352 ^

t PERENNIAL UBRARY $3.95

E R Schumocher
SMALL IS BEAUTIFUL
Economics os lí People Mottered

±M
SMALL IS BEAUTIFUL
SMALL IS BEAUTIFUL
Economics as if People Mattered

E. F. SCHUMACHER

PERENNIAL LIBRARY
Harper & Row, Publishers
New York, Hagerstown, San Francisco, London
This book was originally publishcd by Blond & Briggs Ltd,
London, ¡n 1973. It ¡s here reprinted by arrangement. A hard-
cover edítion ís published by Harper & Row, Publishers, Inc.

SMALL BEAUTiFUL. Copyright

is ©
1973 by E. F. Schumacher.
Introduction copyright <g) 1973 by Harper & Row, Publishers,

Inc. All rights reserved. Printed in the United States of

America. No part of this book may be used or reproduced
in any manner without written permissíon except in the case
of brief quotations embodied in critical articles and reviews.
For information address Harper & Row, Publishers, Inc., 10
East 53d Street, New York, N.Y. 10022.

First Perennial Library edition published 1975

isbn: 0-06-080352-5 (paperback)

Designed by Eve Callahan

84 20 19
Few can contémplate without a sense of exhilara-
tion the splendid achievements of practical energy
and technical skill, which, from the latter part of
the seventeenth century, were transforming the
face of material civilisation, and of which England
was the daring, if not too scrupulous, pioneer. If,
however, economic ambitions are good servants,
they are bad masters.
The most obvious facts are the most easily
forgotten. Both the existing economic order and
too many of the projects advanced for reconstruct-
ing it break down through their neglect of the
truism that, since even quite common men have
souls, no Lacrease in material wealth will com-
pénsate them for arrangements which insult their
self-respect and impair their freedom. A reason-
able estímate of economic organisation must
allow for the fact that, unless industry is to be
paralysed by recurrent revolts on the part of out-
raged human nature, it must satisfy criteria which
are not purely economic.
R. H. Tawney
Religión and the Rise of Capitalism

By and large, our present problem is one of atti-

tudes and implements. We are remodelling the

Alhambra with a steam-shovel, and are proud of
our yardage. We shall hardly relinquish the shovel,
which after all has many good points, but we are
in need of gentler and more objective criteria for
its successful use.
Aldo Leopold
A Sand County Almanac
 Contents

Introduction by Theodore Roszak 1

PART I THE MODERN WORLD

1. The Problem of Production 13
2. Peace and Permanence 23
3. The Role of Economics 40
4. Buddhist Economics 53
5. A Question of Size 63

PART II RESOURCES
1. —
The Greatest Resource Education 79
2. The Proper Use of Land 102
3. Resources for Industry 118
4. Nuclear Energy —Salvation or Damnation? 134
5. Technology with a Human Face 146

PART m THE THIRD WORLD

1. Development 163
2. Social and Economic Problems Calling
for the Development of
Intermedíate Technology 171
3. Two Million Villages 191
4. The Problem of Unemployment in India 206

vii
 PART IV ORGANISATION AND OWNERSHIP
1.

2.

3.

4.

5.
 Introduction
Theodore Roszak

For nearly two centuries —

since Adam Smith published his
—
Weálth of Naíions in 1776 economists have been adver-
tising themselves to the world ^as the most rigorous and
successful of all the social scientists. The aspiratíon has
transcended ideological boundaries. Whatever Marx and
Engeis may have rejected in the "dismal science" of David
Ricardo and Nassau Sénior, they never for a moment
doubted that economics did indeed rank among the sci-
ences. So they named their socialism "scientific" and haíled
it as a breakthrough rivaling Darwin's achievement in
biology.
I suppose we must, as of the 1970s, regard the econo-
mists' long-standing claim as vindicated, at least in the
opinión of as official an intellectual consensus as the world
ever musters in such matters. For in 1969 the Nobel Prize
for "economic science" was established, an event that
finally allows the economists to take their place beside the
physicists, and biologists. Justifying the new
chemists,
award on behalf of the Nobel Committee, Frofessor Erik
Lundberg observed that "economic science has developed
increasingly in the direction of a mathematical specification
and statistical quantification of economic contexts.*' Its

*'techniques mathematical and statistical analysis,"

of
Lundberg explained, have "proved successful" and have
left far behind "the vague, more literary type of econom-
íes" with which most laymen may be familiar. The initial
prize was then given to two European economists whose
aim had been "to lend economic theory mathematical
stringency and to render it in a form that permits empirical
quantification and a statistical testing of hypotheses."
In so honoring the economists, the Nobel Committee
was doing no more than endorsing a conception of eco-
nomics that decisión makers in govemment and business
have held and acted upon at least since World War II.
Other not-yet-scientific-enough behavioral scientists might
envy the economists their status as Nobel laureates, but
even more so they are apt to covet them their privileged
access to the corridors of power. Today there is no govem-
ment in any industrial society which does not have its
counterpart of the American Council of Economic Advi-
sors, where economic policy can supposedly be formulated
with all the professional precisión attending the discussion
of purely technical or scientific questions. Under the tute-
lage of their economic counselors, political leaders manipú-
late discount rates and the money supply with all the
confidence of space scientists at Cape Kennedy pushing the
buttons and throwing the switches which guide rocket ships
to the moon and home. Like the physicists, engineers, and
operations analysts, the economists have become an indis-
pensable part of the new industrial state's panoply of
expertise. How many of us can even imagine a presidential
press conference on the state of the economy where a
surplus of Professor Lundberg's "mathematical specifica-
tion and statistical quantification" is not the order of the
day?
For those to whom economics means a book filled with
numbers, charts, graphs, and formulae, together with much
heady discussion of abstract technicalities like the balance
of payments and gross national product, this remarkable
collection of essays is certain to come either as a shock or
a relief. E. F. Schumacher*s economics is not part of the
dominant style. On the contrary, his delibérate intention is
to subvert "economic science** by calling its every assump-
tion into question, right down to its psychological and
metaphysical foundations.
Perhaps this sounds like a project that only a brash
amateur would take on. But this book is the work of as
professional and experienced an economist as any who
bears the credentials of the guild. Schumacher has been a
Rhodes Scholar an economic advisor to the
in economics,
British Control Commission in postwar Germany, and, for
the twenty years prior to 1971, the top economist and
head of planning at the British Coal Board. It is a back-
ground that might suggest stuffy orthodoxy, but that would
be exactly wrong. For there is another side to Schumacher,
and it is there we find the visión of economics reflected in
these pages. It is an intriguing mix: the president of the
Soil Association, one of Britain's oldest organic farming
organizations; the founder and chairman of the Intermedí-
ate Technology Developmcnt Group, which specializes in
tailoring tools, small-scale machines, and methods of pro-
duction to the needs of developing countries; a sponsor of
the Fourth Worid Movement, a British-based campaign
for political decentralization and regionalism; a director of
the Scott Bader Company, a pioneering effort at common
ownership and workers* control; a cióse student of Gandhi,
nonviolence, and ecology. For more than two decades,
Schumacher has been weaving his economics out of this
off-beat constellation of interests and commitments and
giving his ideas away from the platforms of peace, social
justice, do-good, and third world organizations over all

Europe. With few exceptions, the principal forums for his

writing have been those little, intensely alive, pathfinding
joumals (like MANAS in America and Resurgence in
England) which more than make up for their limited
audience by being ten years ahead of the field in the
quality of their thought.
As all this should make clear, Schumacher's work
belongs to that subterranean tradition of organic and
decentralist economics whose major spokesmen include
Prince Gustav Landauer, Tolstoy, William
Kropotkin,
Morris, Gandhi, Lewis Mumford, and, most recently, Alex
Comfort, Paul Goodman, and Murray Bookchin. It is the
tradition we might cali anarchism, if we meanby that
much abused word a libertarían political economy that
distinguishes itself from orthodox socialism and capitalism
by insisting that the scale of organization must be treated
as an independent and primary problem. The tradition,
while closely aflfiliated with socialist valúes, nonetheless
prefers mixed to "puré" economic systems. It is therefore
hospitable to many forms of free enterprise and prívate
ownership, provided always that the size of prívate enter-
príse is not so large as to divorce ownership from personal
involvement, which is, of course, now the rule in most of

the world's administered capitalisms. Bigness is the nemesis

of anarchism, whether the bigness is that of public or
prívate bureaucracies, because from bigness comes imper-
sonality, insensitivity, and a lust to concéntrate abstract
power. Henee, Schumacher's title, Small Is Beautiful. He
might just as well have said "small is free, efficient, crea-
tive, enjoyable, enduring" — ^for such is the anarchist faith.
Reaching backward, this tradition embraces communal,
handicraft, tríbal, guild, and village life-styles as oíd as the
it is not an ideology at
neolithic cultures. In that sense,
all,but a wisdom gathered from historícal experience. In
our own time, it has reemerged spontaneously in the com-
munitarían experíments and honest craftsmanship of the
counterculture, where we find so many desperate and often
resourceful efforts among young dropouts to make do in
simple, free, and self-respecting ways amid the criminal
waste and manageríal congestión. How strange that this
renewed interest in ancient ways of livelihood and commu-
nity should reappear even as our operations researchers
begin to conceive their most ambitious dreams of cyber-
nated glory. And yet how appropriate. For if there is to be
a humanly tolerable world on tíiis dark side of the emer-
gent technocratic world-system, it wül surely have to
flower from this still fragüe renaissance of organic hus-
bandry, communal households, and do-it-yourself technics
whose faint outlines we can trace through the pages
first

of publications like the Whole Earth Catalog, the Mother

Earth News, and the People's Yellow Pages. And if that
renaissance is to have an economist to make its case before
the world, E. F. Schumacher is the man. Already his
brílliant essay *'Buddhist Economics" has become a much-
read and often-reprinted staple of the underground press.
It would be no exaggeration to cali him the Keynes of
postindustríal society,by which I mean (and Schumacher
means) a society that has left behind its lethal obsession
with those very megasystems of production and distribu-
tion which Keynes tríed so hard to make manageable.
The first example of Schumacher's work I carne across
was an informal talk he gave in the mid-sixties on the
practicality of Gandhi's economic program in India. I was
at the time editing a small pacifist weekly in London
(Peace News) and was on the lookout for anything about
Gandhi I could find. But here was a viewpoint I had never
heard expoimded even by ardent Gandhians, most of
whom bnished over Gandhi's concern for village life and
the spinning wheel as if it were the once regrettable folly
of an otherwise great and important man. Not so of
Schumacher. Step by step, he spelled out the essential
good sense of a third world economic policy that rejected
imitation of Western models: breakneck urbanization,
heavy capital investments, mass production, centralized
development planning, and advanced technology. In con-
trast, Gandhi's scheme was to begin with the villages, to

stabilize and enrich their traditional way of life by use of

labor-intensive manufacture and handicrafts, and to keep
the nation*s economic decisión making as decentralized as
possible, even if this slowed the pace of urban and indus-
trial growth to a crawl.

From the standpoint of conventional economics, this

 —
sounds like a prescription for starvation. It is not that at
all.Schumacher's point was that Gandhi's economics, for
all its lack of professional sophistication (or perhaps for
that very reason) was nonetheless the product of a wise
soul, one which shrewdly insisted on moderation, preserva-
tion, and gradualism, on the assumption that to seek
"progress'* by releasing cataclysmic social change is only
way to demoralize the many and make them the helpless^
dependents of the rich and expert few. And even then, it
may not be a way to feed the hungry. Gandhi's economics
started (and finished) with people, with their need for
strong morale and their desire to be self-determining
objectives which headlong development can only thwart.
As Schumacher points out, "poor countries slip, and are
pushed, into the adoption of production methods and con-
sumption standards which destroy the possibilities of self-
reliance and self-hetp. The results are unintentional
neocolonialism and hopelessness."
It is typical of Schumacher that he should take Gandhi's

economic principies seríously, as much in dealing with the

advanced industrial countries as in discussing the third
world. In doing so, he endorses much that his profession
has written off with unexamined self-assurance. But then,
economists, for all their purported objectivity, are the most
narrowly ethnocentric of people. Since they are univer-
sally urban intellectuals who understand Jittle of rural
ways, they easily come to regard the land, and all that
Uves and grows upon it, as nothing mqre than another
factor of production. Henee, it seems to them no loss, but
indeed a gain, to tum all the world's farming into high-
yield agri-industry, to depopulate the rural áreas, and to
crowd the cities to the point of chronic breakdown and
crisis. Since they inherit their conception of work from the
darkest days of early industrialization, they find it impóssi-
ble to believe that labor might ever be a freely-chosen,
nonexploitive, and creative valué in its own right. Henee, it
seems to them self-evident that work must be eliminated
in favor of machines or cybernated systems. Worst of all,
since their world view is a cultural by-product of industri-

alism, they automatically endorse the ecological stupidity

of industrial man and his love affair with the terrible sim-
plicities of quantification. They thus overlook or distort the
incommensurable Schumacher*s
qualities of life, especially
holy trinity of "health, beauty, and permanence."
Such an ethnocentric, Western economics must clearly
be as devastating for the underdeveloped countries which
import its visión of life as for the developed societies
which originated it. Today in poor nations everywhere we
find far too many Western and Soviet financed projects
like the African textile factory Schumacher describes:
industries demanding such advanced expertise and such
refined materials to finish their luxurious products that they
cannot employ local labor or use local resources, but must
import skills and goods from Europe and America. In
Ghana the vast Volta River power project, built with
American money at high interest, provides Kaiser Alumi-
num with stupendously cheap electricity contracted at a
long-term low pnce. But no Ghanaian bauxite has been
used by Kaiser, and no aluminum plants have been built in
the country. Instead, Kaiser imports its aluminum for
processing and sends it to Germany for finishing. Else-
where we find prestigious megaprojects like Egypt's Aswan
high dam, built by Russian money and brains to produce
a level of power far beyond the needs of the nation's
economy, that meanwhile blights the environment and the
local agriculture in a dozen unforeseen and possibly insolu-
ble ways. Or consider the poor countries that sell them-
selves to the intemational tourist industry in pursuit of
those symbols oí wealth and progress the West has taught
them tacovet: luxurious airports, high-rise hotels, six-lane
motor ways. Their people wind up as bellhops and sou ve-
nir sellers, desk clerks and entertainers, and their proudest
traditions soon degenerate into crude caricatures. But the
balance sheet may show a marvelous increase in foreign-
exchange earaings. As for the developed countries from
which this comipting ethos of progress goes out: more
and more their "growthmania" distorts their environments
and robs the world of its nonrenewable resources for no
better end than to increase the output of ballistic missiles,
electric hairdryers, and eight-track stereophonic tape
recorders. But in the statistics of the economic index such
mad waste measures out as "productivity," and all looks
rosy.
What kind of economics can treat all this as anything
more than childish nonsense or criminal prodigality? The
answer an economics that has no higher idea of what
is:

people are here on earth to be and to do than was

bequeathed to it by Andrew Ure and Samuel Smiles and
that has long since translated that debased conception of
humanity into the objective quantities of its science, as if
to quantify benightedness were to dignify it.
•The great majority of economists," Schumacher
laments, "are still pursuing the absurd ideal of making
their *science' as scientific and precise as physics, as if
there were no qualitative difference between mindless
atoms and men made in the image of God." He reminds
US that economics has only become scientific by becoming
statistical. But at the bottom of its statistics, sunk well out

of sight, are so many sweeping assuraptions about people

like you and me —
about our needs and motivations and
the purpose we have given our lives. Again and again
Schimiacher insists that economics as it is practiced today
— whether it is socialist or capitalist economics is a —
"derived body of thought." It is derived from dubious,
"meta-economic" preconceptions regarding man and
nature that are never questioned, that dare not be ques-
tioned if economic science is to be the science it purports
to be rather than (as it should be) a humanistic social
wisdom that trusts to experienced intuition, plays by ear,
and risks a moral exhortation or two.
What, then, if those preconceptions are obsolete? What

8
i£ they were never correct? What if there stir, in all those
expertly quantified millions of living souls beneath the
statistical surface, aspirations for creativity, generosity,
brotherly and sisterly cooperation, natural harmony, and
self-transcendence which conventional economics, by vir-
tue of a banal misantbropy it mistakes for "being realis-
tic," only works to destroy? (and there is no
If that is so
doubt in my mind that it is), then it is no wonder the
policies which stem from that economics must so often be
made to work, must be forced down against resistance
upon a confused and recalcitrant human material which
none daré ever consult except by way of the phony plebis-
cite of the marketplace, which always tums out as pre-
dicted because it is rigged up by cynics, voted by
demoralized masses, and tabulated by opportunists. And
what sort of science is it that must, for the sake of its
predictive success, hope and pray that people will never
be their better selves, but always be greedy social idiots
with nothing finer to do than getting and spending, getting
and spending? It is as Schumacher tells us: **when the
available *spiritual space* is not filled by some higher
motivations, then it will necessarily be filledby something
lower —by mean, calculating attitude to life
the small,
which is economic calculus."
rationalized in the
If that is so, then we need a nobler economics that is
not afraid to discuss spirit and conscience, moral purpose
and the meaning of life, an economics that aims to edú-
cate and elévate people, not merely to measure their low-
grade behavior. Here it is.
 PART I

The Modern World

 7
The Probiem of Production

One of the most fateful errors of our age is the belief that
"the probiem of production" has been solved. Not only is

held by people remote from production

this belief firmiy
and therefore professionally unacquainted with the facts
— it is held by virtually all the experts, the captains of

industry, the economic managers in the govemments of

the world, the academic and not-so-academic economists,
not to mention the economic joumalists. They may dis-
agree on many things but they all agree that the probiem
of production has been solved; that mankind has at last
come of age. For the rich countries, they say, the most
important task now "education for leisure" and, for the
is

poor countries, the "transfer of technology."

