Managing America: Small Is Beautiful-Economics as if People Mattered

E. F. Schumacher's critiques of Western economics, first published in 1973, Small Is Beautiful brought British economist to a wider audience during the 1973 energy crisis and emergence of globalization. The Times Literary Supplement ranked Small Is Beautiful among the 100 most influential books published since World War II. A further edition with commentaries was published in 1999.

Small Is Beautiful is divided into four parts: "The Modern World," "Resources," "The Third World," and "Organization and Ownership."

In the first chapter, "The Problem of Production", Schumacher states that the modern economy is unsustainable. Natural resources like fossil fuels, are treated as expendable income, when in fact they should be treated as capital, since they are not renewable, and thus subject to eventual depletion. He further argues that nature's resistance to pollution is limited as well.

He concludes that government effort must be concentrated on sustainable development. Relatively minor improvements, for example, technology transfer to Third World countries, will not solve the underlying problem of an unsustainable economy.

Schumacher's philosophy is one of "enoughness," appreciating both human needs and appropriate use of technology.

It grew out of his study of village-based economics, which he later termed "Buddhist economics," which is the subject of the book's fourth chapter.

He faults conventional economic thinking for failing to consider the most appropriate scale for an activity, blasts notions that "growth is good," and that "bigger is better," and questions the appropriateness of using mass production in developing countries, promoting instead "production by the masses."

Schumacher was one of the first economists to question the appropriateness of using GNP to measure human well-being, emphasizing that "the aim ought to be to obtain the maximum amount of well-being with the minimum amount of consumption."

E. F. Schumacher: " A modern economist is used to measuring the 'standard of living' by the amount of annual consumption, assuming all the time that a man who consumes more is 'better off' than a man who consumes less. A Buddhist economist would consider this approach excessively irrational: since consumption is merely a means to human well-being, the aim should be to obtain the maximum of well-being with the minimum of consumption. . . . The less toil there is, the more time and strength is left for artistic creativity. Modern economics, on the other hand, considers consumption to be the sole end and purpose of all economic activity."

Schumacher’s philosophy prescribes an orientation toward “regional” development strategies, which involve primarily local production for local use in economic development and the elimination of poverty.

In the present economic development of globalization orientation towards exports so often prescribed by international economic institutions, his philosophy entails the rethinking the attitude towards human economic development and well-being in life.

Schumacher’s most radical break with the mainstream of economic thought, however, comes with his willingness to sacrifice economic growth  for a more fulfilling working, family, and community life.

Mr. Martin Chekel, a noted international businessman and author of the thought provoking “Managing America” six book series and the retrospective eight book series “The Diary of American Foreign Policy 1938 – 1945” that laid the foundation for US foreign policy the past seventy-four years.