E.F. Schumacher and post-industrial cottage industries

Since I have been corresponding more frequently with individuals at Schumacher College and The New Economics Institute (formerly known as The Schumacher Society), it seemed a good idea to read E.F. Schumacher’s Small is Beautiful: Economics as if People Mattered, a collection of thematically related essays on economics, ethics, and the nature of organizations. Published in 1973, the book can be regarded as an early statement of the thoroughgoingly small-scale (small political communities, local businesses, and presumably close-knit social groups) as well as an early doubt about the boundlessness of economic growth. What seemed to me most inspiring, though, was Schumacher’s repeated claim that wisdom and the virtues (specifically, the cardinal virtues) must be the foundation of any good economy.

If Schumacher’s world is small in scale and if, for him, production is limited by our appreciation that the earth’s offerings are finite in scope and duration, then one would expect us to care for what lies near and one would imagine the right kind of technology to be designed more humanely as well. In Schumacher’s view, technology should be cheap, readily accessible, and useful. Useful not least, one gathers, because work is not to be drudgery, not to be the sort of labor performed for the sake of leisure, but rather a creative activity with intrinsic value. Creative work enhances the spirit.

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Schumacher’s references to greed and envy are made in passing, yet seem to contain his moral indictment of capitalism. It is not, he says, that the lack of distributive justice is harmful in and of itself. Rather, it is harmful because it corrupts the moral characters of the wealthy and the poor both. In one of the final essays on what we would now call a social business, Schumacher makes his case for corruption:

Some inequalities of wealth and income are no doubt “natural” and functionally justifiable, and there are few people who do not spontaneously recognize this. But here again, as in all human affairs, it is a matter of scale. Excessive wealth, like power, tends to corrupt. Even if the rich are not “idle rich,” even when they work harder than anyone else, they work differently, apply different standards and are set apart from common humanity. They corrupt themselves by practicing greed, and they corrupt the rest of society by provoking envy. (my emphases)

Schumacher’s argument needs to be unpacked. Greed does not corrupt one by means of viciousness–mere acquisitiveness–alone. It seems rather that greed is suspect because it closes the greedy person off from cultivating the virtue of generosity and, in turn, causes him to stand outside of “common humanity.” The greedy person, desirous of being absolutely independent, loses ‘the world.’

Worse than this, the greedy person provokes envy in those who are not as wealthy as he. Envy is not just about desiring to acquire the wrong things; it is also about ‘admiring’ or ‘praising’ the wrong exemplar. Wanting to be him or like enough to him, I waste my mental energy as well as my life.

In short, once excessive wealth enters the modern world, the moral foundation of a good economy collapses.

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Does this have to be the case? One social experiment that is in keeping with Schumacher’s moral outlook would be the seeding of a more just ‘style’ of post-industrial cottage industry. Before the onset of the Industrial Revolution, cottage industries were beset by all manner of systemic inequalities. Though many owned their own tools and machines, producers had to purchase their raw materials from merchants who would supply them with textiles at the stipulated cost, only to sell the finished products near and abroad. The merchant accrued wealth through secrecy and the maker lost out mostly. The ‘opacity’ of the supply and the ‘opacity’ of the markets made, in most cases, for what some historians have called ‘proto-industry’: the merchant as proto-capitalist, the maker as proto-factory worker.

This arrangement needn’t be true for our time, however. The Internet, combined with some fairly inexpensive user platforms and educational tutorials, has given rise to small-scale industries of all kinds. Not all are interested in ‘scaling up’, in selling off their startups for millions, or in becoming the latest to be featured in Fast Company. In some admirable enterprises, one can discern the following characteristics:

  • the exercise of moral virtues such as industry, frugality, proper pride (an interest in, and responsibility for, one’s designs);
  • an attention to economy or thrift (not using too much or too little of one’s materials);
  • a proper care for one’s tools;
  • a production properly attentive to demand (e.g., customized orders);
  • a daily demonstration of one’s creative agency;
  • and the appropriate use of technology (a needle-and-thread, an awl, a web-based boutique).

Which is to say: yes, small can be beautiful.

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