E. F. Schumacher

**Ernst Friedrich "Fritz" Schumacher**
	Ernst Friedrich "Fritz" Schumacher
	; Photograph from cover of Small Is Beautiful 1973
Born	August 16, 1911; Bonn, Germany
Died	September 4, 1977 (aged 66); Switzerland
Education	Oxford and Columbia University
Occupation	Economist

From Wikipedia, the free encyclopedia

Jump to: navigation, search

Ernst Friedrich "Fritz" Schumacher (16 August 1911 – 4 September 1977) was an internationally influential economic thinker with a professional background as a statistician and economist in Britain. He served as Chief Economic Advisor to the UK National Coal Board for two decades.^[1] His ideas became well-known in much of the English-speaking world during the 1970s. He is best known for his critique of Western economies and his proposals for human-scale, decentralized and appropriate technologies. According to The Times Literary Supplement, his 1973 book Small Is Beautiful is among the 100 most influential books published since World War II.^[2] It was soon translated into many languages and brought international fame to Schumacher, after which Schumacher was invited to many international conferences, university guest speaker lectures and consultations. Schumacher's basic development theories have been summed up in the catch-phrases Intermediate Size and Intermediate Technology. Schumacher's other notable work is the 1977 A Guide For The Perplexed, which is a critique of materialist scientism and an exploration of the nature and organization of knowledge. Together with long-time friends and associates like Professor Mansur Hoda, Schumacher founded the Intermediate Technology Development Group (now Practical Action) in 1966.

[edit] Early life

Schumacher was born in Bonn, Germany in 1911. His father was a professor of political economy. The younger Schumacher studied in Bonn and Berlin, then from 1930 in England as a Rhodes Scholar at New College, Oxford^[1], and later at Columbia University in New York City, earning a diploma in economics. He then worked in business, farming and journalism.^[1].

[edit] Economist

[edit] Protégé of Keynes

Schumacher moved back to England before World War II, as he had no intention of living under Nazism. For a period during the War, he was interned on an isolated English farm as an "enemy alien." In these years, Schumacher captured the attention of John Maynard Keynes with a paper entitled "Multilateral Clearing" that he had written between sessions working in the fields of the internment camp. Keynes recognised the young German's understanding and abilities, and was able to have Schumacher released from internment. Schumacher helped the British government mobilise economically and financially during World War II, and Keynes found a position for him at Oxford University.

According to Leopold Kohr's obituary for Schumacher, when his paper "was published in the spring of 1943 in Economica, it caused some embarrassment to Keynes who, instead of arranging for its separate publication, had incorporated the text almost verbatim in his famous "Plan for an International Clearing Union," which the British government issued as a White Paper a few weeks later." [1]

[edit] Adviser to the Coal Board

After the War, Schumacher worked as an economic advisor to, and later Chief Statistician for, the British Control Commission which was charged with rebuilding the German economy.^[1] From 1950 to 1970 he was Chief Economic Adviser to the National Coal Board^[1], one of the world's largest organisations, with 800,000 employees. In this position, he argued that coal, not petroleum, should be used to supply the energy needs of the world's population. He viewed oil as a finite resource, fearing its depletion and eventually prohibitive price, and viewing with alarm the fact that, as Schumacher put it, "the richest and cheapest reserves are located in some of the world's most unstable countries" (Daniel Yergin, The Prize [1991], p. 559).

His position on the Coal Board was often mentioned later by those introducing Schumacher or his ideas. It is generally thought that his farsighted planning contributed to Britain's post-war economic recovery. Schumacher predicted the rise of OPEC and many of the problems of nuclear power.

[edit] Thinking outside the box

In 1955 Schumacher travelled to Burma as an economic consultant. While there, he developed the set of principles he called "Buddhist economics," based on the belief that individuals needed good work for proper human development. He also proclaimed that "production from local resources for local needs is the most rational way of economic life." He traveled throughout many Third World countries, encouraging local governments to create self-reliant economies. Schumacher's experience led him to become a pioneer of what is now called appropriate technology: user-friendly and ecologically suitable technology applicable to the scale of the community. He founded the Intermediate Technology Development Group (now Practical Action) in 1966. His theories of development have been summed up for many in catch phrases like "intermediate size," and "intermediate technology." He was a trustee of Scott Bader Commonwealth and in 1970 the president of the Soil Association.

