Small is beautiful - introduction

“Large-scale problems do not require large-scale solutions; they require small-scale solutions within a large-scale framework.” – David Fleming

What is ‘small is beautiful’?

Small is beautiful’ is a philosophy that favours small shops and restaurants rather than enormous supermarkets and chains; small farms and smallholdings rather than huge monoculture agribusiness; local businesses and mutual credit networks rather than multinational corporations and banks, and so on.

The reasoning is that the scale of large businesses subverts democracy, damages nature, provides unfulfilling work and blandness instead of uniqueness. ‘Small is Beautiful’ was the title of a 1973 book by E. F. Schumacher, who went on to found the Intermediate Technology Development Group (now Practical Action), helping to set up small enterprises in poor countries.

The introduction of plantations and factories, producing for multinational corporations, into those countries destroys small farms and businesses and forces people into grindingly boring, unskilled and exhausting work for very little money, with profits exported out of the country. The scale means that they are capital-intensive rather than labour-intensive, which means that small businesses can’t compete when it comes to the capital investment required, and that millions of small farmers are forced off their land and into urban slums and unemployment.

Criticisms of specific industries are often actually criticisms of scale. For example, the corporate meat industry is a problem, but a few animals on a smallholding isn’t; local, small-scale anaerobic digestion is fine, the giant AD industry isn’t.

Distributism

‘Distributism’ was an early 20th-century movement urging that wealth and power be spread thinly through society, not concentrated in corporations or the state. In capitalism, the ‘means of production’ (land, tools, factories, offices, machinery etc.) are mainly owned by large businesses, and under socialism, the means of production are mainly (or completely) owned by the state. In a distributist society, everyone owns the means of production, either individually, or in partnership / co-operatively with other people.

So small farmers own their land and equipment, self-employed plumbers own their tools, shopkeepers own their premises, small manufacturers own their machinery etc. It’s not about redistributing wealth, it’s about redistributing ownership of the means of production, so that people can generate their own wealth.

Distributism actually has conservative (and Catholic) roots. In 1891, Pope Leo XIII issued a statement, the Rerum Novarum, that criticised both communism and unrestricted capitalism, and stressed the need to spread the ownership of property thinly. In the first half of the 20th century, G. K. Chesterton and Hilaire Belloc (both Catholic, but influenced by the growing co-operative movement in Britain) turned it into a political movement. Dorothy Day and the Catholic Worker Movement came on board in the middle of the century, along with socialists who were unimpressed with developments in Stalin’s Soviet Union.

Neither left nor right

The ‘smallist’ message to the left is that collective ownership of the means of production works well on the small, local scale, where people know each other (co-ops, commons etc.), but not at the large scale because trust is lost, it becomes overly bureaucratic, alliances are made with big business, and it can end up concentrating power in very few hands.

The message to the right is that private ownership of the means of production works well on the small, local scale (small businesses and shops, smallholdings, family firms, self-employment etc.) but not at the large scale – again, because it concentrates power.

Politically, it’s about the principle of subsidiarity – that decisions should be made at the lowest, most local level that can deal with them. That’s it – it’s not about destroying competition or the market. The opposite of competition is not co-operation or collectivism, it’s monopoly.

The role of the state

‘Giantism’ can’t happen without state intervention. As a company grows, internal bureaucracy and communication channels become further removed from the market, and they become inefficient and slow to react compared to small companies. Plus their distribution networks get bigger, with higher transport costs. The state helps large institutions to externalise their internal inefficiencies and costs, so that the taxpayer ends up paying for the things that are labelled ‘economies of scale’.

The taxpayer pays for the roads, high-speed rail, airports and communications to allow big business to spread; the military to help them force their way into other countries; the environmental costs, whether they can be cleaned up or not; education, health care and sickness pay for their workers; their research and development; and even for bailing them out if they fail. Also, compliance with growing state legislation is more burdensome for smaller organisations than for large ones.

The same tendency towards giant organisations happens in nationalised industries in more socialist-leaning countries, and even in the co-operative sector. The Co-op Bank would not have stumbled and been swallowed by a hedge fund if it had remained a federation of small co-op banks in every town, rather than merging into one giant institution. ‘Giantism’ produces the same problems whether corporate, state or co-operative.