That things are not going as well as they ought to be
going must be due to human wickedness. We must there-
fore constract a political system so perfect that human
wickedness disappears and everybody behaves well, no
matter how much wickedness there may be in him or her.
In fact, it is widely held that everybody is born good; if
one turas into a criminal or an exploiter, this is the fault
of "the system." No doubt "the system" is in many ways
bad and must be changed. One of the main reasons why
it is bad and why it can still survive in spite of its badness,

is this erroneous view that the "probiem of production"

has been solved. As this error pervades all present-day

13
systems there is at present not much to choose between
them.
The arising of this error, so egregious and so finnly
rooted, is closely cormected with the philosophical, not to
say religious, changes during the last three or four cen-
turies in man's attitude to nature. I should perhaps say:
Western man's attitude to nature, but since the whole
world is now in a process of westemisation, the more
generalised statement appears to be justified. Modem man
does not experience himself as a part of nature but as
an outside forcé destined to domínate and conquer it. He
even taiks of a battle with nature, forgetting that, if he
won the battle, he would find himself on the losing side.
Until quite recently, the battle seemed to go well enough
to give him the illusion of unlimited powers, but not so
well as to bring the possibility of total victory into view.
This has now come into view, and many people, albeit
only a minority, are beginning to realise what this means
for the continued existence of humanity.
The illusion of unlimited powers, nourished by astonish-
ing scientific and technological achievements, has pro-
duced the concurrent illusion of having solved the
problem of production. The latter illusion is based on the
failure to distinguish between income and capital where
this distinction matters most. Every economist and busi-
nessman is familiar with the distinction, and applies it
conscientiously and with considerable subtlety to all eco-
—
nomic affairs except where it really matters: namely,
the irreplaceable capital which man has not made, but
simply found, and without which he can do nothing.
A businessman would not consider a firm to have
solved its problems 9f production and to have achieved
viability if he saw that it was rapidly consuming its
capital. How, then, could we overlook this vital fact
when it comes to that very big firm, the economy of
Spaceship Earth and, in particular, the economies of its

rich passengers?

14
 One reason for overlooking this vital fact is that we are
estranged from reality and inclined to treat as valueless
everything that we have not made ourselves. Even the
great Dr. Marx fell into this devastating error when he
formulated the so-called "labour theory of valué.'* Now
we have indeed laboured to make some of the capital
—
which today helps us to produce a large fund of scien-
tifíc, technological, and other knowledge; an elabórate
physical infrastructure; innumerable types of sophisti-
cated capital equipment, etc. —
but all this is but a smaU
part of the total capital we are using. Far larger is the
capital provided by nature and not by man —
and we do
not even recognize it as such. This larger part is now
being used up at an alarming rate, and that is why it is an
absurd and suicidal error to believe, and act on the belief,
that the problem of production has been solved.
Let US take a closer look at this "natural capital.**
First of all, and most obviously, there are the fossil fuels.
No one, I am sure, will deny that we are treating them
as income ítems although they are undeniably capital
ítems. If we treated them as capital ítems» we should be
concemed with conservation; we should do everything ín
oür power to try and minimize their current rate of use;
we might be saymg, for instance, that the money
obtained from the. realisation of these assets — these
irreplaceable assets — ^must be placed into a special fund
to be devoted exclusívely to the evolution of production
methods and pattems of livíng which do not depend on
fossil fuels at all or depend on them only to a very slight
extent These and many other things we should be doing
íf we treated fossil fuels as capital and not as income.

And we do not do any of them, but the exact contrary

of every one of them: we are not in the least concemed
with conservation; we are maximising, instead of mini-
mising, the current rates of use; and, far from being
ínterested in studying the possibilitíes of altemative meth-
—
ods of production and pattems of líving so as to get

15
off the colusión course on which we are moving with
ever-increasing speed —we happily
talk of unlimited prog-
ress along the beaten track, of "education for leisure"
in the rich countries, and of **the transfer of technology"
to the poor countries.
The liquidation of these capital assets is proceeding
so rapidly that even in the allegedly richest coimtry in
the world, the United States of America, there are many
worried men, right up to the White House, calling for the
massive conversión of coal into oil and gas, demanding
ever more gigantic efforts to search for and exploit the
remaining treasures of the earth. Look at the figures that
are being put forward under the heading "World Fuel
Requirements in the Year 2000." If we are now using
something like 7000 million tons of coal equivalent, the
need in twenty-eight years' time will be three times as
large —around 20,000 million tons What are twenty-eight
I

years? Looking backwards, they take us roughly to the

end of World War II, and, of course, since then fuel
consumption has trebled; but the trebling involved an
increase of less than 5000 million tons of coal equivalent.
Now we are calmly talking about an increase three times
as large.
People ask: Can it be done? And the answer comes
back: It must be done and therefore it shall be done. One

might say (with apologies to John Kenneth Galbraith)

that it is a case of the bland leading the blind. But why
cast aspersions? The question wrong-headed,
itself is

because it carnes the implicit assumption that we are

dealing with income and not with capital. What is so
special about the year 2000? What about the year 2028,
when little children running about today will be planning
for their retirement? Another trebling by then? All these
questions and answers are seen to be absurd the moment
we realise that we are dealing with capital and not with
income: fossil fuels are not made by men; they cannot
be recycled. Once they are gone they are gone for ever.

16
 — —
But what it will be asked about the income fuels?
Yes, índeed, what about tbem? Cuirently, they contribute
(reckoned in calones) less than four per cent to the worid
total. In the foreseeable future they will have to contrib-
ute seventy, eighty, ninety per cent. To do something on
a small scale one thing: to do it on
is a gigantic scale is

quite another, and to make an impact on the world fuel

problem, contributions have to be truly gigantic. Who will

say that the problem of production has been solved

when it comes to income fuels required on a truly gigantic
scale?
Fossil fuels are merely a part of the "natural capital"
which we steadfastly insist on treating as expendable, as
if it were income, and by no means the most important

we squander our fossil fuels, we threaten civilisa-

part. If
tion; if we squander the capital represented by living
but
nature around us, we threaten life itself. People are
waking up to this threat, and they demand that pollution
must stop. They think of pollution as a rather nasty habit
indulged in by careless or greedy people who, as it were,
throw their rubbish over the fence into the neighbour's
garden. A more civilised behaviour, they realise, would
incur some extra cost, and therefore we need a faster
rate of economic growth to be able to pay for it. From
now on, they say, we should use at least some of the
fniits of our ever-increasing productivity to improve "the
quality of life" and not merely to increase the quantity
of consumption. All this is fair enough, but it touches
only the outer fringe of the problem.
To get to the crux of the matter, we do well to ask
—
why it is that all these terms pollution, environment,
ecology, etc.—have so suddenly come into prominence.
After all, we have had an industrial system for quite
some time, yet only five or ten years ago these words
were virtually unknown. a sudden fad, a silly
Is this
fashíon, or perhaps a sudden failure of nerve?
The explanation is not difficult to find. As with fossil

17
fuels, we have indeed been living on the capital of living
nature for some time, but at a fairly modest rate. It is
only since the cnd of World War II that we have
succeeded in increasing this rate to alarming proportions.
In comparíson with what is going on now and what has
been going on, progressively, during the last quarter of a
century, all the industrial activities of mankind up to, and
including, World War n are as nothing. The next four or
five years are likely to see more industrial production,
taking the worid as a whole, than all of mankind accom-
plished up to 1945. In other words, quite recently — so
recently that most of us have hardly yet become con-
scious of it — there has been a unique quantitative jimip
in industrial production.
Partly as a cause and also as an effect, there has also
been a unique qualitative jump. Our scientists and tech-
nologists have leamed to compound substances unknown
to nature. Against many of them, nature is virtually
defenceless. There are no natural agents to attack and
break them down. It is as if aborigines were suddenly
attacked with machine-gun fire: their bows and arrows
are of no avail. These substances, imknown to nature,
owe their almost magical effectiveness precisely to
nature's defencelessness —
and that accounts also for theii
dangerous ecological impact. It is only in the last twenty
years or so that they have made their appearance in bulk.
Because they have no natural enemies, they tend to
accumulate, and the long-term consequences of this
accumulation are in many cases known to be extremely
dangerous, and in other cases totally unpredictable.
In other words, the changes of the last twenty-five years,
both in the quantity and in the quality of man's industrial
processes, have produced an entirely new situation a situ- —
ation resulting not from our failures but from what we
thought were our greatest successes. And this has come so
suddenly that we hardly noticed the fact that we were very
rapidly using up a certain kind of irreplaceable capital

18
asset, namely the tolerance margins which benign nature
always provides.
Now let me retum
to the question of "income fuels"
with which had previously dealt in a somewhat cavalier
I

manner. No one is suggesting that the world-wide indus-

trial system which is being envisaged to opérate in the year

2000, a generation ahead, would be sustained primarily by

water or wind power. No, we are told that we are moving
rapidly into the nuclear age. Of course, this has been the
story for quite some time, for over twenty years, and yet,

the contribution of nuclear energy to man's total fuel and

energy requirements is still minute. In 1970, it amounted
to 2.7 per cent in Britain; 0.6 per cent in the European
Community; and 0.3 per cent in the United States, to men-
tion only the countries that have gone the furthest. Perhaps
we can assume that nature's tolerance margins will be able
to cope with such small impositions, although there are
many people even today who are deeply worried, and Dr.
Edward D. David, President Nixon's Science Adviser,
talking about the storage of radioactive wastes, says that
"one has a queasy feeling about something that has to stay
underground and be pretty well sealed off for 25,000
years before it is harmless."
However that may be, the point I am making is a very
simple one: the proposition to replace thousands of mil-
lions of tons of fossil fuels,, every year, by nuclear energy
means to "solve" the fuel problem by creating an environ-
mental and ecological problem of such a monstrous mag-
nitude that Dr. David will not be the only one to have "a
queasy feeling." It means solving one problem by shifting
itto another sphere — there to créate an infinitely bigger
problem.
Having said this, I am sure that I shall be confronted
with another, even more daring proposition: namely, that
future scientists and technologists will be able to devise
safety rules and precautions of such perfection that the
using, transporting, processing and storing of radioactive

19
materials in ever-increasing quantities will be made entirely
safe; also that be the task of politicians and social
it will
scíentists to créate a world society in which wars or civil
disturbances can never happen. Again, it is a proposition
to solve one problem simply by shifting it to another
sphere, the sphere of everyday human behaviour. And this

takes US to the third category of "natural capital" which

we are recklessly squandering because we treat it as if it
were income: as if it were something we had made our-
selves and could easily replace out of our much-vaunted
and rapidly rising productivity.
Is it not evident that our current methods of production
are already eating into the very substance of industrial
man? To many people this is not at all evident. Now that
we have solved the problem of production, they say, have
we ever had it so good? Are we not better fed, better
clothed, and better housed than ever before —and better
educated? Of course we are: most, but by no means all,
of us: in the rich countries. But this is not what I mean by
"substance.'* The substance of man cannot be measured by
Gross National Product. Perhaps it cannot be measured at
all, except for certain symptoms of loss. However, this is

not the place to go into the statistics of these symptoms,

such as crime, drug addiction, vandalism, mental break-
down, rebellion, and so forth. Statistics never prove
anything.
I started by saying that one of the most fateful errors of
our age is the belief that the problem of production has
been solved. This illusion, I suggested, is mainly due to our
inability to recognise that the modern industrial system,
with all its intellectual sophistication, consumes the very
basis on which it has been erected. To use the language of
the economist, it lives on irreplaceable capital which it

cheerfuUy treats as income. I specified three categories of

such capital: fossil fuels, the tolerance margins of nature,
and the human substance. Even if some readers should

20
rcfuse to accept all three parts of my argument, I suggest
that any one of them suñices to make my case.
And what is my case? Simply that our most important
task is to get off our present colusión course. And who is
there to tackle such a task? I think every one of us,
whether oíd or young, powerful or powerless, rich or poor,
influential or iminfluential. To
about the future is
talk
useful only if it leads to action now. And what
can we do
now, while we are still in the position of "never having had
it so good"? To say the least —
which is already very much
— we must thoroughly understand the problem and begin
to see the possibility of evolving a new life-style, with new
methods of production and new pattems of consumption:
a life-style designed for permanence. To give only three
preliminary examples: in agriculture and horticulture, we
can interest ourselves in the perf ection of production meth-
ods which are biologically sound, build up soil fertility, and
produce health, beauty and permanence. Productivity will
then look after itself. In industry, we can interest ourselves
in the evolution of small-scale technology, relatively non-
violent technology, "technology with a human face," so
that people have a chance to enjoy themselves while they
are working, instead of working solely for their pay packet
and hoping, usually forlornly, for enjoyment solely during
their leisure time. In industr>', again —and, surely, industry
is the pace-setter of modem life —we can interest ourselves
in new forms of partnership between management and
men, even forms of common ownership.
We often hear it said that we are entering the era of
"the Learning Society." Let us hope this is true. We still
have to leam how to live peacefully, not only with our
fellow menbut also with nature and, above all, with those
Higher Powers which have made nature and have made
us; for, assurediy, we have not come about by accident and
certainly have not made ourselves.
The themes which have been merely touched upon in

21
this chapter wiÜ have to be further elaborated as we go
along. Few people will be easily convinced that the chal-
lenge to man's future cannot be met by making marginal
adjustments here or there, or, possibly, by changing the
political system.
The following chapter is an attempt to look at the whole

situation agam, from the angle of peace and permanence.

Now that man has acquired the physical means of self-
obliteration, the question ofpeace obviously looms larger
than ever before in human history. And how could peace
be built without some assurance of permanence with
regard to our economic life?

22
 2
Peace and Permanence

The dominant modern belief is that the soundest founda-

tion of peace would be universal prosperity. One may look
have regularly
in vain for historical evidence that the rich
been more peaceful than the poor, but then it can be
argued that they have never felt secure against the poor;
that their aggressiveness fear; and that the
stemmed from
situation would be quite everybody were rich.
diíferent if

Why should a rich man go to war? He has nothing to

gain. Are not the poor, the exploited, the oppressed most
likely to do so, as they have nothing to lose but their
chains? The road to peace, it is argued, is to follow the
road to riches.
This dominant modem belief has an almost irresistible
attraction, as it suggests that the faster you get one desira-
ble thing the more securely do you attain another. It is

doubly attractive because completely by-passes the whole

it

question of ethics: there is no need for renunciation or

sacrifice; on the contrary! We have science and technology
to help US along the road to peace and plenty, and all that
is needed is that we should not behave stupidly, irration-
ally, cutting into our own flesh. The message to the poor
and discontented is that they must not impatiently upset
or kill the goose that will assuredly, in due course, lay
golden eggs also for them. And the message to the rich is
that they must be intelligent enough from time to time to

23
help the poor, because this is the way by which they wiU
become richer still.
Gandhi used to talk disparagingly of "dreaming of sys-
tems so perfect that no one wiU need to be good." But is it
not precisely this dream which we can now implement in
reality with our marvellous powers of science and technol-
ogy? Why ask for virtues, which man may never acquire,
when scientific rationality and technical competence are all
that is needed?
Instead of listening to Gandhi, are we not more inclined
to listen toone of the most influential economists of our
century, the great Lord Keynes? In 1930, during the world-
wide economic depression, he feit moved to speculate on
the "economic possibilities for our grandchildren" and con-
cluded that the day might not be all that far off when
everybody would be rich. We shall then, he said, "once
more valué ends above means and prefer the good to the
useful."
"But beware!" he continued. *The time for all this is not
yet. For at least another hundred years we must pretend
to ourselvesand to every one that fair is foul and foul is
fair; is useful and fair is not. Avance and usury
for foul
and precaution must be our gods for a little longer still.
For only they can lead us out of the tunnel of economic
necessity into daylight."
This was written forty years ago and since then, of
course, things have speeded up considerabiy. Maybe we do
not even have to wait for another sixty years until univer-
sal plenty will be attained. In any case, the Keynesian
message is clear enough: Beware! Ethical considerations
are not merely irrelevant, they are an actual hindrance,
"for foul is useful and fair is not." The time for faimess
is not yet. The road to heaven is paved with bad
intentions.
I shall now consider this proposition. It can be divided
into three parts:

24
 —
First, that universal prosperity is possible;
Second, that its attainment is possible on the basis of
the materialist philosophy of "enrich your-
selves'*;
Third, that this is the road to peace.

