This is one of a series of posts that will ask what the most pertinent question raised by a prominent influencer of political economy might have been, and what the relevance of that question might be today. There is a list of all posts in the series at the end of each entry. The origin of this series is noted here.
After the first two posts in this series, the topics have been chosen by me, and this is one of those. This series has been produced using what I describe as directed AI searches to establish positions with which I agree, followed by final editing before publication.
This post refers to E.F. Schumacher, whose writing was most notable in the 1970s and 1980s, when they had a considerable influence on my thinking as I first became very aware of the need for action on climate change. His most notable book was Small Is Beautiful, which might fairly be described as eclectic but was nonetheless deeply influential in green thinking and remains so today.
Why is Schumacher in this series? Firstly, because of his influence on me. Second, because he proved that narratives can change thinking on political economy. And third, because he was a pioneer of what I think is incredibly important, which is creating the changed thinking that is essential if our planet is to survive.
Ernst Friedrich Schumacher was one of those rare economists who, as a humanist, saw that the purpose of economics was not to serve markets but to serve life. His book Small Is Beautiful: A Study of Economics as if People Mattered (1973) appeared amid oil shocks and environmental anxiety, but its message has lost little of its power.
Schumacher's starting point was deceptively simple. The modern economy, he said, is built on the illusion that “bigger is better,” and that scale itself is proof of progress. Yet the pursuit of endless expansion, whether in firms, nations, consumption, and technology, destroys the natural, social and moral fabric on which prosperity depends.
He asked a question that economics still cannot answer: how big can we grow before we cease to be humane?
Hence, the Schumacher Question: if small is beautiful because it respects life's limits, why do we persist in worshipping size, speed and growth when they destroy the very foundations of well-being?
Economics as if people mattered
Schumacher's critique began with a reversal of priorities. Economics, he argued, should be a branch of moral philosophy concerned with human flourishing, not a calculus of output.
He wrote that the modern economist “is used to measuring the cost of everything and the value of nothing.” The fixation on GDP and productivity ignores whether work is meaningful, communities are whole, or the environment endures.
An economy that measures success only in money will destroy the things that money cannot buy.
The fetish of bigness
Schumacher saw “bigness” as the modern superstition. Large corporations, vast bureaucracies, and giant technologies all promised efficiency but delivered alienation. When scale outruns empathy, people become cogs.
Bigness centralises power; it dulls accountability; it creates distance between decision and consequence.
He proposed a different principle, which he described as 'appropriate scale'. The right size of enterprise is the smallest that can do the job. The right level of technology is the simplest compatible with need. The right kind of system is one that keeps power close to people.
Small is not nostalgic; it is proportionate.
Technology with a human face
Schumacher rejected the technocratic fantasy that machines could solve every problem. Technology, he argued, must be made to serve man, and not the other way round.
He championed what he called intermediate technology, which comprises tools that enhance local capacity rather than displace it and that respect human skill rather than render it obsolete.
In a world now seduced by artificial intelligence, this warning is prophetic. Technology without moral direction becomes dehumanising. The question is never just what we can do, but what we should do.
The ecological reality
Long before climate change entered mainstream debate, Schumacher recognised that the economy is a subsystem of the environment, not its master. He described fossil fuels as capital being treated as income. By burning them as if infinite, we were liquidating the planet's wealth.
Sustainability, for Schumacher, was not a slogan but a moral imperative. The economy must operate within ecological limits, or it will cease to exist. Growth that destroys its foundations is not progress, he said; it is self-harm.
Work as fulfilment
For Schumacher, work was not merely a means to an income but a source of meaning. He argued that the aim of work should be to liberate people from the compulsion of economic necessity, and to provide the basis for a good life.
When labour is reduced to cost and people to “human resources,” society corrodes. Small-scale, community-rooted production allows dignity and creativity to flourish.
The politics of enough
Schumacher challenged the ideology of scarcity that drives modern capitalism. The problem, he said, is not that we have too little but that we want too much. The pursuit of ever-rising consumption, he argued, is a moral and ecological dead end.
He proposed instead an economics of enough, where meaning is derived from sufficiency rather than accumulation, quality rather than quantity, and well-being rather than wealth.
It is an idea so radical that half a century later, mainstream politics still cannot speak it aloud.
Answering Schumacher today
To answer the Schumacher Question, we must abandon the cult of bigness and relearn proportion. That means:
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Localising production, requiring shorter supply chains, community energy, and regional food systems.
