Small Is Beautiful

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Alternative to Modern Capitalism? Buddhist Economics

So, 12 days since my last post. Preparing for a move to SE Asia has been like bodysurfing a wave that was a tad bit bigger than you – lots of momentum and movement – and it’s pushing you all over the place while you try to keep your head above the foam! But here goes: Buddhist Economics.

One of the essays in Fritz Schumacher’s 1973 Small Is Beautiful: Economics As If People Mattered is entitled ‘Buddhist Economics’. In it, Schumacher argues that labor, for the classic Western capitalist, is a necessary evil that you want to get the most out of. The less labor you need, the better, aka mechanization. Likewise, labor also sees work as a dis-utility; they would rather have more compensation with less work. So, from the get-go, labor and management/ownership find themselves in contrary positions. This is neither harmonious, nor engendering an organizational atmosphere where everyone feels they are working for a common goal.

However, a Buddhist take on economics, Schumacher argues, is quite different.

“The Buddhist point of view takes the function of work to be at least threefold: to give man a chance to utilize and develop his faculties; to enable him to overcome his ego-centeredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence. …To organize work in such a manner that it becomes meaningless, boring, stultifying, or nerve-wracking for the worker would be little short of criminal; it would indicate a greater concern with goods than with people….

The Indian philosopher and economist J.C. Kumarappa sums the matter up as follows:

If the nature of the work is properly appreciated and applied, it will stand in the same relation to the higher faculties as food is to the physical body. It nourishes and enlivens the higher man and urges him to produce the best he is capable of. It directs his free will along the proper course and disciplines the animal in him into progressive channels. It furnishes an excellent background for man to display his scale of values and develop his personality.

If a man has no chance of obtaining work he is in a desperate position, not simply because he lacks an income but because he lacks this nourishing and enlivening factor of disciplined work which nothing can replace.”

And yet, Schumacher goes on, modern capitalism desires a certain percentage of the labor force to be unemployed, for various economic reasons.

Now, I ask you, fellow Christians: which sounds more like the view of work in the Scriptures we call the Old Testament: modern capitalism or Schumacher’s Buddhist economics?

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The irony of modern economics

One of the most amazing ironies of modern Western civilization is, to me, that a few hundred years ago, some economists convinced all Christendom that self-centeredness and greed were actually virtues rather than vices, and would benefit society! The idea, of course, was that if I pursue making my business succeed with all speed, (in order to make more money for myself), my competitors will be doing the same to keep up, and everyone will benefit by better products, more efficient processes, and an increased economic activity in society all around.

One of the things that could be observed was that the traditional Christian virtues were a bit better entrenched in society back then (John Wesley said work as hard as you can for your business to succeed, as long as it doesn’t hurt your neighbor’s business!), but more importantly, this self-centeredness as economic driving force is neither biblical nor good, in the long run, for the world. The theory is that enlightened self-interest will serve as a brake from anyone carrying their selfishness too far… as chopping down too many trees would cut into the sustainability of their bottom-line. However, history has shown that in a world of transnational corporations, this doesn’t actually work.

The modern economy runs almost exclusively on short-term profits, and short term profits erase all notions of long-term environmental sustainability. Humanity’s footprint in the natural world was a lot smaller 300 years ago. If a farmer farmed his land the way transnational corporations “manage” our environment, he’d be looking at a desert within five years. Good farmers know there is much about nurture rather than production that needs to be taken into account, if you want that land to make food for your grandchildren’s generation. In our world today, it is, most often, the people at the bottom of the economic ladder, the poorest of the poor, who bear the brunt of the environmental damage, because they have the least power and voice in the society to make a big deal out of it and apply pressure.

Schumacher makes this point about the dysfunction of classic Western economics in ‘Small is Beautiful:  Economics as if People Mattered.’ I will post his quote in a few days.

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I’m moving to SE Asia

So, I’m a bit late in posting, as some rapid developments in our lives here have resulted in something exciting and new: my family and I are moving at the end of the summer to SE Asia where we have accepted a position in our denomination. More on that in the future. In the meantime, I promised some more from E.F. Schumacher’s Small Is Beautiful: Economics As If People Mattered, from 1973. And here it is… Schumacher starts the book with the following two quotes:

“Few can contemplate without a sense of exhilaration the splendid achievements of practical energy and technical skill, which, from the latter part of the seventeenth century, were transforming the face of material civilization….

If, however, economic ambitions are good servants, they are bad masters.

The most obvious facts are the most easily forgotten. Both the existing economic order and too many of the projects advanced for reconstructing it break down through their neglect of the truism that, since even quite common men have souls, no increase in material wealth will compensate them for arrangements which insult their self-respect and impair their freedom. A reasonable estimate of economic organization must allow for the fact that, unless industry is to be paralyzed by recurrent revolts on the part of outraged human nature, it must satisfy criteria which are not purely economic. “

  • H. Tawney, Religion and the Rise of Capitalism

“By and large, our present problem is one of attitudes and implements. We are remodeling the Alhambra with a steam-shovel, and are proud of our yardage. We shall hardly relinquish the shovel, which after all has many good points, but we are in need of a gentler and more objective criteria for its successful use.”

  • Aldo Leopold, A Sand County Almanac
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Fritz Schumacher’s 1973 ‘Small is Beautiful’

I’ve been reading an interesting book lately: E.F. “Fritz” Schumacher’s 1973 Small is Beautiful: Economics As If People Mattered. Schumacher was a British economist for England’s coal industry. His book argues that economics, and institutions in general, should be built upon a “human scale.” Schumacher observed that our modern human institutions tend to grow to such a scale that they are like frankenstein monsters which grow so large that they come back upon their masters and devour them (my image, not his). Another way you could put it is that our economies/institutions/etc cease being our servants and instead become our masters. Sudddenly the humans don’t matter in the decision-making, it’s the self-perpetuation of the larger structures we’ve created. Our creations come to lord it over us and be too big for us to control or direct in a way to promote human thriving.

It’s a very interesting book, and one that drew quite a bit of interest in the world of economists and international development policy makers back when it was written.

Schumacher argues for things like:

De-centralized, local decision making that takes the long-term good of the community as its goal, not short-term profits for a select few in some faraway metropolis.

A critique of systems that grow too gigantic or destructive of human and ecological well-being.

The need for some limiting principle, to enable a society at some point to legitimately say “enough!”

The recognition that economic profit is not the grounding, priniciple manner to gauge human well-being and the failure of modern economic thought to calculate non-economic factors into policy-makers’ decisions

The concept of intermediate technology – simple, nonviolent and controllable – (or, simple, cheap, small, safe): useful in the local situation and not forcing us to develop giant schemes

A changed view of labor and production where work is elevated to a vocation and labor and ownership aren’t mutually contradictory antagonists

The contention that Third World poverty is a question of “two million villages,” as Gandhi argued, and thus that concentrated endeavors in urban settings merely concentrated the benefits into the hands of a very select few, and the villages stayed in abject poverty

The contention that humanity should adapt within Earth’s ecosystems instead of trying to dominate (and typically destroy) them

The need to return to the Four Cardinal virtues:  prudential, justitia, fortitudo, and temperantia

As I said, it’s a very interesting read, and I’ll include some excerpts in the next few blogs.