Schumacher, Part III Friday, Sep 23 2011 

This final post in my Schumacher series is based on the talk given at the seminar at Rhodes House by Ann Pettifor.  Ms Pettifor is an analyst for the Global Financial Initiative, a fellow of the New Economics Foundation, and the director of Advocacy International, as well as a co-founder of the Jubilee 2000 Project. She also correctly predicted the economic crisis brought on by the market collapse of 2008.

Her talk began with an anecdote that reinforced the disconnect between labour and purpose which Simon Trace’s Practical Action works to combat.  However, Ms Pettifor’s example came not from somewhere in the developing world.  Rather, she described the conditions of working in the Australian coal and iron pits.  These pits are made not by creating old fashioned shafts (which have a smaller environmental impact) but are rather large open gashes which are accessed by enormous trucks.  These trucks are sealed and operated by workers who do little more than oversee largely automated processes.  They also operate on a ‘fly-in-fly-out’ basis, meaning that their time in the towns surrounding the pits is limited to the work week, from which they are shuttled back to their homes elsewhere in Australia.  All these factors combine to create a labour population completely alienated from the communities in which it works, and work which is alienated from the labourers who perform it.  Not to mention the environmental damage that is done by such frequent shuttle flights and such large-scale mining operations.

The responsibility for such alienated labour Ms Pettifor placed at the feet of current economic models, particularly for their reliance of consumption on vast scales.  The problem, she claimed, is largely due to our current models’ need for continued consumption on credit, and the excessive faith placed by many policy makers in the Invisible Hand of the market.  Massive consumption creates the licence and need for production on a correspondingly massive scale.  Such production is harmful both to the environment and to people as individuals and in communities.  However, the only way to curb consumption is some form of regulation.

Unfortunately, the panel was running short on time at this point, as I would have liked to have heard Ms Pettifor’s proposals for specific market regulation which would discourage consumption.  When I have time, I intend to thoroughly explore her blogs at Green New Deal Group, Debtonation, and Prime Economics (all of which are also in the links on the left).

The one possibility for establishing moral regulation of the rhythms of the market that she did mention was connected with her work at Jubilee 2000.  Drawing on social codes outlined in the Mosaic Law in Exodus xx 8-10 and Leviticus xxv, she proposed for pauses in our schedule of labour and retail.  First, we might return to forbidding all nonessential work one day of the week.  There really isn’t any need for most 24/7 services, and far from creating more freedom, they often increase the hectic pace of our lives.  Second, we could allow the land to lie fallow for one year out of every seven.  In addition to making agrobusiness unprofitable, this would have incredibly beneficial results for the environment, first and foremost for the replenishment of the nutrients found in the soil.  And finally, every fiftieth year, all debts would be cancelled.  This would prevent the creation of systems of usury that are based on selling packages of debt around the market (such as led to the 2008 collapse).  It would also introduce a higher level of fiscal responsibility at the national level, discouraging situations such as the one in which the United States has found itself recently.  After outlining her Jubilee system, Ms Pettifor remarked, ‘The Sabbath is market regulation; we deregulated the Sabbath.’  Now that’s market regulation that even Bible-thumping Tea Partiers should be able to get behind.


Schumacher, Part II Thursday, Sep 22 2011 

The second session at the E.F. Schumacher seminar was given by Simon Trace, CEO of Practical Action.  First, Mr Trace outlined the ideas that guided Schumacher to found the Intermediate Technology Development Group (as Practical Action was originally named).  Schumacher’s experience studying economics and working as an economic advisor in a number of countries including the United Kingdom, West Germany, Burma, and India led him to discover several unrecognised but related truths.

First, the sort of perpetual growth that many economists throughout the latter half of the twentieth century believed would result from classical liberal market models was impossible.  You simply cannot have infinite growth in a finite system.

This is in large part due to the second truth: that many natural resources are fixed (in practical terms), and our attitude toward them should reflect this.  This is the idea of ‘natural capital.’  Natural resources like fossil fuels must be consumed at rates that are higher than the rate at which they can be replaced.  Therefore we must treat them not as ends to be consumed themselves, but as the source for consumable goods and services.  Natural resources must therefore be cultivated, rather than depleted, in order to continue to supply the economy.

The third truth follows of the preceding two.  The consumption patterns currently exhibited by the United States and Europe may be viable in the short-term, regardless of their long-term inability to be sustainable. However, even in the immediate future, they are completely unsustainable on a global scale.  If our goal is truly to bring the same standard of living that we enjoy in the West to the rest of the world, we will quickly find that the world’s resources cannot carry the weight.  Thus our remaining options are to consign the rest of the world to massive inequality and an even greater burden of poverty as we live luxuriously off of the resources we draw from their societies (the rising tide does not apparently lift all boats; it swamps quite a few) or to bring our own consumption to a sustainable level so we can maintain an acceptable standard of living (a receding tide of material prosperity in the most affluent parts of the world may bring us all to sea level while keeping us off the bottom).  This last point is even more pressing now than it was in Schumacher’s day as we prepare to deal with the rising economic power (and therefore desire for luxuries dependent on scarce natural resources) of societies with massive populations like China and India.

