'educated' people today.

1. There is the idea of evolution - that higher forms continually develop out of lower forms, as a kind of natural and automatic process. The last hundred years or so have seen the systematic application of this idea to all aspects of reality without exception.

2. There is the idea of competition, natural selection, and the survival of the fittest, which purports to explain the natural and automatic process of evolution and development.

3. There is the idea that all the higher manifestations of human life. such as religion, philosophy, art, etc. - what Marx calls 'the phantasmagorias in the brains of men' - are nothing but 'necessary supplements of the material life process', a super- structure erected to disguise and promote economic interests, the whole of human history being the history of class struggles.

4. In competition, one might think, with the Marxist interpretation of all higher manifestations of human life, there is, fourthly, the Freudian interpretation which reduces them to the dark stirrings of a subconscious mind and explains them mainly as the results of unfulfilled incest-wishes during childhood and early adolescence.

5. There is the general idea of relativism, denying all absolutes, dissolving all norms and standards, leading to the total undermining of the idea of truth in pragmatism, and affecting even mathematics, which has been defined by Bertrand Russell as 'the subject in which we never know what we are talking about, or whether what we say is true'.

6. Finally there is the triumphant idea of positivism, that valid knowledge can be attained only through the methods of the natural sciences and hence that no knowledge is genuine unless it is based on generally observable facts. Positivism, in other words, is solely interested in 'know-how' and denies the possibility of objective knowledge about meaning and purpose of any kind.

No-one, I think, will be disposed to deny the sweep and power of these six 'large' ideas. They are not the result of any narrow empiricism. No amount of factual inquiry could have verified any one of them. They represent tremendous leaps of the imagination into the unknown and unknowable. Of course, the leap is taken from a small platform of observed fact. These ideas could hot have lodged themselves as firmly in men's minds, as they have done, if they did not contain important elements of truth get their essential character is their claim of universality. Evolution takes everything into its stride, not only material phenomena from nebulae to home sapiens but also all mental phenomena, such as religion or language. Competition, natural selection, and the survival of the fittest are not presented as one set of observations among others, but as universal laws. Marx does not say that some parts of history are made up of class struggles; no, 'scientific materialism', not very scientifically, extends this partial observation to nothing less than the whole of 'the history of all hitherto existing society'. Freud, again, is not content to report a number of clinical observations but offers a universal theory of human motivation, asserting, for instance, that all religion is nothing but an obsession neurosis. Relativism and positivism, of course, are purely metaphysical doctrines with the peculiar and ironical distinction that they deny the validity of all metaphysics. including themselves.

What do these six 'large' ideas have in common, besides their nonempirical, metaphysical nature? They all assert that what had previously been taken to be something of a higher order is really 'nothing but' a more subtle manifestation of the 'lower' - unless, indeed, the very distinction between higher and lower is denied. Thus man, like the rest of the universe, is really nothing but an accidental collocation of atoms. The difference between a man and a stone is little more than a deceptive appearance. Man's highest cultural achievements are nothing but disguised economic greed or the outflow of sexual frustrations. In any case, it is meaningless to say that man should aim at the 'higher' rather than the 'lower' because no intelligible meaning can be attached to purely subjective notions like 'higher' or 'lower', while the word 'should' is just a sign of authoritarian megalomania.

The ideas of the fathers in the nineteenth century have been visited on the third and fourth generations living in the second half of the twentieth century. To their originators, these ideas were simply the result of their intellectual processes. In the third and fourth generations, they have become the very tools and instruments through which the world is being experienced and interpreted. Those that bring forth new ideas are seldom ruled by them. But their ideas obtain power over men's lives in the third and fourth generations when they have become a part of that great mass of ideas, including language, which seeps into a person's mind during his 'Dark Ages'.

These nineteenth-century ideas are firmly lodged in the minds of practically everybody in the western world today, whether educated or uneducated. In the uneducated mind they are still rather muddled and nebulous, too weak to make the world intelligible. Hence the longing for education, that is to say, for something that will lead us out of the dark wood of our muddled ignorance into the light of understanding.

I have said that a purely scientific education cannot do this for us because it deals only with ideas of know-how, whereas we need to understand why things are as they are and what we are to do with our lives. What we learn by studying a particular science is in any case too specific and specialised for our wider purposes. So we turn to the humanities to obtain a clear view of the large and vital ideas of our age. Even in the humanities we may get bogged down in a mass of specialised scholarship furnishing our minds with lots of small ideas just as unsuitable as the ideas which we might pick up from the natural sciences. But we may also be more fortunate (if fortunate it is) and find a teacher who will 'clear our minds', clarify the ideas - the 'large' and universal ideas already existent in our minds - and thus make the world intelligible for us.

Such a process would indeed deserve to be called 'education'; And what do we get from it today? A view of the world as a wasteland in which there is no meaning or purpose, in which man's consciousness is an unfortunate cosmic accident, in which anguish and despair are the only final realities. If by means of a real education man manages to climb to what Ortega calls 'the Height of Our Times' or 'the Height of the Ideas of our Times', he finds himself in an abyss of nothingness. He may feel like echoing Byron:

Sorrow is knowledge: they who know the most
Must mourn the deepest o'er the fatal truth,
The Tree of Knowledge is not that of Life.

In other words, even a humanistic education lifting us to the height of the ideas of our time cannot 'deliver the goods', because what men are quite legitimately looking for is life more abundant, and not sorrow.

What has happened? How is such a thing possible?

The leading ideas of the nineteenth century, which claimed to do away with metaphysics, are themselves a bad, vicious, life- destroying type of metaphysics. We are suffering from them as from a fatal disease. It is not true that knowledge is sorrow. But poisonous errors bring unlimited sorrow in the third and fourth generation. The errors are not in science but in the philosophy put forward in the name of science. As Etienne Gilson put it more than twenty years ago:

'Such a development was by no means inevitable, but the progressive growth of natural science had made it more and more probable. The growing interest taken by men in the practical results of science was in itself both natural and legitimate, but it helped them to forget that science is knowledge, and practical results but its by-products .... Before their unexpected success in finding conclusive explanations of the material world, men had begun either to despise all disciplines in which such demonstrations could not be found, or to rebuild those disciplines after the pattern of the physical sciences. As a consequence, metaphysics and ethics had to be either ignored or, at least, replaced by new positive sciences; in either case, they would be eliminated. A very dangerous move indeed, which accounts for the perilous position in which western culture has now found itself.'

It is not even true the metaphysics and ethics would be eliminated. On the contrary, all we got was bad metaphysics and appalling ethics.

Historians know that metaphysical errors can lead to death. R. G. Collingwood wrote:

The Patristic diagnosis of the decay of Greco-Roman civilisation ascribes that event to a metaphysical disease .... It was not barbarian attacks that destroyed the Greco-Roman world .... The cause was a metaphysical cause. The "pagan" world was failing to keep alive its own fundamental convictions, they (the patriotic writers) said, because owing to faults in metaphysical analysis it had become confused as to what these convictions were .... If metaphysics had been a mere luxury of the intellect, this would not have mattered.'

This passage can be applied. without change, to present-day civilisation. We have become confused as to what our convictions really are. The great ideas of the nineteenth century may fill our minds in one way or another, but our hearts do not believe in them all the same. Mind and heart are at war with one another, nor as is commonly asserted, reason and faith. Our reason has become beclouded by an extraordinary, blind and unreasonable faith in a set of fantastic and life-destroying ideas inherited from the nineteenth century. It is the foremost task of our reason to recover a truer faith than that.

Education cannot help us as long as it accords no place to meta- physics. Whether the subjects taught are subjects of science or of the humanities, if the teaching does not lead to a clarification of metaphysics. that is to say, of our fundamental convictions, it cannot educate a man and, consequently, cannot be of real value to society.

