About 40 years ago, British economist E. F. Schumacher published his provocatively titled Small Is Beautiful: A Study of Economics As If People Mattered (Abacus, 1974). Schumacher argued that the modern world economy, based on the idea that "bigger is better," was fundamentally flawed. An economy governed by large corporations (private or public) and driven only by profit or efficiency was ecologically and socially unsustainable. It poisoned the planet, generated mass unemployment, excluded worker creativity, annihilated local communities, and weakened democratic politics. He argued for the application of "intermediate technologies" of production, which would employ more people, make work more humanly satisfying, preserve the environment, and empower the people of communities and nations.
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Schumacher's writing is lucid and powerful, and some of his comments on the dangers of corporate gigantism and globalization now seem prophetic: the ravaged industrial heartland of North America testifies to the destructiveness of the modern economic model to human community. And against the charge that any return to more people-friendly economic arrangements was romantic and impractical, Schumacher made impressive arguments for the social and even narrowly economic value of smaller corporate units and employment-friendly technologies. Here, however, I focus on his moral and political critique of economic gigantism. That critique, in an interesting variation on our usual theme, involved both a rejection and an embrace of the teaching of old books.
For Schumacher, modern economic thought was based on 19th-century assumptions. Those assumptions included: evolution (the higher comes out of the lower, and not just in biological contexts); survival of the fittest (competition is the law of life, including economic and political life); Marxism (all political ideals are cloaked justifications for the current systems of production), relativism (no absolute moral or political standards exist), and positivism (science is the only form of knowledge, so statements of meaning and purpose have no truth-value). These ideas, he wrote, "are firmly lodged in the minds of practically everybody in the western world today, whether educated or uneducated" (p. 73). Further, they constituted "a bad, vicious, life-destroying type of metaphysics" (p. 74).
For Schumacher, this bad metaphysics explained our veneration of large corporations, our emphasis on competition and the attendant elimination of "unfit" entities (such as self-sustaining agricultural communities), our uncritical embrace of all technological change as "progress," our willingness to put expediency above questions of social and political justice, and our cavalier attitude toward the biosphere. Thus, the answer to our economic problems lay not primarily in better techniques of production or redistribution of wealth, but in metaphysical reconstruction.
Schumacher found the resources for metaphysical reconstruction by going behind the old books of 19th-century metaphysics to the still older books of pre-modern metaphysics. Thus, against Keynes's pronouncement that "avarice and usury . . . must be our gods for a little longer still," Schumacher called for the reorientation of economic life to "our great classical-Christian heritage," which teaches virtues such as temperance and justice, and makes the kingdom of God a higher goal than the affluent society. In his second book, A Guide for the Perplexed (1978), he expanded his discussion of the pre-modern tradition, building on passages from Aquinas, Dante, and St. John of the Cross, as well as some texts representative of Eastern wisdom.
The world situation has changed much in detail since 40 years ago, but Schumacher's plea—that we abandon the metaphysics of bad old books in favor of the metaphysics of better and older books—remains unaddressed by the mainstream of economic thinking. His own (moderately old) books are therefore still worth a look. •