E.F. (Ernst Friedrich) Schumacher published Small Is Beautiful: A Study of Economics As If People Mattered in 1973.
I read the book years ago [Whoops! Here’s my 2009 review, which is much shorter!] and even used it as “the text” for my microeconomics course ten years ago, but I had not re-read it for awhile. I’m glad that I did, as the book is (a) interesting and provocative (=you didn’t think of this) at the same time as (b) it makes a number of dated or mistaken assertions. So the book is a mix of enduring (never dying?) truth and provincial fetish.
The book has four parts: The Modern World, Resources, the Third World, and Organization and Ownership. In each we see a side of EFS’s thoughts, i.e., the modern world’s problem with wasteful consumption (in contrast with Buddhist satisfaction with quality), the over-use of non-renewable resources (coal, oil, nuclear) and under-emphasis on renewables (water, wood, people), and a “soft path” of development at an appropriate scale and technology — ideas that EFS borrowed directly from Gandhi’s ideas of Swadeshi (self-reliance) — in contrast with producing commodities on the frontiers of technology and scale to compete in global markets.
The main point of this book — and the reason that I find it so interesting — is that EFS does not directly criticize “large is ugly” over-consumption of vast quantities of goods and inputs. He instead argues that we should get our happiness from adding more quality to our lives. Put differently, he favors getting the most from limited means over consuming everything you can.
Such a change in perspective would require one of two changes of heart: Either “society” changes is preferences from quantity to quality or the government limits society’s consumption. The first change is bottom-up, voluntary, organic and slow in comparison to the second, but it is easier from a political perspective. The second change wold “fix everything, overnight,” but it’s hard to think of any examples of a government that limits consumption while remaining in power. (“We all know what to do, we just don’t know how to get re-elected after we’ve done it.” — J-C. Junker, 2008.)
What about Bhutan? It’s pretty sustainable due to its natural resources and conservation policies but less than half of its 800,000 citizens (=Amsterdam’s population) are “happy’ — an important caveat for a Buddhist (!) country that pursues “Gross National Happiness” over GDP.

So the book is thought-provoking, but not exactly taking the world by storm now… or in the 52 years since it was published. I’m a bit sad about that, because I think the book has a lot of wisdom, but consumption is popular (see 117 year old advert, left).
Let’s get into some of EFS’s observations:
- The world did not (and still does not) have enough resources to “bring the poor” up to the levels of rich consumption. We’re talking 14 times more energy per capita, and so on. EFS says it clearly: we can’t grow without limit, either due to resource constraints or the resulting pollution impact.
- EFS argues instead for cheap, small-scale production that humans can use creatively. He also warns that economists leave “free” goods (air, water, etc.) out of calculations that justify their consumption, which is NOT free!
- Buddhist economics is not just about prioritizing quality of quantity. It also takes work as a good thing, as a means of self-fulfillment, whereas mainstream economics takes it as a “bad” to be minimized (paradise is where everyone uses universal basic income to pay for 24/7 consumption).
- “Development,” then does not mean consuming as much as “obtaining the maximum of well being with a minimum of consumption” [p48]. This definition makes a lot of sense when you consider the resources involved in consumption and how those resources (non-renewable, but also renewables that are “mined”) are gone once we consume them. EFS makes the obvious but often forgotten point that we can only consume “income” from Nature. If we consume Nature itself, then we will permanently lose that income.
- EFS talks a lot about scale, which is why the book has Small in the title. Thus, he favors smaller-scale production and smaller markets that are shared by a smaller group of people who live in a smaller area. These ideas align with Gandhi’s notions even as they contradict basic economic recommendations of specialization, gains from trade and interlinking markets. I can see both sides on this debate, but I side with EFS at the moment, as I think we’ve gone too far with global drop-shipping, pollution exports, and supply chains that value cheap over cheerful.
- In Part II, EFS begins with Education, which is NOT the solution to everything but a mixed blessing. He uses the jargon of convergent problems that can be solved and divergent problems that cannot (taking roughly the same positions as “objective” and “subjective,” respectively) to point out that too much science and too little poetry can lead to an “education” that delivers material progress but spiritual death. It’s useful to remember at this point that the book came out at the height of hippie consciousness — just before a majority of those hippies turned into yuppies of the “I’ve got mine, fuck you” variety.
