Saturday, July 7, 2007

Chapter 1: The Problem of Production

Schumacher opens Small is Beautiful (1973) with a chapter on "the problem of production." As he sees it, "[o]ne of the most fateful errors of our age is the belief that 'the problem of production' has been solved" (3*). Such a fictitious belief sees the "rich countries" as essentially industrialized and able to produce goods and services in mass quantities (presumably available to all), with all that remains being a need to focus on "education for leisure" and the "transfer of technology" to the "poor countries" (3). Opposing this attitude, Schumacher's goal in the first chapter is to show that problems do indeed still exist.


For Schumacher, "The arising of this error, so egregious and so firmly rooted, is closely connected with the philosophical, not to say religious, changes during the last three or four centuries in [Western] man's attitude to nature" (4). What exactly is this new attitude? The following text is worth quoting in its entirety:
Modern man does not experience himself as a part of nature but as an outside force destined to dominate and conquer it. He even talks of a battle with nature, forgetting that, if he won the battle, he would find himself on the losing side. Until quite recently, the battle seemed to go well enough to give him the illusion of unlimited powers, but not so well as to bring the possibility of total victory into view. This has now come into view, and many people, albeit only a minority, are beginning to realize what this means for the continued existence of humanity. (4)
This perspective is quite fascinating and worth discussing. Schumacher's assessment rings even truer today in my opinion, as we grow increasingly dependent upon the digital world of computers and the web. Truly, where is the sense of vitality and connection to life in our modern mechanized milieu?

Despite Schumacher's valuable insights here, though, I also think more could have been said to make his case even stronger. He could have easily given historical examples of the frequency of imperialistic attitudes in both modern science and economics. For instance, consider even the earliest modern philosopher-scientists, Francis Bacon and Rene Descartes, with their talk of dominating and lording over nature.

Also, if time allows it, perhaps we can ask ourselves here another equally important unaddressed question: why exactly have we moved in this direction? Is it simply our increased technological ability to control nature that tempts us down this road, or are there additional factors? Are there religious or philosophical influences? Are evolutionary forces at play, and are they stronger in males than females, as many feminists have argued?

I don't have any sort of final answer, but I think these kinds of questions would be worth considering here, in addition to the diagnosis Schumacher has given.


Another one of Schumacher's central points is the notion that we have failed to see just how dependent we really are upon nature. Previous economic theorists tended to see capital only as that which is produced by humans, while the land and its resources were understood merely as income. Schumacher wants to completely reorientate this vision:
Far larger is the capital provided by nature and not by man--and we do not even recognise it as such. This larger part is now being used up at an alarming rate, and that is why it is an absurd and suicidal error to believe, and act on the belief, that the problem of production has been solved. (5)
In other words, we have failed "to recognize that that the modern industrial system, with all its intellectual sophistication, consumes the very basis on which it has been erected. To use the language of the economist, it lives on irreplaceable capital which it cheerfully treats as income" (9). As far as I can tell, Schumacher was one of the first to speak of "natural capital," an idea that has become increasingly influential since the 1990s, with growing interest in another concept--sustainability--and numerous ecologists and economists in recent years giving estimates of the annual economic value of nature ($2.9 trillion U.S. dollars, according to one calculation).

Still, I wonder how far we can go with this method. Yes, it may be helpful in getting profit driven businesses and corporations (and even governments) to see the $ value of nature, but we still seem to primarily be looking at nature from the perspective of the market. Are there higher values than the almighty dollar (or pound or whatever else) that ought to be influencing our attitude toward nature and humanity?

Schumacher himself suggests higher values, but with little development. For example, after looking at our limited sources of fossil fuels, he makes the following poignant remark: "If we squander our fossil fuels, we threaten civilisation; but if we squander the capital represented by living nature around us, we threaten life itself" (6). Life itself then, seems to be a higher value. Are there others though, such as cultural values for example, that a mere market perspective seems to show little or no concern about (aside from whether they might bring in profit)?


