E. F. Schumacher

Last updated

E.F. Schumacher
SchumacherSiB200.jpg
Photograph of Schumacher from the cover of Small Is Beautiful , 1973
Born
Ernst Friedrich Schumacher

(1911-08-16)16 August 1911
Died4 September 1977(1977-09-04) (aged 66)
Switzerland
Education University of Oxford
Columbia University
OccupationEconomist

Ernst Friedrich Schumacher (16 August 1911 – 4 September 1977) was a German-British statistician and economist who is best known for his proposals for human-scale, decentralised and appropriate technologies. [1] He served as Chief Economic Advisor to the British National Coal Board from 1950 to 1970, and founded the Intermediate Technology Development Group (now known as Practical Action) in 1966.

A statistician is a person who works with theoretical or applied statistics. The profession exists in both the private and public sectors. It is common to combine statistical knowledge with expertise in other subjects, and statisticians may work as employees or as statistical consultants.

Economist professional in the social science discipline of economics

An economist is a practitioner in the social science discipline of economics.

Decentralization is the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from a central, authoritative location or group. Concepts of decentralization have been applied to group dynamics and management science in private businesses and organizations, political science, law and public administration, economics, money and technology.

Contents

In 1995, his 1973 book Small Is Beautiful: A Study of Economics As If People Mattered was ranked by The Times Literary Supplement as one of the 100 most influential books published since World War II. [2] In 1977 he published A Guide for the Perplexed as a critique of materialistic scientism and as an exploration of the nature and organisation of knowledge.

<i>Small Is Beautiful</i> book by Ernst Friedrich Schumacher

Small Is Beautiful: A Study of Economics As If People Mattered is a collection of essays by German born British economist E. F. Schumacher. The phrase "Small Is Beautiful" came from a phrase by his teacher Leopold Kohr. It is often used to champion small, appropriate technologies that are believed to empower people more, in contrast with phrases such as "bigger is better".

The Times Literary Supplement is a weekly literary review published in London by News UK, a subsidiary of News Corp.

<i>A Guide for the Perplexed</i> book by Ernst Friedrich Schumacher

A Guide for the Perplexed is a short book by E. F. Schumacher, published in 1977. The title is a reference to Maimonides's The Guide for the Perplexed. Schumacher himself considered A Guide for the Perplexed to be his most important achievement, although he was better known for his 1973 environmental economics bestseller Small Is Beautiful, which made him a leading figure within the ecology movement. His daughter wrote that her father handed her the book on his deathbed, five days before he died and he told her "this is what my life has been leading to". As the Chicago Tribune wrote, "A Guide for the Perplexed is really a statement of the philosophical underpinnings that inform Small is Beautiful".

Early life

Schumacher was born in Bonn, Germany in 1911. His father was a professor of political economy. The younger Schumacher studied in Bonn and Berlin, then from 1930 in England as a Rhodes Scholar at New College, Oxford, [1] and later at Columbia University in New York City, earning a diploma in economics. He then worked in business, farming and journalism. [1] His sister, Elizabeth, was the wife of the physicist Werner Heisenberg.

Bonn Place in North Rhine-Westphalia, Germany

The Federal City of Bonn is a city on the banks of the Rhine in the German state of North Rhine-Westphalia, with a population of over 300,000. About 24 km (15 mi) south-southeast of Cologne, Bonn is in the southernmost part of the Rhine-Ruhr region, Germany's largest metropolitan area, with over 11 million inhabitants. It is famously known as the birthplace of Ludwig van Beethoven in 1770. Beethoven spent his childhood and teenage years in Bonn.

Political economy Study of production, buying, and selling, and their relations with law, custom, and government

Political economy is the study of production and trade and their relations with law, custom and government; and with the distribution of national income and wealth. As a discipline, political economy originated in moral philosophy, in the 18th century, to explore the administration of states' wealth, with "political" signifying the Greek word polity and "economy" signifying the Greek word "okonomie". The earliest works of political economy are usually attributed to the British scholars Adam Smith, Thomas Malthus, and David Ricardo, although they were preceded by the work of the French physiocrats, such as François Quesnay (1694–1774) and Anne-Robert-Jacques Turgot (1727–1781).