Credit clearing and mutual credit

Credit clearing and mutual credit are ways for trusted networks of small businesses to reduce their need for giant banks, or even money. They provide ways for local businesses to support each other, and to survive in times of economic crisis.

What are the benefits of ‘small is beautiful’?

• We get better-quality products, food, housing etc.
• Smallness involves principles of freedom, independence and responsibility beloved by the right and principles of unity, equality and mutual support beloved by the left – all fine principles.
• More interesting and creative jobs that promote independence, responsibility and dignity – with apprenticeships to learn fulfilling trades.
• Humans are happier in human-scale institutions and communities.
• Better value for money. If mass-produced corporate goods carried the full price of the damaged lives and damaged environments they cause, they’d be much more expensive than locally-produced goods. We have to make our choices.
• Smallholdings and small farms produce more food per hectare than large monoculture farms, and don’t destroy the biosphere like industrial ag does.

• Helps solve the democracy problem.
• Stronger, safer communities, more interesting High Streets, unique localities.
• Corporations suck money out of communities to pay distant shareholders, and ensure that we have to chase perpetual growth to give shareholders back more than they put in. The move from ‘one person, one vote’ to ‘one share, one vote’ is the true source of the lack of democracy in capitalism (communism removes democracy by a more direct route).
• ‘Smallism’ can support a free market, but not the giant casino that is the global stock market. It rewards people for the work they do, not how much money they have. Business people own enough to run their business, but not to dominate an industry.
• Farmers own enough land to produce food for the local market, not huge tracts of land that prevent other potential small farmers from having any. Land is the ultimate zero sum game. You can’t have any if I have it all.
• No business would be ‘too big to fail’, and require taxpayers’ money to bail them out.
• Smallness is good for employment; unemployment causes psychological and social problems.

What can I do?

First, read Schumacher’s seminal 1973 work, Small is Beautiful (free online or free pdf). There are many more sources of information online (search Schumacher or Small is Beautful); and you can support the principle with both your consumption and your production / work.

Consumption

If small businesses are to prosper there has to be a body of people prepared to support them by buying what they’re offering, rather than giving money to the corporate sector. So:

• use local shops, markets, independent restaurants, small businesses and co-ops rather than large supermarkets or chains;
• in those shops, try to buy goods produced locally and by small businesses, rather than large brands;
• use credit unions or building societies rather than big banks;
• get a veg box delivery, or use a farmers’ market to support local food producers.

With some products and services this will be difficult (cars, phones, laptops), but let’s do what we can now and see what develops. 3D printing may help obviate the need for large amounts of capital and huge factories.

Production

Some production lends itself to the household scale (growing veg, keeping bees or chickens), and some to the community scale. For example, it makes much more sense for a community to support a bakery, potter, blacksmith etc, rather than individual households doing those things for themselves. For local consumption, there has to be a range of local, small businesses to consume from. So:

• Re-skill
• Start a small business
• Downshift (to cope with any reduction in income)

If you just want to escape the rat race right now, but don’t have the skills or the ideas to start your own business, then go WWOOFing. You could get new ideas, gain new skills and meet new people who could help you change direction.

You can do something for yourself first, then friends and family, and if you enjoy it (and are good at it), start to do it for your community. Consider trading via a local mutual credit network, where local producers commit to buy from each other (and if there isn’t one, contact us to talk about starting one).

We think it’s something we have to do ourselves. Governments are corporate-controlled, subsidise the corporate sector, ignore their tax avoidance, invite corporate leaders into government, accept their money, talk to their lobbyists, introduce corporate-friendly legislation, and bail them out with our money if they fail.

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The specialist(s) below will respond to queries on this topic. Please comment in the box at the bottom of the page.

Ian Roderick is the director of The Schumacher Institute for Sustainable Systems in Bristol, UK. The institute is an independent fellowship that promotes systems thinking and the ideas of E. F. Schumacher, author of Small is Beautiful. Through the institute he has taken part in numerous research projects and consultancies, where a systems approach was always an important ingredient. He has given many talks on Schumacher and system thinking.

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The views expressed here are those of the author and not necessarily lowimpact.org's

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