The question with which to start my investigation is

obviously this: Is there enough to go round? Immediately

we encounter a serious difficulty: What is "enough"?
Who can tell us? Certainly not the economist who pursues
"economic growth" as the highest of all valúes, and there-
fore has no concept of "enough." There are poor societies
which have too little; but where is the rich society that
says: "Haití We have enough"? There is none.
Perhaps we can forget about "enough" and content
ourselves with exploring the growth of demand upon the
world's resources which when everybody simply
arises
strives hard to have "more." As we cannot study all
resources, I propose to focus attention on one type of
resource which somewhat central position fuel.
is in a —
More prosperity means a greater use of füel there can —
be no doubt about that. At present, the prosperity gap
between the poor of this world and the rich is very wide
indeed, and this is clearly shown in their respective fuel
consumption. Let us define as "rich" all populations in
countries with an average fuel consumption — in 1966
of more than one metric ton of coal equivalent (abbrevi-
ated: ce.) per head, and as "poor" all those below this
level. On these definitions we can draw up the table on
the next page (using United Nations figures throughout).
The average fuel consumption per head of the "poor" is
—
only 0.32 tons roughly one-fourteenth of that of the
"rich," and thete are very many "poor" people in the world
—on these definitions nearly seven-tenths of the world
population. If the "poor" suddenly used as much fuel as
the "rich," world fuel consumption would treble right
away.

25
 —
TABLE I (1966)

Rich (%) Poor (%) World (%)

PopuLATioN (millions)
1060 (31) 2284 (69) 3384 (100)

FuEL CoNsuMPTiON (million tons ce.)

4788 (87) 721 (13) 5509 (100)

FuEL CoNsuMPTiON PER Head (tons c.e.)

4.52 0.32 1.65

But this cannot happen, as everything takes time. And in

time both the "rich" and the "poor" are growing in desires
and in numbers. So let us make an exploratory calculation.
If the "rich" populations grow at the rate of 1V4 per cent
and the "poor" at the rate of 2Vi per cent a year, worid
population will grow to about 6900 million by a.d. 2000
a figure not very different from the most authoritative cur-
rent forecasts. If at the same time the fuel consumption
per head of the "rich" population grows by 2Va per cent,
while that of the "poor" grows by 4Vi per cent a year, the
following figures will emerge for the year a.d. 2000:

TABLE II (A.D. 2000)

Rich (%) Poor (%) World (%)

Population (millions)
1617 (23) 5292 (77) 6909 (100)

Fuel Consumption (million tons c.e.)

15588 (67) 7568 (33) 23156 (100)

Fuel Consumption per Head (tons c.e.)

9.64 1.43 3.35

The total result on worid fuel consumption would be a

growth from 5.5 milliard tons c.e. in 1966 to 23.2 milliard
in the year 2000 —
an increase by a factor of more than

26
foiir, half of which would be attributable to population
mercase and half to increased consumption per head.
Th's half-and-half split is interesting enough. But the
split between the "rich" and the "poor" is even more inter-

esting. Of the total increase in world fuel consumption

from 5.5 milliard to 23.2 milliard tons ce., i.e. an increase
by 17.7 milliard tons, the "rich" would account for nearly
two-thirds and the "poor" for only a little over one-third.
Over the whole thirty-four-year period, the world would
use 425 milliard tons of coal equivalent, with the "rich"
using 321 milliards or seventy-five per cent, and the
"poor," 104 milliards.
Now, does not this put a very interesting light on the
total situation? These figures are not, of course, predic-
tions: they are what might be called "exploratory calcula-
tions." I have assumed a very modest population growth
on the part of the "rich"; and a population gro'ívth rate
twice as high on the part of the "poor"; yet it is the "rich"
and not the "poor" who'do by far the greatest part of the
—
damage if "damage" it may be called. Even if the popu-
lations classified as "poor" grew only at the rate assumed
for the "rich," the effect on total world fuel requirements
—
would be hardly si^nificant a reduction of just óver ten
—
per cent. But if the "rich" decided and I am not saying
that this is likely — that their present per capita fuel con-
sumption was really high enough and that they should not
allow it to grow any further, considering that it is already
fourteen times as high as that of the "poor" now, that —
would malíe a difference: in spite of the assumed rise in
the "rich" populations, it would cut total worid fuel
requirements in the year 2000 by over one-third.
The most important comment, however, is a question:
Is it plausible to assume that worid fuel consumption could
grow to anything like 23,000 million tons ce. a year by
the year 2000, using 425,000 million tons ce. during the
thirty-four years in question? In the light of our present

27
knowledge of fossil fuel reserves this is an implausible
figure, even if we assume that one-quarter or one-third of
the world total would come from nuclear fission.
It is olear that the "rich" are in the process of stripping
the world of its once-for-all endowment of relatively
cheap and simple fuels. It is their continuing economic
growth which produces ever more exorbitant demands,
with the result that the world's cheap and simple fuels
could easily become dear and scarce long before the poor
countries had acquired the wealth, education, industrial
sophistication,and power of capital accumulation needed
for the application of altemative fuels on any significant
scale.
Exploratory calculations, of course, do not prove any-
thing. A
proof about the future is in any case impossible,
and has been sagely remarked that all predictions are
it

unreliable, particularly those about the future. What is

required is judgement, and exploratory calculations can at
least inform our judgement. In any case, our
help to
calculations in a most important respect understate the
magnitude of the problem. It is not realistic to treat the
world as a unit. Fuel resources are very unevenly dis-
tributed, and any shortage of supplies, no matter how
slight, would immediately divide the world into "haves**

and "have-nots" along entirely novel Unes. The specially

favoured áreas, such as the Middle East and North África,
would attract envious attention on a scale scarcely imagi-
nable today, while some high consumption áreas, such as
Western Europe and Japan, would move into the unenvi-
able position of residual legatees. Here is a source of
conflict if ever there was one.
As nothing can be preved about the future not even —
about the relatively short-term future of the next thirty
—
years it is always possible to dismiss even the most
threatening problems with the suggestion that something
will tum up. There could be simply enormous and alto-
gether unheard-of discoveries of new reserves of oil, natu-

28
ral gas, or even coal. And why should nuclear energy be
confinad to supplying one-quarter or one-third of total
requirements? The problem can thus be shifted to another
plañe, but it refuses to go away. For the consumption of

fuel on the indicated scale —assuming no insurmountable

difñculties of fuel supply —would produce environmental
hazards of an unprecedented kind.
Take nuclear energy. Some people say that the world's
resources of relatively concentrated uranium ar€ insuffi-
cient to sustain a really large nuclear programme — large
enough to have a significant impact on the world fuel
situation, where we have to reckon with thousands of
millions, not simply with millions, of tons of coal equiva-
lent. But assume that these people are wrong. Enough
uranium will be found; it will be gathered together from
the remotest coraers of the earth, brought into the main
centres of population, and made highly radioactive. It is
hard to imagine a greater biological threat, not to men-
tion the political danger that someone might use a tiny bit
of this terrible substance for purposes not altogether
peaceful.
On the other hand, fantastic new discoveries of fossil
if

fuels should make

unnecessary to forcé the pace of
it

nuclear energy, there would be a problem of thermal pol-

lution on quite a different scale from anything encoimtered
hitherto.
Whatever the fuel, increases in fuel consvmiption by a
factor of four and then five and then six there is no . . .

plausible answer to the problem of poUution.

I have taken fuel merely as an example to illustrate a

very simple thesis: that economic growth, which viewed

from the point of view of economics, physics, chemistry
and technology, has no discemible limit, must necessarily
run into decisive bottlenecks when viewed from the point
of view of the environmental sciences. An attitude to life
which seeks fulfilment in the single-minded pursuit of
wealth — ^in short, materialism —does not fit into this

29
world, because it contains within itself no limiting princi-
pie, while the environment in which it is placed is strictly

limited. Already, the environment is trying to tell us that

certain stresses are becoming excessive. As one problem is
being "solved," ten new problems arise as a result of the
first "solution." As Professor Barry Conunoner emphasises,

the new problems are not the consequences of incidental

but of technological success.
f ailure
-Here again, however, many people will insist on discuss-
ing these matters solely in terms of optimism and pessi-
mism, taking pride in their own optimism that "science will
find a way out." They could be right only, I suggest, if

there is a conscious and fundamental change in the direc-

tion of scientific effort. The developments of science and
technology over the last hundred years have been such
that the dangers have grown even faster than the oppor-
tunities. About have more to say later.
this, I shall

Already, there overwhelming evidence that the great

is

self-balan cing system of nature is becoming increasingly

unbalanced in particular respects and at specific points. It
would take us too far if I attempted to assemble the evi-
dence here. The condition of Lake Ene, to which Professor
Barry Conmioner, among others, has drawn attention,
should serve as a sufficient waming. Another decade or
two, and all the inland water systems of the United States
may be in a similar condition. In other words, the condi-
tion of unbalance may then no longer apply to specific
points but have become generalised. The further this proc-
ess is allowed to go, the more difficult it will be to reverse
it, if indeed the point of no retum has not been passed

already.
We find, therefore, that the idea of unlimited economic
growth, more and more until everybody is saturated with
wealth, needs to be seriously questioned on at least two
counts: the availability of basic resources and, altema-
tively or additionally, the capacity of the
environment to
cope with the degree of interference implied. So much

30
about the physical-material aspect of the matter. Let us
now tura to certain non-material aspects.

There can be no doubt that the idea of personal enrichment

has a very strong appeal to human nature. Keynes, in the
essay from which I have quoted already, advised us that
the time was not yet for a "retum to some of the most
sure and certain principies of religión and traditional vir-
tue— that avance is a vice, that the exaction of usury is a
misdemeanour, and the love of money is detestable."
Economic progress, he counselled, is obtainable only if
we employ those powerful human drives of selfishness,
which religión and traditional wisdom universally cali upon
US to resist. The modem economy is propelled by a frenzy
of greed and indulges in an orgy of envy, and these are not
accidental features but the very causes of its expansionist
success. The question is whether such causes can be effec-
tive for long or whether they cany within themselves the
seeds of destniction. If Keynes says that "foul is useful and
fair is not," he propounds a statement of fact which may
be true or false; or it may look true in the short run and
turn out to be false in the longer run. Which is it?

I should think that there is now enough evidence to

demónstrate that the statement is false in a very direct,
practical sense. If human vices such as greed and envy
are systematically cultivated, the inevitable result is noth-
ing less than a coUapse of intelligence. A man driven by
greed or envy loses the power of seeing things as they
really are, of seeing things in their roundness and whole-
ness, and his very successes become failures. If whole
societies become infected by these vices, they may indeed
achieve astonishing things but they become increasingly
incapable of solving the most elementary problems of
everyday existence. The Gross National Product may rise
rapidly: as measured by statisticians but not as experienced
by actual people, who find themselves oppressed by
increasing frustration, alienation, insecurity, and so forth.

31
After a while, even the Gross National Product refuses to
rise any further, not because of scientific or technological
failure, but because of a creeping paralysis of non-coopera-
tion, as expressed in various types of escapism on the part,
not only of the oppressed and exploited, but even of highly
privileged groups.
One can go on for a long time deploring the irrationality
and stupidity of men and women in high positions or low
— "if only people would realise where their real interests
lie!" But why do they not realise this? Either because their
intelligence has been dimmed by greed and envy, or
because in their heart of hearts they understand that their
real interests lie somewhere quite different. There is a
revolutionary saying that "Man shall not Uve by bread
alone but by every word of God."
Here again, nothing can be "proved.** But does it still
look probable or plausible that the grave social diseases
infecting many rich societies today are merely passing
phenomena which an able govemment — if only we could
get a really able government! —could eradicate by simply
making faster use of science and technology or a more
radical use of the penal system?
I suggest that the foundations of peace cannot be laid
by universal prosperity, in the modem sense, because such
prospérity, if attainable at all, is attainable only by culti-
vating such drives of human nature as greed and envy,
which destroy and thereby
intelligence, happiness, serenity,
the peacefulness of man.
could wcll be that rich people
It

treasure peace more highly than poor people, but only if

—
they feel utteriy secure añd this is a contradiction in
terms. Their wealth depends on making inordinately large
demands on limited worid resources and thus puts them
on an unavoidable coUision course not primarily with —
the poor (who are weak and defenceless) but with other
rich people.
In short, we can say today that man is far too clever to
be able to survive without wisdom. No one is really work-

32
ing for peace unless he is working primarily for the
restoration of wisdom. The assertion that "foul is usfeul
and fair is not" is the antithesis of wisdom. The hope that
the pursuit of goodness and virtue can be postponed until
we have attained universal prosperity and that by the
single-minded pursuit of wealth, without bothering our
heads about spiritual and moral questions, we could estab-
lishpeace on earth, is an unrealistic, unscientific, and
irrational hope. The exclusión of wisdom from econom-
ics, science, and technology was something which we
could perhaps get away with for a little while, as long as
we were relatively unsuccessful; but now that we have
become very successful, the problem of spiritual and
moral truth moves into the central position.
From an economic point of view, the central concept
of wisdom is permanence. We must study the economics
of permanence. Nothing makes economic sensc unless its
continuance for a long time can be projected without
ninning into absurdities. There can be "growth" towards
a limited objective, but there cannot be unlimited, gen-
eralised growth. It is more than likely, as Gandhi said,
that "Earth provides enough to satisfy every man's need,
but not for every man's greed." Permanence is incom-
patible with a predatory attitude which rejoices in the fact
that "what were luxuries for our fathers have become
necessities for us."
The and expansión of needs is the antithesis
cultivation
of wisdom. It is freedom and peace.
also the antithesis of
Every increase of needs tends to increase one's depend-
ence on outside forces over which one cannot have con-
trol, and therefore increases existential fear. Only by a
reduction of needs can one promote a genuine reduction
in those tensions which are the ultímate causes of strife
and war.
The economics of permanence implies a profound reori-
entation of science and technology, which have to open
their doors to wisdom and, in fact, have to incorpórate

33
wisdom into their very structure. Scientific or technologi-
cal "solutions" which poison the environment or degrade
the social structure and man himself are of no benefit, no
matter how brilliantly conceived or how great their super-
ficial attraction. Ever-bigger machines, entailing ever-big-
ger concentrations of economic power and exerting ever-
greater violence against the environment, do not represen!
progress: they are a denial of wisdom. Wisdom demands
a new orientation of ^cience and technology towards the
organic, the gentle, the non-violent, the elegant and beau-
tiful. Peace, as has often been said, is indivisible —how
then could peace be built on a foundation of reckless
Science and violent technology? We must look for a revolu-
tíon technology to give us inventions and machines
in
which reverse the destructive trends now threatening us al!.

What is it that we really require from the scientists and

technologists? I should answer: We need methods and
equipment which are

—cheap enough so that they are accessible to virtually

everyone;
— suitable for small-scale application; and
—compatible with man's need for creativity.

