Schumacher On Scale
“In the current vocabulary of condemnation there are few words as final and conclusive as the word ‘uneconomic’” (SIB, p. 44). Thus states Schumacher in his work “Small is Beautiful” (1973). I believe this pattern still holds true, as does Schumacher’s question as to the “meaning” produced by the methods of economics. Economics does not, and cannot, produce any other meaning aside from adequate profit. While such an assessment would be deemed incorrect by nearly all practicing economists - i.e., other forms of value can be translated into monetary terms, thus obviating the need for ethics, religion, and other forms of value generation. Social, aesthetic, moral, or political reasons need not apply. Robert F. Kennedy demonstrated agreement with the sentiment of Schumacher when, in an address to the University of Kansas on March 18, 1968, he stated “too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things”. Of course, if pressed on the matter, Kennedy might have demurred towards such a philosophy being a nice idea but impractical in the context of a Presidential administration.
I also agree with Schumacher that cost/benefit analysis, while designed to account for costs and benefits that might otherwise go overlooked, tends to reduce the higher to the level of the lower and give a price to that which is priceless. I was particularly struck in my reading of Small Is Beatiful by the notion of “meta-economics”. That is, a bounding of the applicability of economics. Economics deals with the production of man within his/her environment. Meta-economics must then have two parts defined by (1) the study of man and (2) the study of the environment. The lack of understanding of this nature of the field makes for an economic calculus that is ignorant of the reliance of man on the natural world. Schumacher further distinguishes between primary goods (i.e., non-renewable and renewable resources) and secondary goods (i.e., manufactured goods and services). While economics often talks about “production”, Schumacher notes that we are converters only and lack the ability to produce primary goods.
Schumacher turns to the topic of scale through a discussion of a Buddhist-based economic system as a contrast to Western materialism. Schumacher was not a Buddhist. In fact, he was largely irreligious. Buddhism is simply used as one value system (among many) as a basis for an alternative meta-economics. Let us begin with the notion of work. Economics defines work as a disutlity, to me minimized or removed through the application of technology. The Buddhist perspective provides a threefold motivation for labour. First, it is a means to utilize and develop skills. Second, to ovecome the ego by joining with other people in a common task. Third, to produce the goods and services necessary for a fulfilled life. By this viewpoint, work and leisure are equally important and complementary aspects of life. We now come to the question of scale. To the modern economist, standard of living is measured by the amount of consumption. To a Buddhist economist, such a perspective is irrational! Schumacher gives the excellent example of clothing. If the purpose of clothing is to regulate temperature and provide modesty, then the objective will be to provide these outcomes with the minimal input of labour and materials. “It would be highly uneconomic, for instance, to go in for complicated tailoring like the modern West, when a much more beautiful effect can be achieved by the skilful draping of uncut material” (SIB, p. 61).
Schumacher argues that scaling and agglomeration dominate, not only modern economic thought, but any number of other fields. He spends some time talking about the appropriate size of a city, setting an upper limit of 500,000 inhabitants. This topic may be one that Schumacher and I differ, at least on the surface. I am a great lover of cities. It is hard not to appreciate large infrastructure as a trained civil engineer. However, I believe Schumacher and I may be in agreement that large scale settlement is only successful when decomposable into smaller units. Having spent time in Toronto as a graduate student, a metropolitan region of far more than 500,000, I believe its success comes from its ability to be decomposed into smaller spatial and social units. This principle relates to the in-vogue concept of the 15-minute city. A mostly self-contained community in terms of access to services is ideal. It is when we scale economic provisioning, such as retail provided at centralized “Big Box Stores”, that the hazards of scale manifest as long and congested travel times. Likewise, recent writings on the benefits of local governance and the power of mayors align well with Schumacher’s downscaling of governance to the community scale. Schumacher advocates for a refocusing of policy on people over goods and profit - “production by the masses, rather than mass production” (SIB, p. 79). This is a movement that I can get behind sitting in my basement writing for an audience of one simply because I enjoy the work.