Berlin Capital of Germany

Berlin is the capital and largest city of Germany by both area and population. Its 3,748,148 (2018) inhabitants make it the second most populous city proper of the European Union after London. The city is one of Germany's 16 federal states. It is surrounded by the state of Brandenburg, and contiguous with Potsdam, Brandenburg's capital. The two cities are at the center of the Berlin-Brandenburg capital region, which is, with about six million inhabitants and an area of more than 30,000 km², Germany's third-largest metropolitan region after the Rhine-Ruhr and Rhine-Main regions.

Economist

Protégé of Keynes

Schumacher moved back to England before World War II, as he had no intention of living under Nazism. For a period during the War, he was interned on an isolated English farm as an "enemy alien". In these years, Schumacher captured the attention of John Maynard Keynes with a paper entitled "Multilateral Clearing" [3] that he had written between sessions working in the fields of the internment camp. Keynes recognised the young German's understanding and abilities, and he was able to have Schumacher released from internment. Schumacher helped the British government mobilise economically and financially during World War II, and Keynes found a position for him at Oxford University.

World War II 1939–1945, between Axis and Allies

World War II, also known as the Second World War, was a global war that lasted from 1939 to 1945. The vast majority of the world's countries—including all the great powers—eventually formed two opposing military alliances: the Allies and the Axis. A state of total war emerged, directly involving more than 100 million people from more than 30 countries. The major participants threw their entire economic, industrial, and scientific capabilities behind the war effort, blurring the distinction between civilian and military resources. World War II was the deadliest conflict in human history, marked by 70 to 85 million fatalities, most of whom were civilians in the Soviet Union and China. It included massacres, the genocide of the Holocaust, strategic bombing, premeditated death from starvation and disease, and the only use of nuclear weapons in war.

National Socialism, more commonly known as Nazism, is the ideology and practices associated with the Nazi Party—officially the National Socialist German Workers' Party —in Nazi Germany, and of other far-right groups with similar ideas and aims.

John Maynard Keynes English economist

John Maynard Keynes, 1st Baron Keynes, was a British economist, trained mathematician, whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. He built on and greatly refined earlier work on the causes of business cycles, and was one of the most influential economists of the 20th century. Widely considered the founder of modern macroeconomics, his ideas are the basis for the school of thought known as Keynesian economics, and its various offshoots.

According to Leopold Kohr's obituary for Schumacher, when "Multilateral Clearing" "was published in the spring of 1943 in Economica, it caused some embarrassment to Keynes who, instead of arranging for its separate publication, had incorporated the text almost verbatim in his famous "Plan for an International Clearing Union", which the British government issued as a White Paper a few weeks later." [4]

Leopold Kohr was an economist, jurist and political scientist known both for his opposition to the "cult of bigness" in social organization and as one of those who inspired the small is beautiful movement. For almost twenty years, he was Professor of Economics and Public Administration at the University of Puerto Rico. He described himself as a "philosophical anarchist." His most influential work was The Breakdown of Nations. In 1983, he was awarded the Right Livelihood Award for "for his early inspiration of the movement for a human scale."

Adviser to the Coal Board

After the War, Schumacher worked as an economic advisor to, and later Chief Statistician for, the British Control Commission, which was charged with rebuilding the German economy. [1] From 1950 to 1970 he was Chief Economic Adviser to the National Coal Board, [1] one of the world's largest organisations, with 800,000 employees. In this position, he argued that coal, not petroleum, should be used to supply the energy needs of the world's population. He saw oil as a finite resource, fearing its depletion and eventually prohibitive price, and viewed with alarm the reality that "the richest and cheapest reserves are located in some of the world's most unstable countries" [5]

Following the termination of hostilities in World War II, the Allies were in control of the defeated Axis countries. Anticipating the defeat of Germany and Japan, they had already set up the European Advisory Commission and a proposed Far Eastern Advisory Commission to make recommendations for the post war period. Accordingly, they managed their control of the defeated countries through Allied Commissions, often referred to as Allied Control Commissions (ACC), consisting of representatives of the major Allies.