It is often asserted that education is breaking down because of over-specialisation. But this is only a partial and misleading diagnosis. Specialisation is not in itself a faulty principle of education. What would be the alternative - an amateurish smattering of all major subjects? Or a lengthy studium generale in which men are forced to spend their time sniffing at subjects which they do not wish to pursue, while they are being kept away from what they want to learn? This cannot be the right answer, since it can only lead to the type of intellectual man, whom Cardinal Newman castigated -'an intellectual man, as the world now conceives of him. , who is full of "views" on all subjects of philosophy, on all matters of the day'. Such 'viewiness' is a sign of ignorance rather than knowledge. 'Shall I teach you the meaning of knowledge?' said Confucius. 'When you know a thing to recognise that you know it, and when you do not, to know that you do not know - that is knowledge.'

What is at fault is not specialisation, but the lack of depth with which the subjects are usually presented, and the absence of meta- physical awareness. The sciences are being taught without any awareness of the presuppositions of science, of the meaning and significance of scientific laws, and of the place occupied by the natural sciences within the whole cosmos of human thought. The result is that the presuppositions of science are normally mistaken for its findings. Economics is being taught without any awareness of the view of human nature that underlies present-day economic theory. In fact, many economists are themselves unaware of the fact that such a view is implicit in their teaching and that nearly all their theories would have to change if that view changed. How could there be a rational teaching of politics without pressing all questions back to their metaphysical roots? Political thinking must necessarily become confused and end in 'double-talk' if there is a continued refusal to admit the serious study of the meta- physical and ethical problems involved. The confusion is already so great that it is legitimate to doubt the educational value of studying many of the so-called humanistic subjects. I say 'so- called' because a subject that does not make explicit its view of human nature can hardly be called humanistic.

All subjects, no matter how specialised, are connected with a centre; they are like rays emanating from a sun. The centre is constituted by our most basic convictions, by those ideas which really have the power to move us. In other words, the centre consists of-metaphysics and ethics, of ideas that - whether we like it or not - transcend the world of facts. Because they transcend the world of~ facts, they cannot be proved or disproved by ordinary scientific method. But that does not mean that they are purely 'subjective' or 'relative' or mere arbitrary conventions. They must be true to reality, although they transcend the world of facts - an apparent paradox to our positivistic thinkers. If they are not true to reality, the adherence to such a set of ideas must inevitably lead to disaster.

Education can help us only if it produces 'whole men'. The truly educated man is not a man who knows a bit of everything, not even the man who knows all the details of all subjects (if such a thing were possible): the 'whole man', in fact, may have little detailed knowledge of facts and theories, he may treasure the Encyclopaedia Britannica because 'she knows and he needn't', but he will be truly in touch with the centre. He will not be in doubt about his basic convictions, about his view on the meaning and purpose of his life. He may not be able to explain these matters in words, but the conduct of his life will show a certain sureness of touch which stems from his inner clarity.

I shall try to explain a little bit further what is meant by 'centre'. Ah human activity is a striving after something thought of as good. This is not more than a tautology, but it helps us to ask the right question: 'Good for whom?' Good for the striving person; So, unless that person has sorted out and coordinated his manifold urges, impulses, and desires, his strivings are likely to be confused, contradictory, self-defeating, and possibly highly destructive. The 'centre', obviously, is the place where he has to create for himself an orderly system of ideas about himself and the world, which can regulate the direction of his various strivings. If he has never given any thought to this (because he is always too busy with more important things, or he is proud to think 'humbly' of himself as an agnostic), the centre will not by any means be empty: it will be filled with all those vital ideas which, in one way or another, have seeped into his mind during his Dark Ages. I have tried to show what these ideas are likely to be today: a total denial of meaning and purpose of human existence on earth, leading to the total despair of anyone who really believes in them. Fortunately, as I said, the heart is often more intelligent than the mind and refuses to accept these ideas in their full weight. So the man is saved from despair, but landed in confusion. His fundamental convictions are confused; hence his actions, too, are confused and uncertain. If he would only allow the light of consciousness to fall on the centre and face the question of his fundamental convictions, he could create order where there is disorder. That would 'educate' him, in the sense of leading him out of the darkness of his metaphysical confusion.

I do not think, however, that this can be successfully done unless he quite consciously accepts - even if only provisionally - a number of metaphysical ideas which are almost directly opposite to the ideas (stemming from the nineteenth century) that have lodged in his mind. I shall mention three examples.

While the nineteenth-century ideas deny or obliterate the hierarchy of levels in the universe, the notion of an hierarchical order is an indispensable instrument of understanding. Without the recognition of 'Levels of Being' or 'Grades of Significance' we cannot make the world intelligible to ourselves nor have we the slightest possibility to define our own position, the position of man, in the scheme of the universe. It is only when we can see the world as a ladder, and when we can see man's position on the ladder, that we can recognise a meaningful task for man's life on earth. Maybe it is man's task - or simply, if you like, man's happiness - to attain a higher degree of realisation of his potentialities, a higher level of being or 'grade of significance' than that which comes to him 'naturally': we cannot even study this possibility except by recognising the existence of a hierarchical structure, To the extent that we interpret the world through the great, vital ideas of the nineteenth century, we are blind to these differences of level, because we have been blinded.

As soon, however, as we accept the existence of 'levels of being', we can readily understand, for instance, why the methods of physical science cannot be applied to the study of politics or economics, or why the findings of physics - as Einstein recognised - have no philosophical implications.

If we accept the Aristotelian division of metaphysics into ontology and epistemology, the proposition that there are levels of being is an ontological proposition; I now add an epistemological one: the nature of our thinking is such that we cannot help thinking in opposites.


G. N. M. Tyrell has put forward the terms 'divergent' and 'convergent' to distinguish problems which cannot be solved by logical reasoning from those that can. Life is being kept going by divergent problems which have to be 'lived' and are solved only in death. Convergent problems on the other hand are man's most useful invention; they do not, as such, exist in reality, but are created by a process of abstraction. When they have been solved, the solution can be written down and passed on to others, who can apply it without needing to reproduce the mental effort necessary to find it. If this were the case with human relations - in family life, economics, politics, education. and so forth - well, I am at a loss how to finish the sentence, There would be no more human relations but only mechanical reactions; life would be a living death. Divergent problems, as it were, force man to strain himself to a level above himself; they demand, and thus provoke the supply of, forces from a higher level, thus bringing love, beauty. goodness, and truth into our lives. It is only with the help of these higher forces that the opposites can be reconciled in the living situation.



This impoverishment, so movingly described by Darwin, will overwhelm our entire civilisation if we: permit the current tendencies to continue which Gilson calls 'the extension of positive science to social facts'. All divergent problems can be turned into convergent problems by a process of 'reduction'. The result how- ever, is the loss of all higher forces to ennoble human Life. and the degradation not only of the emotional part of our nature, but also, as Darwin sensed, of our intellect and moral character. The signs are everywhere visible today.


To have to grapple with divergent problems tends to be exhausting, worrying, and wearisome. Hence people try to avoid it and to run away from it. A busy executive who has been dealing with divergent problems all day long will read a detective story or solve a crossword puzzle on his journey home. He has been using his brain all day: why does he go on using it? The answer is that the detective story and the crossword puzzle present convergent problems, and that is the relaxation. They require a bit of brainwork. even difficult brainwork, but they do not call for this straining and stretching to a higher level which is the specific challenge of a divergent problem, a problem in which irreconcilable opposites have to be reconciled. It is only the latter that are the real stuff of life.

Finally, I turn to a third class of notions, which really belong to metaphysics, although they are normally considered separately: ethics.

The most powerful ideas of the nineteenth century, as we have seen, have denied or at least obscured the whole concept of 'levels of being' and the idea that some things are higher than others. This, of course, has meant the destruction of ethics which is based on the distinction of good and evil, claiming that good is higher than evil. Again, the sins of the fathers are being visited on the third and fourth generations who now find themselves growing up without moral instruction of any kind. The men who conceived the idea that 'morality is bunk' did so with a mind well-stocked with moral ideas. But the minds of the third and fourth generations are no longer well-stocked with such ideas: they are well- stocked with ideas conceived in the nineteenth century, namely, that 'morality is bunk', that everything that appears to be 'higher' is really nothing but something quite mean and vulgar.

