Small Is Beautiful: A Study of Economics as if People Mattered (4 page)

The second requirement is suitability for small-scale application. On the problem of 'scale', Professor Leopold Kohr has written brilliantly and convincingly; its relevance to the economics of permanence is obvious.

Small-scale operations. no matter how numerous, are always less likely to be harmful to the natural environment than large-scale ones, simply because their individual force is small in relation to the recuperative forces of nature.

There is wisdom in smallness if only on account of the smallness and patchiness of human knowledge, which relies on experiment far more than on understanding. The greatest danger invariably arises from the ruthless application, on a vast scale, of partial knowledge such as we are currently witnessing in the application of nuclear energy, of the new chemistry in agriculture. of transportation technology, and countless other things.

Although even small communities are sometimes guilty of causing serious erosion, generally as a result of ignorance, this is trifling in comparison with the devastations caused by gigantic groups motivated by greed, envy, and the lust for power. It is moreover obvious that men organised in small units will take better care of their bit of land or other natural resources than anonymous companies or megalomaniac governments which pre- tend to themselves that the whole universe is their legitimate quarry.

The third requirement is perhaps the most important of all - that methods and equipment should be such as to leave ample room for human creativity.

Over the last hundred years no-one has spoken more insistently and warningly on this subject than have the Roman pontiffs. What becomes of man if the process of production 'takes away from work any hint of humanity, making of it a merely mechanical activity'? The worker himself is turned into a perversion of a free being.

'And so bodily labour (said Plus XI) which even after original sin was decreed by Providence for the good of man's body and soul, is in many instances changed into an instrument of perversion; for from the factory dead matter goes out improved. whereas men there are corrupted and degraded.'

Again, the subject is so large that I cannot do more than touch upon it.

Above anything else there is need for a proper philosophy of work which understands work not as that which it has indeed become, an inhuman chore as soon as possible to be abolished by automation, but as something 'decreed by Providence for the good of man's body and soul'. Next to the family, it is work and the relationships established by work that are the true foundations of society. If the foundations are unsound, how could society be sound? And if society is sick, how could it fail to be a danger to peace?

'War is a judgment,' said Dorothy I,. Sayers, 'that overtakes societies when they have been living upon ideas that conflict too violently with the laws governing the universe., Never think that wars are irrational catastrophes: they happen when wrong ways of thinking and living bring about intolerable situations. ‘Economically, our wrong living consists primarily in systematically cultivating greed and envy and thus building up a vast array of totally unwarrantable wants. It is the sin of greed that has delivered us over into the power of the machine. If greed were not the master of modern man - ably assisted by envy - how could it be that the frenzy of economism does not abate as higher 'standards of living' are attained, and that it is precisely the richest societies which pursue their economic advantage with the greatest ruthlessness? How could we explain the almost universal refusal on the part of the rulers of the rich societies - whether organised along private enterprise or collectivist enterprise lines - to work towards the humanisation of work? It is only necessary to assert that something would reduce the 'standard of living', and every debate is instantly closed. That soul-destroying, meaningless, mechanical, monotonous, moronic work is an insult to human nature which must necessarily and inevitably produce either escapism or aggression, and that no amount of 'bread and circuses' can compensate for the damage done - these are facts which are neither denied nor acknowledged but are met with an unbreakable conspiracy of silence -

because to deny them would be too obviously absurd and to acknowledge them would condemn the central preoccupation of modern society as a crime against humanity.

The neglect, indeed the rejection, of wisdom has gone so far that most of our intellectuals have not even the faintest idea what the term could mean.

As a result, they always tend to try and cure a disease by intensifying its causes. The disease having been caused by allowing cleverness to displace wisdom, no amount of clever research is likely to produce a cure. Rut what is wisdom? Where can it be found? Here we come to the crux of the matter: it can be read about in numerous publications but it can be found only inside oneself, To be able to find it, one has first to liberate oneself from such masters as greed and envy. The stillness following liberation - even if only momentary - produces the insights of wisdom which are obtainable in no other way.

They enable us to see the hollowness and fundamental unsatisfactoriness of a life devoted primarily to the pursuit of material ends, to the neglect of the spiritual. Such a life necessarily sets man against man and nation against nation, because man's needs are infinite and infinitude can be achieved only in the spiritual realm, never in the material. Man assuredly needs to rise above this humdrum 'world'; wisdom shows him the way to do it; without wisdom, he is driven to build up a monster economy, which destroys the world, and to seek fantastic satisfactions, like landing a man on the moon.

Instead of overcoming the 'world' by moving towards saintliness, he tries to overcome it by gaining pre eminence in wealth, power, science, or indeed any imaginable 'sport'.

These are the real causes of war, and it is chimerical to try to lay the foundations of peace without removing them first. It is doubly chimerical to build peace on economic foundations which, in turn, rest on the systematic cultivation of greed and envy, the very forces which drive men into conflict.

How could we even begin to disarm greed and envy? Perhaps by being much less greedy and envious ourselves; perhaps by resisting the temptation of letting our luxuries become needs; and perhaps by even scrutinising our needs to see if they cannot be simplified and reduced. If we do not have the strength to do any of this, could we perhaps stop applauding the type of economic 'progress' which palpably lacks the basis of permanence and give what modest support we can to those who, unafraid of being denounced as cranks, work for non-violence: as conservationists, ecologists, protectors of wildlife, promoters of organic agriculture, distributists, cottage producers, and so forth? An ounce of practice is generally worth more than a ton of theory.

It will need many ounces, however, to lay the economic foundations of peace. Where can one find the strength to go on working against such obviously appalling odds? What is more: where Can one find the strength to overcome the violence of greed, envy, hate and lust within oneself?