National Coal Board organization

The National Coal Board (NCB) was the statutory corporation created to run the nationalised coal mining industry in the United Kingdom. Set up under the Coal Industry Nationalisation Act 1946, it took over the United Kingdom's collieries on "vesting day", 1 January 1947. In 1987, the NCB was renamed the British Coal Corporation, and its assets were subsequently privatised.

Price quantity of payment or compensation given by one party to another in return for goods or services

A price is the quantity of payment or compensation given by one party to another in return for one unit of goods or services. A price is influenced by both production costs and demand for the product. A price may be determined by a monopolist or may be imposed on the firm by market conditions.

His position on the Coal Board was often mentioned later by those introducing Schumacher or his ideas. It is generally thought that his farsighted planning contributed to Britain's post-war economic recovery. Schumacher predicted the rise of OPEC and many of the problems of nuclear power. [6]

Thinking outside the box

In 1955 Schumacher travelled to Burma as an economic consultant. While there, he developed the set of principles he called "Buddhist economics", based on the belief that individuals need good work for proper human development. He also proclaimed that "production from local resources for local needs is the most rational way of economic life." He travelled throughout many Third World countries, encouraging local governments to create self-reliant economies. Schumacher's experience led him to become a pioneer of what is now called appropriate technology: user-friendly and ecologically suitable technology applicable to the scale of the community; a concept very close to Ivan Illich's conviviality. He founded the Intermediate Technology Development Group (now Practical Action) in 1966. His theories of development have been summed up for many in catch phrases such as "intermediate size", and "intermediate technology". He was a trustee of Scott Bader Commonwealth [7] and in 1970 the president of the Soil Association.

E. F. Schumacher was greatly influenced by Mahatma Gandhi and J. C. Kumarappa and Gandhi's concepts of "Economy of Permanence" and appropriate technology. While delivering the Gandhi Memorial Lecture at the Gandhian Institute of Studies at Varanasi (India) in 1973, Schumacher described Gandhi as the greatest 'People's Economist' whose economic thinking was compatible with spirituality as opposed to materialism. [8]

Influence

Schumacher was influenced by Richard Henry Tawney, Mahatma Gandhi, Leopold Kohr, Gautama Buddha, Karl Marx, John Ruskin and the Catholic Church throughout his life. [9]

He and his solution to the great economy problems influences E. F. Schumacher Society, The Arche, George McRobie, William Schweke, and many people in the World.

Schumacher as writer

Schumacher wrote on economics for London's The Times and became one of the paper's chief editorial writers. At this post he was assigned the task of compiling information for the obituary of John Maynard Keynes. He also wrote for The Economist and Resurgence . He served as adviser to the India Planning Commission, as well as to the governments of Zambia and Burma – an experience that led to his much-read essay "Buddhist Economics".

The 1973 publication of Small is Beautiful: a study of economics as if people mattered , a collection of essays, finished in the house of his friend Leopold Kohr, brought his ideas to a wider audience. One of his main arguments in Small is Beautiful is that we cannot consider the problem of technological production solved if it requires that we recklessly erode our finite natural capital and deprive future generations of its benefits. Schumacher's work coincided with the growth of ecological concerns and with the birth of environmentalism, and he became a hero to many in the environmental movement and community movement.

In 1976, he received the prestigious award Prix Européen de l'Essai Charles Veillon for Small is Beautiful.

His 1977 work A Guide for the Perplexed is both a critique of materialistic scientism and an exploration of the nature and organisation of knowledge.

Later life

As a young man, Schumacher was a dedicated atheist, but his later rejection of materialist, capitalist, agnostic modernity was paralleled by a growing fascination with religion. [10] [11] He developed an interest in Buddhism, but beginning in the late 1950s, Catholicism heavily influenced his thinking. He noted the similarities between his own economic views and the teaching of papal encyclicals on socio-economic issues, from Leo XIII's "Rerum novarum" to Pope John XXIII's Mater et magistra , as well as with the distributism supported by the Catholic thinkers G. K. Chesterton, Hilaire Belloc and Vincent McNabb. Philosophically, he absorbed much of Thomism, which provided an objective system in contrast to what he saw as the self-centered subjectivism and relativism of modern philosophy and society. [12] He also was greatly interested in the tradition of Christian mysticism and read deeply such writers as St. Teresa of Avila and Thomas Merton. These were all interests that he shared with his friend, the Catholic writer Christopher Derrick. In 1971, he converted to Catholicism. [13]

Schumacher gave interviews and published articles for a wide readership in his later years. He also pursued one of the loves of his life: gardening. He died of a heart attack on 4 September 1977, in Switzerland, during a lecture tour.