Schumacher closes the opening chapter then with a urgent call for us to change paths from our present "collision" course. He admits that humans "have indeed been living on the capital of living nature for some time, but at a fairly modest rate." "[T]he changes of the last twenty-five years, both in the quantity and in the quality of man's industrial processes," however, "have produced an entirely new situation"--"our present crisis" (7-8). As he sees it, we are now in the process of destroying the very foundations upon which we exist, yet many of us still don't even realize it.

Schumacher believes everyone needs to get involved in order to tackle these problems, for "[to talk about the future is useful only if it leads to action now" (9-10). What follows are a number of prescriptions which will presumably be elaborated upon throughout the book:
We must thoroughly understand the problem and begin to see the possibility of evolving a new life-style, with new methods of production and patterns of consumption: a life-style designed for permanence [much akin to the "sustainability" idea mentioned earlier]...

In industry, we can interest ourselves in the evolution of small-scale technology, relatively nonviolent technology, "technology with a human face," so that people have a chance to enjoy themselves while they are working, instead of working solely for their pay packet and hoping, usually forlornly, for enjoyment solely during their leisure time...

We can interest ourselves in new forms of partnership between management and men, even forms of common ownership. (10)
All of these potential remedies are worth exploring in greater detail, but I'm not sure we should do this now since they look to (hopefully!) be further developed in later chapters.

Lastly, Schumacher closes with the following remark--"we still have to learn how to live peacefully, not only with our fellow men but also with nature and, above all, with those Higher Powers which have made nature and have made us" (10). Again, I'm not entirely sure what he means here, but since it looks like he'll be dealing specifically with this in the next chapter, perhaps discussion of this too can wait until then.
* Excerpts cited here come from the 25th anniversary edition: E. F. Schumacher, Small is Beautiful: Economics As If People Mattered, 25 years later . . . with commentaries (Point Roberts, WA: Hartley & Marks, 1999).


steven said...

This chapter plays like a teaser trailer, so there's not a whole lot to chew here beyond a little speculation.

What appealed to me was the concept that value, whether it be in silver, gold, or something else, is a subjective force, most likely reliant on the status quo. And perhaps there is some "greater" morality that is concerned not with short term goals of global conquest but with sustainability and health.

After all, money is a philosophy, a concept if you will--man-made. The natural world, on the other hand, is the arena for such concepts. So it seems the Titanic theory that all the gold in the world is valueless when your ship is sinking.

Chris said...

Regarding this question of money and values, here's an interesting quote from the commentary to chapter three (p. 31-32), where this topic is picked up again by Schumacher. The commentator is Susan Witt, executive director of the E. F. Schumacher Society:

Money, for all its obvious advantages, introduces an element of abstraction into the economic processs. This was less so in the past, when real goods were used as currency, to back currency, or denominate units of currency. Value was still understood in terms of the amount of labor applied to natural resources. When the Tibetan herdsman traded a brick of tea (once used as currency in Tibet) for his lamb, he had a picture of tea brewing in a bucket over a fire, and could imagine the days it took to cultivate the tea plant on a mountainside plantation and the hours of bending to gather the tiny new tea leaves. He could compare in his mind the value of a generalized brick of tea to that of the actual lamb in his arms.

At the end of the 20th century, money has become altogether abstracted from our daily experience. We talk of earning six percent interest, but have no picture of "what our money is doing tonight"--whether it is working to build wheelbarrows in Brazil, grow corn on chemically fertilized land in Iowa, or make shoes in a crowded factory in Thailand.

Not only is money a concept then, nor a mere means to some end (more efficient exchange), but it is also something that affects how we understand reality, tending to remove us from "daily experience," as Witt puts it. I don't think this means we have to get rid of money (after all, efficiency isn't necessarily a bad thing), but it does seem that we need to have other activities (promoting other values) countering the abstract and removed direction in which money tends to push us (a direction that becomes perhaps even more dangerous in our age of digital monetary exchange). In other words, we need to find a healthier balance. Thoughts anyone?

Also, see the end of chapter 3, pages 30-36, for further consideration of the place of values in economics, much of which I'm sure will also be brought up in the third discussion post here on the blog.