Out of these three characteristics is born non-violence

and a relationship of man to nature which guarantees per-
manence. If only one of these three is neglected, things are
bound to go wrong. Let^us look at them one by one.
Methods and machines cheap enough to be accessible to
virtually everyone —
why should we assume that our scien-
tists and technologists are unable to develop them? This

was a primary concern of Gandhi: "I want the dumb

millions of our land to be healthy and happy, and I want
them to grow spiritually. If we feel the need of
. . .

machines, we certainly will have them. Every machine

that helps every individual has a place," he said, "but
there should be no place for machines that concéntrate

34
power m a few hands and tum the masses into mere
machine minders, if indeed they do not make them
unemployed."
Suppose it becomes the acknowledged purpose of inven-
tors and engineers, observed Aldous Huxley, to provide
ordinary people with the means of "doing profitable and
intrinsically significant work, of helping men and women
to achieve independence from bosses, so that they may
become their own employers, or members of a self-

goveming, cooperative group working for subsistence and

a local market . this differently orientated technological
. .

progress [would result in] a progressive decentralisation

of population, of accessibility of land, of ownership of the
means of production, of political and economic power.*'
Other advantages, said Huxley, would be "a more humanly
satisfying life for more people, a greater measure of genu-
ine self-goveming democracy and a blessed freedom from
the silly or pemicious adult education provided by the
mass producéis of consumer goods through the médium of
advertisements. "^
If methods and machines are to be cheap enough to be
generally accessible, thismeans that their cost must stand
in some definable relationship to the level of incomes in
the society in which they are to be used. I have myself
come to the conclusión that the upper limit for the aver-
age amount of capital investment per workplace is prob-
ably given by the annual earnings of an able and ambitious
industrial worker. That is to say, if such a man can nor-
mally earn, say, $5000 a year, the average cost of estab-
lishíng his workplace should on no account be in excess of
$5000. If the cost is significantly higher, the society in
question is run into serious troubles, such as an
likely to
undue concentration of wealth and power among the priv-
ileged few; an increasing problem of "drop-outs" who
cannot be integrated into society and constitute an ever-
growing threat; "structural" unemployment; maldistribu-
tion of the population due to excessive urbanisation; and

35
general frustration and alienation, with soaring crime rates,
and so forth.
The second requirement is suitability for small-scale
application. On the probiem of "scale," Professor Leopold
Kohr has written brilliantly and convincingly; its relevance
to the economics of permanence is obvious. Small-scale
operations, no matter how numerous, are always less likely
to be harmful to the natural environment than large-scale
ones, simply because their individual forcé is small in rela-
tion to the recuperative forces of nature. There is wisdom
only on account of the smallness and patchi-
in smallness if
ness of human knowledge, which relies on experimeijt far
more than on understanding. The greatest danger invari-
ably arises from the ruthless application, on a vast scale,
of partial knowledge such as we are cuirently witnessing
in the application of nuclear energy, of the new chemistry
in agriculture, of transportaíion technology, and countless
other things.
Although even small communities are sometimes guilty
of causing serious erosión, generally as a result of igno-
rance, this is trifling in comparison with the devastations
caused by gigantic groups motivated by greed, envy, and
the lust for power. It is, moreover, obvious that men orga-
nised in small units will take better care of their bit of
land or other natural resources than anonymous com-
panies megalomanic governments which pretend to
or
themselves that the whole universe is their legitimate
quarry.
The is perhaps the most important of
third requirement
all — methods and equipment should be such as to
that
leave ampie room for human creativity. Over the last
hundred years no one has spoken more insistently and
warningly on this subject than have the Román pontiffs.
What becomes of man if the process of production "takes
away from work any hint of humanity, making of it a
merely mechan ical activity"? The worker himself is turned
into a perversión of a free being.

36
 —
"And so bodily labour [said Pius XI] which even after
original sin was decreed by Providence for the good of
man's body and soul, is in many instances changed into an
instrument of perversión; for from the factory dead matter
goes out improved, whereas men there are corrupted and
degraded.**
Again, the subfect is so large that I cannot do more
than touch upon it. Above anything else there is need for
a proper philosophy of work which understands work not
as that which it has indeed become, an inhuman chore as
soon as possible to be abolished by automation, but as
something "decreed by Providence for the good of man's
body and soul.*' Next to the family, it is work and the
relationships established by work that are the true founda-
tions of society. If the foundations are unsound, how could
society be sound? And if society is sick, how could it fail
to be a danger to peace?
"War is a judgement," said Dorothy L. Sayers, "that
overtakes societies when they have been living upon ideas
that conflict too violently with the laws governing the
universe. . Never think that wars are irrational catastro-
. .

phes: they happen when wrong ways of thinking and living

bring about intolerable situations."^ Economically, our
wrong living consists primarily in systematically cultivating
greed and envy and thus building up a vast array of totally
unwarrantable wants. It is the sin of greed that has deliv-
ered us over into the power of the machine. If greed were
not the master of modem man—ably assisted by envy
how could it be that the frenzy of economism does not
abate as higher "standards of living" are attained, and that
it is precisely the richest societies which pursue their
economic advantage with the greatest ruthlessness? How
could we explain the almost universal refusal on the part
of the rulers of the rich societies —
whether organised along
prívate enterprise or collectivist enterprise lines — to work
towards the humanisation of work? It is only necessary to
assert that something would reduce the "standard of liv-

37
 —

¡ng," and every debate is instantly closed. That soul-

destroying, meaningless, mechanical, monotonous, moronic
work is an insult to human nature which raust necessarily
and inevitably produce either escapism or aggression, and
that no amount of "bread and circuses" can compénsate
for the damage done —
these are facts which are neither
denied nor acknowledged but are met with an unbreakable
conspiracy of silence —
because to deny them would be too
obviously absurd and to acknowledge them would con-
demn the central preoccupatipn of modera society as a
crime against humanity.
The wisdom has gone so
neglect, indeed the rejection, of
far that most of our intellectuals have not even the faintest
idea what the term could mean. As a result, they always
tend to try and cure a disease by intensifying its causes.
The disease having been caused by allowing cleverness to
displace wisdom, no amount of clever research is likely to
produce a cure. But what is wisdom? Where can it be
found? Here we come to the crux of the matter: it can be
read about in numerous publications but it can be found
only inside oneself. To be able to find it, one has first to
libérate oneself from such masters as greed and envy. The
stillness following liberation —
even if only momentary
produces the insights of wisdom which are obtainable in
no other way.
They enable us to see the hollowness and fundamental
unsatisfactoriness of a life devoted primarily to the pursuit
of material ends, to the neglect of the spiritual. Such a life

necessarily sets man against man and nation against

nation, because man's needs are infinite and infinitude can
be achieved only in the spiritual realm, never in the mate-
rial. Man assuredly needs to rise above this humdrum
"worid"; wisdom shows him the way
do it; without
to
wisdom, he is driven to build up a monster economy,
which destroys the worid, and to seek fantastic satisfac-
tions, like landing a man on the moon. Instead of overcom-
ing the "worid" by moving towards saintliness, he tries to

38
overeóme by gaining preeminence in wealth, power,
it

science, or indeed any imaginable "sport.**

These are the real causes of war, and it is chimerical to
try to lay the foundations of peace without removing
them first. It is doubly chimerical to build peace on eco-
nomic foimdations which, in tum, rest on the systematic
cultivation of greed and envy, the very forces which drive
men into conflict.
How could we even begin to disarm greed and envy?
Perhaps by being much less greedy and envious ourselves;
perhaps by resisting the temptation of letting our luxuries
become needs; and perhaps by even scnitinising our needs
to see if they cannot be simplified and reduced. If we do
not have the strength to do any of this, could we perhaps
stop applauding the type of economic "progress** which
palpably lacks the basis of permanence and give what
modest support we can to those who, unafraid of being
denounced as cranks, work for non-violence: as conserva-
tionists, ecologists, protectors of wildlife, promoters of

organic agriculture, distributists, cottage producéis, and so

forth? An ounce of practice is generally worth more than
a ton of theory.
It will need mtny ounces, however, to lay the economic
foundations of peace. Where can one find the strength to
go on working against such obviously appalling odds?
What is more: where can one find the strength to over-
eóme the violence of greed, envy, hate and lust within
oneselí?
I think Gandhi has given the answer: *There must be
recognition of the existence of the soul apart from the
body, and of its permanent nature, and this recognition
must amount to a living faith; and, in the last resort, non-
violence does not avail those who do not possess a living
faith in the God of Love.'*

39
 3
The Role of Economics

To say that our economic future is being determined by

the economists would be an exaggeration; but that their

influence, or in any case the influence of economics, is
far-reaching can hardly be doubted. Economics plays a
central role in shaping the activities of the modera world,
inasmuch as it supplies the criteria of what is "economic"
and what is "uneconomic," and there is no other set of
criteria that exercises a greater influence over the actions
of individuáis and groups as well as over those of govera-
ments. It may be thought, therefore, that we should look
to the economists on how to overeóme the
for advice
dangers and difficulties in which the modem world finds
itself, and how to achieve economic arrangements that

vouchsafe peace and permanence.

How does economics relate to the problems discussed in
the previous chapters? When the economist delivers a
verdict that this or that activity is "economically sound"
or "uneconomic," two important and closely related ques-
tions arise: First, what does this verdict mean? And, sec-
ond, is the verdict conclusive in the sense that practical
action can reasonably be based on it?
Going back into history we may recall that when there
was talk about founding a professorship for political econ-
omy at Oxford 150 years ago, many people were by no
means happy about the prospect. Edward Copleston, the
great Provost of Oriel College, did not want to admit into

40
the University's curriculum a science "so prone to usurp
the rest"; even Henry Drummond of Albury Park, who
endowed the professorship in 1825, felt it necessary to
make it clear that he expected the University to keep the
new study "in its proper place." The ^st professor, Nassau
Sénior, was certainly not to be kept in an inferior place.
Immediately, in his inaugural lecture, he predicted that
the new science "will rank in public estimation among the
first of moral sciences in interest and
and in utility"
claimed that "the pursuit of wealth is, to the mass of
. . .

mankind, the great source of moral improvement." Not

all economists, to be sure, have staked their claims quite

so high. John Stuart Mili ( 1 806-73 ) looked upon political

economy "not as a thing by itself, but as a fragment of
a greater whole; a branch of social philosophy, so inter-
linked with all the other branches that its conclusions, even
in its own peculiar province, are only true conditionally,
subject to interferenceand counteraction from causes not
directly within itsAnd even Keynes, in contradic-
scope."
tion to his own advice (already quoted) that "avance
and usury and precaution must be our gods for a little
longer still," admonished us not to "overestimate the
importance of the economic problem, or sacrifice to its
supposed necessities other matters of greater and more
permanent significance."
Such voices, however, are but seldom heard today. It is
hardly an exaggeration to say that, with increasing afflu-
ence, economics has moved into the very centre of public
concern, and economic performance, economic growth,
economic expansión, and so forth have become the abid-
ing interest,if not the obsession, of all modem societies.

In the current vocabulary of condemnation there are few

words as final and conclusive as the word "uneconomic."
If an activity has been branded as uneconomic, its right to
existence is not merely questioned but energetically denied.
AnytMng that is found to be an impediment to economic
growth is a sñameful thing, and if people cling to it, they

41
are thought of as either saboteurs or fools. Cali a thing
immoral or ugly, soul-destroying or a degradation of man,
a peril to the peace of the worid or to the well-being of
future generations; as long as you have not shown it to be
"uneconomic" you have not really questioned its right to
exist, grow, and prosper.

But what does it mean when we say something is uneco-

nomic? I am not asking what most people mean when
they say this; because that is clear enough. They simply
mean that it is like an illness: you are better off without it.
The economist is supposed to be able to diagnose the ill-
ness and then, with luck and skill, remove it Admittedly,
economists often disagree among each other about the
diagnosis and, even more frequently, about the cure; but
that merely proves that the subject matter is uncommonly
and economists, like other humans, are fallible.
diflficult

No, I am asking what it means, what sort of meaning

the method of economics actually produces. And the
answer to this question cannot be in doubt: something is
uneconomic when it fails to eam an adequate profit in
terms of mone^. The method of economics does not, and
cannot, produce any other meaning. Numerous attempts
have been made to obscure this fact, and they have caused
a very great deal of confusión; but the fact remains.
Society, or a group or an individual within society, may
decide to hang on to an activity or asset for non-economic
—
reasons social, aesthetic, moral, or political but this —
does in no way alter its uneconomic character. The judge-
ment of economics, in other words, is an extremely frag-
mentary judgement; out of the large number of aspects
which in real life have to be seen and judged together
before a decisión can be taken, economics supplies only
—
one whether a thing yields a money profit to those who
undertake it or not.
Do not overlook the words *'to those who undertake it."
It is a great error to assume, for instance, that the method-

ology of economics is normally applied to determine

42
whether an activity carried on by a group within society
yields a profit to society as a whole. Even nationalised
industries are not coosidered from this more comprehen-
sive point of view. Every one of them is given a financial
target —^which is, in fact, an obligation —
and is expected
to pursue this target without regard to any damage it
might be inflicting on other parts of the economy. In fact,
the prevailing creed, held with equal fervour by all politi-
cal parties, is that the common good will necessarily be
maximised if everybody, every industry and trade, whether
nationalised or not, strives to eam an acceptable "return"
on the capital employed. Not even Adam Smith had a
more implicit faith in the "hidden hand" to ensure that
"what is good for General Motors is good for the United
States."
However that may be, about the fragmentary nature of
the judgements of economics there can be no doubt what-
ever. Even within the narrow compass of the economic
calculus, these judgements are necessarily and methodi-
cally narrow. For one thing, they give vastly more weight
to the short than to the long term, because in the long
term, as Keynes put it with cheerful brutality, we are all
dead. And then, second, they are based on a definition of
cost which exeludes all "free goods," that is to say, the
entire God-given environment, except for those parts of
it that have been privately appropriated. This means that

an activity can be economic although it plays hell with the

environment, and that a competing activity, if at some
cost it protects and conserves the environment, will be
uneconomic.
Economics, moreover, deals with goods in accordance
with their market valué and not in accordance with what
they really are. The same rules and criteria are applied to
primary goods, which man has to win from nature, and
secondary goods, which presuppose the existence of pri-
mary goods and are manufactured from them. All goods
are treated the same, because ths point of view is funda-

43
mentally that of prívate profit-making, and this means that
it is inherent in the methodology of economics to ignore
man's dependence on the natural world.
Another way of stating this is to say that economics
deals with goods and services from the point of view of the
market, where willing buyer meets willing seller. The buyer
is essentially a bargain hunter; he is not concemed with the

origin of the goods or the conditions under which they

have been produced. His solé concern is to obtain the best
valué for his money.
The market therefore represents only the surface of
society and its significance relates to the momentary situa-
tion as it exists there and then. There is no probing into
the depths of things, into the natural or social facts that
lie behind them. In a sense, the market is the institution-
alisation of individualism and non-responsibility. Neither
buyer ñor seller is responsible for anything but himself. It

would be **uneconomic" for a wealthy seller to reduce his

pnces to poor customers merely because they are in need,
or for a wealthy buyer to pay an extra pnce merely
because the supplier is poor. Equally, it would be "uneco-
nomic" for a buyer to give preference to home-produced
goods if imported goods are cheaper. He does not, and is
not expected to, accept responsibility for the country's
balance of payments.
As regards the buyer's non-responsibility, there is, sig-
nificantly, one exception: the buyer must be careful not
to buy stolen goods. This is a rule against which neither
ignorance ñor innocence counts as a defence and which
can produce extraordinarily unjust and annoying results.
It is nevertheless required by the sanctity of prívate prop-

erty, to which it testifies.

To be relieved of all responsibility except to oneself,
means of course an enormous simplification of business.
We can recognise that it is practical and need not be sur-
prised that it is highly popular among businessmen. What
may cause surprise is that it is also considered virtuous to

44
make máximum use of this freedom from responsibil-
the
ity. Ifa buyer refused a good bargain because he suspected
that the cheapness of the goods in question stemmed from
exploitation or other despicable practices (except theft),
he would be open to the criticism of behaving "uneconom-
ically," which is viewed as nothing less than a fall from
grace. Economists and others are wont to treat such
eccentric behaviour with derision if not indignation. The
religión of economics has its own code of ethics, and the
FirstGk)mmandment is to behave "economically" in any —
casewhen you are producing, selling, or buying. It is only
when the bargain hunter has gone home and becomes a
consumer that the First Commandment no longer applies:
he is then encouraged to "enjoy himself in any way he '

pleases. As far as the religión of economics is conceraed,

the consumer is extra-territorial. This strange and signifi-
cant feature of the modem worid warrants more discus-
sion than it has yet received.
In the market place, for practical reasons, innumerable
qualitative distinctions which are of vital importance for
man and society are suppressed; they are not allowed to
surface. Thus the reign of quantity celebrates its greatest
triumphs in *The Market." Everything is equated with
everything else. To equate things means to give them a
price and thus to make them exchangeable. To the extent
that economic thinking is based on the market, it takes the
sacredness out of life, because there can be nothing sacred
in something that has a price. Not surprisingly, therefore,
ifeconomic thinking pervades the whole of society, even
simple non-economic valúes like beauty, health, or cleanli-
ness can survive only if they prove to be "economic."
To press non-economic valúes into the framework of the
economic calculus, economists use the method of cost/
benefit analysis. This is generally thought to be an enlight-
ened and progressive development, as it is at least an
attempt to take account of costs and benefits which might
otherwise be disregarded altogether. In fact, however, it is

45
a procedure by which the higher reduced to the level of is

the lower and the priceless given a price.