By the end of his life, it can be said that Schumacher's personal development had led him very far afield from the ideas of John Maynard Keynes. Keynes, second only to Adam Smith, is widely regarded as the most influential modern orthodox economist. In contrast, Schumacher is one of the most widely recognized heterodox economists.^{[citation needed]}

[edit] Schumacher as writer

Schumacher wrote on economics for London's The Times and became one of the paper's chief editorial writers. At this post he was assigned the somewhat uncomfortable task of compiling information for the obituary of John Keynes many years before the event of his death. He also wrote for The Economist and Resurgence. He served as adviser to the India Planning Commission, as well as to the governments of Zambia and Burma — an experience that led to his much-read essay on "Buddhist Economics."

The 1973 publication of Small is Beautiful, a collection of essays, brought his ideas to a wider audience. Schumacher's work coincided with the growth of ecological concerns and with the birth of environmentalism and he became a hero to many in the environmental movement and community movement.

His 1977 work A Guide For The Perplexed is both a critique of materialistic scientism and an exploration of the nature and organization of knowledge.

[edit] Later life and posthumous recognition

Schumacher's rejection of materialist, capitalist, agnostic modernity was paralleled by a growing fascination with religion. His interest in Buddhism has been noted. However, from the late 1950s on, Catholicism heavily influenced his thought. He noted the similarities between his own economic views and the teaching of papal encyclicals on socio-economic issues, from Leo XIII's "Rerum Novarum" to Pope John XXIII's "Mater et Magistra", as well as with the distributism supported by the Catholic thinkers G. K. Chesterton, Hilaire Belloc and Vincent McNabb. Philosophically, he absorbed much of Thomism, which provided an objective system in contrast to what he saw as the self-centered subjectivism and relativism of modern philosophy and society. He also was greatly interested in the tradition of Christian mysticism, reading deeply such writers as St. Teresa of Avila and Thomas Merton. These were all interests that he shared with his friend, the Catholic writer Christopher Derrick. In 1971, he converted to Catholicism.

Schumacher gave interviews and published articles for a wide readership in his later years. He also pursued one of the loves of his life: gardening. He died during a lecture tour of a heart attack on 4 September 1977, in Switzerland.

The Schumacher Circle organisations were founded in his memory. They include the Schumacher College in Totnes, Devon, the E. F. Schumacher Society founded in New England, the Soil Association and the New Economics Foundation.

Schumacher's personal collection of books and archives are currently held by the E. F. Schumacher Society in Great Barrington, Massachusetts. The Schumacher Society continues the work of E. F. Schumacher by maintaining a research library, organizing lectures and seminars, publishing papers, developing model economic programs, and providing technical assistance to groups all for the purpose of linking people, land, and community to build strong, diverse local economies.

[edit] Schumacher's Teachings

[edit] Homo viator

“It is when we come to politics,” Schumacher insisted, “that we can no longer postpone or avoid the question regarding man's ultimate aim and purpose.” If one believes in God one will pursue politics “mindful of the eternal destiny of man and of the truths of the Gospel”. However, if one believes “that there are no higher obligations”, it becomes impossible to resist the appeal of Machiavellianism—“politics as the art of gaining and maintaining power so that you and your friends can order the world as they like it”(2). Once one accepted that man was created by God with a designated purpose, politics, economics and art had value only for the end of helping man reach a higher plane of existence, which should be his goal (2).

By the end of the fifties Schumacher had reached the conclusion that man was homo viator (a pilgrim on a journey). He believed that it was the failure to recognize this fact which led to society's ills (2).

[edit] Three Culprits

For Schumacher there were three main culprits, that had all been corrosive agents in a world which had lost sight of individual responsibility and a world bound to the parameters of realism and science. These were Freud, Marx and Einstein. Freud had made perception subjective through his teaching that perception was subject to the complex interplay of the ego and the id, literally rendering it self-centered. This led inevitably to a change of attitude in human relations where self-fulfillment took precedence over the needs of others. Marx, by seeking a scapegoat in the bourgeoisie, had replaced personal responsibility with a hatred for others. His fault lay in his blaming of others for problems with society. Einstein had supposedly undermined belief in absolutes with his insistence on the relativity of everything. The application of 'relativity' in all other fields including morality, led to rejection of moral codes and responsibility (2). (Of course, Einstein's actual theory of relativity was strictly limited to physics, and its correctness has been thoroughly verified by experiment.)

