This year is the centenary of Ernst Freidrich Schumacher’s birth, and celebrations of his life and work have been consistently in the newspapers and blogs the last several months surrounding his birthday on 16 August. Rhodes House held a seminar in his honour last Friday, and as my own tribute to him, I would like to do three posts highlighting the talks given by the three panelists: Barbara Wood, Schumacher’s daughter; Simon Trace, CEO of Practical Action; and Ann Pettifor, fellow of the New Economics Foundation and director of Advocacy International.
Mrs Wood’s talk coincided with the reissuing of her biography of her father, entitled Alias Papa: A Life of Fritz Schumacher. She spoke about her father’s life, particularly his connection with the Rhodes Scholarship. Schumacher, born in Bonn, was elected in 1930 as one of the first Rhodes Scholars from Germany following the First World War; Mrs Wood listed the qualities expected of Scholars (truthfulness, courage, devotion to duty, sympathy for and protection of the weak, kindliness, unselfishness, and fellowship) and described her father as fully possessing all of them. For much of his life he was an atheist and sympathetic to Marxism. However, the education that life had in store for him modified these philosophical positions. After studying at Oxford he spent a year in New York learning about the financial markets. While in New York, Adolph Hitler was appointed chancellor of Germany, and upon his return to his native land, Schumacher quickly found life intolerable. He returned to England, but with the advent of war in 1939, found himself an ‘enemy alien’ unable to obtain work except as a farm labourer.
This, Mrs Woods claimed, was the first major educational moment for him. Initially frustrated with the apparent inefficiencies of traditional farm life, he soon learned their underlying rationale. Among his chores was a daily numbering of the cattle, which he felt a redundant and silly task. However, one day his count came up one short. Upon investigation, he discovered the cow was dead. When he related this to the farmer, his employer was irate, and demanded to know why Schumacher had not told him that the cow was ill. This experience demonstrated to Schumacher the importance of seeing the trees amongst the forest; viewing individuals as individuals, not merely as components of a statistical whole. Individuals, whether livestock or people, had intrinsic value and had to be cared for accordingly. In this light, the rhythms of traditional farm labour made sense.
Schumacher’s time on the farm was limited, however. He was sent to an internment camp with other Germans in the United Kingdom. There he was quickly elected as the leader of the internees. In this capacity, he found he had to look beyond the exterior in meeting the needs of those under his authority, and recognise them as having complex and unique desires that could not be understood solely in terms of the aggregate. However, he still believed in the viability of statist solutions to economics problems, and often during the war met and worked with John Maynard Lord Keynes and William Lord Beveridge, despite his status as an ‘enemy alien.’
These lessons were further reinforced while working as an economic advisor to the British Control Commission in the rebuilding of postwar West Germany. Throwing money at the economic difficulties was not going to provide a solution; the root issues were education, the development of skills, and the encouragement of a proper work ethic and motivation. In other words, it was about people rather than money (another issue that he presciently appreciated at the time and later with his work on the National Coal Board was the coming fuel crisis, as energy demands increased and natural capital was spent).
His thinking took another leap after a consulting trip to Burma where he realised that the level of human happiness in that country was attached not to their levels of material prosperity, but to their sense of purpose. Their traditional methods of production imbued their labour with meaning and was united to a deeper understanding of the aim of life. Economics was not a science with natural laws, it was not set in stone; instead, it involved deep philosophical questions about human spirituality. Upon returning from Burma, he enthusiastically declared to his friends, ‘I am a Buddhist!’ It was his further work in Asia, particularly in India, that led him to become an advocate for ‘intermediate’ (or ‘appropriate’) technology; Western-imported first-grade technology often is incompatible with local infrastructures or cultural sensitivities to be of practical use to developing societies, thus the urgent material problems of these societies must be met by technology appropriate to their capacity and culture (more on this tomorrow).
The final step that I found particularly interesting with regard to Schumacher’s life (and one which seems understated or completely unknown among Schumacher fans) was his relationship with the Roman Catholic Church. His new understanding of economics increasingly involved him in broader reading, which included the Church Fathers and Saint Thomas Aquinas. Both his wife and daughter separately converted to Catholicism, but Schumacher remained officially noncommittal. However, he was impressed and inspired by papal teaching; not only by social encyclicals such as Leo XIII’s Rerum novarum, but also by moral ones, such as Paul VI’s Humanæ vitæ. Ultimately, though, Schumacher entered the Church not through intellectual persuasion but by observation of practical action. From Mrs Woods’ biography:
‘Although he was well acquainted with Catholic writers ancient and modern, he knew next to nothing about the actual form of worship in the rites of the Church. He was fascinated, struck particularly by the reverence with which the priests handled the chalice and the paten after they had distributed Communion, the care with which every vessel was carefully wiped and polished.’
To make a brief editorial comment here, I find this vindication of the evangelical quality of traditional ceremonial particularly striking. A laissez-faire attitude toward the liturgy (with, for example, only cursory post-communion cleaning of the sacramental vessels or, worse, having lay people do it after Mass in the sacristy while chatting about their days) may suggest that the Church is a friendly, welcoming, and easy-going place where people can feel comfortable (an ecclesiology that I think is pretty flawed), but it certainly does not suggest that we are serious about what we say we believe. Care and attention to the cleaning of the chalice and paten and the reverence shown to the Blessed Sacrament throughout liturgical services demonstrates to the world the fact that this is not a pretty figurative or metaphorical practice divorced from reality; instead the transubstantiation that occurs during the consecration has practical consequences for the way we handle the physical objects with which the Sacrament comes into contact.
At any rate, in 1971 Schumacher was received into the One, Holy, Catholic, and Apostolic Church, making, in his words, ‘legal a long-standing illicit love affair’. Two years later he published the best-selling Small is Beautiful: Economics as if People Mattered, which predicted many of the troubles in which we currently find ourselves and some which we will shortly have to face. It is a foundational text for anyone interested in how economics must relate to human well-being in the modern world. Schumacher died in 1977, and his favourite of his works, A Guide for the Perplexed, was published in that year. His posthumous Good Work (1979) is also an important book.
Tomorrow I’ll discuss the ongoing work being done by Practical Action, an organisation founded by Schumacher (as the Intermediate Technology Development Group) during his lifetime, and how the work he advocated continues to have relevance. But quite apart from the practical applications of his ideas, Schumacher’s contributions to economics are invaluable to modern distributism and an ethical approach to the field generally. Mrs Woods quoted Chief Rabbi Jonathan Lord Sacks at the end of her talk as saying, ‘Science takes things apart to find out how they work, religion puts them together to find out what they mean.’ Since the latter half of the last century, we have owed a great debt to E.F. Schumacher for reclaiming economics from the scientists and returning it to the sphere of moral action.