It can therefore
is

never serve to clarify the situation and lead to an enlight-

ened decisión. All it can do is lead to self-deception or the
deception of others; for to undertake to measure the
immeasurable is absurd and constitutes but an elabórate
method of moving from preconceived notions to foregone
conclusions; all one has to do to obtain the desired results
is to impute suitable valúes to the immeasurable costs and

benefits. The logical absurdity, however, is not the greatest

fault of the undertaking: what is worse, and destructive of
civilisation, is the pretence that everything has a price or,
in other words, that money is the highest of all valúes.
Economics operates legitimately and usefully within a
"given" framework which lies altogether outside the eco-
nomic calculus. We might say that economics does not
stand on its own feet, or that it is a "derived" body of
—
thought derived from meta-economics. If the economist
fails to study meta-economics, or, even worse, if he
remains unaware of the fact that there are boundaries to
the applicability of the economic calculus, he is likely to
fall into a similar kind of error as that of certain medieval

theologians who tried to questions of physics by

settle
means of biblical quotations. Every science is beneficial
within its proper limits, but becomes evil and destructive
as soon as it transgresses them.
The science of economics is "so prone to usurp the rest"
—even more so today than it was 150 years ago, when
Edward Copleston pointed to this danger —because it

relates to certain very strong drives of human nature, such

as envy and greed. All the greater is the duty of its

experts, the economists, to understand and clarify its limi-

tations, that is to say, to imderstand meta-economics.
What, then, is meta-economics? As economics deals with
man in his environment, we may expect that meta-
economics consists of two parts one dealing with man —
and the other dealing with the environment. In other

46
words, we may expect that economics must derive its aims
and objectives from a study of man, and that it must
derive at least a large part of its methodology from a
study of nature.
In the next chapter, I shall attempt to show how the
conclusions and prescriptions of economics change as the
underlying picture of man and his purpose on earth
changes. In this chapter, I confine myself to a discussion
of the second part of meta-economics, i.e. the way in
which a vital part of the methodology of economics has
to be derived from a s'tudy of nature. As I have empha-
sised already,on the market all goods are treated the same,
because the market is essentially an institution for unlim-
ited bargain hunting, and this means that it is inherent in
the methodology of modem economics, which is so largely
market-oriented, to ignore man's dependence on the natu-
ral world. Professor E. H. Phelps Brown, in his Presiden-
tial Address to the Royal Economic Society on "The
Underdevelopment of Economics," talked about "the
smallness of the contribution that the most conspicuous
developments of economics in the last quarter of a cen-
tury have made to the solution of the most pressing prob-
lems of the times," and among these problems he lists
"checking the adverse effects on the environment and the
quálity of life of industrialism, population growth and
urbanism."
As a matter of fact, to talk of "the smallness of the con-
tribution" is employ an euphemism, as there is no con-
to
tribution at on the contrary, it would not be unfair to
all;

say that economics, as currently constituted and practised,

acts as a most effective barrier against the understanding
of these problems, owing to its addiction to purely quanti-
tative analysis and its timorous refusal to look into the real
nature of things.
Economics deals with a virtually limitless variety of
goods and services, produced and consumed by an equally
limitless variety of people. It would obviously be impossi-

47
ble to develop any economic theory at all, unless one were
prepared to disregard a vast array of qualitative distinc-
tions. But it should be just as obvious that the total
suppression of qualitative distinctions, wbile it makes
theorising easy, at the same time makes it totally sterile.
Most of the "conspicuous developments of economics in
the last quarter of a century" (referred to by Professor
Phelps Brown) are in the direction of quantification, at
the expense of the understanding of qualitative d;fferences.
Indeed, one might say that economics has become increas-
ingly intolerant of the latter, because they do not fit into
its method and make demands on the practical under-
standing and the power of insight of economists, which
they are unwilling or unable to fulfil. For example, having
established by his purely quantitative methods that the
Gross National Product of a country has risen by, say, five
per cent, the economist-tumed-econometrician is unwill-
ing, and generally unable, to face the question of whether
this is to be taken as a good thing or a bad thing. He
would lose all his certainties if he even entertained such a
question: growth of GNP must be a good thing, irrespec-
tive of what has grown and who, if anyone, has benefited.
The idea that there could be pathological growth,
unhealthy growth, disruptive or destructive growth, is to
him a perverse idea which must not be allowed to surface.
A small minority of economists is at present beginning to
question how much further "growth" will be possible,
since infinite growth in a finite environment is an obvious
impossibility; but even they cannot get away from the
purely quantitative growth concept. Instead of insisting on
the primacy of qualitative distinctions, they simply sub-
stitute non-growth for growth, that is to say, one empti-
ness for another.
It is of course true that quality is much more difñcult to
"handle" than quantity, just as the exercise of judgement
is a higher function than the ability to count and calcúlate.

Quantitative diíferences can be more easüy grasped and

48
certainly more easily defined than qualitative differences;
their concreteness is beguiling and gives them the appear-

ance of scientific precisión, even when this precisión has

been purchased by the suppression of vital differences of
quality. The great majority of economists is still pursuing
the absurd ideal of making their "science" as scientific and
precise as physics, as if there were no qualitative differ-
ence between mindless atoms and men made in the image
of God.
The main subject matter of economics is "goods." Econ-
omistsmake some rudimentary distinctions between cate-
gories of goods from the point of view of the purchaser,
such as the distinction between consumers' goods and
producéis' goods; but there is virtually no attempt to take
cognisance of what such goods actually are; for instance,
whether they are man-made or God-given, whether they
are freely reproducible or not. Once any goods, whatever
their meta-econoniic character, have appeared on the
market, they are treated the same, as objects for sale, and
economics is primarily concemed with theorising on the
bargain hunting áctivities of the purchaser.
It is a fact, however, that there are fundamental and

vital differences between various categories of "goods"

which cannot be disregarded without losing touch with
reality. The following might be called a minimum scheme
of categorisation:

"Goods"

primary secondary

non-renewable renewable manufacturéis service»

(1) (2) (3) (4)

There could hardly be a more important distinction, to

startwith, than that between primary and secondary

49
goods, because the latter presuppose the availability of the
former. An expansión of man's ability to bring forth sec-
ondary producís is useless iinless preceded by an expansión

of his ability to win primary products from the earth; for

man is not a producer but only a converter, and for every
Job of conversión he needs primary products. In particu-
lar, his power to convert depends on primary energy,

which immediately points to the need for a vital distinc-

tion within the field of primary goods, that between non-
renewable and renewable. As far as secondary goods are
concemed, there is an obvious and basic distinction
between manufactures and services. We thus arrive at a
mínimum of four categories, each of which is essentially
different from each of the three others.
The market knows nothing of these distinctions. It pro-
vides a price tag for all goods and thereby enables us to
pretend that they are all of equal significance. Five
pounds' worth of oil (category 1) equals five pounds'
worth of wheat (category 2), which equals five pounds'
worth of shoes (category 3) or five pounds* worth of
hotel accommodation (category 4). The solé criterion to
determine the relative importance of these different goods
is the rate of profit that can be obtained by providing

Ihem. If categories 3 and 4 yield higher profits than

categories 1 and 2, this is taken as a "signal" that it is

"rational" to put additional resources into the former and

withdraw resources from the latter.
I am not here concemed with discussing the reliability
or rationality of the market mechanism, of what econo-
mists cali the "invisible hand." This has endlessly been
discussed, but invariably without attention to the basic
incommensurability of the four categories detailed above.
It has rematned unnoticed, for instance or if not unno- —
ticed, ithas never been taken seriously in the formulation
of —
economic theory that the concept of "cost" is
essentially different as between renewable and non-renew-
able goods, as also between manufactures and services. In

50
fact, without going into any further details, it can be said
that economics, as currently constituted, fully applies only
to manufactures (category 3), but it is being applied
without discrimination to all goods and services, because
an appreciation of the essential, qualitative differences
between the four categories is entirely lacking.
These differences may be called meta-economic, inas-
much as they have to be recognised before econoraic
analysis begins. Even more important is the recognition of
the existence of "goods*' which never appear on the
market, because they cannot be, or have not been, pri-
vately appropriated, but are nonetheless an essential
precondition of all human activity, such as air, water, the
soil, and in fact the whole framework of living nature.

Until fairly recently the economists have felt entitled,

with tolerably good reason, to treat the entire framework
within which economic activity takes place as given, that
is to say, as permanent and indestructible. It was no part
of their job and, indeed, of their professional competence,
to study the effects of economic activity upon the frame-
work. Since there is now increasing evidence of environ-
mental deterioration, particularly in living nature, the
entire outlook and methodology of economics is being
The study of economics is too narrow
called into question.
and to fragmentary to lead to valid insights, unless com-
plemented and completed by a study of meta-economics.
The trouble about valuing means above ends which, —
as confirmed by Keynes, is the attitude of modern eco-
—
nomics is that it destroys man's freedom and power to
choose the ends he really favours; the development of
means, as it were, dictates the choice of ends. Obvious
examples are the pursuit of supersonic transport speeds
and the immense efforts made to land men on the moon.
The conception of these aims was not the result of any
insight into real human needs and aspirations, which
technology is meant to serve, but solely of the fact that
the necessary technical means appeared to be available.

51
 As we have economics is a "derived" science
seen,
which accepts from what I cali meta-
instructions
economics. As the instructions are changed, so changes
the content of economics. In the following chapter, we
shall explorewhat economic laws and what definitions of
the concepts "economic" and "uneconomic" result when
the meta-economic basis of Western materialism is aban-
doned and the teaching of Buddhism is put in its place.
The cholee of Buddhism for this purpose is purely inci-
dental; the teachings of Christianity, Islam, or Judaism
could have been used just as well as those of any other
of the great Eastem traditions.

52
 4
Buddhist Economics

"Right Livelihood" is one of the requirements of the

Buddha's Noble Eightfold Path. It is clear, therefore, that
there must be such a thing as Buddhist economics.
Buddhist countries have often stated that they wish to
remain faithful to their heritage. So Burma: "The New
Burma sees no conflict between religious valúes and eco-
nomic progress. Spiritual health and material well-being
are not enemies: they are natural allies."^ Or: "We can
blend successfully the religious and spiritual valúes of our
heritage with the benefits of modem technology."^ Or:
"We Burmans have a sacred duty to conform both our
dreams and our acts to our faith. This we shall ever do."^
All the same, such countries invariably assume that they
can model their economic development plans in accord-
ance with modem economics, and they cali upon modern
economists from so-called advanced countries to advise
them, to formúlate the policies to be pursued, and to
construct the grand design for development, the Five-Year
Plan or whatever it may be called. No one seems to think
that a Buddhist way of Ufe would cali for Buddhist
economics, just as the modern materialist way of life has
brought forth modem economics.
Economists themselves, like most specialists, normally
suffer from a kind of metaphysical blindness, assuming
that theirs is a science of absolute and invariable truths,
without any pre^uppositions. Some go as far as to claim

53
that economic laws are as free from "metaphysics** or
"valúes" as the law of gravitation. We need not, however,
get involved in arguments of methodology. Instead, let us
take some fundamentáis and see what they look like when
viewed by a modera economist and a Buddhist economist.
There is universal agreement that a fundamental source
of wealth is human labour. Now, the modera economist
has been brought up to consider "labour" or work as little
more than a necessary evil. From the point of view of the
employer, it is in any case simply an item of cost, to be
reduced to a minimum if it cannot be eliminated alto-
gether, say, by automation. From the point of view of the
workman, it is a "disutility"; to work is to make a sacrifice
of one's leisure and comfort, and wages are a kind of
compensation for the sacrifice. Henee the ideal from the
point of view of the employer is to have output without
employees, and the ideal from the point of view of the
employee is to have income without employment.
The consequences of these attitudes both in theory and
in practice are, of course, extremely far-reaching. If the
ideal with regard to work is to get rid of it, every method
that "reduces the work load" is a good thing. The most
potent method, short of automation, is the so-called "divi-
sión of labour" and the classical example is the pin factory
eulogised in AdamSmith's Wealth of Nations.^ Here it is
not a matter of ordinary specialisation, which mankind has
practised from time immemorial, but of dividing up every
complete process of production into minute parts, so that
the final product can be produced at great speed without
anyone having had to contribute more than a totally
insignificant and, in most cases, unskilled movement of his
limbs.
The Buddhist point of view takes the function of work
to be at least threefold: to give a man a chance to utilise
and develop his faculties; to enable him to overeóme his
ego-centredness by joining with other people in a common
task; and to bring forth the goods and services needed for

54
a becoming existence. Again, the consequences that flow
from this view are endless. To organise work in such a
manner that it becomes meaningless, boring, stultifying,
or nerve-racking for the worker would be little short of
criminal; it would indicate a greater concern with goods
than with people, an evil lack of compassion and a soul-
destroying degree of attachment to the most primitive side
of this worldly existence. EquaUy, to strive for leisure
as an altemative to work would be considered a complete
misunderstanding of one of the basic truths of human
existence, namely that work and leisure are complemen-
tary parts of the same living process and cannot be
separated without destroying the joy of work and the
bhss of leisure.
From the Buddhist point of view, there are therefore
two types of mechanisation which must be clearly dis-
tinguished: one that enhances a man's skill and power and
one that tums the work of man over to a mechanical
slave, leaving man in a position of having to serve the
slave. How one from the other? "The craftsman
to tell the
himself," says Ananda Coomaraswamy, a man equally
competent to talk about the modem West as the ancient
East, "can always, if allowed to, draw the delicate distinc-
tion between the machine and the tool. The carpet loom
is a tool, a contrivance for holding warp threads at a
stretch for the pile to be woven round them by the
craftsmen*s fingers; but the power loom is a machine, and
its significance as a destróyer of culture lies in the fact
that it does the essentially human part of the work."^ It
is clear, therefore, that Buddhist economics must be very
different from the economics of modem materialism, since
the Buddhist sees the essence of civilisation not in a
multiplication of wants but in the purification of human
same time, is formed primar-
character. Character, at the
ily by a man's work. And work, properly conducted in
conditions of human dignity and freedom, blesses those
who do it and equally their products. The Indian

55
 a

philosopher and economist J. C. Kumarappa sums the

matter up as follows:
If the nature of the work is properly appreciated and ap-
plied, it will stand in the same relation to the higher faculties
as food is to the physical body. It nourishes and enlivens the
higher man and urges him to produce the best he is capable

of. It directs his free will along the proper course and dis-
ciplines the animal in him into progressive channels. It
ñirnishes an excellent background for man to display his
scale of valúes and develop his personality.®

If a man
has no chance of obtaining work he is in a
desperate position, not simply because he lacks an income
but because he lacks this nourishing and enlivening factor
of disciplinad work which nothing can replace. A modera
economist may engage in highly sophisticated calculations
on whether fuU employment "pays" or whether it might
be more "economic" to run an economy at less than
full employment so as to ensure a greater mobility of

labour, a better stability of wages, and so forth. His

fundamental criterion of success is simply the total quan-
tity of goods produced during a given period of time. "If

the marginal urgency of goods is low," says Professor

Galbraith in The Affluent Society, "then so is the urgency
of employing the last man or the last million men in
the labour force."^ And again: "If we can afford . . .

some unemployment in the interest of stability —

proposition, incidentally, of impeccably conservative ante-
cedents —then we can aíford to give those who are
unemployed the goods that enable them to sustain their
accustomed standard of living."
From a Buddhist point of view, this is standing the
truth on head by considering goods as more important
its

than people and consumption as more important than

Creative activity. It means shifting the emphasis from the
worker to the product of work, that is, from the human
to the subhuman, a surrender to the fonces of evil. The
very start of Buddhist economic planning would be a

56
planning for employment, and the primary purpose oí
full

this would be employment for everyone who needs

in fact
an "outside" job: it would not be the maximisation of
employment ñor the maximisation of production. Women,
on the whole, do not need an "outside" job, and the
large-scale employment of women in oflSces or faetones
would be considered a sign of serious economic failure.
In particular, to let mothers of young children work in
faetones while the ehildren nin wild would be as uneco-
nomic in the eyes of a Buddhist eeonomist as the employ-
ment of a skilled worker as a soldier in the eyes of a
modern eeonomist.
While the materialist is mainly interested in goods, the
Buddhist is mainly interested in liberation. But Buddhism

is "The Middle Way" and therefore in no way antagonistic

to physieal well-being. It is not wealth that stands in the
way of liberation but the attaehment to wealth; not the
enjoyment of pleasurable things but the eraving for them.
The keynote of Buddhist economies, therefore, is simplic-
ity and non-violence. From an eeonomist's point of view,
the marvel of the Buddhist way of life is the utter
rationaíity of its pattem —
amazingly small means leading
to extraordinarily satisfactory results.
For the modem
eeonomist this is very difl&eult to under-
stand. He used to measuring the "standard of living" by
is

the amount of annual eonsumption, assuming all the time

that a man who eonsumes more is "better off' than a man
who eonsumes less. A Buddhist eeonomist would consider
this approaeh exeessively in^ational: since eonsumption is
merely a means to human well-being, the aim should be
to obtain the máximum of well-being with the minimum
of eonsumption. Thus, If the purpose of elothing is a cer-
tain amoimt of temperature eomfort and an attractive
appearanee, the task is to attain this purpose with the
smallest possible eífort, that is, with the smallest annual
destniction of cloth and with the help of designs that
involve the smallest possible input of toiL The less toil