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Democratising ownership, with an emphasis on cooperatives, municipal enterprises, and worker-led firms that keep wealth circulating locally.
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Redefining progress, requiring the replacement of GDP with indicators of well-being, sustainability, and equity.
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Humanising technology, implying the redirection of innovation towards care, repair, and ecological restoration rather than speed and profit.
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Embedding limits, meaning accepting that infinite growth on a finite planet is impossible, and redesigning prosperity accordingly.
Inference
The Schumacher Question exposes the moral void at the heart of modern economics. We have mistaken scale for success, quantity for quality, and growth for good.
Schumacher's vision remains the antidote: economies rooted in place, guided by ethics, and organised for sufficiency rather than excess.
If small is beautiful, it is not because it is quaint, but because it is sustainable, humane, and free.
The task now is to make economics beautiful again and to design systems that serve life instead of consuming it.
Previous posts in this series
- The economic questions
- Economic questions: The Henry Ford Question
- Economic questions: The Mark Carney Question
- Economics questions: The Keynes question
- Economics questions: The Karl Marx question
- Economics questions: the Milton Friedman question
- Economic questions: The Hayek question
- Economic questions: The James Buchanan question
- Economic questions: The J K Galbraith question
- Economic questions: the Hyman Minsky question
- Economic questions: the Joseph Schumpeter question
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Over many years working in the social enterprise movement we saw first hand the deceptive attraction of adopting big business conceptions of ‘success’. After long grass-roots incubation out of the 60s counter-culture, and following the collapse of the planned economy models in Eastern Europe, social enterprise became in the 2000s quite fashionable. Politicians and potential investors arrived, looking for ‘scalability’, ”brand-building, etc… Many accepted such standard business conceptions uncritically – but others did bravely reject them, believing that growing the mission, but not the organisation, would in the end work best; that brands, and indeed IPR in general, should be community-owned, held in trust, and used for social benefit not private accumulation.
One example that springs to mind is Unicorn Grocery in Manchester, who ‘franchise’ their model free to anyone wanting to create a similar co-op. “We think there’s room for a Unicorn-type store in every city, and perhaps more besides. We have no plans to expand outside the one shop, so we’ve put together a guide intended to help facilitate the emergence of new stores run on similar lines all over the UK.” – https://www.unicorn-grocery.coop/about-us/grow-your-own-grocery/
A great deal to agree with.
Thanks for this summary of a book I never got around to reading.
The idiots pushing for the new combined authorities have obviously never read Schumacher because there is an obsession with ‘economies of scale’. This will be a system based on cost management not quality or solution management. I can’t wait. It is the same thinking that drives corporate take overs in the private sector, where economies of scale savings are allocated to ‘investors’. And so wealth is transferred up.
What lies we are told, but it is the scale of the lies too. Nothing seems to have been learnt at all.
Why?
Because we are dealing with a caustic belief system, a theology – where facts do not matter. We are dealing with extremists in our midst.
“The right level of technology is the simplest compatible with need”.
I like that. For 25+ years I’ve used a computer for the same few purposes, so I don’t need any more than I had to begin with. But every decade or so I’ve been forced to buy a new machine, each one offering yet more of what I don’t need, because the ‘tech bros’ keep deciding it’s time to render my machine obsolete.
I’m pretty good a fixing things, and it makes me so mad how everything is designed with weak points – usually inadequate switches, when the key things which make then work, like electric motors are incredibly robust – whereas the switches are just there to provide stylish and fancy ways of selecting functions which nobody either needs nor uses.
Things being more complicated than they need be simply causes anxiety for the user and tragedy for the environment.
Much to agree with
Although we do push computers to limits these days….
I find myself agreeing with Schumaker on nearly all aspects of economics. No surprise, because I am a humanist and recognise that economics is primarily about allocating scarce resources for the benefit of humanity, not about organising firms to maximise profits for entrepreneurs. I’ve got no objection to the latter provided that any benefits from economies of scale or monopolies are shared fairly between consumers, producers and workers. To ensure fairness, governments always need to intervene. Free markets don’t work for everyone which I find immoral and inhumane. They should do.
[…] By Richard Murphy, Emeritus Professor of Accounting Practice at Sheffield University Management School and a director of Tax Research LLP. Originally published at Funding the Future […]
I bought Schumacher book many years ago on one of my visits to London from working in Mufulira mine in Zambia. I still have it in my library. One of the most important things I learnt was the “KISS” (Keep It Simple Stupid) especially for mining safety.
🙂