Revisiting 'Small is Beautiful'

Even though the above observations about development economics were made back in 1974, almost 50 years ago, there are distinct analogies to development today. Many rural and even urban areas around the world today, including many within post-industrial societies urgently require revitalization. This is particularly the case after 40 years of globalization where low labour cost countries became the factories of the developed world.    

The Schumacher hypothesis

Schumacher saw that under the current economic system, the poor would get poorer and the rich would get richer, increasing the wealth divide.

Consequently, Schumacher published his alternative manifesto, calling for a new direction in development.

One of the biggest problems are mega-metropolises which soaked up national resources, became home to isolated conclaves, were unsustainable and generated the majority of a nation’s pollution. Schumacher believed cities over 500,000 people were undesirable and there should be progressive decentralization.

Focus could then be put back into revitalizing communities built upon sustainable numbers, according to the quality and sparsity of available hinterlands. These communities would engage in creating enterprises and food production that would sustainably serve their immediate communities. These enterprises could vary in the way they were owned, organized, and operated, based on empowering people and maximising members’ wellbeing. Appropriate technology that could be constructed locally, that was affordable, and connected people with their work and enterprises is the much more important than the established concept of economies of scale. Appropriate technology would create value and bring economic wellbeing to local communities.

Some legacies

Schumacher’s work brought a refocus back to sustainable and organic farming after the world became dominated by fertilizer production from the green revolution. This allowed for the formation of many boutique farming enterprises around the world, where there are now a host of organic food products on the market.

Companies like the Bodyshop and Ben & Jerry’s Ice Cream were formed and developed using Schumacher’s community principles, but were eventually bought-out by multinational corporations. Japan’s One Village One Product (OVOP) and later Thailand’s One Tambun One Product (OTOP) programs were based upon Schumacher’s principles and successful in their time.

Schumacher’s educational principles were taken up by academics like Peter Senge in the 1990s with his seminal book The Fifth Discipline: The art and practice of the learning organization. The ideas were incorporated directly into education in the 2000s with Schools that Learn: A Fifth Discipline Fieldbook for Educators, Parents and Everyone Who Care about Education.

Schumacher highlighted the illusion of economics as resources were infinite, leading to a movement towards utilizing renewable inputs in products. Schumacher also alluded to the tendency of humans to accumulate a perception of unlimited powers, and an assumption that humankind’s mastery over science, gave control over the environment.

Schumpeter and “The Great Reset”