Legacy

Schumacher's personal collection of books and archives is held by the Schumacher Center for a New Economics library in Great Barrington, Massachusetts. The Center continues the work of E. F. Schumacher by maintaining a research library, organising lectures and seminars, publishing papers, developing model economic programs, and providing technical assistance to groups all for the purpose of linking people, land, and community to build strong, diverse local economies. [14]

Schumacher Circle

The Schumacher Circle is a family of organisations which were founded in E.F. Schumacher's memory or were inspired by his work, and which co-operate to support each other. The circle includes [15] the Schumacher College in Totnes, Devon, Resurgence Magazine (now Resurgence & Ecologist ), publishing company Green Books, international non-governmental organisation Practical Action, the New Economics Foundation [ citation needed ] in the UK, the Schumacher Center for a New Economics (heir to the legacy programs of the former E. F. Schumacher Society) founded in New England, [16] the Soil Association, the educational Centre for Alternative Technology (CAT) North Wales, the Jeevika Trust, and the research organisation the Schumacher Institute in Bristol.

Selected bibliography

See also

Related Research Articles

Post-Keynesian economics is a school of economic thought with its origins in The General Theory of John Maynard Keynes, with subsequent development influenced to a large degree by Michał Kalecki, Joan Robinson, Nicholas Kaldor, Sidney Weintraub, Paul Davidson, Piero Sraffa and Jan Kregel. Historian Robert Skidelsky argues that the post-Keynesian school has remained closest to the spirit of Keynes' original work. It is a heterodox approach to economics.

Appropriate technology is a movement encompassing technological choice and application that is small-scale, decentralized, labor-intensive, energy-efficient, environmentally sound, and locally autonomous. It was originally articulated as intermediate technology by the economist Dr. Ernst Friedrich "Fritz" Schumacher in his work Small is Beautiful. Both Schumacher and many modern-day proponents of appropriate technology also emphasize the technology as people-centered.

Frank P. Ramsey British mathematician, philosopher

Frank Plumpton Ramsey was a British philosopher, mathematician, and economist who made major contributions to all three fields before his death at the age of 26. He was a close friend of Ludwig Wittgenstein and was instrumental in translating Wittgenstein's Tractatus Logico-Philosophicus into English, as well as persuading Wittgenstein to return to philosophy and Cambridge. Like Wittgenstein, he was a member of the Cambridge Apostles, the intellectual secret society, from 1921.

Practical Action

Practical Action is a development charity registered in the United Kingdom which works directly in four regions of the developing world – Latin America, East Africa, Southern Africa and South Asia, with particular concentration on Peru, Bolivia, Kenya, Sudan, Zimbabwe, Bangladesh and Nepal.

Buddhist economics spiritual and philosophical approach to the study of economics

Buddhist economics is a spiritual and philosophical approach to the study of economics. It examines the psychology of the human mind and the emotions that direct economic activity, in particular concepts such as anxiety, aspirations and self-actualization principles. In the view of its proponents, Buddhist economics aims to clear the confusion about what is harmful and what is beneficial in the range of human activities involving the production and consumption of goods and services, ultimately trying to make human beings ethically mature. The ideology's stated purpose is to "find a middle way between a purely mundane society and an immobile, conventional society."

James R. Crotty is an American Post-Keynesian macroeconomist whose research in theory and policy attempts to integrate the complementary analytical strengths of the Marxian and Keynesian traditions. He has made contributions to the social structure of accumulation (SSA) theory; the implications of radical uncertainty for macro theory and theories of financial markets.

