Economics If Earth Mattered

What sort of science is it
that must, for the sake of its predictive success,
hope and pray that people will never be their better selves,
but always be greedy social idiots
with nothing finer to do
than getting and spending, getting and spending?

—Theodore Roszak

Earth provides enough to satisfy every man’s need,
but not for every man’s greed.

—Mahatma Gandhi

If it can be said that humanity
collectively shrinks back more and more from the Truth,
it can also be said that on all sides
the Truth is closing in more and more upon humanity.

—Martin Lings

As I have mentioned before, one of the things the pandemic caused me to do was to scour my bookshelves for items bought in bibliophilic passion yet still left unread (libraries being off-limits at the time).  Like a lot of us, I was desperate for some fresh stimulation, and you can only binge Netflix for so long before the brain screams for something intellectually demanding.  Fortunately, there were some pretty weighty tomes awaiting my attention, and they kept me occupied most of that first summer.

Yet what I could not have anticipated was how prophetic some of them—written decades ago—would turn out to be.  McIntyre’s After Virtue, Bellah et al’s Habits of the Heart and The Good Society…they described the pathway to today’s world with frightening clarity and prescience, and what reading them has caused me to do ever since is to be on the lookout for similarly visionary offerings from an earlier age.  Which brings me to my most recent find: E.F. Schumacher’s Small is Beautiful, a powerful critique of the economics of capitalism and another work that I discovered was way ahead of its time.

Published in the mid-1970s (and only a few years prior to Schumacher’s death), this book was a NYT best-seller back when a literate lay-audience still tackled works of scholarship, and the irony of reading its complexity while finishing up my previous essay was not lost on me (I don’t think his book could even get a literary agent these days).  However, none of that makes Schumacher’s arguments any less pertinent (or prophetic) for the world in which we currently find ourselves; so please allow me to share two highlights from his work and why I think they’re so important for education (something we shall see Schumacher himself addresses).

One feature of his argument that I find particularly compelling is his discussion of the ecological consequences of the kind of consumption capitalism we tend to practice here in the U.S. He starts by pointing out that we have a bad habit of not factoring in the full economic costs when it comes to the production of goods and services.  At best, we ignore the unpaid contributions our ecological systems provide (think water for data centers), and at worst, we fail entirely to understand that “far larger is the capital provided by nature and not by man—and we do not even recognize it as such” (p. 15).  Furthermore, “this larger part is now being used up at an alarming rate” and “if we squander our fossil fuels (1973 was the height of the oil embargo), we threaten civilization; but if we squander the capital represented by living nature around us, we threaten life itself” (p. 17).  Thus, if we are not factoring in the environmental degradation our system for economic growth causes (think mining for lithium), we are deficit spending in a manner that is fundamentally unsustainable.

Then again, Schumacher continues, “nothing makes economic sense unless its continuance for a long time can be projected without running into absurdities” (p. 34), and “it does not require more than a simple act of insight to realize that infinite growth of material consumption in a finite world is an impossibility” (p. 129).  Put bluntly, “permanence is incompatible with a predatory attitude which rejoices in the fact that ‘what were luxuries for our fathers have become necessities for us’ ” (p. 34), and Schumacher (like myself) believes ecology should be a compulsory subject for all economists because “modern man does not experience himself as a part of nature but as an outside force destined to dominate and conquer it… forgetting that, if he won the battle, he would find himself on the losing side” (p. 14).[i]

The second highlight I would like to hold up for our attention is Schumacher’s critique of the justifications often used for an industrialized capitalist economy.  He starts by pointing out that “the dominant modern belief is that the soundest foundation of peace would be universal prosperity” (p. 23) and that the best way to achieve this is through free markets (the classic “a rising tide lifts all boats”).  Furthermore, he argues, there is the belief that because these markets are “the institutionalization of individualism…neither buyer or seller is responsible for anything but himself” (p. 46) and hence, each “boat” is their own moral agent—meaning that any economic inequalities are the fault of the individual, not the system.  Indeed, “the idea that there could be pathological growth, unhealthy growth, disruptive or destructive growth, is to him [the modern economist] a perverse idea which must not be allowed to surface” in their thinking (p. 51).