57
there is, the more time and strength is left for artistic
creativity. It would be highly uneconomic, for instance, to
go in for complicated tailoring, like the modern West,
when a much more beautiful effect can be achieved by
the skilful draping of imcut material. It would be the
height of foUy to make material so that it should wear

out quickly and the height of barbarity to make anything

ugly, shabby or mean. What has just been said about
clothing applies equally to all other human requirements.
The ownership and consumption of goods is a means
the
to an end, and Buddhist economics is the systematic
study of how to attain given ends with the minimum
means.
Modem economics, on the other hand, considers con-
sxmíption to be the solé end and purpose of all economic
activity, taking the factors of production —land, labour,
—
and capital as the means. The former, in short, tries to
maximise human satisfactions by the optimal pattem of
consumption, while the latter tries to maximise consump-
tion by the optimal pattem of productive effort. It is easy
to see that the effort needed to sustain a way of life which
seeks to attain the optimal pattern of consumption is
likely to be much smaller than the eífort needed to sustain
a drive for máximum consumption. We need not be sur-
prised, therefore, that the pressure and strain of living is
very much less in, say, Burma than it is in the United
States, in spite of the fact that the amount of labour-
saving machinery used in the former country is only a
minute f raction of the amount used in the latter.
Simplicity and non-violence are obviously closely
related. The optimal pattern of consumption, producing a
high degree of human satisfaction by means of a relatively
low rate of consumption, allows people to live without
great pressure and strain and to fulfil the primary injunc-
tion of Buddhist teaching: "Cease to do evil; try to do
good." As physical resources are everywhere limited,
people satisfying their needs by means of a modest use of

58
resources are obviously less likely to be at each other's
throats than people depending upon a high rate of use.
Equally, people who live in highly self-sufficient local

communities are less likely to get involved in large-scale

violence than people whose existence depends on world-
wide systems of trade.
From the point of view of Buddhist economics, there-
fore, production from local resources for local needs is
the most rational way of economic life, while dependence
on imports from afar and the consequent need to produce
for export to unknown and distant peoples is highly
uneconomic and justifiable only in exceptional cases and
on a small scale. Just as the modern economist would
admit that a high rate of consumption of transpon serv-
ices between a man's home and his place of work signifies
a misfortune and not a high standard of life, so the
Buddhist economist would hold that to satisfy human
wants from faraway sources rather than from sources
nearby signifies failure rather than success. The former
tends to take statistics showing an increase in the number
of ton/ miles per head of the population carried by a
country's transport system as proof of economic prog-
ress, while to the latter — the Buddhist economist —the
same statistics would indícate a highly undesirable deteri-
oration in the pattern of consumption.
Another striking diíference between modem economics
and Buddhist economics arises over the use of natural
resources. Bertrand de Jouvenel, the eminent French
political philosopher, has characterised "Western man'* in
words which may be taken as a fair description of the
modern economist:
He tends to count nothing as an expenditure, other than
human effort; he dees not seem to mind how much mineral
matter he wastes and, far worse, how much living matter he
destroys.He does not seem to realise at all that human life
is a dependent part of an ecosystem of many different forms
of life. As the world is ruled from towns where men are cut

59
 off from any form of lifc other than human, the feeling of
belongÍDg to an ecosystem is not revi ved. This results in a
harsh and improvident treatment of things upon which we
ultimately depend, such as water and trees.»

The teaching of the Buddha, on the other hand, enjoins

a reverent and non-violent attitude not only to all sentient
beings but also, with great emphasis, to Every
trees.
follover of the Buddha ought few
to plant a tree every
years and look after it until it is safely established, and the
Buddhist economi^st can demónstrate without difíiculty
that the universal observation of this rule would result in
a high rate of genuine economic development independent
of any foreign aid. Much of the economic decay of south-
east Asia (as of many other parts of the world) is
undoubtedly due to a heedless and shameful neglect of
trees.
Modem economics does not distinguish between renew-
able and non-renewable materials, as itsvery method is to
equalise and quantify everything by means of a money
price. Thus, taking various altemative fuels, like coal, oil,
wood, or water-power: the only difference between them
recognised by modem economics is relative cost per equiv-
alent unit. The cheapest is automatically the one to be
preferred, as to do otherwise would be irrational and "un-
economic." From a Buddhist point of view, of course, this
will not do; the essential difference between non-renew-
able fuels like coal and oil on the one hand and renewable
fuels like wood and water-power on the other cannot be
simply overlooked. Non-renewable goods must be used
only if they are indispensable, and then only with the
greatest care and the most meticulous concern for con-
servation. To use them heedlessly or extravagantly is an
act of violence, and while complete non-violence may not
be attainable on this earth, there is nonetheless an ineluc-
table duty on man to aim at the ideal of non-violence in
all he does.

Just as a modem European economist would not con-

60
sider it a great economic achievementif all European art

treasures were sold to America at attractive pnces, so the

Buddhist economist would insist that a population basing
its economic Ufe on non-renewable fuels is living parasiti-

cally, on capital instead of income. Such a way of life could

have no permanence and could therefore be justified only
as a purely temporary expedient. As the world's resources
of non-renewable fuels —
coal, oil and natural gas are —
exceedingly unevenly distributed over the globe and
undoubtedly limited in quantity, it is clear that their
exploitation at an ever-increasing rate is an act of violence
against nature which must almost inevitably lead to vio-
lence between men.
This fact alone might give food for thought even to
those people in Buddhist, countries who care nothing for
the religious and spüitual valúes of their heritage and
ardently desire to embrace the materialism of modem
economics at the fastest possible speed. Before they dis-
miss Buddhist economics as nothing better than a nostalgic
dream, they might wish to consider whether the path of
economic development outlined by modern economics is
likely to lead them to places where they really want to be.
Towards the end of his courageous book The Challenge of
Man's Future, Professor Harrison Brown of the California
Institute of Technology gives the following appraisal:

Thus we see that, just as industrial society is fundamentally

unstable and subject to reversión to agrarían existence, so
within it the conditions which offer individual freedom are
unstable in their ability to avoid the conditions which imposc
rigid organisation and totalitarian control. Indeed, when we
examine all of the foreseeable diíficultíes which threaten ihe
survival of industrial civilisation, it is dífficult to see how
the achievement of stability and the maintenance of individ-
ual liberty can be made compatible.®

Even if this were dismissed as a long-term view there is

the immediate question of whether "modemisation," as

61
currently practised without regard to religious and spirit-
ual valúes, is actually producing agreeable results. As far

as the masses are concerned, the results appear to be

disastrous — a collapse of therrural economy, a rising tide
of unemployment in town and country, and the growth
of a city proletariat without nourishment for either body
or soul.
It is in the light of both immediate experience and long-

term prospects that the study of Buddhist economics could

be recommended even to those who believe that eco-
nomic growth is more important than any spiritual or
religious valúes. For it is not a question of choosing
between "modem growth" and "traditional stagnation." It
is a question of finding the right path of development, the

Middle Way between materialist heedlessness and tradi-

tionalist immobility, in short, of finding "Right Liveli-
hood."

62
 5
A Question of Size

I was brought up on an interpretation of history which

suggested that in the beginning was the family; then
families got together and formed tribes; then a number of
tribes formed a nation; then a number of nations formed
a "Union" or "United States" of this or that; and that,
finally, we could look forward to a single World Govern-
ment. Ever since I heard this plausible story I have taken
a special interest in the process, but cx)uld not help
noticing that the opposite seemed to be happening: a
proliferation of nation-states. The United Nations Organi-
sation started some some sixty
twenty-five years ago with
members; now there are more than twice as many, and
the number is still growing. In my youth, this process of
proliferation was called "Balkanisation" and was thought
to be a very bad thing. Although everybody said it was
bad, it has now been going on merrily for over fifty
years, in most parts of the world. Large units tend to
break up into smaller units. This phenomenon, so mock-
ingly the opposite of what I had been taught, whether we
approve of it or not, should at least not pass unnoticed.
Second, I was brought up on the theory that in order to
be prosperous a country had to be big the bigger the —
better. Look at what
This also seemed quite plausible.
pumpemickel principalities" of Ger-
Churchill called "the
many before Bismarck; and then look at the Bismarckian
Reich. Is it not true that the great prosperity of Germany

63
became possible only through this unification? All the
same, the German-speaking Swiss and the German-speak-
ing Austrians, who did not join, did just as well economi-
cally, and if we make a list of all the most prosperous
countries in the worid, we find that most of them are very
small; whereas a list of all the biggest countries in the
world shows most of them to be very poor indeed. Here
again, there is food for thought.
And third, I was brought up on the theory of the "econ-
—
omies of scale" that with industries and firms, just as
with nations, there is an irresistible trend, dictated by
modem technology, for units to become ever bigger. Now,
it is quite true that today there are more large organisa-
tions and probably also bigger organisations than ever
before in history; but the number of small units is also
growing and certainly not declining in countries like
Britain and the United States, and many of these small
units are highly prosperous and provide society with most
of the really fruitful new developments. Again, it is not
altogether easy to reconcile theory and practice, and the
situation as regards this whole issue of size is certainly
puzzling to anyone brought up on these three concurrent
theories.
Even today, we are generally told that gigantic organi-
sations are inescapably necessary; but when we look
closely we can notice that as soon as great size has been
created there is often a strenuous attempt to attain
smallness within bigness. The great achievement of Mr.
Sloan of General Motors was to structure this gigantic
firm in such a manner that it became, in fact, a federa-
tion of fairly reasonably sized firms. In the British
National Coal Board, one of the biggest firms of Western
Europe, something very similar was attempted imder the
chairmanship of Lord Robens; strenuous efforts were
made to evolve a structure which would maintain the
unity of one big organisation and at the same time créate
the "climate" or feeling of there being a federation of

64
 .

numerous "quasi-firms." The monolith was transformed

into a well-coordinated assembly of lively, semi-autono-
mous each with its own dríve and sense of
units,
achievement. While many theoreticians who may not be —
too closely in touch with real life —
are still engaging in
the idolatry of large size, with practical people in the
actual worid there is a tremendous longing and striving to
profit, if at all possible, from the convenience, huraanity,
and manageability of smallness. This, also, is a tendency
which anyone can easily observe for himself
Let US now approach our subject from another anglé
and ask what is actually needed. In the affairs of men,
there always appears to be a need for at least two things
simultaneously, which, on the face of it, seem to be
incompatible and to exelude one another. We always need
both freedom and order. We need the freedom of lots
and lots of small, autonomous units, and, at the same
time, the orderliness of large-scale, possibly global, unity
and coordination. When it comes to action, we obviously
need small units, because action is a highly personal affair,
and one cannot be in touch with more than a very limited
number of persons at any one time. But when it comes to
the world of ideas, to principies or to ethics, to the
indivisibility of peace and also of ecology, we need to
recognise the unity of mankind and base our actions upon
this recognition. Or to put it differently, it is true that all

men are brothers, but it is also true that in our active

personal relationships we can, in fact, be brothers to only
a few of them, and weare called upon to show more
brotherliness to them than we could possibly show to the
whole of mankind. We all know people who freely talk
about the brotherhood of man while treating their neigh-
bours as enemies, just as we also know people who have,
in fact, excellent relations with all their neighbours while
harbouring, at the same time, appalling prejudices about
all human groups outside their particular circle.
What I wish to emphasise is the duality oí the human

65
requirement when it comes to the question of size: there
is no single answer. different purposes man needs
For his
many both small ones and large ones,
different structures,
some exclusive and some comprehensive. Yet people find
it most diíficult to keep two seemingly opposite necessities

of truth in their minds at the same time. They always

tend to clamour for a final solution, as if in actual Ufe
there could ever be a final solution other than death. For
constructive work, the principal task is always the restora-
tion of some kind of balance. Today, we suffer from an
almost universal idolatry of giantism. It is therefore
necessary to insist on the virtues of smallness where this —
applies. (If there were a prevailing idolatry of smallness,
iirespective of subject or purpose, one would have to try
and exercise influence in the opposite direction.)
The question of scale might be put in another way:
what is needed in all these matters is to discriminate, to
get things sorted out. For every activity there is a certain
appropriate scale, and the more active and intimate the
activity, the smallcr the number of people that can take
part, the greater is the number of such relationship
arrangements that need to be established. Take teaching:
one listens to all sorts oi extraordinary debates about the
superiority of the teaching machine over some other
forms of teaching. Well, let us discriminate: what are we
trying to teach? It then becomes immediately apparent
that certain things can only be taught in a very intimate
circle, whereas other things can obviously be taught en
masse, via the air, via televisión, via teaching machines,
and so on.
What scale is appropriate? It depends on what we are
trying to do. The question of scale is extremely crucial
today, in political, social and economic affairs just as in
almost everything else.What, for instance, is the appropri-
ate size of a city? And also, one might ask, what is the
appropriate size of a country? Now these are serious and

66
difficult questions. It is not possible to programme a Com-
puter and get the answer. The really serious matters of
life cannot be calculated. We cannot directly calcúlate
what is right; but we jolly well know what is wrong! We
can recognise right and wrong at the extremes, although
we cannot normally judge them finely enough to say:
"This ought to be five per cent more/* or "that ought to be
five per cent less."

Take the question of size of a city. While one cannot

judge these things with precisión, I think it is fairly safe to

say that the upper limit of what is desirable for the size of
a city is probably something of the order of half a million
iiAabitants. It is quite clear that above such a size noth-

ing is added to the virtue of the city. In places like

London, or Tokyo, or New York, the millions do not add
to the city's real valué but merely créate enormous
problems and produce human dégradation. So probably
the order of magnitude of 500,000 inhabitants could be
looked upon as the upper limit. The question of the lower
limit of a real city is much more difficult to judge. The
finest cities in historyhave been very small by twentieth-
century standards. The Instruments and institutions of city
culture depend, no doubt, on a certain accumulation of
wealth. But how much wealth has to be accumulated
depends on the type of culture pursued. Philosophy, the
arts and religión cost very, very little money. Other types
of what claims to be "high culture" —
space research or
—
ultra-modern physics cost a lot of money, but are some-
what remote from the real needs of men.
I raise the question of the proper size of cities both for

its own sake but also because it is, to my mind, the most

relevant point when we come to consider the size of

nations.
The idolatry of giantism that I have talked about is

possibly one of the causes and certainly one of the effects

of modern technology, particularly in matters of transport

67
and Communications. A highly developed transport and
Communications system has one immensely powerful
effect: it makes people footloose,
Millions of people start moving about, deserting the
rural áreas and the smaller towns to follow the city lights,
to go to the big city, causing a pathological growth. Take
the country in which all this is perhaps most exemplified

— the United States. Sociologists are studying the problem

The word "metrópolis" is no longer big
of "megalopolls.**
enough; henee "megalopolis.** They freely talk about the
polarisation of the population of the United States into
three immense megalopolitan áreas: one extending from
Boston to Washington, a continuous built-up area> with
sixty million people; one around Chicago, another sixty
million; and one on the West Coast, from San Francisco
to San Diego, again a continuous built-up área with sixty
million people; the rest of the country being left practi-
cally empty; deserted provincial towns, and the land
cultivated with v'ast tractors, combine harvesters, and
immense amounts of chemicals.
If this is somebody*s conception of the future of the
United States, it is hardly a future worth having. But
whether we like it or not, this is the result of people hav-
ing become footloose; it is the result of that marvellous
mobility of labour which economists tre asure abo ve aJl
else.

Everything in fhis world has to have a structure^ other-

wise it is chaos. Before the advent of mass transport and
mass Communications, the structure was simply there,
because people were relatively immobile. People who
wanted to move did so; witness the flood of saints from
Ireland moving all over Europe. There were conmiunica-
tions, there was mobility, but no footlooseness. Now, a
great deal of structure has collapsed, and a country is like
a big cargo ship in which the load is in no way secured. It
tilts, and all the load slips over, and the ship founders.