- His next chapter — Land — highlights the contradiction of a farmer (“produce as much as possible, at the lowest cost”) who is also a human (“cherish the land that gives you life and joy”) — a schizophrenia that has only deepened since 1973. He goes on to lament the depopulation of rural areas as newly
freedfired workers exchange their families and communities for wage slavery in the Satanic Mills. - In Resources for Industry, EFS “does the math” to show how the world cannot possibly produce (and consume) at American levels, due to the fact that “five percent of the world’s population is consuming forty percent of the world’s resources.” Fair point.
By the way, it bears repeating that the sustainability (definition: “it can go on, indefinitely”) that we find in Nature emerges from an endless struggle for survival, as each species expands, evolves and fights and dies in a quest for the resources in various ecological niches. Humans have escaped that competition by taking space and life from other species. We are no longer held back by natural predators or threats. The only thing that would limit or stop us from dominating everything — we now control 95 percent of the Earth’s land biomass — is our conscious decision to limit ourselves. EFS and a few others have made that decision; the vast majority of the rich people (and would-be rich people) who should be making those decisions have not. Maybe that’s a collective action problem (if I don’t consume, you will), but that doesn’t make it any less of a failure — or a big step towards self-genocide.
- I was surprised to read so much in favor of coal (a local fuel to the UK, and thus “small”) and so much against nuclear (radioactive waste will kill us forever), but (a) I didn’t know that EFS worked for Coal Britain and (b) he didn’t know how dangerous GHG emissions would be to our survival. That said, he’s right to worry about the impacts of “more, cheaper energy” on our ecosystems and societies. Example: The Dutch used to heat one room with coal; when they found natural gas, they heated the entire home. They were probably healthier (indoor air pollution), but they were probably not happier (it’s transitional), and their “footprint” got way bigger!
- In Technology with a Human Face, EFS makes his case for “intermediate” technology that is appropriate for human hands (in size) and minds (in comprehension. He points out that the vast majority of workers do not actually make anything tangible. Many of us work with ideas, administration or management, with a good share in that group doing bullshit jobs that are even less meaningful. EFS says that our dependency on technology and complexity is not just unsustainable but also demeaning to our human spirit. He posits a “first law of economics” as “the amount of real leisure a society enjoys tends to be in inverse proportion to the amount of labor-saving machinery it employs” [p124]. He’s got a point [pdf].
- In Part III (Development), EFS explains (a) why employment is more important than output efficiency (agreed!) and (b) how poorer countries should embrace “intermediate technology” — rather than “high” technology — in order to employ as many locals as possible, making simple cheap products for other locals. Jane Jacobs (1969) explained why this is a good idea, in terms of learning-by-doing and expanding into under-appreciated niches (read my review).
- EFS is right to worry about rural areas dying as people migrate to cities in search of work. That’s why he (a) opposes aid from rich countries modeled on “do like us” and (b) suggests that rural areas are better served by businesses working with intermediate technology. (He doesn’t have a lot of good words for foreign aid workers.)
- In The Problem of Unemployment in India (a lecture that joins as a chapter), he further develops these themes, warning his audience against pursuing expensive capital-intensive factories over, say, planting trees. Everyone can work if the work matches their skills and education.
- In Part IV (Organization and Ownership), EFS returns to several important themes, i.e., the unpredictability of life (and thus need for flexibility), the value of scenarios over forecasts (since life is non-linear), and the need for decentralization (since top-down mostly fails). I agree with his repeated warnings against larger organizations, extra management layers, etc., since smaller groups are far more effective at organizing and implementing plans.
- In his chapters on Ownership, Socialization and New Patterns of Ownership, EFS argues against private ownership of larger enterprises, mostly due to (a) their concentration of financial power and (b) their pursuit of profit over other social values. I have issues with this view, since the private owner (+ shareholders) has a stronger incentive to innovate and create value (profits!) relative to a state-appointed manager. I agree with him about limiting market power as well as negative externalities, but abuses can also happen when the state runs things. A weak state would be bad at regulation as well as running a large enterprise. A strong state can do both, but “strong” does not mean “good” as far as citizens are concerned.
- He goes on to call for fifty percent public ownership of larger companies, to “represent the contribution of the public to the company’s success.” While I agree with his “you didn’t build that” point as well as the need to tax large profits, I worry (again!) about the State as owner deciding that a company should do X or not do Y. President Xi is trying to do a lot of this in China right now, and it seems he’s getting a lot more bureaucracy and bullshit and a lot less value added. OTOH, he doesn’t care about the private sector, so that may be a price he’s willing inflict on “his” people.
- He ends by repeating his call for less materialism and more prudence, i.e., to make the most of what you have without being greedy for more.
I give this book FIVE stars for its many provocative — and often right! — suggestions of how to live happily and sustainably on our fragile planet.