However, Schumacher is quick to point out that “one may look in vain for historical evidence that the rich have regularly been more peaceful than the poor” (p. 23), and he likewise contends that the notion that somehow “by the single-minded pursuit of wealth we could establish peace on earth” is as delusional an idea as they come (p. 33).  After all, if the richest country in the world (the U.S.) hasn’t gotten rid of its “public squalor,” how will more economic growth solve such problems? The reality instead, he insists, is that: 

as physical resources are everywhere limited, people satisfying their needs by means of a modest use of resources are obviously less likely to be at each other’s throats than people depending upon a high rate of use.  Equally, people who live in highly self-sufficient local communities are less likely to get involved in large-scale violence than people whose existence depends on world-wide systems of trade (p. 62).

Only “a society ruled primarily by the idolatry of enrichissez-vous, which celebrates millionaires as its cultural heroes” could think otherwise he concludes (p. 271), and consequently, Schumacher predicts, what unfettered capitalism truly and inevitably leads to is “an undue concentration of wealth and power among the privileged few,” “structural unemployment” (i.e. the unemployable), “maldistribution of the population,” and “general frustration and alienation” (p. 36).

Sound familiar? Like I said, prophetic—and like the Hebrew prophets of Biblical fame, not listened to any better than they were, which is why were in the general mess we’re in right now.

Interestingly enough, though, Schumacher offers an insight as to the possible cause of such a mess, suggesting that “if Western civilization is in a state of permanent crisis, it is not far-fetched to suggest that there may be something wrong with its education” (p. 84).  Furthermore, he goes on to argue, “we are suffering from a metaphysical disease, and the cure must therefore be metaphysical” (p. 107) because “systems are never more nor less than incarnations of man’s most basic attitudes” (p. 280) and “it is our [current] central convictions that are [now] in disorder” (p. 107).  He believes, like McIntyre, that we now live in an age “after virtue” has fallen out of favor as a set of principles guiding human behavior (he blames 19th century science for the dethroning), and he argues that the cure lies in how we educate people since “the task of education would be, first and foremost, the transmission of ideas of value, of what to do with our lives” (p. 85).  Thus, capitalism’s evils reign unchecked according to Schumacher because “it is obviously somewhat foolhardy to put great powers into the hands of people without making sure that they have a reasonable idea of what to do with them” (p. 86), and therefore, we need to be educating people with a better set of principles and ideals (i.e. what he calls “metaphysics”) than we presently are doing.

Here, however, is where Schumacher and I part ways.  Not that I don’t think we need to be educating people with a better set of values than our current capitalist ones.  But Schumacher, again like McIntyre, is a traditional Aristotelian (it is not without reason that his other great work is a translation of Maimonides’ A Guide for the Perplexed), and this Neo-Kantian Platonist has his philosophical limits.  I happen to think many of the values dethroned by 19th Century science and beyond have made the world a better place—that humans are not the pinnacle of evolution; that race is strictly a social construct with zero biological roots whatsoever; that disease is caused by pathogens and damaged organs, not one’s character—these more modern values have the capacity to make our world a more compassion, caring place…the very antithesis of the capitalist creed “whoever dies with the most wins.”

So while Schumacher and I are in complete agreement that education is the key to changing a fatally flawed and ultimately doomed economic system and we are equally in agreement that it is all about the values and ideals—the virtues—we teach our children, I can’t affirm his particular set of “metaphysical cures.”  But I can give him the last word:

It is of little use trying to suppress terrorism if the production of deadly devices continues to be deemed a legitimate employment of man’s creative powers.  Nor can the fight against pollution be successful if the patterns of production and consumption continue to be of a scale, a complexity, and a degree of violence which, as is becoming more and more apparent, do not fit into the laws of the universe, to which man is just as much subject as the rest of creation.  Equally, the chance of mitigating the rate of resource depletion or of bringing harmony into the relationships between those in possession of wealth and power and those without is non-existent as long as there is no idea anywhere of enough being good and more-than-enough being evil.  Study how a society uses its land, and you can come to pretty reliable conclusions as to what its future will be (pp. 315 & 108).

References

Schumacher, E.F. (1973) Small is Beautiful: Economics as if People Mattered.  New York: Harper Perennial.


[i] Please note that I am fully aware of the male-as-normative language employed by Schumacher; I would ask the reader’s generosity to recall that he was a product of his era and would not have thought to use any more inclusive wording in his writing.