These realisations led Schumacher to a conclusion that remains revolutionary: simple growth as the aim of economic activity is fundamentally wrong.  Instead, our economic, political, and social structures must tackle the person as a whole, including, first and foremost, his spirituality.  This does not mean his creed, but rather the purpose of his life, particularly in this case as it regards labour.

The consequences of this approach to Western aid for the developing world are immense.  In addition to the practical concerns about compatibility with existing infrastructure and sensitivity to alien cultural priorities, this focus on the process in addition to the ends of economic activity challenges the very desirability of introducing highly sophisticated Western labour-saving technologies in order to alleviate global poverty and suffering.  Schumacher instead proposes what he calls ‘intermediate technology,’ though the term ‘appropriate technology’ better reflects his meaning and is now more widely used.  The term is highly adaptable, which is part of the purpose of the idea.  It encompasses three principles: it should be low in cost so as to be affordable to virtually everyone in the societies which it serves; it should be human in scale, rather than requiring enormous amounts of automated labour; and it must accommodate man’s inherent need for creativity.  This is the antidote to the soul-numbing mass-production line.

Mr Trace then proceeded to outline the practical reasons for why the need for such technology was so urgent in the developing world, where Practical Action focuses its energies.  Many areas have little or no access to the most basic services, such as clean water or electricity.  There is little opportunity for the establishment of sustainable livelihoods in much of the developing world, where supposed economic opportunities in the cities depopulate the countryside, only to fill the cities with a surplus of unskilled labourers who suffer from unemployment on a massive scale.  Finally, the frequent scarce availability of food, brought on by droughts, floods, wars, or poor ecological and agricultural practice (often encouraged by Western interests) creates famines that further retard the ability to create sustainable livelihoods.

The solution of appropriate technology is designed to counter these problems by meeting the needs of areas in crisis where they are.  It does not require massive outlays of capital, it does not overrun traditional practices thereby alienating those who do and should remain attached to their native culture, and it orients labour toward human ends rather than humans toward the ends of labour.

Mr Trace concluded with a discussion of what Practical Action calls ‘technology justice.’  The principle behind the introduction of technology should not be the growth of consumption but rather the growth in human well-being.  Furthermore, the choices we make regarding technology shape the societies in which we live (we need only look at our own obsession with social networking sites and ‘smart’ mobile devices for evidence of this).  Recognising these two truths, ‘justice’ concerning technology is found, according to Mr Trace, in the right to the use of technology that allows societies to live the life they value, so long as it does not compromise other contemporary or future societies’ ability to do the same.

For the most part, I find this a compelling principle.  However, I do have reservations about definitions of justice that make cavalier rights claims.  Do any of us have a ‘right to technology’ (of any sort) in the same way that we have a right to the freedom of conscience?  Perhaps the bigger issue is how one determines what sort of technology it is that allows a society to live the life that it values.  Thankfully, traditional elements are sometimes strong enough in foreign cultures to attempt to resist the influence of Western priorities.  But the deluge of Western advertising as Western companies try to make inroads into foreign markets undermines this conservatism, and the lure of iPhones and plasma televisions can blot out ancestral heritage and wisdom, as it has largely done in the West.  I’m not sure that I trust purely democratic processes to protect the interests of their societies when sexy advertising backed by American dollars is thrown into the equation.

This flows into my second concern about Mr Trace’s talk.  As Mr Trace acknowledged, Schumacher intended appropriate technology to be a principle applied not only in the developing world, but also in Europe and the United States.  Mr Trace made a very compelling case for the urgency with which the solutions offered by appropriate technology are needed in the developing world.  People are suffering and dying without them.  But so long as all of our energy and resources are being dedicated to implementing appropriate technology in the developing world, it seems to me that we are trying to build the sand castle on the same spot in between each wave of the incoming tide.  Surely so long as the West continues to live in the material luxury that we now enjoy and broadcast it to the rest of the world through television sitcoms and Coca-Cola advertisements, the rest of the world will continue to think of appropriate technologies as stopgap measures that are either a rung on the ladder to the American lifestyle or an appeasement measure intended to keep them from climbing that ladder.  We are basking in comfort and convenience, occasionally thinking it’s a pity that others can’t live like this, while selling the appeal of our material prosperity to who cannot afford it.  But even if (or even when) they could (or can), such a strain on the limited resources that make such prosperity possible (if only for a small percentage of the world for a short period of time) will bring the entire house of cards crashing down.  Therefore, doesn’t there need to be at least equal energy devoted toward implementing appropriate technological solution in the West?  Certainly, it is a more challenging and thankless task; who wants to give up on cheap Wal-Mart or Primark goods that wear out within the year for more expensive, but higher quality and more durable goods made by artisans?  However, I do believe that encouraging and implementing appropriate technology here in Europe and the United States (particularly in the realm of agriculture and encouraging small-holding farms, the need for which is especially dire in the U.S.) is the only way to make appropriate technology sustainable as a philosophy.

When I asked Mr Trace about this concern, he directed me toward several organisations at work in the United Kingdom: the Soil Association, the Centre for Alternative Technology, and the New Economics Foundation.  There is also the E.F. Schumacher Society, and for those interested in work in the developing world, Practical Action. These are all also in the links to the left.

Tomorrow will be a summary of the talk by Ann Pettifor on the imminent relevance of the work and ideas of E.F. Schumacher in light of the current economic crisis.

Schumacher, Part I Wednesday, Sep 21 2011 

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.