The resulting confusion is indescribable. What is the Leitbird, as the Germans say, the guiding image, in accordance with which young people could try to form and educate themselves? There is none, or rather there is such a muddle and mess of images that no sensible guidance issues from them. The intellectuals, whose function it would be to get these things sorted out, spend their time proclaiming that everything is relative - or something to the same effect, Or they deal with ethical matters in terms of the most unabashed cynicism.

I shall give an example already alluded to above. It is significant because it comes from one of the most influential men of our time, the late Lord Keynes. 'For at least another hundred years' he wrote, 'we must pretend to ourselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still.'

When great and brilliant men talk like this we cannot be surprised if there arises a certain confusion between fair and foul, which leads to double talk as long as things are quiet, and to crime when they get a bit more lively. That avarice, usury, and pre caution (i.e. economic security) should be our gods was merely a bright idea for Keynes: he surely had nobler gods. But ideas are the most powerful things on earth, and it is hardly an exaggeration to say that by now the gods he recommended have been enthroned.

In ethics, as in so many other fields, we have recklessly and wilfully abandoned our great classical-Christian heritage. We have even degraded the very words without which ethical discourse cannot carry on, words like virtue, love, temperance. As a result, we are totally ignorant, totally uneducated in the subject that of all conceivable subjects, is the most important, We have no idea· to think with and therefore are only too ready to believe that ethics is a held where thinking does no good. Who knows anything today of the Seven Deadly Sins or of the Four Cardinal Virtues? Who could even name them? And if these venerable. old ideas are thought not to be worth bothering about, what new ideas have taken their place?

What is to take the place of the soul- and life-destroying metaphysics inherited from the nineteenth century? The task of our generation, I have no doubt, is one of metaphysical reconstruction. It is not as if we had to invent anything new: at the same time, it is not good enough merely to revert to the old formulations. Our task - and the task of all education - is to understand the present world, the world in which we live and make our choices.

The problems of education are merely reflections of the deepest problems of our age. They cannot be solved by organization, administration, or the expenditure of money, even though the importance of all these is not denied. We are suffering from a metaphysical disease, and the cure must therefore be meta- physical. Education which fails to clarify our central convictions is mere training or indulgence. For it is our central convictions that are in disorder, and, as long as the present anti-metaphysical temper persists. the disorder will grow worse. Education, far from ranking as man's greatest resource, will then be an agent of destruction, in accordance with the principle corruptio optimipessima.
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Re: Small is Beautiful, by E.F. Schumacher

Postby admin » Tue Jan 05, 2016 2:11 am

Seven: The Proper Use of Land

Among material resources, the greatest, unquestionably, is the land, Study how a society uses its land, and you can come to pretty reliable conclusions as to what its future will be. The land carries the topsoil, and the topsoil carries an immense variety of living beings including man. In 1955, Tom Dale and Vernon Gill Carter, both highly experienced ecologists, published a book called Topsoil and Civilisation. I cannot do better, for the purposes of this chapter, than quote some of their opening paragraphs:

'Civilised man was nearly always able to become master of his environment temporarily. His chief troubles came from his delusions that his temporary master ship was permanent. He thought of himself as "master of the world", while failing to understand fully the laws of nature.

'Man, whether civilised or savage, is a child of nature - he is not the master of nature. He must conform his actions to certain natural laws if he is to maintain his dominance over his environment. When he tries to circumvent the laws of nature, he usually destroys the natural environment that sustains him. And when his environment deteriorates rapidly, his civilisation declines.

'One man has given a brief outline of history by saying that "civilised man has marched across the face of the earth and left a desert in his footprints". This statement may be somewhat of an exaggeration, but it is not without foundation. Civilised man has despoiled most of the lands on which he has lived for long. This is the main reason why his progressive civilisations have moved from place to place. It has been the chief cause for the decline of his civilisations in older settled regions. It has been the dominant factor in determining all trends of history.

'The writers of history have seldom noted the importance of land use. They seem not to have recognised that the destinies of most of man's empires and civilisations were determined largely by the way the land was used. While recognising the influence of environment on history, they fail to note that man usually changed or despoiled his environment.

'How did civilised man despoil this favourable environment? He did it mainly by depleting or destroying the natural resources. He cut down or burned most of the usable timber from forested hillsides and valleys. He overgrazed and denuded the grasslands that fed his livestock. He killed most of the wildlife and much of the fish and other water life. He permitted erosion to rob his farm land of its productive topsoil. He allowed eroded soil to clog the streams and fill his reservoirs, irrigation canals, and harbours with silt. In many cases, he used and wasted most of the easily mined metals or other needed minerals. Then his civilisation declined amidst the despoliation of his own creation or he moved to new land. There have been from ten to thirty different civilisations that have followed, this road to ruin (the number depending on who classifies the civilisations).''

The 'ecological problem', it seems, is not as new as it is frequently made out to be. Yet there are two decisive differences: the earth is now much more densely populated than it was in earlier times and there are, generally speaking, no new lands to move to; and the rate of change has enormously accelerated, particularly during the last quarter of a century.

All the same, it is still the dominant belief today that, whatever may have happened with earlier civilisations, our own modem, western civilisation has emancipated itself from dependence upon nature. A representative voice' is that of Eugene Rabinowitch. editor-in-chief of the Bulletin of Atomic Scientists.

The only animals.' he says (in The Times of 29 April 1972), 'whose disappearance may threaten the biological viability of man on earth are the bacteria normally inhabiting our bodies. For the rest there is no convincing proof that mankind could not survive even as the only animal species on earth! If economical ways could be developed for synthesising food from inorganic raw materials - which is likely to happen sooner or later - man may even be able to become independent of plants, on which he now depends as sources of his food..., 'I personally - and, I suspect, a vast majority of mankind - would shudder at the idea (of a habitat without animals and plants). But millions of inhabitants of "city jungles" of New York, Chicago, London or Tokyo have grown up and spent their whole lives in a practically "azoic" habitat (leaving out rats, mice, cockroaches and other such obnoxious species) and have survived.'

Eugene Rabinowitch obviously considers the above a 'rationally justifiable' statement. He deplores that 'many rationally unjustifiable' things have been written in recent years - some by very reputable scientists - about the sacredness of natural ecological systems, their inherent stability and the danger of human interference with them'. What is 'rational' and what is 'sacred'? Is man the master of nature or its child? If it becomes 'economical' to synthesise food from inorganic materials - 'which is likely to happen sooner or later' - if we become independent of plants, the connection between topsoil and civilisation will be broken. Or will it? These questions suggest that 'The Proper Use of Land' poses, not a technical nor an economic, but primarily a metaphysical problem. The problem obviously belongs to a higher level of rational thinking than that represented by the last two quotations.

There are always some things which we do for their own sakes, and there are other things which we do for some other purpose. One of the most important tasks for any society is to distinguish between ends and means-to-ends, and to have some sort of cohesive view and agreement about this. Is the land merely a means of production or is it something more, something that is an end in itself? And when I say 'land', I include the creatures upon it.

Anything we do just for the sake of doing it does not lend itself to utilitarian calculation. For instance, most of us try to keep ourselves reasonably clean. Why? Simply for hygienic reasons? No, the hygienic aspect is secondary; we recognise cleanliness as a value in itself. We do not calculate its value; the economic calculus simply does not come in. It could be argued that to wash is uneconomic: it costs time and money and produces nothing - except cleanliness. There are many activities which are totally uneconomic, but they are carried on for their own sakes. The economists have an easy way of dealing with them: they divide all human activities between 'production' and 'consumption'. Anything we do under the head of 'production' is subject to the economic calculus, and anything we do under the heading of 'consumption' is not. But real life is very refractory to such classifications, because man-as-producer and man-as-consumer is in fact the same man, who is always producing and consuming all the same time. Even a worker in his factory consumes certain 'amenities', commonly referred to as 'working conditions', and when insufficient 'amenities' are provided he cannot - or refuses to - carry on. And even the man who consumes water and soap may be said to be producing cleanliness.

