Small Is Beautiful: A Study of Economics As If People Mattered (Book Review)

This book review marks the beginning of ‘REVIEWING SUSTAINABILITY CLASSICS’ – a series that hopes to deep-dive into some inspiring imaginations of a sustainable future. The book in discussion here, is a collection of essays by British economist E.F. Schumacher. The phrase “Small Is Beautiful” came from a phrase by his teacher Leopold Kohr. It is often used to champion small, appropriate technologies that are believed to empower people more, in contrast with phrases such as “bigger is better“.

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In his intriguing, yet slightly dated book “Small is Beautiful” Mr. EF Schumacher argues for a return of an economic thinking which places people at its core, as made obvious by the subtitle – ‘economics as if people mattered’. The bulk of his book is dedicated to criticizing the way large-scale industrialisation has been a dehumanising experience and a people-centred approach is important for human and environmental sustainability and prosperity. This book came out as a critique of western economics during the oil crisis of 1973 and the emergence of globalisation, and, as if to account for the complexity of such a project, he divides the book in four parts carrying a collection of total nineteen essays, papers and speeches written and given over several years.

The first part of the book is titled ‘the modern world’ and here Schumacher begins with the inability of our current economic system to distinguish between natural capital and income. He observes that we keep using natural capital resources, like oil as an income, and he refers to this as the problem of production. At the time when he was writing this book, the world was faced with dwindling stocks of oil and a likelihood of exhaustion in a few decades. Even though the world does not face an immediate oil-crisis, today, Schumacher’s concern is relevant as use of fossil fuels is the biggest contributor to the ecological crisis of global temperature rise and the industrial production system contributes to this. India was the fourth largest importer of crude oil in 2013 and since our economy largely depends on fossil fuel for its energy needs, our consumption is on the rise.1 Elaborating the role of economics, the author sees that “market represents only the surface of the society… It is inherent in the methodology of economics to ignore man’s dependence on the natural world”. As a solution to this, he proposes the concept of meta-economics, an approach which derives its aims and objectives from a study of both man and nature. Economists operate in a framework that value means above ends and even in today’s time this is evident in the way nations and societies chase GDP growth, single-mindedly. A local example of this comes in the form of a new report that finds that environmental degradation costs India $80 billion per year or 5.7% of its economy.2

The author introduces next, the concepts of right livelihood & the question of consumption, central to Buddhist Economics. His observation that consumption is merely a means to human well-being, and the aim should be to obtain the maximum well-being with the minimum of consumption is very relevant, especially when research shows that household consumption is the biggest contributor to greenhouse gas emission in today’s time.3 (Here it is important to note, that Schumacher was probably a bit of a conservative, as reflected by his opinion that women do not need an “outside” job. I struggle to subscribe to this view, and I believe, this reflects upon the times he was writing in. It would be apt to read Schumacher with a piece like ‘if women counted’ (Marilyn Waring, 1988) which brings to light the damage caused by the fact that unpaid household work traditionally done by women is made invisible in national accounting systems and how it is like the neglect of natural environment.) He ends this section with a recognition of the duality of human requirement when it comes to the question of size. He sees that “there is no single answer, appropriateness of scale depends on what we are trying to do” and “people can be themselves only in small comprehensible groups” emphasising the need to create structures which can accommodate the multiplicity of small-units. There are various examples of grass-root level societies from India, which are reviving local communities like Barefoot College, Deccan development society and Auroville.

The second part of the book talks about resources and he begins by addressing what he calls the greatest resource of all, education, and how today’s approach to education lacks subsequent depth. Here he makes a very interesting distinction between convergent and divergent problems, something that I found very useful to develop a lens for ecology and development concerns. Briefly, convergent problems are those where there is a solution that can be conveyed to others easily (like in mathematics or engineering) where as a divergent problem is one that must be ‘lived out’ not solved (like in social sciences or politics) All divergent problems can be converted into convergent problems by the process of reduction and we can find an example of that happening in India where green revolution was brought in to solve the problem of food security as a convergent response to a divergent problem. This reductionist approach, resulted in water crisis, chemical pollution of soil and multitudes of ecological damages in regions where green revolution penetrated the most. A determination to apply the principles of industry to agriculture pose a danger to soil, agriculture and civilisation. He argues that the social structures of agriculture which have been produced by large scale mechanisation and heavy chemicalisation makes it impossible for man to be in touch with nature, and “supports destructive tendencies like violence alienation and environmental destruction”. Citing MIT’s ‘limits to growth’ report, he argues that “an infinite growth of material consumption in a finite world is not possible”.