I think Gandhi has given the answer: 'There must be recognition of the existence of the soul apart from the body, and of its permanent nature, and this recognition must amount to a living faith; and, in the last resort, non-violence does not avail those who do not possess a living faith in the God of Love.'

Three

The Role of Economics

To say that our economic future is being determined by the economists would be an exaggeration; but that their influence, or in any case the influence of economics, is far-reaching can hardly be doubted. Economics plays a central role in shaping the activities of the modern world, inasmuch as it supplies the criteria of what is 'economic' and what is 'uneconomic', and there is no other set of criteria that exercises a greater influence over the actions of individuals and groups as well as over those of governments. It may be thought, therefore, that we should look to the economists for advice on how to overcome the dangers and difficulties in which the modern world finds itself, and how to achieve economic arrangements that vouchsafe peace and permanence.

How does economics relate to the problems discussed in the previous chapters? When the economist delivers a verdict that this or that activity is

'economically sound' or 'uneconomic', two important and closely related questions arise: first, what does this verdict mean? And, second, is the verdict conclusive in the sense that practical action can reasonably be based on it?

Going back into history we may recall that when there was talk about founding a professorship for political economy at Oxford 150 years ago, many people were by no means happy about the prospect. Edward Copleston, the great Provost of Oriel College, did not want to admit into the University's curriculum a science 'so prone to usurp the rest'; even Henry Drummond of Albury Park, who endowed the professorship in 1825, felt it necessary to make it clear that he expected the University to keep the new study 'in its proper place'. The first professor, Nassau Senior, was certainly not to be kept in an inferior place, Immediately, in his inaugural lecture, he predicted that the new science 'will rank in public estimation among the first of moral sciences in interest and in utility' and claimed that 'the pursuit of wealth ... is, to the mass of mankind, the great source of moral improvement'. Not all economists, to be sure, have staked their claims quite so high. John Stuart Mill (1806-73) looked upon political economy 'not as a thing by itself, but as a fragment of a greater whole; a branch of social philosophy, so interlinked with all the other branches that its conclusions, even in its own peculiar province, are only true conditionally, subject to interference and counteraction from causes not directly within its scope'.

And even Keynes, in contradiction to his own advice (already quoted) that

'avarice and usury and precaution must be our gods for a little longer still', admonished us not to 'overestimate the importance of the economic problem, or sacrifice to its supposed necessities other matters of greater and more permanent significance'.

Such voices, however, are but seldom heard today. It is hardly an exaggeration to say that, with increasing affluence, economics has moved into the very centre of public concern, and economic performance, economic growth, economic expansion, and so forth have become the abiding interest, if not the obsession, of all modern societies. In the current vocabulary of condemnation there are few words as final and conclusive as the word

'uneconomic'. If an activity has been branded as uneconomic, its right to existence is not merely questioned but energetically denied. Anything that is found to be an impediment to economic growth is a shameful thing, and if people cling to it, they are thought of as either saboteurs or fools. Call a thing immoral or ugly, soul- destroying or a degradation of man, a peril to the peace of the world or to the well-being of future generations: as long as you have not shown it to be 'uneconomic' you have not really questioned its right to exist, grow, and prosper.

But what does it mean when we say something is uneconomic? I am not asking what most people mean when they say this: because that is clear enough. They simply mean that it is like an illness: you are better off without it. The economist is supposed to be able to diagnose the illness and then, with luck and skill, remove it. Admittedly, economists often disagree among each other about the diagnosis and, even more frequently, about the cure: but that merely proves that the subject matter is uncommonly difficult and economists, like other humans, are fallible.

No. 1 am asking what ii means,
what sort of meaning the method of
economics actually produces.
And the answer to this question cannot be in doubt: something is uneconomic when it fails to earn an adequate profit in terms of money. The method of economics does not, and cannot, produce any other meaning. Numerous attempts have been made to obscure this fact, and they have caused a very great deal of confusion: but the fact remains.

Society, or a group or an individual within society, may decide to hang on to an activity or asset for non-economic reasons - social, aesthetic, moral, or political - but this does in no way alter its uneconomic character. The judgment of economics, in other words, is an extremely fragmentary judgment: out of the large number of aspects which in real life have to be seen and judged together before a decision can be taken, economics supplies only one - whether a thing yields a money profit to those who undertake it or not.

Do not overlook the words 'to those who undertake it'. It is a great error to assume, for instance, that the methodology of economics is normally applied to determine whether an activity carried on by a group within society yields a profit to society as a whole. Even nationalised industries are not considered from this more comprehensive point of view. Every one of them is given a financial target - which is, in fact, an obligation - and is expected to pursue this target without regard to any damage it might be inflicting on other parts of the economy. In fact, the prevailing creed, held with equal fervour by all political parties, is that the common good will necessarily be maximised if everybody, every industry and trade, whether nationalised or not, strives to earn an acceptable 'return' on the capital employed. Not even Adam Smith had a more implicit faith in the 'hidden hand' to ensure that 'what is good for General Motors is good for the United States',

However that may be, about the fragmentary nature of the judgments of economics there can be no doubt whatever. Even within the narrow compass of the economic calculus, these judgments are necessarily and methodically narrow. For one thing, they give vastly more weight to the short than to the long term. because in the long tem~. as Keynes put it with cheerful brutality.

we are all dead. And then, second, they are based on a definition of cost which excludes all 'free goods'. that is to say, the entire God-given environment, except for those parts of it that have been privately appropriated. This means that an activity can be economic although it plays hell with the environment, and that a competing activity, if at some cost it protects and conserves the environment, will be uneconomic.