Small Is Beautiful: A Study of Economics as if People Mattered (8 page)

The idolatry of gigantism that I have talked about is possibly one of the causes and certainly one of the effects of modern technology, particularly in matters of transport and communications. A highly developed transport and communications system has one immensely powerful effect: it makes people footloose.

Millions of people start moving about, deserting the rural areas and the smaller towns to follow the city lights, to go to the big city, causing a pathological growth. Take the country in which all this is perhaps most exemplified - the United States. Sociologists are studying the problem of

'megalopolis'. The word 'metropolis' is no longer big enough; hence

'megalopolis'. They freely talk about the polarisation of the population of the United States into three immense megalopolitan areas: one extending from Boston to Washington, a continuous built-up area, with sixty million people; one around Chicago, another sixty million: and one on the West Coast from San Francisco to San Diego, again a continuous built- up area with sixty million people; the rest of the country being left practically empty; deserted provincial towns, and the land cultivated with vast tractors, combine harvesters, and immense amounts of chemicals.

If this is somebody's conception of the future of the United States, it is hardly a future worth having. But whether we like it or not, this is the result of people having become footloose; it is the result of that marvellous mobility of labour which economists treasure above all else.

Everything in this world has to have a structure, otherwise it is chaos.

Before the advent of mass transport and mass communications, the structure was simply there, because people were relatively immobile. People who wanted to move did so; witness the hood of saints from Ireland moving all over Europe. There were communications, there was mobility, but no footlooseness. Now, a great deal of structure has collapsed, and a country is like a big cargo ship in which the load is in no way secured. It tilts, and all the load slips over, and the ship founders.

One of the chief elements of structure for the whole of mankind is of course the stale. And one of the chief elements or instruments of structuralisation (if I may use that term), is frontiers, national frontiers. Now previously, before this technological intervention. the relevance of frontiers was almost exclusively political and dynastic: frontiers were delimitations of political powers determining how many people you could raise for war.

Economists fought against such frontiers becoming economic barriers -

hence the ideology of free trade. But, then, people and things were not footloose; transport was expensive enough so that movements, both of people and of goods, were never more than marginal. Trade in the pre-industrial era was not a trade in essentials, but a trade in precious stones, precious metals, luxury goods, spices and - unhappily - slaves. The basic requirements of life had of course to be indigenously produced. And the movement of populations except in periods of disaster, was confined to persons who had a very special reason to move, such as the Irish saints or the scholars of the University of Paris.

But now everything and everybody has become mobile. All structures are threatened, and all structures are vulnerable to an extent that they have never been before.

Economics, which Lord Keynes had hoped would settle down as a modest occupation similar to dentistry, suddenly becomes the most important subject of all. Economic policies absorb almost the entire attention of government, and at the same time become ever more impotent. The simplest things, which only fifty years ago one could do without difficulty, cannot get done any more. The richer a society, the more impossible it becomes to do worthwhile things without immediate pay-off. Economics has become such a thraldom that it absorbs almost the whole of foreign policy. People say,

'Ah yes, we don't like to go with these people, but we depend on them economically so we must humour them.' It tends to absorb the whole of ethics and to take precedence over all other human considerations. Now, quite clearly, this is a pathological development, which has, of course, many roots, but one of its clearly visible roots lies in the great achievements of modern technology in terms of transport and communications.

While people. with an easy-going kind of logic, believe that fast transport and instantaneous communications open up a new dimension of freedom (which they do in some rather trivial respects), they overlook the fact that these achievements also tend to destroy "freedom, by making everything extremely vulnerable and extremely insecure, unless conscious policies are developed and conscious action is taken, to mitigate the destructive effects of these technological developments.

Now, these destructive effects are obviously most severe in large countries, because, as we have seen, frontiers produce 'structure', and it is a much bigger decision for someone to cross a frontier, to uproot himself from his native land and try and put down roots in another land, than to move within the frontiers of his country. The factor of footlooseness is, therefore, the more serious, the bigger the country. Its destructive effects can be traced both in the rich and in the poor countries. In the rich countries such as the United States of America, it produces, as already mentioned, 'megalopolis'.

It also produces a rapidly increasing and ever more intractable problem of

'drop-outs', of people, who, having become footloose, cannot find a place anywhere in society. Directly connected with this, it produces an appalling problem of crime, alienation, stress, social breakdown, right down to the level of the family. In the poor countries, again most severely in the largest ones, it produces mass migration into cities, mass unemployment, and, as vitality is drained out of the rural areas, the threat of famine. The result is a

'dual society' without any inner cohesion, subject to a maximum of political instability.

As an illustration, let me take the case of Peru. The capital city, Lima, situated on the Pacific coast, had a population of 175.000 in the early 1920s, just fifty years ago. Its population is now approaching three million. The once beautiful Spanish city is now infested by slums, surrounded by misery-belts that are crawling up the Andes. But this is not all. People are arriving from the rural areas at the rate of a thousand a day - and nobody knows what to do with them. The social or psychological structure of life in the hinterland has collapsed; people have become footloose and arrive in the capital city at the rate of a thousand a day to squat on some empty land, against the police who come to beat them out, to build their mud hovels and look for a job.
And nobody knows what to do about them.
Nobody knows how to stop the drift,

Imagine that in 1864 Bismarck had annexed the whole of Denmark instead of only a small part of it, and that nothing had happened since. The Danes would be an ethnic minority in Germany, perhaps struggling to maintain their language by becoming bilingual, the official language of course being German. Only by thoroughly Germanising themselves could they avoid becoming second-class citizens. There would be an irresistible drift of the most ambitious and enterprising Danes, thoroughly Germanised, to the mainland in the south, and what then would be the status of Copenhagen?