We produce in order to be able to afford certain amenities and comforts as 'consumers'. If, however, somebody demanded these same amenities and comforts while he was engaged in 'production', he would be told that this would be uneconomic, that it would be inefficient, and that society could not afford such inefficiency. In other words, everything depends on whether it is done by man-as-producer or by man-as-consumer. If man-as- producer travels first-class or uses a luxurious car, this is called a waste of money: but if the same man in his other incarnation of man-as-consumer does the same, this is called a sign of a high standard of life.

Nowhere is this dichotomy more noticeable than in connection with the use of the land. The farmer is considered simply as a producer who must cut his costs and raise his efficiency by every possible device, even if he thereby destroys - for man-as-consumer - the health of the soil and beauty of the landscape, and even if the end effect is the depopulation of the land and the overcrowding of cities. There are large-scale farmers, horticulturists, food manufacturers and fruit growers today who would never think of consuming any of their own products. 'luckily, they say, 'we have enough money to be able to afford to buy products which have been organically grown, without the use of poisons.' When-they are asked why they themselves do not adhere to organic methods and avoid the use of poisonous substances, they reply that they could not afford to do so. What man-as-producer can afford is one thing; what man-as-consumer can afford is quite another thing. But since the two are the same man, the question of what man - or society - can really afford gives rise to endless confusion.

There is no escape from this confusion as long as the land and the creatures upon it are looked upon as nothing but 'factors of production'. They are, of course, factors of production, that is to say, means-to-ends, but this is their secondary, not their primary, nature. Before everything else, they are ends-in-themselves; they are meta-economic, and it is therefore rationally justifiable to say, as a statement of fact, that they are in a certain sense sacred. Man has not made them, and it is irrational for him to treat things that he has not made and cannot make and cannot recreate once he has spoilt them, in the same manner and spirit as he is entitled to treat things of his own making.

The higher animals have an economic value because of their utility; but they have a meta-economic value in themselves. If I have a car, a man-made thing, I might quite legitimately argue that the best way to use it is never to bother about maintenance and simply run it to ruin. I may indeed have calculated that this is the most economical method of use. If the calculation is correct, nobody can criticise me for acting accordingly, for there is nothing sacred about a man-made thing like a car. But if I have an animal - be it only a calf or a hen - a living, sensitive creature, am I allowed to treat it as nothing but a utility? Am I allowed to run it to ruin?

It is no use trying to answer such questions scientifically. They are metaphysical, not scientific, questions. It is a metaphysical error, likely to produce the gravest practical consequences, to equate 'car' and 'animal' on account of their utility, while failing to recognize the most fundamental difference between them, that of 'level of being'. An irreligious age looks with amused contempt upon the hallowed statements by which religion helped our for- bears to appreciate metaphysical truths. 'And the Lord God took man and put him in the Garden of Eden' - not to be idle, but 'to dress it and keep it'. 'And he also gave man dominion over the fish in the sea and the fowl in the air, and over every living being that moves upon the earth.' When he had made 'the beast of the earth after his kind, and cattle after their kind, and everything that creepeth upon the earth after his kind', he saw that it was 'good'. But when he saw everything he had made, the entire biosphere, as we say today, 'behold, it was very good'. Man, the highest of his creatures, was given 'dominion', not the right to tyrannise, to ruin and exterminate. It is no use talking about the dignity of man without accepting that noblesse oblige. For man to put himself into a wrongful relationship with animals, and particularly those long domesticated by him, has always, in all traditions, been considered a horrible and infinitely dangerous thing to do. There have been no sages or holy men in our or in anybody else's history who were cruel to animals or who looked upon them as nothing but utilities, and innumerable are the legends and stories which link sanctity as well as happiness with a loving kindness towards lower creation.

It is interesting to note that modem man is being told, in the name of science, that he is really nothing but a naked ape or even an accidental collocation of atoms. 'Now we can define man', says Professor Joshua Lederberg. 'Genotypically at least, he is six feet of a particular molecular sequence of carbon, hydrogen, oxygen, nitrogen and phosphorous atoms.'2 As modern man thinks so 'humbly' of himself, he thinks even more 'humbly' of the animals which serve his needs: and treats them as if they were machines. Other, less sophisticated - or is it less depraved? - people take a different attitude. As H. Fielding Hall reported from Burma: 'To him (the Burmese) men are men, and animals are animals, and men are far the higher. But he does not deduce from this that man's superiority gives him permission to ill-treat or kill animals. It is just the reverse. It is because man is so much higher than the animal that he can and must observe towards animals the very greatest care, feel for them the very greatest compassion, be good to them in every way he can. The Burmese’s motto should be noblesse oblige. He knows the meaning, he knows not the Words.'

In Proverbs we read that the just man takes care of his beast, but the heart of the wicked is merciless, and St Thomas Aquinas wrote: 'It is evident that if a man practises a compassionate affection for animals, he is all the more disposed to feel compassion for his fellowmen.' No-one ever raised the question of whether they could asked to live in accordance with, these convictions. At the level of values, of ends-in-themselves, there is no question of 'affording'.

What applies to the animals upon the land applies equally, and without any suspicion of sentimentality, to the land itself. Although ignorance and greed have again and again destroyed the fertility of the soil to such an extent that whole civilisations foundered, there have been no traditional teachings which failed to recognise the meta-economic value and significance of 'the generous earth'. And where these teachings were heeded. not only agriculture but also of all other factors of civilisation achieved health and wholeness. Conversely, where people imagined that they could not 'afford' to care for the soil and work with nature, instead of against it, the resultant sickness of the soil has invariably imparted sickness to all the other factors of civilisation.

In our time, the main danger to the soil, and therewith not only to agriculture but to civilisation as a whole, stems from the towns- man's determination to apply to agriculture the principles of industry. No more typical representative of this tendency could be found than Dr Sicco I.. Mansholt, who, as Vice-President of the European Economic Community, launched the Mansholt Plan for European Agriculture. He believes that the farmers are 'a group that has still not grasped the rapid changes in society'. Most of them ought to get out of farming and become industrial labourers in the cities, because 'factory workers, men on building sites and those in administrative jobs - have a five-day week and two weeks' annual holiday already. Soon they may have a four-day week and four weeks' holiday per year. And the farmer: he is condemned to working a seven day week because the five day cow has not yet been invented, and he gets no holiday at ail." The Mansholt Plan, accordingly, is designed to achieve, as quickly as humanely possible, the amalgamation of many small family farms into large agricultural units operated as if they were factories, and the maximum rate of reduction in the community's agriculture population. Aid is to be given 'which would enable the older as well as the younger farmers to leave agriculture'."

In the discussion of the Mansholt Plan, agriculture is generally referred to as one of Europe's 'industries'. The question arises of whether agriculture is, in fact, an industry, or whether it might be something essentially different. Not surprisingly, as this is a metaphysical - or meta-economic - question, it is never raised by economists.

Now, the fundamental 'principle' of agriculture is that it deals with life, that is to say, with living substances. Its products are the results of processes of life and its means of production is the living soil. A cubic centimetre of fertile soil contains milliards of living organisms, the full exploration of which is far beyond the capacities of man. The fundamental 'principle' of modern industry, on the other hand, is that it deals with man-devised processes which work reliably only when applied to man-devised, non-living materials. The ideal of industry is the elimination of living substances. Manmade materials are preferable to natural materials, because we can make them to measure and apply perfect quality control. Man-made machines work more reliably and more predictably than do such living substances as men. The ideal of industry is to eliminate the living factor, even including the human factor, and to turn the productive process over to machines. At Alfred North Withehead defined life as 'an offensive directed against the repetitious mechanism of the universe', so we may define modern industry as 'an offensive against the unpredictability, un- punctuality, general waywardness and cussedness of living nature, including man'.

