I rant about the evils of economics often enough. I won’t do it any more in this post. One thing is obvious though. We have an economic system because we need an economic system. One can point out the flaws of our current economic system all day long, but there’s no hope of destroying it unless we have something to replace it with. E. F. Schumacher’s Small if Beautiful: Economics as if People Mattered offers that something.
This is a book of sound economic principles whose guiding theme is summed up in the title. We should not try to change people to meet the needs of economic theory, but should instead change economic theory to meet the needs of people. Based on that guideline, Schumacher considers all kinds of issues in economics, including production and consumption, economies of scale, organization, and government, as well as specific topics such as nuclear power and agricultural policy.
One of his best decisions in writing the book was to write each chapter as an essay which can be read separately. This not only helps keep it organized and readable, but also allows the individual chapters to be taken and used as needed. As with any good book, the best way to introduce Small if Beautiful is to present a sample. Perhaps the most famous chapter is Buddhist Economics. (Few people know that Schumacher originally called the chapter Catholic Economics, but his publisher rejected the idea of saying anything positive about Catholicism. He changed the title but added a note that an economic philosophy based on any religion would look similar.) The chapter compares assumptions made by all modern economists to assumptions that would be made by a Buddhist economist working from traditional religious principles. Here’s an excerpt:
There is universal agreement that a fundamental source of wealth is human labour. Now, the modern economist has been brought up to consider “labour” or work as little more than a necessary evil. From the point of view of the employer, it is in any case simply an item of cost, to be reduced to a minimum if it can not be eliminated altogether, say, by automation. From the point of view of the workman, it is a “disutility”; to work is to make a sacrifice of one’s leisure and comfort, and wages are a kind of compensation for the sacrifice. Hence the ideal from the point of view of the employer is to have output without employees, and the ideal from the point of view of the employee is to have income without employment.
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 practiced 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.
The Buddhist point of view takes the function of work to be at least threefold: to give man a chance to utilise and develop his faculties; to enable him to overcome his ego-centredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence. Again, the consequences that flow from this view are endless. To organise work in such a manner that it becomes meaningless, boring, stultifying, or nerve-racking for the worker would be little short of criminal; it would indicate a greater concern with goods than with people, an evil lack of compassion and a soul-destroying degree of attachment to the most primitive side of this worldly existence. Equally, to strive for leisure as an alternative to work would be considered a complete misunderstanding of one of the basic truths of human existence, namely that work and leisure are complementary parts of the same living process and cannot be separated without destroying the joy of work and the bliss of leisure.