One of the chief elements of structure for the whole of

68
 —

mankind is of course the state. And one of the chief ele-

ments or instmments of structuralisation (if I may use

that term), is frontiers, national frontiers. Now previ-
ously, before this technological intervention, the relevance
of frontiers was almost exclusively political and dynastic;
frontiers were delimitations of political power, determin-
ing how many people you could raise for war. Economists
fought against such frontiers becoming economic barriers
henee the ideology of free trade. But, then, people and
things were not footloose; transport was expensive enough
so that movements, both of people and of goods, were
never more than marginal. Trade in the pre-industrial era
was not a trade in essentials, but a trade in precious
stones, precious metáis, luxury goods, spices and unhap- —
pily —^slaves. The basic requirements of life had of course

to be indigenously produced. And the movement of

populations, except in periods of disaster, was confined to
persons who had a very special reason to move, such as
the Irish saints or the scholars of the University of París.
But now everything and everybody has become mobile.
All structures are threatened, and all structures are vulner-
able to an extent that they have never been before.
Economics, which Lord Keynes had hoped would settle
down as a modest occupation similar to dentistry, sud-
denly becomes the most important subject of all. Eco-
nomic policies absorb almost the entire attention of
govemment, and at the same time become ever more
impotent. The simplest things, which only fifty years ago
one could do without difl&culty, cannot get done any more.
The richer a society, the more impossible it becomes to do
worthwhile things without immediate pay-ofif. Economics
has become such a thraldom that it absorbs almost the
whole of foreign policy. People say, "Ah yes, we don't like
to go with these people, but we depend on them economi-
cally so we must humour them." It tends to absorb the
whole of ethics and to take precedence over all other
human considerations. Now, quite clearly, this is a patho-

69
logical development, which has, of course, many roots,
but one of its clearly visible roots lies in the great achieve-
ments of modem technology in terms of transpon and
Communications.
While people, with an easy-going kind of logic, believe
that fast transpórt and instantaneous Communications open
up a new dimensión of freedom (which they do in some
rather trivial respects), they overlook the fact that these
achievements also tend to destroy freedom, by making
everything extremely vulnerable and extremely insecure,
unless conscious policies are developed and conscious
action is taken to mitigate the destnictive effects of these
technological developments.
Now, these destnictive effects are obviously most severe
in large countries, because, as we have seen, frontiers pro-
duce "stnicture," and it is a much bigger decisión for
someone to cross a frontier, to uproot himself from his
native land and try and put down roots in another land,
than to move within the frontiers of his country. The
factor of footlooseness is, therefore, the more serious, the
bigger the country. Its destnictive effects can be traced
both in the rich and in the poor countries. In the rich
countries such as the United States of America, it pro-
duces, as already mentioned, *'megalopolis." It also pro-
duces a rapidly increasing and ever more intractable
problem of "drop-outs," of people, who, having become
footloose, cannot find a place anywhere in society. Directly
connected with produces an appalling problem of
this, it

crime, alienation, stress, social breakdown, right down to

the level of the family. In the poor countries, again most
severely in the largest ones, it produces mass migration
into cities, mass unemployment, and, as vitality is drained
out of the rural áreas, the threat of famine. The result is

a "dual society" without any inner cohesión, subject to

a máximum of political instability.
As an illusttation, let me take the case of Peni. The
capital city, Lima, situated on the Pacific coast, had a

70
populatíon of 175,000 in the early 1920s, just fifty years
ago. Its population now approaching three million. The
is

once beautifiil Spanish city is now infested by slums, sur-

rounded by misery-belts that are crawling up the Andes.
But this is not all. People are arriving from the rural áreas
at thé rate of a thousand a day —
and nobody knows what
to do with them. The social or psychological stnicture of
life in the hinterland has collapsed; people have become

footloose and arrive in the capital city at the rate of a

thousand a day to squat on some empty land, against the
pólice who come to beat them out, to build their mud
hovels and look for a job.And nobody knows what to do
about them. Nobody knows how to stop the drift.
Imagine that 1864 Bismarck had annexed the whole
in
of Denmark instead of only a small part of it, and that

nothing had happened since. The Danés would be an ethnic

minority in Gennany, perhaps struggling to maintain their
language by becoming bilingual, the official language of
course being Germán. Only by thoroughly Germanising
themselves could they avoid becoming second-class citi-
zens. There would be an irresistible drift of the most
ambitious and enterprising Danés, thoroughly Germanised,
to the mainland in the south, and what then would be the
status of Copenhagen? That of a remote provincial city.
Or imagine Belgium as part of France. What would be the
status of Brussels? Again, that of an unimportant provin-
cial city. I don't have to enlarge on it. Imagine now that
Denmark a part of Germany, and Belgium a part of
France, suddenly tumed what is now charmingly called
"nats" wanting independence. There would be endless,
heated arguments that these "non-countries" could not be
economically viable, that their desire for independence
was, to quote a famous political commentator, "adolescent
emotionalism, political naivety, phoney economics, and
sheer bare-faced opportunism.*'
How can one talk about the economics of small inde-
pendent countries? How can one discuss a problem that is

71
a non-problem? There is no such thing as the viability of
States or of nations, there ¡s only a probiem of viability
of people: people, actual persons like you and me, are
viable when they can stand on their own feet and eam
their keep. You do not make non-viable people viable by
putting large numbers of them into one huge community,
and you do not make viable people non-viable by splitting
a large community into a number of smaller, more intí-
mate, more coherent and more manageable groups. All this
is perfectly obvious and there is absolutely nothing to
argüe about. Some people ask: "What happens when a
country, composed of one rich province and several poor
ones, falls apart because the rich province secedes?'* Most
probably the answer is: "Nothing very much happens."
The rich will continué to be rich and the poor will con-
tinué to be poor. "But if, before secession, the rich prov-
ince had subsidised the poor, what happens then?" Well
then, of course, the subsidy might stop. But the rich rarely
subsidise the poor; more often they exploit them. They
may not do so directly so much as through the terms of
trade. They may obscure the situation a little by a certain
redistribution of tax revenue or small-scale charity, but the
last thing they want to do is secede from the poor.

The normal case is quite different, namely that the poor

provinces wish to sepárate from ttíe rich,and that the rich
want to hold on because they know that exploitation of
the poor within one's own frontiers is infinitely easier than
exploitation of the poor beyond them. Now if a poor prov-
ince wishes to secede at the risk of losing some subsidies,
what attitude should one take?
Not that we have to decide this, but what should we
think about it? Is it not a wish to be applauded and
respected? Do we not want people to stand on their own
feet, as free and self-reliant men? So again this is a "non-
problem." I would assert therefore that there is no prob-
iem of viability, as all experience shows. If a country
wishes to export all over the world, and import from all

72
over the world, it has never been held that it had to annex
the whole world in order to do so.
What about the absolute necessity of having a large
intemal market? This again is an optical illusion if the
meaning of "large" is conceived in terms of political
boundaries. Needless to say, a prosperous market is better
than a poor one, but whether that market is outside the
political boimdaries or inside, makes on the whole very
little difference. I am not aware, for instance, that Ger-

many, in order to export a large number of Volkswagens

to the United States, a very prosperous market, could only
do so after annexing the United States. But it does make
a lot of difference if a poor community or province finds

itself politically tied to or ruled by a rich community or

province. Why? Because, in a mobile, footloose society the

law of disequilibrium is infinitely stronger than the
so-called law of cquilibrium. Nothing succeeds like success,
and nothing stagnates like stagnation. The successful prov-
ince drains the life out of the unsuccessful, and without
protection against the strong, the weak have no chance;
either they remain weak or they must migrate and join
the strong; they cannot effectively help themselves.
A most important problem in the second half of the
twentieth century is the geographical distribution of popu-

lation, the question of "regionalism." But regionalism, not

in the sense of combining a lot of states into free-trade
systems, but in the opposite sense of developing all the
regions within each country. This, in fact, is the most
important subject on the agenda of all the larger countries
today. And a lot of the nationalism of small nations today,
and the desire for self-govemment and so-called independ-
ence, is simply a logical and rational response to the need
for regional development. In the poor countries in partic*
ular there is no hope for the poor unless there is successful
regional development, a development effort outside the
capital city covering all the rural áreas wherever people
happen to be.

73
 not brought forth, their only choice is
If this effort is
either to remain in their miserable condition where they
are, or to migrate into the big city where their condition
will be even more miserable. It is a strange phenomenon
indeed that the conventional wisdom of present-day eco-
nomics can do nothing to help the poor.
Invariably it proves that only such policies are viable as
have in fact the result of making those already rich and
powerful, richer and more powerful. It proves that indus-
trial development only pays if it is as near as possible to

the capital city or another very large town, and not in the
rural áreas. It proves that large projects are invariably
more economic than small ones, and it proves that capital-
intensive projects are invariably to be preferred as against
labour-intensive ones. The economic calculus, as applied by
present-day économics, forces the industrialist to elimínate
the himian factor because machines do not make mistakes,
which people do. Henee the enonnous effort at automation
and the drive for ever-larger units. This means that those
who have nothing to sell but their labour remain in the
weakest possible bargaining position. The conventional
wisdom of what is now taught as économics by-passes the
poor, the very people for whom development is really
needed. The économics of giantism and automation is a
left-over of nineteenth-century conditions and nineteenth-
century thinking and it is totally incapable of solving any
of the real problems of today. An entirely new system of
thought is needed, a system based on attention to people,
—
and not primarily attention to goods (the goods will
look after themselves!). It could be simmied up in the
phrase, "production by the masses, rather than mass pro-
duction." What was impossible, however, in the nineteenth
century, is possible now. And what was in fact —
if not

necessarily at least understandably —neglected in the nine-

teenth century is unbelievably urgent now. That is, the
conscious utüisation of our enormous technological and
scientific potential for the fight against misery and human

74
degradation —
a fight in intímate contact with actual peo-
pie, with individuáis, families, small groups, rather than
States and other anonymous abstractions. And this presup-
poses a political and organisational structure that can
provide this intimacy.
What is the meaning of democracy, freedom, human
dignity, standard of living, self-realisation, fulfilment? Is it

a matter of goods, or of people? Of course it is a matter

of people. But people can be themselves only in small com-
prehensible groups. Therefore we must leam to think in
terms of an articuíated structure that can cope with a
multiplicity of small-scale units. If economic thinking can-
not grasp this it is useless. If it cannot get beyond its vast

abstractions, the national income, the rate of growth,

capital/ output ratio, input-output analysis, labour mobility,
capital accumulation; if cannot get beyond all this and
it

make contact with the humanrealities of poverty, frustra-

tion, alienation, despair, breakdown, crime, escapism,
stress, congestión, ugliness, and spiritual death, then let us
scrap economics and start afresh.
Are there not indeed enough "signs of the times" to
indícate that a new start is needed?

75
 1

PART 1

Resources
 7
The Greatest Resource —
Education

Throughout history and in virtually every part of the earth

men have lived and multiplied, and have created some
form of culture. Always and everywhere they have found
their means of subsistence and something to spare. Ci\dli-
satíons have been built up, have flourished, and, in most
cases, have declined and perished. This is not the place
to discusswhy they have perished; but we can say: there
must have been some failure of resources. In most
instances new civilisations have arisen, on the same
ground, which would be quite incomprehensible if it had
been simply the material resources that had given out
before. How could such resources have reconstituted
themselves?
All history — as well as all current experience
—^points to

the fact that man, not nature, who provides the pri-
it is

mary resource: that the key factor of all economic devel-

opment comes out of the mind of man. Suddenly, there is
an outburst of daring, initiative, invention, constructive
activity, not in one field alone, but in many fields all at
once. No one may be able to say where it came from in
the first place; but we can see how it maintains and even
strengthens itself: through various kinds of schools, in

other words, through education. In a very real sense, there-

fore, we can say that education is the most vital of all
resources.

79
 .

If Western civilisation is in a state of permanent crisis,

it is not far-fetched to suggest that there may be some-
thing wrong with its education. No civilisation, I am sure,
has ever devoted more energy and resources to organised
education, and if we believe in nothing else, we certainly
believe that education is, or should be, the key to every-
thing. In fact, the beüef in education is so strong that we
treat it as the residual legatee of all our problems. If the
nuclear age brings new dangers; if the advance of genetic
engineering opens the doors to new abuses; if commercial-
ism brings new temptations —the answer must be more and
better education. The modern way of life is becoming ever
more complex: this means that everybody must become
more highly educated. "By 1984," it was said recently, "it
will be desirable that the most ordinary of men is not
embarrassed by the use of a logarithm table, the elemen-
tary concepts of the calculus, and by the definitions and
uses of such words as electrón, coulomb, and volt. He
should further have become able not only to handle a pen,
pencil, and ruler but also a magnetic tape, valve, and
transistor. The improvement of conmiunications between
individuáis and groups depends on it." Most of all, it
appears, the international situation calis for prodigious
educational efforts. The classical statement on this point
was delivered by Sir Charles (now Lord) Snow in his
Rede Lecture some years ago: "To say that we must
edúcate ourselves or perish, is a little more melodramatic
than the facts warrant. To say, we have to edúcate our-
selves or watch a steep decline in our lifetime, is about
right." According to Lord Snow, the Russians are appar-
ently doing much better than anyone else and will "have a
clear edge," "unless and until the Americans and we edú-
cate ourselves both sensibly and imaginatively."
Lord Snow, it will be recalled, talked about "The Two
Cultures and the Scieutific Revolution" and expressed his
concern that "the intellectual life of the whole of western
society is increasingly being split into two polar groups. . .

80
At one pole we have the literary intellectuals . . . at the
other the scientists." He deplores the "gulf of mutual
incomprehension" between these two groups and wants it
brídged. It is quite clear how he thinks this "bridging"

operation is to be done; the aims of his educational policy

would be, first, to ^et as many "alpha-plus scientists as the
country can throw up"; second, to train "a much larger
stratum of alpha professionals" to do the supporting
research, high-class design and development; third, to train
"thousands upon thousands" of other scientists and engi-
neers; and finally, to train "politicians, administrators, an
entire community, who know enough science to have a
sense of what the scientists are talking about.** If this
fourth and group can at least be educated enough to
last

"have a what the real people, the scientists and

sense*' of
engineers, are talking about, so Lord Snow seems to sug-
gest, the gulf of mutual incomprehension between the
*Two Cultures" may be bridged.
These ideas on education, which are by no means
unrepresentative of our times, leave one with the uncom-
fortable feeling that ordinary people, including politicians,
administrators, and so forth, are really not much use; they
have failed to make the grade: but, at least, they should be
educated enough to have a sense of what is going on, and
to know what the scientists mean when they talk to —
—
quote Lord Snow's example about the Second Law of
Thermodynamics. It is an uncomfortable feeling, because
the scientists never tire of telling us that the fruits of their
labours are "neutral": whether they enrich humanity or
destroy it depends on how they are used. And who is to
decide how they are used? There is nothing in the training
of scientists and engineers to enable them to take such
decisions, or else, what becomes of the neutrality of
science?
If so much reliance is today being placed in the power
of education to enable ordinary people to cope with the
problems thrown up by scientific and technological prog-

81
ress, then there must be something more to education than
Lord Snow suggests. Science" and engineering produce
"know-how"; but "know-how" is nothing by itself; it is a
means without an end, a mere potentiality, an unfinished
sentence. "Know-how" is no more a culture than a piano
is music. Can education help us to finish the sentence, to

turn the potentiality into a reality to the benefit of man?

To do so, the task of education would be, first and fore-
most, the transmission of ideas of valué, of what to do
with our lives. There is no doubt also the need to transmit
know-how but this must take second place, for it is obvi-
ously somewhat foolhardy to put great powers into the
hands of people without making sure that they have a
reasonable idea of what to do with them. At present, there
can be little doubt that the whole of mankind is in mortal
danger, not because we are short of scientific and techno-
logical know-how, but because we tend to use it destruc-
tively, without wisdom. More education can help us only
if it produces more wisdom.

The essence of education, I suggested, is the transmis-

way
sion of valúes, but valúes do not help us to pick our
through life become our own, a part, so
unless they have
to say, of our mental make-up. This means that they are
more than mere formulae or dogmatic assertions: that we
think and feel with them, that they are the very Instru-
ments through which we look at, interpret, and experience
the world. When we think, we do not just think: we think
with ideas. Our mind is not a blank, a tabula rasa. When
we begin to think we can do so only because our mind is
already filled with all sorts of ideas with which to think.
All tkrougk our youth and adolescence, before the con-
scious and critical mind begins to act as a sort of censor
and guardián at the threshold, ideas seep into our mind,
vast hosts and multitudes of them. These years are, one
might say, our Dark Ages during which we are nothing
but inheritors; it is only in later years that we can gradu-
ally leam to sort out our inheritance.

82
First of all, there is language. Each word is an idea. If
the language which seeps into us during our Dark Ages is

English, our mind is thereby furnished by a set of ideas

which is significantly different from the set represented by
Chinese, Russian, Germán, or even American. Next to
words, there are the rules of putting them together: gram-
mar, another bundle of ideas, the study of which has fas-
cinated some modem philosophers to such an extent that
they thought they could reduce the whole of philosophy to
a study of grammar.
All philosophers —and others—have always paid a great
deal of attention to ideas seen as the result of thought and
observation; but in modem times all too little attention
has been paid to the study of the ideas which form the
very instruments by which thought and observation pro-
ceed. On the basis of experience and conscious thought
small ideas may easily be dislodged, but when it comes to
bigger, more universal, or more subtle ideas it may not be
so easy to change them. Indeed, it is often difficult to
become aware of them, and
as they are the instruments
not the results of our thinking —
you can see what is
just as
outside you, but can not easily see that with which you see,
the eye itself. And even when one has become aware of
them it is often impossible to judge them on the basis of
ordinary experience.
We often notice the existence of more or less fixed ideas

in other people's minds — ideas with which they think with-

out being aware of doing so. We then cali them prejudices,
which is logically quite correct because they have merely
seeped into the mind and are in no way the result of a
judgement. But the word "prejudice" is generally applied to
ideas that are patently erroneous and recognisable as such
by anyone except the prejudiced man. Most of the ideas
with which we think are not of that kind at all. To some
of them, like those incorporated in words and grammar,
the notions of truth or error cannot even be applied;
others are quite definitely not prejudices but the result of

83
 —
a judgement; others again are tacit assumptions or pre-
suppositions which may be very difficult to recognise.
I say, therefore, that we think with or through ideas and
that what we cali thinking is generally the application of
pre-existing ideas to a given situation or set of facts. When
we think about, say, the political situation we apply to
that situation our political ideas, more or less systemati-
cally, and attempt to make that situation "intelligible" to
ourselves by means of these ideas. Similarly everywhere
else. Some of the ideas are ideas of valué, that is to say,

we evalúate the situation in the light of our value-ideas.

