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Small is Beautiful

A Study of Economics as if People Mattered

By E. F. Schumacher
15-minute read
Audio available
Small is Beautiful: A Study of Economics as if People Mattered by E. F. Schumacher

Small is Beautiful (1973) is a collection of essays by renowned British economist E. F. Schumacher outlining his critique of the Western economic system. First published in 1973, this classic collection, which is now considered to be one of the most influential books published since World War II, is as relevant today as it was in the ‘70s.

  • People interested in politics and economics
  • Mindful citizens who want to understand how our economic system affects the earth

Ernst Friedrich Schumacher, the protégé of John Maynard Keynes, was a famed economist. From 1950 to 1970, he served as the Chief Economic Advisor to the UK National Coal Board.

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Small is Beautiful

A Study of Economics as if People Mattered

By E. F. Schumacher
  • Read in 15 minutes
  • Audio & text available
  • Contains 9 key ideas
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Small is Beautiful: A Study of Economics as if People Mattered by E. F. Schumacher
Synopsis

Small is Beautiful (1973) is a collection of essays by renowned British economist E. F. Schumacher outlining his critique of the Western economic system. First published in 1973, this classic collection, which is now considered to be one of the most influential books published since World War II, is as relevant today as it was in the ‘70s.

Key idea 1 of 9

The modern economic system relies on depleting the Earth's natural resources.

Modern economic systems have brought great prosperity to the Western world; however, that prosperity came with a big price tag. Our lives are now so removed from nature that we constantly destroy it without compunction.

For instance, thanks to the global industrial system, we squander a great deal of our precious natural resources – such as fossil fuels. The modern economy treats fossil fuels as income, a constant stream of goods, rather than capital, a finite supply of goods. To thus regard them is a way of justifying waste.

If we viewed fossil fuels as capital rather than income we'd be much more concerned with their conservation. However, we use them as if they'll never run out – which, of course, they will.

It's not possible for humans to manufacture or recycle fossil fuels, so once they're gone, they're gone. And running out of them too quickly would threaten the very foundation of our modern economy, which requires a steady energy supply.

The modern economic system itself also threatens two types of natural capital: the tolerance margins of nature and the human substance.

Since World War II, the world has seen a dramatic increase in industrial production, which threatens the tolerance margins of nature. Our actions are harming the environment at a rate much greater than its natural rate of regeneration.

The economic system also devalues humans, who are reduced to little more than cogs in the economic machine. For instance, most people in the world don't find their work fulfilling and many spend their lives doing back-breaking labor.

Such problems threaten the foundation of the modern economy, too, because they threaten society as a whole. The economic machine can't sustain itself if the people who run it can't live.

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