In other words, there can be no doubt that the fundamental 'principles' of agriculture and of industry, far from being compatible with each other, are in opposition. Real life consists of the tensions produced by the incompatibility of opposites, each of which is needed, and just as life would be meaningless without death, so agriculture would be meaningless without industry. It remains true, however, that agriculture is primary, whereas industry is secondary, which means that human life can continue with- out industry, whereas it cannot continue without agriculture. Human life at the level of civilisation, however, demands the balance of the two principles, and this balance is ineluctably destroyed when people fail to appreciate the essential difference between agriculture and industry - a difference as great as that between life and death - and attempt to treat agriculture as just another industry.

The argument is, of course, a familiar one. It was put succinctly by a group of internationally recognised experts in A Future for European Agriculture:

'Different parts of the world possess widely differing advantages for the production of particular products, depending on differences in climate, the quality of the soil and cost of labour. All countries would gain from a division of labour which enabled them to concentrate production on their most highly productive agricultural operations. This would result both in higher income for agriculture and lower costs for the entire economy, particularly for industry. No fundamental justification can be found for agricultural protectionism.'

It this were so it would be totally incomprehensible that agricultural protectionism, throughout history, has been the rule rather than the exception. Why are most countries, most of the time, unwilling to gain these splendid rewards from so simple a prescription? Precisely because there is more involved in 'agricultural operations' than the production of incomes and the lowering of costs: what is involved is the whole relationship between man and nature, the whole life-style of a society, the health, happiness and harmony of man, as well as the beauty of his habitat. If all these things are left out of the experts' considerations, man himself is left out - even if our experts try to bring him in, as it were, after the event, by pleading that the community should pay for the 'social consequences' of their policies. The Mansholt Plan. say the experts, 'represents a bold initiative. It is based on the acceptance of a fundamental principle: agricultural income can only be maintained if the reduction in the agricultural population is accelerated, and if farms rapidly reach an economically viable size.'' Or again: 'Agriculture, in Europe at least is essentially directed towards food-production.... It is well known that the demand for food increases relatively slowly with increases in real income. This causes the total incomes earned in agriculture to rise more slowly in comparison with the incomes earned in industry; to maintain the same rate of growth of incomes per head is only possible if there is an adequate rate of decline in the numbers engaged in agriculture." ...'The conclusions seem inescapable: under circumstances which are normal in other advanced countries, the community would be able to satisfy its own needs with only one third as many farmers as now.'

No serious exception can be taken to these statements if we adopt - as the experts have adopted - the metaphysical position of the crudest materialism, for which money costs and money incomes are the ultimate criteria and determinants of human action, and tile living world has no significance beyond that of a quarry for exploitation.

On a wider view, however, the land is seen as a priceless asset which it is man's task and happiness 'to dress and to keep'. We can say that man's management of the land must be primarily orientated towards three goals - health, beauty, and permanence. The fourth goal - the only one accepted by the experts - productivity, wilt then be attained almost as a by-product. The crude materialist view sees agriculture as 'essentially directed towards food-production', A wider view sees agriculture as having to fulfil at least three tasks:

to humanise and ennoble man's wider habitat; and
to bring forth the foodstuffs and other materials which are needed for a becoming life.

I do not believe that a civilisation which recognises only the third of these tasks, and which pursues it with such ruthlessness and violence that the other two tasks are not merely neglected but systematically counteracted, has any chance of long-term survival. Today, we take pride in the fact that the proportion of people engaged in agriculture has fallen to very low levels and continues to fall. Great Britain produces some sixty per cent of its food requirements while only three per cent of its working population are working on farms. In the United States, there were still twenty- seven per cent of the nation's workers in agriculture at the end of World War I, and fourteen per cent at the end of World War II: the estimate for 1971 shows only 4·4 per cent. These declines in the proportion of workers engaged in agriculture are generally associated with a massive flight from the land and a burgeoning of cities. At the same time, however, to quote Lewis Herber:

'Metropolitan life is breaking down. psychologically, economically and biologically. Millions of people have acknowledged this breakdown by voting with their feet, they have picked up their belongings and left, If they have not been able to sever their connections with the metropolis, at least they have tried. As a social symptom the effort is significant.’

In the vast modern towns, says Mr Herber, the urban dweller is more isolated than his ancestors were in the countryside: 'The city man in a modern metropolis has reached a degree of anonymity, social atomisation and spiritual isolation that is virtually unprecedented in human history.'"

So what does he do? He tries to get into the suburbs and becomes a commuter. Because rural culture has broken down, the rural people are fleeing from the land~ and because metropolitan life is breaking down, urban people are fleeing from the cities. 'Nobody, according to Dr Mansholt, 'can afford the luxury of not acting economically','" with the result that everywhere life tends to become intolerable for anyone except the very rich.

I agree with Mr. Herber's assertion that 'reconciliation of man with the natural world is no longer merely desirable, it has become a necessity'. And this cannot be achieved by tourism, sightseeing, or other leisure-time activities, but only by changing the structure of agriculture in a direction exactly opposite to that proposed by Dr Mansholt and supported by the experts quoted above: instead of searching for means to accelerate the drift out of agriculture, we should be searching for policies to reconstruct rural culture, to open the land for the gainful occupation to larger numbers of people, whether it be on a full-time or a part-time basis, and to orientate all our actions on the land towards the threefold ideal of health, beauty, and permanence.

The social structure of agriculture, which has been produced by -- and is generally held to obtain its justification from - large-scale mechanisation and heavy chemicalisation. makes it impossible to keep man in real touch with living nature; in fact, it supports all the most dangerous modern tendencies of violence, alienation, and environmental destruction Health, beauty and permanence are hardly even respectable subjects for discussion, and this is yet another example of the disregard of human values - and this means a disregard of man - which inevitably results from the idolatry of economism.

If 'beauty is the splendour of truth', agriculture cannot fulfil its second task, which is to humanise and ennoble man's wider habitat, unless it clings faithfully and assiduously to the truths revealed by nature's living processes. One of them is the law of return; another is diversification - as against any kind of monoculture; another is decentralisation, so that some use can be found for even quite inferior resources which it would never be rational to transport over long distances. Here again, both the trend of things and the advice of the experts is in the exactly opposite direction - towards the industrialisation and depersonalisation of agriculture, towards concentration, specialisation, and any kind of material waste that promises to save labour. As a result, the wider human habitat, far from being humanised and ennobled by man's agricultural activities, becomes standardised to dreariness or even degraded to ugliness.

All this is being done because man-as-producer cannot afford 'the luxury of not acting economically', and therefore cannot produce the very necessary 'luxuries' - like health, beauty, and permanence - which man-as-consumer desires more than anything else. It would cost too much; and the richer we become, the less we can 'afford'. The aforementioned experts calculate that the 'burden' of agricultural support within the Community of the Six amounts to 'nearly three per cent of Gross National Product', an amount they consider 'far from negligible'. With an annual growth rate of over three per cent of Gross National Product, one might have thought that such a 'burden' could be carried without difficulty: but the experts point out that 'national resources are largely committed to personal consumption, investment and public services.... By using so large a proportion of resources to prop up declining enterprises, whether in agriculture or in industry, the Community foregoes the opportunity to undertake "necessary improvements'' in these other fields.

Nothing could be clearer. If agriculture does not pay, it is just a 'declining enterprise'. Why prop it up? There are no 'necessary improvements' as regards the land, but only as regards farmers' incomes, and these can be made if there are fewer farmers. This is the philosophy of the townsman. alienated from living nature, who promotes his own scale of priorities by arguing in economic terms that we cannot 'afford' any other. In fact, any society can afford to look after its land and keep it healthy and beautiful in perpetuity. There are no technical difficulties and there is no lack of relevant knowledge. There is no need to consult economic experts when the question is one of priorities. We know too much about ecology today to have any excuse for the many abuses that are currently going on in the management of the land, in the management of animals, in food storage, food processing, and in heedless urbanisation. If we permit them, this is not due to poverty, as if we could not afford to stop them; it is due to the fact that, as a society, we have no firm basis of belief in any meta-economic values, and when there is no such belief the economic calculus takes over. This is quite inevitable. How could it be otherwise? Nature, it has been said, abhors a vacuum, and when the avail- able 'spiritual space' is not filled by some higher motivation, then it will necessarily be filled by something lower - by the small, mean, calculating attitude to life which is rationalised in the economic calculus.

