‘Small is Beautiful’ is a wonderful book written by Eric Schumacher way back in the 1970’s but has great relevance even now. He calls about certain debates which generate more heat than light. That is the scheme of things in most debates. More heat than light.
He calls upon a unique concept in economics where the small industries are privately owned and the big ones nationalised. Private enterprise must exist with nationalised industries for a happy growth of the individual and the country. He then proposes that for big industries which actually thrive on public infrastructure, profit taxes should be abolished and half the shares but must be transferred to the public domain for development of areas around the place where it is sited. The public domain does not have any role in the managerial issues of the industry, but would have a share in the profits from day one. It is quite radical in its suggestions, cannot and will never be probably implemented, but thought provoking.
The unlimited growth of science and technology is taking place in the environment which has a limited capacity to absorb. Ultimately, the environment is being degraded to the point of no return. Economic thinking which takes the consumption and production of non-renewable sources like fuel as income will be the cause of a sorrowful world says the author. Science and technology is being considered as ‘raising the standard’ of living but he considers this as ‘fragmentary economy’ where only a selective analysis is made in terms of economic calculations. The dangers to the environment and ecological disturbances leading to long term disasters are hardly considered. All the calculations are made in the short term perspective only. The standards of living probably have risen, but it is confined to a select group of countries and a select group of people in the world. Science and technology has not caused an advantage to the whole world as a complete unit. The advantages have been selective.
The amalgamation into big countries and big organizations of smaller units leads to people becoming footloose and a bit irrelevant in the scheme of things. The feelings of being purposeless and working as an automaton leads to frustration, depression, and crime in the long run. In countries, this leads to urbanisation, slums, poverty, and crime. Whatever be the structure of any government, the rich have got richer, and the poor have become poorer. Rarely has it happened with economic policies that the poor have become rich. The raising of living standards has been termed as fragmentary economics where the economic policies and its effects are studied in small parts without considering the larger picture. The ecological and the environmental destruction in the process of economic growth is hardly considered.
The true asset of any country and organization is human labour, but that has been replaced with automation to reduce costs and improve efficiency. The human factor increases without doubt creativity and fulfilment, but that has now been completely eliminated. The non-renewable energy sources like oil is considered to be a great income and countries have become super rich in the process. But, he warns of such an ill-fated policy. When the limited oil reserves run out, there would be only strife and sorrow. In the meantime, a whole lot of ecology would have been upset. The Gaian response is increasing the global temperatures and in a self-balancing act, humans will leave the Earth, I presume. That will restore the balance, that has now become totally hinged out of balance to an extremely chaotic state thanks to the brilliance of human mind and intellect. Science and technology has destroyed Earth at the cost of advancements of a few nations and individuals.
Schumacher says that the developing countries and the developed countries suffer from a same kind of economic thinking in the present times. The belief is in mass production which would imply a capital intensive, labour reducing strategy. It is very expensive to set up and maintain, and ultimately leads to displacement of the masses from their rural set ups to urban centres and then into bad conditions. There is no happiness in the urban employment as the demeaning of human beings continue giving crime, poor sanitation, and slums. The shift should be for production by the masses and for this he advocates an intermediate technology. Typically, the creation of workplace stands in the ratio of 1:1 with the annual income. That means that a worker saving one month of his annual income for 12 years can set up a workplace for himself. In a developing country the ratio stands at typically 1:10. The worker has to save a month’s income annually for 120 years to set up a workplace and that is clearly an impossibility. The creation of high technology jobs requires a great investment which is not noticed and starts with a great education policy and a background of extreme investments. In contrast, production by the masses does not require so much investment and people would be in fact encouraged to work more. This kind of policy where people matter would not require the school leaving age to be raised and the retirement age to be decreased to keep people off the labour market. This was something which I had never thought of. The book certainly provokes a lot of thoughts but does seem a little controversial. There is no way the present day economists would accept the views in the book. He seems to be certainly inspired with Gandhi in his views on these issues of production by masses. Gandhi advocated a vocational education and not the education which seem to be a colonial continuation. The policy makers after independence somehow never agreed to those policies. We went for the modern education not considering the fact that we were the greatest economic superpower simply based on the strength of our labour force who were occupied in caste based skills.
SOME NUGGETS BY SCHUMACHER
•Economics, and even more so applied economics, is not an exact science; it is in fact, or ought to be, something much greater: a branch of wisdom.
•I thus come to the cheerful conclusion that life, including economic life, is still worth living because it is sufficiently unpredictable to be interesting.
•In his urgent attempt to obtain reliable knowledge about his essentially indeterminate future, the modern man of action may surround himself by ever-growing armies of forecasters, by ever-growing mountains of factual data to be digested by ever more wonderful mechanical contrivances: I fear that the result is little more than a huge game of make-believe and an ever more marvellous vindication of Parkinson’s Law. The best decisions will still be based on the judgments of mature non-electronic brains possessed by men who have looked steadily and calmly at the situation and seen it whole.
It is a thought provoking great book. One may or may not agree with the author; but some of the perspectives are definitely worth knowing.
RANDOM MUSINGS 