Coming to the subject of nuclear energy, he asserts that no degree of prosperity could justify the accumulation of large amounts of highly toxic substances which nobody knows how to make safe. Ideally we should go ahead with it only after sufficient research in radiation biology is done, which currently lacks.  Mr. Schumacher has been involved with the soil association and he started the Intermediate Technology Development group, so it is not a surprise that one of his finest chapters is the study of technology with a human face. He observes that “the prestige carried out by the people in a modern industrial society varies in inverse proportion to their closeness to actual production” He argues that we are suffering from breakdowns of three kinds – aesthetic, ecological and resource-use and recommends the use of intermediate technology, the kind that puts people and the earth first.

In parts three and four, the author elaborates on themes around ‘The third world’ and ‘Organisation and ownership’. While writing of development he observes that planners often tend to oversimplify complexities that are a result of evolution and lead to challenges like dual economies, mass unemployment and mass migration. This reminded me of portions of another classic, ‘Seeing like a state’ (James C Scott, 1998). Planners call this a transitional phase, inspired by a thinking that what is best for the rich must be best for the poor. He describes how poor countries slip and are pushed into adoption of production methods and consumption standards which destroy the possibility of self-reliance and self-help. The results are unintentional neo-colonialism and hopelessness for the poor. Schumacher uses the example of an African textile mill and incidentally I have come across this dilemma in my own work-experience in the garment manufacturing industry. The pressure to create so called ‘export-quality’ clothing keeps the manufacturers looking for ways to reduce human-factor and they end up depending increasingly on resource heavy technologies (like giant printing machines) that not only impact the employment situation but also are an ecological stress in terms of energy and resource use.

Then again, the chapter on the problem of unemployment in India, touches upon the issue of ecological destruction and how if, as Buddhist tradition held, each person would plant a tree and take care of it for the next five years, India would have an abundance of primary resources and access to healthy air, water and soil. This makes a lot of sense in the current Indian context where communities which were traditionally dependent of forests and trees are separated from their habitat and it has been observed that they are made more vulnerable in the process. The tribal communities of central India are a good example of this. He argues that the development of the very poor requires local and inexpensive workplace and technology along with local materials for local consumption, a logic that also makes ecological sense.

The centrality of this book lies in the assertion for the need of a metaphysical foundation or a value position that can inform economic theories and doctrines. One realises towards the end of the book that Schumacher’s interest does not lie specifically in smallness per se, but appropriateness of scale and technology. However, one suspects, this compellingly optimistic vision for reinventing economics as if people (and the planet) mattered, would have touched the millions of lives that it ended up doing, by any other name. Small is beautiful is an idea that keeps reappearing – one can see this in Bangalore with the growing demand for farmer’s markets, cafes serving local cuisine and revival of handmade art & craft products.


  1. Article Title: U.S. Energy Information Administration – EIA – Independent Statistics and Analysis. Website Title: India is increasingly dependent on imported fossil fuels as demand continues to rise.  URL:
  2. Article Title: India: Green Growth – Overcoming Environment Challenges to Promote Development. Website Title: World Bank. URL:
  3. Ivanova, D., Stadler, K., Steen-Olsen, K., Wood, R., Vita, G., Tukker, A. and Hertwich, E. G. (2016), Environmental Impact Assessment of Household Consumption. Journal of Industrial Ecology, 20: 526–536. doi:10.1111/jiec.12371

Hansika Singh, the writer of this article, is a part of Team Ecofolk. She is a student of development and is passionate about finding and popularizing sustainable ways of consuming+producing things. Feel free to share your thoughts about this article with Hansika and the rest of the team at