I have no doubt that a callous attitude to the land and to the animals thereon is connected with, and symptomatic of, a great many other attitudes, such as those producing a fanaticism of rapid change and a fascination with novelties- technical, organisational, chemical, biological, and so forth - which insists on their application long before their long-term consequences are even remotely understood. In the simple question of how we treat the land, next to people our most precious resource, our entire way of life is involved, and before our policies with regard to the land will really be changed, there will have to be a great deal of philosophical, not to say religious, change. It is not a question of what we can afford but of what we choose to spend our money on. If we could return to a generous recognition of meta-economic values, our landscapes would become healthy and beautiful again and our people would regain the dignity of man, who knows himself as higher than the animal but never forgets that noblesse oblige.
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Re: Small is Beautiful, by E.F. Schumacher

Postby admin » Tue Jan 05, 2016 2:18 am

Eight: Resources for Industry


Industrially, the most advanced country today is undoubtedly the United States of America. With a population of about 207 million, it contains 5-6 per cent of mankind; with only about fifty- seven people per square mile - as against a world average of over seventy - and being situated wholly within the northern temperate zone, it ranks as one of the great sparsely populated areas of the world. It has been calculated that if the entire world population were put into the United States, its density of population would then be just about that of England now. This may be thought to be an 'unfair' comparison; but even if we take the United Kingdom as a whole, we find a population density that is more than ten times that of the United States (which means that the United States could accommodate more than half the present world population before it attained a density equal to that of the United Kingdom now), and there are many other industrialised countries where densities are even higher. Taking the whole of Europe, exclusive of the USSR, we find a population density of 2427 persons per square mile, or 4.25 times that of the United States. It cannot be said, therefore, that - relatively speaking - the United States is disadvantaged by having too many people and too little space.

Nor could it be said that the territory of the United States was poorly endowed with natural resources. On the contrary, in all human history no large territory has ever been opened up which has more excellent and wonderful resources, and, although much has been exploited and ruined since, this still remains true today.

All the same, the industrial system of the United States cannot subsist on internal resources alone and has therefore had to extend its tentacles right around the globe to secure its raw material supplies. For the 5-6 per cent of the world population which live in the United States require something of the order of forty per cent of the world's primary resources to keep going. Whenever estimates are produced which relate to the next ten, twenty, or thirty years, the message that emerges is one of ever-increasing dependence of the United States economy on raw material and fuel supplies from outside the country. The National Petroleum Council, for instance, calculates that by 1985 the United States will have to cover fifty-seven percent of its total oil requirements from imports, which would then greatly exceed -- at 800 million tons - the total oil imports which Western Europe and Japan currently obtain from the Middle East and Africa.

An industrial system which uses forty per cent of the world's primary resources to supply less than six per cent of the world's population could be called efficient only if it obtained strikingly successful results in terms of human happiness, well-being, culture, peace, and harmony. I do not need to dwell on the fact that the American system fails to do this, or that there are not the slightest prospects that it could do so if only it achieved a higher rate of growth of production, associated, as it must be, with an even greater call upon the world's finite resources. Professor Waiter Heller, former Chairman of the US President's Council of Aluminum Economic Advisers, no doubt reflected the opinion of the most Chromium modern economists when he expressed this view:

'We need expansion to fulfil our nation's aspirations. In a fully employed, high-growth economy you have a better chance to free public and private resources to fight the battle of land, air, water and noise pollution than in a low-growth economy.

'I cannot conceive,' he says, 'a successful economy without growth.' But if the United States' economy cannot conceivably be successful without further rapid growth, and if that growth depends on being able to draw ever-increasing resources from the rest of the world, what about the other 94·4 per cent of mankind which are so far 'behind' America?

If a high-growth economy is needed to fight the battle against pollution, which itself appears to be the result of high growth, what hope is there of ever breaking out of this extraordinary circle? In any case, the question needs to be asked whether the earth's resources are likely to be adequate for the further development of an industrial system that consumes so much and accomplishes so little.

More and more voices are being heard today which claim that they are not. Perhaps the most prominent among these voices is that of a study group at the Massachusetts Institute of Technology which produced The Limits to Growth, a report for the Club of Rome's project on the predicament of mankind. The report contains, among other material, an interesting table which shows the known global reserves; the number of years known global reserves will last at current global consumption rates; the number of years known global reserves will last with consumption continuing to grow exponentially; and the number of years they could meet growing consumption if they were five times larger than they are currently known to be: all this for nineteen non-renewable natural resources of vital importance to industrial societies. Of particular interest is the last column of the table which shows 'US Consumption as % of World Total'. The figures are as follows:

Aluminium 42%
Chromium 19%
Coal 44%
Cobalt 32%
Copper 33%
Gold 26 %
Iron 28 %
Lead 25 %
Manganese 14%
Mercury 24 %
Molybdenum 40%
Natural Gas 63%
Nickel 38 %
Petroleum 33 %
Platinum Group 31%
Silver 26%
Tin 24%
Tungsten 22%
Zinc 26%

In only one or two of these commodities is US production sufficient to cover US consumption. Having calculated when, under certain assumptions, each of these commodities will be exhausted, the authors give their general conclusion, cautiously, as follows:

'Given present resource consumption rates and the projected increase in these rates, the great majority of the currently important non-renewable resources will be extremely costly 100 years from now.

In fact, they do not believe that very much time is left before modern industry, 'heavily dependent on a network of international agreements with the producing countries for the supply of raw materials' might be faced with crises of unheard-of proportions.

'Added to the difficult economic question of the fate of various industries as resource after resource becomes prohibitively expensive is the imponderable political question of the relationships between producer and consumer nations as the remaining resources become concentrated in more limited geographical areas. Recent nationalisation of South American mines and successful Middle Eastern pressures to raise oil prices suggest that the political question may arise long before the ultimate economic one.'

It was perhaps useful, but hardly essential, for the MIT group to make so many elaborate and hypothetical calculations. In the end, the group's conclusions derive from its assumptions, and it does not require more than a simple act of insight to realise that infinite growth of material consumption in a finite world is an impossibility. Nor does it require the study of large numbers of commodities, of trends, feedback loops, system dynamics, and so forth, to come to the conclusion that time is short. Maybe it was useful to employ a computer for obtaining results which any intelligent person can reach with the help of a few calculations on the back of an envelope, because the modern world believes in computers and masses of facts, and it abhors simplicity. But it is always dangerous and normally self-defeating to try and cast out devils by Beelzebub, the prince of the devils.

For the modern industrial system is not gravely threatened by possible scarcities and high prices of most of the materials to which the MIT study devotes such ponderous attention. Who could say how much of these commodities there might be in the crust of the earth; how much will be extracted, by ever more ingenious methods, before it is meaningful to talk of global exhaustion; how much might be won from the oceans; and how much might be recycled? Necessity is indeed the mother of invention, and the inventiveness of industry, marvellously supported by modem science, is unlikely to be easily defeated on these fronts.

It would have been better for the furtherance of insight if the MIT team had concentrated its analysis on the one material factor the availability of which is the precondition of all others and which cannot be recycled - energy.


As long as there is enough primary energy - at tolerable prices - there is no reason to believe that bottlenecks in any other primary materials cannot be either broken or circumvented. On the other hand, a shortage of primary energy would mean that the demand for most other primary products would be so curtailed that a question of shortage with regard to them would be unlikely to arise.

