by Joseph Pearce
This is one of the suggested books in the Mater Amabilis™ high school curriculum available in the facebook group for supplemental reading in economics. We put off economics for the year, but in anticipation of a personal finance and economics course in tenth grade, I read this book to consider requiring it.
Most of the book reiterates the arguments presented originally by E. F. Schumacher's book, Small Is Beautiful: Economics As If People Mattered. Published decades after Schumacher's book, Small Is Still Beautiful is able to show the prescience of Schumacher's ideas about the environment and economic policy and provide examples of people, cooperatives, and companies attempting to shape business around people, instead of people around business.
Collins English Dictionary defined the term as "the social science concerned with the production and consumption of goods and services and the analysis of the commercial activities of a society." According to this conventional definition, people are either producers or (as individuals, more likely) consumers of goods and services. For Schumacher, this understanding of personhood is clearly incomplete. The discipline of economics must be ordered to an end that is determined by factors more than purely economic.If economics asks and answers questions solely based on economic output and spending, individuals and communities should carefully consider how much emphasis economic measurements and predictions should guide political and development policies. Rather than asking, how can we make more money, we should be asking, how can we create an environment in which people can flourish? In this way, Small Is Still Beautiful reminded me of The Blue Zones of Happiness.
Pearce highlights how emphasizing rampant economic growth leads directly to environmental destruction.
The worship of economic growth as an end in itself is based on the highly questionable assumption that there are no limits to the planet's ability to sustain it. Yet none of these pressing issues are addressed by conventional economics. It doesn't have the answers because it doesn't even ask the questions.He traces the development of mega-corporations in America to the 1890 Sherman Antitrust Act.
The passing of this act in America, and the absence of anything similar in Europe, was to tip the scales of advantage firmly in America's favor: not, however, because the act succeeded but because it failed.Instead of colluding with smaller companies to control markets, the large ones bought or merged themselves into complete control. Though he acknowledges most economists favor unmitigated economic growth, Pearce and Schumacher argue we must ask about more than just the material. Pearce poses questions like:
- Does money buy happiness?
- Can material possessions prevent personal sorrow or suffering?
- Does everything have its price, or are some things priceless?
Later he says:
If economics was to play any meaningful part in solving the most pressing problems facing humanity and the planet it would have to look beyond the purely economic to the wider questions of life which give economics its purpose. In other words, to become truly relevant, economics must look beyond itself: the "how" of economics needs to be reconciled with the "why" of human existence.Schumacher divided this meta-economics into three areas: consideration of its purpose, assessing qualitative aspects of life, and expanding the concept of mankind beyond material well-being.
Conventional economics, obsessed with perpetual growth, has no concept of "enough." [...] And although there are poor societies that have too little, there are no rich societies saying that they have enough, still less that they have too much.Chapter seven introduces the idea of subsidiarity based on Pope Pius XI's encyclical Quadragesimo Anno. This important Catholic idea should inform us as we assess governmental policies. Contrary to most of our current policies, we should be creating economic environments that encourage small businesses and discourage rampant growth and mergers.
In short, inverse economies of scale should prevail.This may decrease a nation's measurements of earnings and spendings, but Pearce and Schumacher argue (with Pope Pius XI) that subsidiarity provides an environment in which men and women and families can better flourish, even if they don't have as much capital.
Pearce explores more human-based economics through a handful of "case-studies," looking in-depth at areas like organic farming, the growth of local breweries, and the Scott Bader Commonwealth. While pertinent, they seemed rambling with far too many numbers from the 1980s and early 1990s. They would be more powerful if more succinct and a focus on recent (as of 2006, when the book was published) data. I wonder what Pearce thinks of the number of massive corporations acquiring organic companies. He might have written something on it recently, but when I tried searching I mostly found links to Small Is Still Beautiful.
Sadly, one of the cooperatives highlighted, Equity Shoes, closed in December 2008, citing debt and competition from "competition from cheap imports." It was purchased by Pavers but I can't tell if it's still a cooperative or if they are just using the brand.
I think this book is a little long (and long-winded in parts) for First Son to read all of it, but I think it's an important part of what I want him to consider as he studies economics. Therefore, I intend to assign selected chapters from the book, asking him to narrate them. If he is interested, he is welcome to read the whole book. (He won't, but I suppose other students might.)
I selected the chapters in which I had highlighted the most. I don't know how useful that will be to others, but here's the list I think we'll use:
- Chapter I: Beginnings and Ends - how economics does not currently serve humans
- Chapter II: Malignant Growth - how large companies came to dominate our economic development and shape our policies
- Chapter V: Mechanistic and Materialistic - how economics should look beyond itself
- Chapter VII: The Cult of Bigness - which introduces the idea of subsidiarity
- Chapter XVIII: Ends and Beginnings - the role of science and technology
I purchased this book used and have received nothing in exchange for this post; all opinions are my own. Links above to Amazon are affiliate links.
