Small Is Beautiful by Ernst F. Schumacher (January 2017)
EconTalk podcast host Russ Roberts made an interesting point about free trade during a January episode. He cited free trade as a mechanism that, although it advances our quality of living, tends to come without an open discussion about the costs involved.
Free trade generally advances quality of life by making cheaper products available. But, often, the cost is disproportionately borne by those whose industries are directly impacted by the agreement. In other words, for some the savings realized by purchasing cheaper products does not offset the cost of entering into a free trade agreement.
The problems that grow out of an initial failure to consider the costs of free trade agreements (or any agreement, really) tend rear their heads at just the worst time. Groups that are left entirely unaccounted for tend sit idle, perhaps convinced that their well-intended neighbors will not allow them to come to harm. When they choose to step forward and be counted, the corrective movement is significant enough to cause a number of negative outcomes. These might include delayed progress, destabilization of important services, or further divisions among groups along their differences.
Schumacher's 1973 Small Is Beautiful is a thoughtful example of how to address such considerations before they explode in a manner reminiscent of pent-up anger. Today, the general drift of this book is familiar thanks to many years of discussion on issues such as climate change, peak oil, and development economics. But in his time, the thesis ran counter to two decades of fixation on growth and the firm belief that more is always better. For some readers, the ideas in this book were simply revolutionary.
Schumacher criticized profit-driven economics for its failure to address the critical question of what people are put on Earth to do. It reduces business to measurement of just the profit factor and results in primitive thinking among its leadership. Such calculations do not consider the cost to the human spirit. These leaders become unable to even consider, much less answer, simple questions such as 'how is it so hard to find something for the unemployed to do when there is so much in the world to work on?' unless it is first reformatted into a neat profit/loss calculation.
Schumacher saw that economics, like any social science, rarely produced ideas about how or why to live. Instead, the mad rush in these fields to explain every trivial technical detail about the world led thinkers toward problems that could be solved logically or empirically. Thus, the advent of mass production instead of determining ways for the masses to produce. Though such thinking is useful at times, it provided no help in sorting out the real problems of living- those that require the reconciliation of seemingly incompatible interests, ideas, or groups.
Such reconciliations will lay the foundations for peace. To Schumacher, peace is the philosophy of the wise. Without the restoration of wisdom, the end of conflict remains impossible. Unfortunately, the current economic system, built on the glorification of accumulation, cultivates greed and envy as its natural by-products. As long as these destructive values are normalized by the capitalist system, the pathways to peace remain obstructed and unclear.
Where Schumacher may perhaps wish most strongly for peace is in man's battle with nature. Schumacher reasons that a business quickly churning through its capital is not considered viable yet notes that the same standard is not applied to society's use of natural resources. From his point of view, a good first step toward reducing some of our damage to the environment would involve the restoration of 'tolerance margins' that allow human mistakes to occur without causing permanent harm to the environment.
The concern of man's ongoing relationship with nature occupies Schumacher for two reasons.
First, to him the current condition of man's superiority implies a higher-order responsibility to take great care of nature's resources.
Second is the wise observation that, even when man bests nature, he is destined to occupy the losing side.
As Russ Roberts pointed out, to enter into any agreement without factoring in the costs implies that the bill will be steep when it finally does come due. The failure to consider the costs defines our relationship with the planet. The longer nature remains the left behind party, the longer its pent-up anger at having its concerns ignored will build.
And when nature's pent-up anger explodes, man always loses.
One up: In my first read of this book, I found that a number of Schumacher's concepts translated nicely to managerial concepts.
His insight into the psychology of automation was fascinating. Workers become intellectually confused in environments where the elimination of work is constantly preached. They also find it confusing to think for themselves if the computer is idolized as the solution to the worker's burden of using a brain.
Over time, the worker is worn out by the contradicting approach. Why put in the effort if the goal is to install the systems that will eventually render effort moot? A strong organization must combat this potential malaise by defining success through worker efforts and framing technological advances as tools to free up, not restrict, the strengths of each contributing member in the team.
Another idea I drew on was originally described as a framework for development economics. There is no sustained development in societies that lack one of education, organization, or discipline.
Applied to a work environment, it meant that new initiatives required equal consideration to the three. Employees that are trained for the task, understand their role in it, and know when they will be held accountable are equipped to bring the new initiative to productive fruition.
One down: This is a 'big idea' book that might not sit well with those who like being told exactly what to do next, step by step. And with current events as they are, a book that discusses these larger topics might seem irrelevant, perhaps a case of 'putting the cart before the horse'.
Such books work for me in these times because, whenever life has been turbulent or uncertain for me, I've responded by focusing simultaneously on the very short and very long term. Only when things are more stable do I shift my attention to the three to six week time frame with which I'm most comfortable.
Just saying: It occurred to me that, as wonderful as this book is in its entirety, the biggest themes from it are just as easily expressed in short phrases.
One example: "growth is the ideology of the cancer cell". That comment made to the right person at the right time will probably have the same kind of impact as reading this entire book did for me.
