Ernst Friedrich Schumacher CBE (16 August 1911 – 4 September 1977) was a German-born British statistician and economist who is best known for his proposals for human-scale, decentralised and appropriate technologies.
[1] He served as Chief Economic Advisor to the British National Coal Board from 1950 to 1970, and founded the Intermediate Technology Development Group (now known as Practical Action) in 1966.
The younger Schumacher studied in Bonn and Berlin, then from 1930 in England as a Rhodes Scholar at New College, Oxford,[1] and later at Columbia University in New York City, earning a diploma in economics.
In these years, Schumacher captured the attention of John Maynard Keynes with a paper entitled "Multilateral Clearing"[3] that he had written between sessions working in the fields of the internment camp.
Schumacher helped the British government mobilise economically and financially during World War II, and Keynes found a position for him at Oxford University.
"[4] After the war, Schumacher worked as an economic advisor to, and later Chief Statistician for, the British Control Commission, which was charged with rebuilding the German economy.
He saw oil as a finite resource, fearing its depletion and eventually prohibitive price, and viewed with alarm the reality that "the richest and cheapest reserves are located in some of the world's most unstable countries".
He served as adviser to the India Planning Commission, as well as to the governments of Zambia and Burma – an experience that led to his much-read essay "Buddhist Economics".
The 1973 publication of Small Is Beautiful: A Study of Economics As If People Mattered, a collection of essays, finished in the house of his friend Leopold Kohr, brought his ideas to a wider audience.
One of his main arguments in Small Is Beautiful is that we cannot consider the problem of technological production solved if it requires that we recklessly erode our finite natural capital and deprive future generations of its benefits.
Just like his mentor Leopold Kohr, Schumacher discusses the problems of separatism and regionalism in Small Is Beautiful, which he called "the question of size".
[10] He notes that the opposite process is taking place as the number of countries worldwide is growing, as large nations break up into smaller ones, and states that Balkanisation should not have negative connotations.
He asserts that the smaller internal market area of a small country is not a hindrance, but rather the basis of great economic potential and development.
[10] For Schumacher, however, as soon as an organisation of a great size is created, it inevitably entails "a strenuous attempt to attain smallness within bigness" in order to remain efficient; he argues that the General Motors was organised as a federation of medium-sized firms, and recalls his experience in the British National Coal Board, which was decentralised into a "federation of numerous quasi-firms" under Lord Robens.
[10] He also discusses globalisation, identifying the "idolatry of gigantism" as a harmful belief steming from technological progress – the highly developed communications system greatly increased labor mobility, rendering people "footloose".
[10] He states that most modern developments only result in widening the gap between the rich and the poor, as they almost exclusively focus on the capital or already wealthy areas instead, as these yield the most profit.
[10] He argues that modern technological and scientific potential must focus on fighting human degradation, in "intimate contact" with individuals and small groups rather than large states.
He argues that economic thinking is useless if it only engages in "vast abstractions" such as "the national income, the rate of growth, capital/output ratio, input-output analysis, labour mobility, capital accumulation" instead of addressing "the human realities of poverty, frustration, alienation, despair, breakdown, crime, escapism, stress, congestion, ugliness and spiritual death.
"[10] As a young man, Schumacher was a dedicated atheist, but his later rejection of materialist, capitalist, agnostic modernity was paralleled by a growing fascination with religion.
He noted the similarities between his own economic views and the teaching of papal encyclicals on socio-economic issues, from Leo XIII's "Rerum novarum" to Pope John XXIII's Mater et magistra, as well as with the distributism supported by the Catholic thinkers G. K. Chesterton, Hilaire Belloc, and Vincent McNabb.
He died of a heart attack on 4 September 1977, on arrival at Billens hospital in Romont, Switzerland; after falling ill on a train in Zurich during a lecture tour.
The center continues the work of Schumacher by maintaining a research library, organising lectures and seminars, publishing papers, developing model economic programs, and providing technical assistance to groups all for the purpose of linking people, land, and community to build strong, diverse local economies.