Humanistic economics is a distinct pattern of economic thought with old historical roots that have been more recently invigorated by E. F. Schumacher's Small Is Beautiful: Economics as if People Mattered (1973). Proponents argue for "persons-first" economic theories as opposed to mainstream economic theories which are understood as often emphasizing financial gain over human well-being. In particular, the overly abstract human image implicit in mainstream economics is critically analyzed and instead it attempts a rethinking of economic principles, policies and institutions based on a richer and more balanced view of human nature.

John Papworth is an English clergyman, writer and activist against big public and private organizations and for small communities and enterprises.

Fritz Schumacher may refer to:

J. C. Kumarappa was an Indian economist and a close associate of Mahatma Gandhi. A pioneer of rural economic development theories, Kumarappa is credited for developing economic theories based on Gandhism – a school of economic thought he coined "Gandhian economics."

Nobuo Okishio was a Japanese Marxian economist and emeritus professor of Kobe University. In 1979, he was elected President of the Japan Association of Economics and Econometrics, which is now called Japanese Economic Association.

Sufficiency economy is the name of a Thai development approach attributed to the late King Bhumibol Adulyadej's "sufficiency economy philosophy" (SEP). It has been elaborated upon by Thai academics and agencies, promoted by the Government of Thailand, and applied by over 23,000 villages in Thailand that have SEP-based projects in operation.

History of macroeconomic thought

Macroeconomic theory has its origins in the study of business cycles and monetary theory. In general, early theorists believed monetary factors could not affect real factors such as real output. John Maynard Keynes attacked some of these "classical" theories and produced a general theory that described the whole economy in terms of aggregates rather than individual, microeconomic parts. Attempting to explain unemployment and recessions, he noticed the tendency for people and businesses to hoard cash and avoid investment during a recession. He argued that this invalidated the assumptions of classical economists who thought that markets always clear, leaving no surplus of goods and no willing labor left idle.

Surur Hoda Trade unionist and socialist activist

Surur Hoda, also known as M. S. Hoda, was a socialist politician and trade unionist who believed in the ideals promoted by Mahatma Gandhi.

Robert Swann was a community land trust pioneer, Georgist, and peace activist in the United States. He was born in Cleveland Heights, Ohio and died in Great Barrington, Massachusetts. According to his obituary, "Swann dedicated more than a half century of his life to non-violence, desegregation, appropriate technology, affordable housing, land trusts, community credit, worker cooperatives and local currency".

The Schumacher Center for a New Economics is a tax exempt nonprofit organization based in Great Barrington, Massachusetts.

References

  1. 1 2 3 4 5 Biography on the inner dustjacket of Small Is Beautiful
  2. The Times Literary Supplement, 6 October 1995, p. 39
  3. E. F. Schumacher, Multilateral Clearing Economica, New Series, Vol. 10, No. 38 (May 1943), pp. 150–165
  4. Leopold Kohr. ""Tribute to E. F. Schumacher"". Archived from the original on 11 October 2007. Retrieved 14 May 2008.CS1 maint: BOT: original-url status unknown (link), in Satish Kumar (ed.), The Schumacher Lectures, Harper & Row, 1980.
  5. Daniel Yergin. The Prize, Simon & Schuster, 1991, p. 559.
  6. "Small is Beautiful" Section 2, Chapters 3-4. Schumaker, EF. Harper and Row Publishers. 1989.
  7. "Scott Bader". Scott Bader. Archived from the original on 26 September 2012. Retrieved 20 September 2019.
  8. "Surur Hoda (1928–2003)". Gandhi Foundation. 7 September 2008.
  9. "Chapter 12: Influences - E. F. Schumacher: Ideas That Matter". www.schumacher-haney.info. Retrieved 20 September 2019.
  10. Diana Schumacher. "Who was Fritz Schumacher?"
  11. Julia Forster. "E. F. Schumacher"
  12. Charles Fager. "Small Is Beautiful, and So Is Rome: The Surprising Faith of E. F. Schumacher" Archived 20 June 2010 at the Wayback Machine , Christian Century , 6 April 1977.
  13. Pearce, Joseph (2008). "The Education of E.F. Schumacher". God Spy.
  14. Schumacher Center for a New Economics web site.
  15. Schumacher Circle links, Schumacher Society
  16. "An Economics Embodying Our Highest Ideals". Schumacher Center for a New Economics . Retrieved 16 April 2013.

Further reading