Although these basic facts are perfectly obvious, they are not yet sufficiently appreciated. There is still a tendency, supported by the excessively quantitative orientation of modern economics, to treat the energy supply problem as just one problem alongside countless others - as indeed was done by the MIT team. The quantitative orientation is so bereft of qualitative understanding that even the quality of 'orders of magnitude' ceases to be appreciated. And this, in fact, is one of the main causes of the lack of realism with which the energy supply prospects of modern industrial society are generally discussed. It is said, for instance, that 'coal is on the way out and will be replaced by oil', and when it is pointed out that this would mean the speedy exhaustion of all proved and expected (i.e. yet-to-be-discovered) oil reserves, it is blandly asserted that 'we are rapidly moving into the nuclear age', so that there is no need to worry about anything, least of all about the conservation of fossil fuel resources. Countless are the learned studies, produced by national and international agencies, committees, research institutes, and so forth, which purport to demonstrate, with a vast array of subtle calculation, that the demand for western European coal is declining and will continue to decline so quickly that the only problem is how to get rid of coal miners fast enough. Instead of looking at the total situation, which has been and still is highly predictable, the authors of these studies almost invariably look at innumerable constituent parts of the total situation, none of which is separately predictable, since the parts cannot be understood unless the whole is understood.

To give only one example, an elaborate study by the European Coal and Steel Community, undertaken in 1960-1, provided precise quantitative answers to virtually every question anyone might have wished to ask about fuel and energy in the Common Market countries up to 1975. I had occasion to review this report shortly after publication, and it may not be out of place to quote a few passages from this review':

‘It may seem astonishing enough that anyone should be able to predict the development of miners' wages and productivity in his own country fifteen years ahead: it is even more astonishing to find him predicting the prices and transatlantic freight rates of American coal. A certain quality of US coal, we are told, will cost "about $1450 per ton" free North Sea port in 1970, and "a little more" in 1975. "About $14·50." the report says, should be taken as meaning "anything between $13·75 and $15·25", a margin of uncertainty of $1.50 or - five per cent,' (In fact, the c.i.f.* price of US coal in European ports rose to between $24 and $25 per ton for new contracts concluded in October 1970!)

'Similarly, the price of fuel oil will be something of the order of $17-19 per ton, while estimates of various kinds are given for natural gas and nuclear energy. Being in the possession of these (and many other) "facts", the authors find it an easy matter to calculate how much of the Community's coal production will be competitive in 1970, and the answer is "about 125 million, i.e. a little over half the present production".

'It is fashionable today to assume that any figures about the future are better than none. To produce figures about the unknown, the current method is to make a guess about something or other - called an "assumption" - and to derive an estimate from it by subtle calculation. The estimate is then presented as the result of scientific reasoning, something far superior to mere guesswork. This is a pernicious practice which can only lead to the most colossal planning errors, because it offers a bogus answer where, in fact, an entrepreneurial judgment is required.

'The study here under review employs a vast array of arbitrary assumptions, which are then, as it were, put into a calculating machine to produce a "scientific" result. It would have been cheaper, and indeed more honest, simply to assume the result.'

As it happened, the 'pernicious practice' did maximise the planning errors; the capacity of the western European coal industry was virtually cut down to half its former size, not only in the Community but in Britain as well. Between 1960 and 1970 the dependence on fuel imports of the European Community grew from thirty per cent to over sixty per cent and that of the United Kingdom, from twenty-five per cent to forty-four per cent. Although it was perfectly possible to foresee the total situation that would have to be met during the 1970s and thereafter, the governments of western Europe, supported by the great majority of economists, deliberately destroyed nearly half of their coal industries, as if coal was nothing but one of innumerable marketable commodities, to be produced as long as it was profitable to do so and to be scrapped as soon as production ceased to be profitable. The question of what was to take the place of indigenous coal supplies in the long term was answered by assurances that there would be abundant supplies of other fuels at low prices 'for the foreseeable future', these assurances being based on nothing other than wishful thinking.

It is not as if there was - or is now - a lack of information, or that the policy-makers happened to have overlooked important facts. No, there was perfectly adequate knowledge of the current situation and there were perfectly reasonable and realistic estimates of future trends. But the policymakers were incapable of drawing correct conclusions from what they knew to be true. The arguments of those who pointed to the likelihood of severe energy shortages in the foreseeable future were not taken up and refuted by counter-arguments but simply derided or ignored. It did not require a great deal of insight to realise that, whatever the long term future of nuclear energy might be, the fate of world industry during the remainder of this century would be determined primarily by oil. What could be said about oil prospects a decade or so ago? I quote from a lecture delivered in April 1961.

'To say anything about the long-term prospects of crude oil availability is made invidious by the fact that some thirty or fifty years ago somebody may have predicted that oil supplies would give out quite soon, and, look at it, they didn't. A surprising number of people seem to imagine that by pointing to erroneous predictions made by somebody or other a long time ago they have somehow established that oil will never give out no matter how fast is the growth of the annual take. With regard to future oil supplies, as with regard to atomic energy, many people manage to assume a position of limitless optimism, quite impervious to reason.

'I prefer to base myself on information coming from the oil people themselves. They are not saying that oil will shortly give out; on the contrary, they are saying that very much more oil is still to be found than has been found to date and that the world's oil reserves, recoverable at a reasonable cost, may well amount to something of the order of 200,000 million tons, that is about 200 times the current annual take. We know that the so-called "proved" oil reserves stand at present at about 40,000 million tons; and we certainly do not fall into the elementary error of thinking that that is all the oil there is likely to be. No, we are quite happy to believe that the almost unimaginably large amount of a further 160,000 million tons of oil will be discovered during the next few decades. Why almost unimaginable? Because, for instance, the great recent discovery of large oil deposits in the Sahara (which has induced many people to believe that the future prospects of oil have been fundamentally changed thereby) would hardly affect this figure one way or another. Present opinion of the experts appears to be that the Saharan oil fields may ultimately yield as much as 1,000 million tons. This is an impressive figure when held, let us say, against the present annual oil requirements of France; but it is quite insignificant as a contribution to the 160,000 million tons which we assume will be discovered in the foreseeable future. That is why I said "almost unimaginable", because 160 such discoveries as that of Saharan oil are indeed difficult to imagine. All the same, let us assume that they can be made and will be made.

'It looks therefore as if proved oil reserves should be enough for forty years and total oil reserves for 200 years - at the current rate of consumption. Unfortunately, however, the rate of consumption is not stable but has a long history of growth at a rate of six or seven per cent a year. Indeed, if this growth stopped from now on, there could be no question of oil displacing coal; and everybody appears to be quite confident that the growth of oil - we are speaking on a world scale - will continue at the established rate. Industrialisation is spreading right across the world and is being carried forward mainly by the power of oil. Does anybody assume that this process would suddenly cease? If not, it might be worth our while to consider, purely arithmetically, how long it could continue.

'What I propose to make now is not a prediction but simply an exploratory calculation or, as the engineers might call it, a feasibility study. A growth rate of seven per cent means doubling in ten years. In 1970, therefore, world oil consumption might be at the rate of 2,000 million tons per annum. (In the event, it amounted to 2,3-73 million tons.) The amount taken during the decade would be roughly 15,000 million tons. To maintain proved reserves at 40,000 million tons new proving during the decade would have to amount to about 15,000 million tons. Proved reserves, which are at present forty times annual take, would then be only twenty times, the annual take having doubled. There would be nothing inherently absurd or impossible in such a development. Ten years, however, is a very short time when we are dealing with problems of fuel supply. So let us look at the following ten years leading up to about 1980.

If oil consumption continued to grow at roughly seven per cent per annum, it would rise to about 4,000 million tons a year in 1980. The total take during this second decade would be roughly 30,000 million tons. If the "life'' of proved reserves were to be maintained at twenty years - and few people would care to engage in big investments without being able to look to at least twenty years for writing them off- it would not suffice merely to replace the take of 30,000 million tons: it would be necessary to end up with proved reserves at 80,000 million tons (twenty times 4,000). New discoveries during that second decade would therefore have to amount to not less than 70,000 million tons. Such a figure, I suggest, already looks pretty fantastic. What is more, by that time we would have used up about 45,000 million tons out of our original 200,000 million tons total. The remaining 155,000 million tons, discovered and not- yet-discovered, would allow a continuation of the 1980 rate of consumption for less than forty years. No further arithmetical demonstration is needed to make us realise that a continuation of rapid growth beyond 1980 would then be virtually impossible.

