Economics without ethics is wrong

Celebrating the 50th anniversary of a seminal book that has inspired contemporary thought on regenerative economics.

Economics without ethics is a body without a soul, a well without water, a flower without fragrance.

This year marks the 50th anniversary of the publication of EF Schumacher’s groundbreaking book Small Is Beautiful. Schumacher wrote this book when everyone was moving rapidly towards the ‘bigger is better’ ideal: big business, big government, big hospitals, big schools and big universities, resulting, of course, in big bureaucracy.

It needed a writer of great courage and vision to go in the opposite direction and write about human scale and human dignity. Schumacher stood against the tide of mass production, mass consumption and the prevalent global economy.

Satish Kumar will be speaking at the SMALL IS THE FUTURE event taking place on Saturday, 17 June 2023. Speakers include Dr Ann Pettifor, Charlie Hertzog Young, Gareth Dale and Professor Herbert Girardet. Tickets at £3 for the online event are on sale now!

Schumacher was an economist who graduated from the University of Oxford. He had been educated to think in terms of industrial development, economic growth and technological innovation as the symbols of progress. 

Transformed

Some years later, he was sent to Myanmar, then called Burma, by the British government and the UN to advise the Burmese government on how to transform their country from an agricultural and ‘undeveloped’ one to a ‘developed’ one.

Schumacher soon encountered a happy Buddhist culture with a high quality of craftsmanship and thriving agriculture. The economy was closer to the economy of Nature than any western industrial economy. And to his surprise he found people there to be much more contented than people in the UK.

Schumacher quickly realised that if Burma were to follow the western economic model of industrialisation, it would need a huge amount of financial capital, which the country did not have and would therefore need to borrow from the west, thereby creating crippling debt. 

It would need a long period of time to train people in industrial technology, and the inevitble end result of all this effort would be pollution, waste and unemployment, with no guarantee that there would be any extra happiness.

After about six months in Burma, Schumacher wrote an essay called ‘Buddhist Economics’, resulting from a profound experience that had transformed his thinking. This was the first time a western economist had dared to put the two words ‘Buddhist’ and ‘economics’ together.

Service

In conversation, Schumacher said that mainstream economists had asked him, “Mr Schumacher, what has economics got to do with Buddhism?” His reply was, “Economics without ethics is a body without a soul, a well without water, a flower without fragrance. 

"In my opinion there is no distinction between spirituality and economics. In the west we have separated spiritual values from economics, and as a result we lack happiness and contentment.”

Economics without ethics is a body without a soul, a well without water, a flower without fragrance.

When Small Is Beautiful was published in 1973, it was an instant success. It was among the most read books by members of the British parliament. In the US the book was received with great acclaim. Schumacher spoke to large audiences around the country and was even received in the White House by Jimmy Carter, the then US president.

Schumacher told me: “Economics should be in the service of humanity rather than humanity being in the service of economics. Also, economics must maintain the integrity of Nature. In other words, economics as if people and planet matter.”

Harmless

“What are the attributes of such economics?” I asked him.

“Such economics should be small, simple and harmless,” he replied. “To keep things simple and harmless, organisations need to be human-scale.”

For Schumacher, simplicity and harmlessness were essential principles for the proper functioning of an economy, as well as for society as a whole.

Schumacher believed that small scale favours simplicity, solidarity, diversity, the local and the vernacular: all ideals he aspired to. Large scale favours complication, separation, uniformity, global and monumental: the goals he least admired. Small scale, in his view, was much more compatible with ethical values than large scale.

He also believed that ethics and economics should not be separated, and that ethical economics should be founded on the principle that we should always be mindful of doing no harm to Nature, no harm to people, and no harm to ourselves. Such harmless economics needs to be kept simple. “Any fool can make things complicated. It requires a genius to keep things simple,” he added.

Beauty

As a result of our conversation, I started to take simplicity seriously. However, I also felt that simplicity in itself was not enough. It needed an additional dimension, a dimension of elegance. I called it elegant simplicity, and this has resulted in a book of the same title. I believe that things should be simple, but they should also be elegant – cluttered minds, cluttered lives and cluttered homes are neither simple nor elegant.

Like Schumacher, my mother believed in living a simple life. She believed that to make life simple we need to embrace the BUD principle: beautiful, useful and durable. 

Modern materialistic economics ignores the importance of beauty, but a lack of beauty causes spiritual poverty. Without beauty our souls starve, even when our bodies are fed. Therefore we should make nothing that is not beautiful. Furthermore, beauty and utility should not be separated. Form and function need to complement each other.

Arts and crafts need to be an integral part of a simple life. Additionally, beauty and utility need to embrace durability. Frugality is an essential aspect of simplicity. Inbuilt obsolescence is a sin against Nature!

Sustainable

The BUD principle makes simplicity elegant. We all can and should have a good life, a comfortable life and a joyful life. Simplicity should not be associated with drab or dry living. Simplicity is the soil in which we can cultivate a magnanimous mind. 

What benefit is there if our shops are full of paraphernalia but our souls are impoverished? Combining Schumacher’s idea of simplicity with my mother’s BUD principle made perfect sense: BUD made simplicity both elegant and spiritually fulfilling.

Simplicity with elegance, I thought, is a prerequisite for sustainability. All our tools and technologies, our garments and gadgets, our cars and computers, our trains and planes, all the things we use in our profligate lifestyle come from the finite sources of Nature. 

We cannot meet all our insatiable consumption, our unlimited and infinite needs, which are driven by our greed, from a finite Earth. Therefore elegant simplicity is an essential requirement for meeting our true needs in a sustainable manner.

Debt

Elegant simplicity is also a prerequisite for social justice. We need to live simply so that others may simply live. If some of us live extravagant lives, accumulating more ‘stuff’ than we truly need, then many of our fellow humans will not be able to meet even their most basic needs. 

As Schumacher proposed ethical economics, elegant simplicity proposes equitable economics. Elegant simplicity offers the right context for such a combination. 

This trinity of ethics, economics and equity can solve many of our pressing problems, such as environmental injustice and social injustice. Ethics, economics, equity is a moral social and ecological imperative for our time.

EF Schumacher was my good friend and a mentor. His book Small Is Beautiful inspired me to write Elegant Simplicity. And so, on the occasion of the 50th anniversary of the publication of Small Is Beautiful, I acknowledge my deep debt to him.

This Author

Satish Kumar will speak at the Small Is the Future conference in Bristol on 17 June 2023 organised by The Ecologist and the Schumacher Institute. His book Elegant Simplicity: The Art of Living Well is available from the Resurgence shop. Satish is a member of the management team of the Resurgence Trust, which owns and publishes The Ecologist. This article first appeared in the latest issue of the Resurgence & Ecologist magazine, which is on sale now

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