That of a remote provincial city. Or imagine Belgium as part of France.

What would be the status of Brussels? Again, that of an unimportant provincial city. I don't have to enlarge on it. Imagine now that Denmark a part of Germany, and Belgium a part of France, suddenly turned what is now charmingly called 'nats' wanting independence. There would be endless, heated arguments that these 'non-countries' could not be economically viable, that their desire for independence was, to quote a famous political commentator, 'adolescent emotionalism, political naivety, phoney economics, and sheer bare-faced opportunism'.

How can one talk about the economics of small independent countries?

How can one discuss a problem that is a non-problem? There is no such thing as the viability of states or of nations, there is only a problem of viability of people: people, actual persons like you and me, are viable when they can stand on their own feet and earn their keep. You do not make non-viable people viable by putting large numbers of them into one huge community, and you do not make viable people non-viable by splitting a large community into a number of smaller, more intimate, more coherent and more manageable groups. All this is perfectly obvious and there is absolutely nothing to argue about. Some people ask: 'What happens when a country, composed of one rich province and several poor ones, falls apart because the rich province secedes?' Most probably the answer is: 'Nothing very much happens.' The rich will continue to be rich and the poor will continue to be poor. 'But if, before secession, the rich province had subsidised the poor, what happens then?' Well then, of course, the subsidy might stop. But the rich rarely subsidise the poor; more often they exploit them. They may not do so directly so much as through the terms of trade.

They may obscure the situation a little by a certain redistribution of tax revenue or small-scale charity, but the last thing they want to do is secede from the poor.

The normal case is quite different, namely that the poor provinces wish to separate from the rich, and that the rich want to hold on because they know that exploitation of the poor within one's own frontiers in infinitely easier than exploitation of the poor beyond them. Now if a poor province wishes to secede at the risk of losing some subsidies, what attitude should one take?

Not that we have to decide this, but what should we think about it? Is it not a wish to be applauded and respected? Do we not want people to stand on their own feet, as free and self-reliant men? So again this is a 'non-problem'.

I would assert therefore that there is no problem of viability, as all experience shows. If a country wishes to export all over the world, and import from all over the world, it has never been held that it had to annex the whole world in order to do so.

What about the absolute necessity of having a large internal market? This again is an optical illusion if the meaning of 'large' is conceived in terms of political boundaries. Needless to say, a prosperous market is better than a poor one, but whether that market is outside the political boundaries or inside, makes on the whole very little difference. r am not aware, for instance, that Germany, in order to export a large number of Volkswagens to the United States, a very prosperous market could only do so after annexing the United States, But it does make a lot of difference if a poor community or province finds itself politically tied to or ruled by a rich community or province. Why? Because, in a mobile, footloose society the law of disequilibrium is infinitely stronger than the so-called law of equilibrium.

Nothing succeeds like success, and nothing stagnates like stagnation. The successful province drains the life out of the unsuccessful. and without protection against the strong, the weak have no chance: either they remain weak or they must migrate and join the strong, they cannot effectively help themselves.

A most important problem in the second half of the twentieth century is the geographical distribution of population, the question of 'regionalism'. But regionalism, not in the sense of combining a lot of states into free-trade systems, but in the opposite sense of developing all the regions within each country. This, in fact, is the most important subject on the agenda of all the larger countries today. And a lot of the nationalism of small nations today, and the desire for self-government and so-called independence, is simply a logical and rational response to the need for regional development. In the poor countries in particular there is no hope for the poor unless there is successful regional development, a development effort outside the capital city covering all the rural areas wherever people happen to be.

If this effort is not brought forth, their only choice is either to remain in their miserable condition where they are, or to migrate into the big city where their condition will be even more miserable. It is a strange phenomenon indeed that the conventional wisdom of present-day economics can do nothing to help the poor.

Invariably it proves that only such policies are viable as have in fact the result of making those already rich and powerful, richer and more powerful.

It proves that industrial development only pays if it is as near as possible to the capital city or another very large town, and not in the rural areas. It proves that large projects are invariably more economic than small ones, and it proves that capital-intensive projects are invariably to be preferred as against labour-intensive ones. The economic calculus, as applied by present-day economics, forces the industrialist to eliminate the human factor because machines do not make mistakes which people do. Hence the enormous effort at automation and the drive for ever-larger units. This means that those who have nothing to sell but their labour remain in the weakest possible bargaining position. The conventional wisdom of what is now taught as economics by-passes the poor, the very people for whom development is really needed. The economics of gigantism and automation is a left-over of nineteenth-century conditions and nineteenth-century thinking and it is totally incapable of solving any of the real problems of today. An entirely new system of thought is needed, a system based on attention to people, and not primarily attention t~ goods - (the goods will look after themselves!). It could be summed up in the phrase, 'production by the masses, rather than mass production'. What was impossible, however, in the nineteenth century, is possible now. And what was in fact - if not necessarily at least understandably - neglected in the nineteenth century is unbelievably urgent now. That is, the conscious utilisation of our enormous technological and scientific potential for the fight against misery and human degradation - a fight in intimate contact with actual people, with individuals, families, small groups, rather than states and other anonymous abstractions. And this presupposes a political and organisational structure that can provide this intimacy.