'This, then, is the result of our "feasibility study": if there is any truth at all in the estimates of total oil reserves which have been published by the leading oil geologists, there can be no doubt that the oil industry will be able to sustain its established rate of growth for another ten years; there is considerable doubt whether it will be able to do so for twenty years; and there is almost a certainty that it will not be able to continue rapid growth beyond 1980. In that year, or rather around that time, world oil consumption would be greater than ever before and proved oil reserves, in absolute amount, would also be the highest ever. There is no suggestion that the world would have reached the end of its oil resources; but it would have reached the end of oil growth. As a matter of interest, I might add that this very point appears to have been reached already today with natural gas in the United States. It has reached its ail-time high; but the relation of current take to remaining reserves is such that it may now be impossible fur it to grow any further.

'As far as Britain is concerned -- a highly industrialised country with a high rate of oil consumption but without indigenous supplies - the oil crisis will come, not when all the world's oil is exhausted, but when world oil supplies cease to expand, If this point is reached, as our exploratory calculation would suggest that it might, in about twenty years' time, when industrialisation will have spread right across the globe and the underdeveloped countries have had their appetite for a higher standard of living thoroughly whetted, although still finding themselves in dire poverty, what else could be the result but an intense struggle for oil supplies, even a violent struggle, in which any country with large needs and negligible indigenous supplies will find itself in a very weak position.

'You can elaborate the exploratory calculation if you wish, varying the basic assumptions by as much as fifty per cent: you will find that the results do not become significantly different. If you wish to be very optimistic, you may find that the point of maximum growth may not be reached by 1980 but a few years later. What does it matter? We, or our children, will merely be a few years older.

'All this means that the National Coal Board has one over- riding task and responsibility, being the trustees of the nation's coal reserves: to be able to supply plenty of coal when the world-wide scramble for oil comes. This would not be possible if it permitted the industry, or a substantial part of the industry, to be liquidated because of the present glut and cheapness of oil, a glut which is due to all sorts of temporary causes....

'What, then, will be the position of coal in, say, 1980? All indications are that the demand for coal in this country will then be larger than it is now. There will still be plenty of oil. but not necessarily enough to meet all requirements. There may be a world-wide scramble for oil, reflected possibly in greatly enhanced oil prices. We must all hope that the National Coal Board will be able to steer the industry safely through the difficult years that lie ahead, maintaining as well as possible its power to produce efficiently something of the order of 200 million tons of coal a year. Even if from time to time it may look as if less coal and more imported oil were cheaper or more convenient for certain users or for the economy as a whole, it is the longer-term prospect that must rule national fuel policy. And this longer-term prospect must be seen against such worldwide developments as population growth and industrialisation. The indications are that by the 1980s we shall have a world population at least one-third bigger than now and a level of world industrial production at least two-and-a-half times as high as today, with fuel use more than doubled. To permit a doubling of total fuel consumption it will be necessary to increase oil fourfold: to double hydro-electricity: to maintain natural gas production at least at the present level; to obtain a substantial (though still modest) contribution from nuclear energy, and to get roughly twenty per cent more coal than now. No doubt, many things will happen during the next twenty years which we cannot foresee today. Some may increase the need for coal and some may decrease it. Policy cannot be based on the unforeseen or unforeseeable. If we base present policy on what can be foreseen at present, it will be a policy of conservation for the coal industry, not of liquidation....

These warnings, and many others uttered throughout the 1960s, did not merely remain unheeded but were treated with derision and contempt - until the general fuel supplies scare of 1970. Every new discovery of oil, or of natural gas, whether in the Sahara, in the Netherlands, in the North Sea, or in Alaska, was hailed as a major event which 'fundamentally changed all future prospects', as if the type of analysis given above had not already assumed that enormous new discoveries would be made every year. The main criticism that can today be made of the exploratory calculations of 1961 is that all the figures are slightly understated. Events have moved even faster than I expected ten or twelve years ago.

Even today, soothsayers are still at work suggesting that there is no problem. During the 1960s, it was the oil companies who were the main dispensers of bland assurances, although the figures they provided totally disproved their case. Now, after nearly half the capacity and much more than half the workable reserves of the western European coal industries have been destroyed, they have changed their tune. It used to be said that OPEC - the Organisation of Petroleum Exporting Countries - would never amount to anything, because Arabs could never agree with each other, let alone with non-Arabs: today it is clear that OPEC is the greatest cartel-monopoly the world has ever seen. It used to be said that the oil exporting countries depended on the oil importing countries just as much as the latter depended on the former; today it is clear that this is based on nothing but wishful thinking, because the need of the oil consumers is so great and their demand so inelastic that the oil exporting countries, acting in unison, can in fact raise their revenues by the simple device of curtailing output. There are still people who say that if oil prices rose too much (whatever that may mean) oil would price itself out of the market: but it is perfectly obvious that there is no ready substitute for oil to take its place on a quantitatively significant scale, so that oil, in fact, cannot price itself out of the market.

The oil producing countries, meanwhile, are beginning to realise that money alone cannot build new sources of livelihood for their populations. To build them needs, in addition to money, immense efforts and a great deal of time. Oil is a 'wasting asset', and the faster it is allowed to waste, the shorter is the time available for the development of a new basis of economic existence. The conclusions are obvious: it is in the real longer-term interest of both the oil exporting and the oil importing countries that the 'life-span' of oil should be prolonged as much as possible. The former need time to develop alternative sources of livelihood and the latter need time to adjust their oil-dependent economies to a situation - which is absolutely certain to arise within the lifetime of most people living today - when oil will be scarce and very dear. The greatest danger to both is a continuation of rapid growth in oil production and consumption throughout the world. Catastrophic developments on the oil front could be avoided only if the basic harmony of the long-term interests of both groups of countries came to be fully realised and concerted action were taken to stabilise and gradually reduce the annual Bow of oil into consumption.

As far as the oil importing countries are concerned, the problem is obviously most serious for western Europe and Japan. These two areas are in danger of becoming the 'residuary legatees' for oil imports. No elaborate computer studies are required to establish this stark fact. Until quite recently, western Europe lived in the comfortable illusion that 'we are entering the age of limit- less, cheap energy' and famous scientists, among others, gave it as their considered opinion that in future 'energy will be a drug on the market'. The British White Paper on Fuel Policy, issued in November 1967, proclaimed that:

'The discovery of natural gas in the North Sea is a major event in the evolution of Britain's energy supplies. It follows closely upon the coming of age of nuclear power as a potential major source of energy. Together, these two development will lead to fundamental changes in the pattern of energy demand and supply in the coming years.'

Five years later, all that needs to be said is that Britain is more dependent on imported oil than ever before. A report presented to the Secretary of State for the Environment in February 1972, introduces its chapter on energy with the words:

'There is deep-seated unease revealed by the evidence sent to us about the future energy resources, both for this country and for the world as a whole. Assessments vary about the length of time that will elapse before fossil fuels are exhausted, but it is increasingly recognised that their life is limited and satisfactory alternatives must be found. The huge incipient needs of developing countries, the increases in population, the rate at which some sources of energy are being used up without much apparent thought of the consequences, the belief that future resources will be available only at ever-increasing economic cost and the hazards which nuclear power may bring in its train are all factors which contribute to the growing concern.' 'It is a pity that the 'growing concern' did not show itself in the 1960s, during which nearly half the British coal industry was abandoned as 'uneconomic' - and, once abandoned, it is virtually lost for ever - and it is astonishing that, despite 'growing concern', there is continuing pressure from highly influential quarters to go on with pit closures for 'economic' reasons.
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