[edit] Three Planes of Thought

May 1957 he called his talk 'The Insufficiency of Liberalism' and it was an exposition of what he termed the “three stages of development”. The first great leap, he said, was made when man moved from stage one of primitive religion to stage two of scientific realism. This was the stage modern man tended to be at. A few move to the third stage in which one can find in the lapses and deficiencies in science and realism, and that there is something beyond fact and science. He called this stage three. The problem, he explained, was that stage one and stage three appear to be exactly the same to people stuck in stage two. Consequently, those in stage three are seen as having had some sort of a relapse into childish nonsense. Only those in stage three, can understand the differences between stage one and stage three.

[edit] Labour

In 1955 Schumacher traveled to Burma as an economic consultant. While there, he developed the principles of what he called "Buddhist economics", based on the belief that good work was essential for proper human development and that "production from local resources for local needs is the most rational way of economic life." (1)

The following four quotes from Schumacher are said to exemplify his ideas:

1. “From the point of view of the employer, it [work] is in any case simply an item of cost, to be reduced to a minimum if it cannot 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.”(2)

2. “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, surrender to the forces of evil.”(2)

3. The Buddhist view, “takes the function of work to be at least threefold”: “to give a man a chance to utilize and develop his faculties; to enable him to overcome his egocentredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence.”(2)

4. “to organize 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”.(2)

[edit] Appropriate technology

Interwoven with his ideas of labor were Schumacher's ideas about what would later be called appropriate technology. His two basic development theories were Intermediate Size, and Intermediate Technology.

To impose Intermediate Size on a national economy Schumacher suggested superimposing on large-area states a cantonal structure of modest size so that vast industrial concentration (with all this entails in imbalance, ineptitude, and diseconomies of scale) becomes not only unnecessary but also impractical and inefficient. (1)

Intermediate Technology would be a byproduct of the cantonal structure. Once a development district is 'appropriately' reduced, it becomes possible to fulfill a society's material requirements by means of less expensive and simpler equipment than the costly, computerized, labor-saving machinery necessary for satisfying the massive appetite for the remedial transport and integration commodities without which a very large modern market community cannot exist. Though this means a reduction in productivity, it does not mean a reduction in even the highest humanely attainable standard of living. (1)

Putting it differently, the reduced efficiency of intermediate technology provides the same amount of goods, but at a higher cost in labor. However, since higher labor cost longer working hours means simply that the desired level of production can be achieved only by full rather than partial employment of the available labor force; they represent socially no additional cost at all. They are, in fact, a benefit. It is unemployment, defined by Schumacher as the degrading saving of manpower through the inappropriate use of advanced machinery, which is the prohibitive cost which no society can afford to pay in the long run. Furthermore the unemployment caused by excessive technological progress will inevitably lead to the revolt of the unemployed (1).

[edit] References

^ ^a ^b ^c ^d ^e Biography on the inner dustjacket of Small Is Beautiful
^ The Times Literary Supplement, October 6, 1995, p. 39

[edit] See also

Sustainable development portal

[edit] Selected bibliography

Small Is Beautiful: A Study of Economics As If People Mattered (1973, ISBN 0-06-131778-0); a 25th anniversary edition was published (ISBN 0-88179-169-5)
A Guide For The Perplexed (1977, ISBN 0-224-01496-X; still in paperback, ISBN 0-06-090611-1)
This I Believe and Other Essays (1977; reissued, ISBN 1-870098-66-8)
Good Work (1979, ISBN 0-06-013857-2)

[edit] Further reading

[edit] Books about E. F. Schumacher

Kirk, Geoffrey, ed. Schumacher on Energy (London: Sphere Books, 1983)
Wood, Barbara, E.F. Schumacher: His Life and Thought (New York: Harper & Row, 1984)
Etherden, Peter, The Schumacher Enigma, Fourth World Review, 1999
Pearce, Joseph, Small is Still Beautiful, (Wilmington: ISI Books, 2006)

[edit] External links

Wikiquote has a collection of quotations related to: E. F. Schumacher

[SiBbiog-0] Biography on the inner dustjacket of Small Is Beautiful

[TLS100-1] The Times Literary Supplement, October 6, 1995, p. 39

[1]

[2]