The way in which we experience and interpret the world
obviously depends very much indeed on the kind of ideas
that our minds. If they are mainly small, weak, super-
fill

ficial, and incoherent, life will appear insipid, uninterest-

ing, petty and chaotic. It is difficult to bear the resultant
feeling of emptiness, and the vacuum of our minds may
only too easily be filled by some big, fantastic notion
political or otherwise —
^which suddenly seems to illumine
everything and to give meaning and purpose to our exist-
ence. It needs no emphasis that herein lies one of the great
dangers of our time.
When people ask for education they normally mean
something more than mere training, something more than
mere knowledge of facts, and something more than a mere
diversión. Maybe they cannot themselves formúlate pre-
cisely what they are looking for; but I think what they
are really looking for is ideas that would make the world,
and their own lives, intelligible to them. When a thing is
intelligible you have a sense of participation; when a thing
is unintelligible you have a sense of estrangement. "Well,

I don't know," you hear people say, as an impotent protest

against the unintelligibility of the world as they meet it. If

the mind cannot bring to the world a set —
or, shall we
say, a tool-box —of powerful ideas, the world must appear
to it as a chaos, a mass of unrelated phenomena, of
meaningless events. Such a man is like a person in a

84
 .

strange land without any signs of civilisation, without

maps or signposts or indicators of any kind. Nothing has
any meaning to him; nothing can hold his vital interest; he
has no means of making anything intelligible to himself
All traditional philosophy is an attempt to créate an
orderly system of ideas by which to Uve and to interpret
the world. "Philosophy as the Greeks conceivedit,** writes

Professor Kuhn, "is one single effort of the human mind

to interpret the system of signs and so to relate man to the
world as a comprehensivo order within which a place is
assigned to him." The classical-Christian culture of the
late Middle Ages supplied man with a very complete and
astonishingly coherent interpretation of signs, i.e. a system
of vital ideas giving a most detailed picture of man, the
universe, and man's place in the universe. This system,
however, has been shattered and fragmented, and the
result is bewilderment and estrangement, never more dra-
matically put than by Kirkegaard in the middle of last
century:

One sticks one's finger into the soil to tell by the smell
in what land one is: my finger into existence
I stick — it

smells of nothing. Where am I? Who am I? How came I

here? What is this thing called the world? What does this
world mean? Who is it that has lured me into this thing and
now leaves me there? How did I come into the world?
. . .

Why was I but was thrust into the ranks

not consulted . . .

as though I had been bought of a kidnapper, a dealer in

souls? How did I obtain an interest in this big enterprise
they cali reality? Why should I ha ve an interest in it? Is it
not a voluntary concern? And if I am compelled to take
part in it, where is the director? . . . Whither shall I tum
with my complaint?

Perhaps there is not even a director. Bertrand Russell

said that the whole universe is simply "the outcome of
accidental collocations of atoms" and claimed that the
scientific theories leading to this conclusión "if not quite
beyond dispute, are yet so nearly certain, that no philoso-

85
phy that rejects them can hope to stand. . . . Only on the
firm foundation of unyielding despair can the soul's habi-
tation henceforth be safely built." Sir Fred Hoyle, the
astronomer, talks of "the truly dreadful situation in which
we find ourselves. Here we are in this whoUy fantastic
universe with scarcely a clue as to whether our existence
has any real significance."
Estrangement breeds loneliness and despair^ the
"encounter with nothingness," cynicism, empty gestures
of defiance, as we can see in the greater part of existential-
istphilosophy and general literature today. Or it suddenly
turns —
as I have mentioned before —
into the ardent
adoption of a fanatical teaching which, by a monstrous
simplification of reality, pretends to answer all questions.
So, what is Never has science
the cause of estrangement?
been more triumphant; never has man's power over his
environment been more complete ñor his progress faster.
It cannot be a lack of know-how that causes the despair
not only of religious thinkers like Kierkegaard but also of
leading mathematicians and scientists like Russell and
Hoyle. We know how to do many things, but do we know
what to do? Ortega y Gasset put it succinctly: "We cannot
live on the human level without ideas. Upon them depends
what we do. Living is nothing more or less than doing one
thing instead of another." What, then, is education? It is
the transmission of ideas which enable man to choose
between one thing and another, or, to quote Oretega again,
"to live a Ufe which is something above meaningless trag-
edy or inward disgrace.'*
How could, for instance, a knowledge of the Second Law
of Thermodynamics help us in this? Lord Snow tells us
that when educated people deplore the "illiteracy of scien-
tists'* he sometimes asks "How many of them could
describe the Second Law of Thermodynamics?" The
response, he reports, is usually cold and negativo. "Yet,"
he says, "I was asking something which is about the
scientific equivalent of Have you read a work of Shake-
:

86
 —a

speare's?" Such a statement challenges the entire basis of

our civil isation. What matters is the tool-box of ideas with
which, by which, through which, we experience and inter-
pret the world. The Second Láw of Thermodynamics is
nothing more than a working hypothesis suitable for vari-
ous types of scientific research. On the other hand —
work by Shakespeare: teeming with the most vital ideas
about the inner development of man, showing the whole
grandeur and misery of human existence. How could these
two things be equivalent? What do I miss, as a human
being, if I have never heard of the Second Law of Thermo-
dynamics? The answer is: Nothing.^ And what do I miss
by not knowing Shakespeare? Unless I get my under-
standing from another source, I simply miss my Ufe. Shall
we tell our children that one thing is as good as another
here a bit of knowledge of physics, and there a bit of
knowledge of literature? If we do so, the sins of the
f athers will be visited upon the children unto the third and

fourth generation, because that normally is the time it

takes from the birth of an idea to its fuU maturity when it

filis the minds of a new generation and makes them think

by it.

Science cannot produce ideas by which we could live.

Even the greatest ideas of science are nothing more than
working hypotheses, useful for purposes of special research
but completely inapplicable to the conduct of our Uves or
the interpretation of the world. If, therefore, a man seeks
education because he feels estranged and bewildered,
because his Ufe seems to him empty and meaningless, he
cannot get what he is seeking by studying any of the natu-
ral sciences, Le. by acquiring "know-how." That study has
its own valué which I am not inclined to beUttle; it tells
him a great deal about how things work in nature or in
engineering: but it tells him nothmg about the meaning
of Ufe and can in no way cure his estrangement and secret
despair.
Where, then, shall he turn? Maybe, in spite of aU that

87
 —
he hears about the scientific revolution and ours being an
age of science, he tums to the so-calle*d humantties. Here
indeed he can find, if he is lucky, great and vital ideas to
fill his mind, ideas with which to think and through which

to make the world, society, and his own life intelligible. Let
US see what are the main ideas he is likely to find today. I
cannot attempt to make a complete list; so I shall confine
myself to the enumeration of six leading ideas, all stem-
ming from the nineteenth century, which still domínate, as
far as I can see, the mind^of "educated" people today.

1. There is the idea of evolution — that higher forms

continually develop out of lower forms, as a kind of
natural and automatic process. The last hundred years
or so have seen the systematic application of this idea
to all aspects of reality without exception.
2. There is the idea of competition, natural selection,

and the survival of the fittest, which purports to explain

the natural and automatic process of evolution and
development.
3. There is the idea that all the higher manifestations
of human life, such as religión, philosophy, art, etc.
what Marx calis "the phantasmagorias in the brains of
—
men" are nothing but "necessary supplements of the
material life process,'* a superstructure erected to dis-
guise and promote economic interests, the whole of
human history being the history of class struggles.
4. In competition, one might think, with the Marxist
interpretation of all higher manifestations of human life,

there is, fourthly, the Freudian interpretation which

reduces them to the dark stirrings of a subconscious
mind and explains them mainly as the results of un-
fulfilled incest-wishes during childhood and early
adolescence.
5. There is the general idea of relativism, denying all
absolutes, dissolving all norms and standards, leading
to the total undermining of the idea of tnith in prag-

88
 matism, and affecting even mathematics, which has been
defined by Bertrand Russell as "the subject in which
we never know what we are talking about, or whether
what we say is true."
6. Finally there is the triumphant idea of positivism,
that validknowledge can be attained only through the
methodSs of the natural sciences and henee that no
knowledge is genuine unless it is based on generally
observable facts. Positivism, in other words, is solely
interested in "know-how" and denies the possibility of
objective knowledge about meaning and purpose of any
kind.

No one, I think, will be disposed to deny the sweep and

power of these six **large" ideas. They are not the result of
any narrow empiricism. No amount of factual enquiry
could have verified any one of them. They represent tre-
mendous leaps of the imagination into the unknown and
unknowable. Of course, the leap is taken from a small
platform of observed fact. These ideas could not have
lodged themselves as finnly in men's minds, as they have
done, if they did not contain important elements of truth.
But their essential charactér is their claim of universality.
Evolution takes everything into its stride, not only material
phenomena from nebulae to homo sapiens but also all
mental phenomena, such as religión or language. Competi-
tion, natural selection, and the survival of the fittest are not
presented as one set of observations among others, but as
universal laws. Marx does not say that some parts of
history are made up of class stniggles; no, "scientific mate-
rialismo* not very scientifically, extends this partial obser-
vation to nothing less than the whole of "the history of all
hitherto existing society." Freud, again, is not content to
report a number of clinical observations but offers a
universal theory of human motivation, asserting, for
instance, that all religión is nothing but an obsessional
neurosis. Relativism and positivism, of course, are purely

89
metaphysical doctrines, with the peculiar and ironical dis-
tinction that they deny the validity of all metaphysics,
including themselves.
What do these six "large*' ideas have in common,
besides their non-empirical, metaphysical nature? They all
assert that what had previously been taken
to be something
of a higher order is "nothing but" a more subtle
really
—
manifestation of the "lower" unless, indeed, the vcry dis-
tinction between higher and lower is denied. Thus man,
like the rest of the uni verse, is really nothing but an acci-
dental coUocation of atoms. The difference between a man
and a stone is little more than a deceptive appearance.
Man's highest cultural achievements are nothing but dis-
guised economic greed or the outflow of sexual frustra-
tions. In any case, it is meaningless to say that man should
aim at the "higher" rather than the "lower" because no
intelligible meaning can be attached to purely subjective
notions like "higher" or "lower," while the word "should"
is just a sign of authoritarian megalomanía.
The ideas of the fathers in the nineteenth century have
been visited on the third and fourth generations living in
the second half of the twentieth century. To their origina-
tors, these ideas were simply the result of their intellectual
processes. In the third and fourth generations, they have
become the very tools and Instruments through which the
world is being experienced and interpreted. Those that
bring forth new ideas are seldom ruled by them. But their
ideas obtain power over men's Uves in the third and fourth
generations when they have become a part of that great
mass of ideas, including language, which seeps into a per-
sonas mind during his "Dark Ages."
These nineteenth-century ideas are firmiy lodged in the
minds of practically everybody in the Western world today,
whether educated or uneducated. In the uneducated mind
they are still rather muddled and nebulous, too weak to
make the world intelligible. Henee the longing for educa-
tion, that is to say, for something that will lead us out of

90
the dark wood of our muddled ignorance into the light of
understanding.
I have said that a purely scientific education cannot do
this for US because it deals only with ideas of know-how,
whereas we need to understand why things are as they are
and what we are to do with our lives. What we learn by
studying a particular science is in any case too specific and
specialised for our wider purposes. So we tum to the
huraanities to obtain a clear view of the large and vital
ideas of our age. Even in the humanities we may get
bogged down in a mass of specialised scholarship, fumish-
ing our minds with lots of small ideas just as unsuitable as
the ideas which we might pick up from the natural sci-
ences. But we may also be more fortúnate (if fortúnate it
is) and find a teacher who will "clear our minds," clarify

the ideas —
the "large" and universal ideas already existent
in our —
minds and thus make the world intelligible for us.
Such a process would indeed deserve to be called "edu-
cation." And what do we get from it today? A view of
the world as a wasteíand in which there is no meaning or
purpose, in which man's consciousness is an unfortunate
cosmic accident, in which anguish and despair are the
only final realities. If by means of a real education man
manages to climb to what Ortega calis "the Height of Our
Times" or "the Height of the Ideas of our Times," he finds
himself in an abyss of nothingness. He may feel like echo-
ing Byron:

Sorrow is knowledge; they who know the most

Musí mourn the deepest o'er the fatal truth,
The Tree of Knowledge is not that of Life.

In other words, even a humanistic education lifting us to

the height of the ideas of our time cannot "deliver the
goods," because what men are quite legitimately looking
foris life more abundant, and not sorrow.

What has happened? How is such a thing possible?

The leading ideas of the nineteenth century, which

91
claimed to do away with metaphysics, are themselves a
bad, vicious, life-destroying type of metaphysics. We are
suffering from them as from a fatal disease. It is not tnie
that knowledge is sorrow. But poisonous errors bring un-
iimited sorrow in the third and fourth generation. The
errors are not in science but in the philosophy put forward
in the ñame of science. As Etienne Gilson put it more
than twenty years ago:

Such a development was by no means inevitable, but the

Progressive growth of natural science had made it more
and more probable. The growing interest taken by men in
the practical results of science was in itself both natural
and legitimate» but it helped them to forget that science is
knowledge, and practical results but its by-products. . . .
Before their imexpected succcss in finding conclusive ex-
planations of the material world, men had begun either
to despise all disciplines in which such demonstrations could
not be found, or to rebuild those disciplines after the pat-
tem of the physical sciences. As a consequence, meta-
physics and ethics had to be either ignored or, at least,
replaced by new positíve sciences; in either case, they
would be eliminated. A very dangerous move indeed, which
accounts for the perilous position in which westem culture
has now found itsell

It is not even tnie that metaphysics and ethics would be

eliminated. On the contrary, all we got was bad metaphys-
ics and appalling ethics.
Historians know that metaphysical errors can lead to
death. R. G. Collingwood wrote:

The Patristic diagnosis of the decay of Greco-Roman civil-

isation ascríbes that event to a metaphysical disease. . . . It

was not barbarian attacks that destroyed the Greco-Roman

world. The cause was a metaphysical cause. The **pagan**
. . .

world was failing to kecp alive its own fundamental con-

victions, they [the patristic writers] said, because owing to
faults in metaphysical analysis it had become confused as to
what these convictions were. If metaphysics had been a
. . .

mere luxury of the intellect, this would not have mattered.

92
 This passage can be applied, without change, to
present-day civilisation. We have become confused as to
what our convictions really are. The great ideas of the
nineteenth century may fill our minds in one. way or
another, but our hearts do not believe in them all the
same. Mind and heart are at war with one another, not,
as is commonly asserted, reason and faith. Our reason has
become beclouded by an extraordinary, blind and unrea-
sonable faith in a set of fantastic and life-destroying ideas
inheriíed from the nineteenth century. It is the foremost
task of our reason to recover a truer faith than that.

Education cannot help us as long as it accords no place to

metaphysics. Whether the subjects taught are subjects of
science or of the humanities, if the teaching does not lead
to a clarification of metaphysics, that is to say, of our
fundamental convictions, it cannot edúcate a man and,
consequently, cannot be of real valué to society.
It is often asserted that education is breaking down

because of over-specialisation. But this is only a partial

and mísleading diagnosis. Specialisation is not in itself a
faulty principie of education. What would be the altema-
—an amateurish smattering of
tive all major subjects? Or
a lengthy studium genérale in which men are forced to
spend their time sniflfing at subjects which they do not
wish to pursue, while they are being kept away from what
they want to leara? This cannot be the right answer, since
it can only lead to the type of intellectual man whom
—
Cardinal Newman castigated "an intellectual man, as the
world now conceives of him, one who is full of *views*
. . .

on all subjects of philosophy, on all matters of the day."

Such "viewiness'* is a sign of ignorance rather than knowl-
edge. "Shall I teach you the meaning of knowledge?" said
Confucius. "When you know a thing to recognise that you
know it, and when you do not, to know that you do not
—
know that is knowledge."
What is at fault is not specialisation, but the lack of

93
depth with which the subjects are usually presented, and
the absence of metaphysical awareness. The sciences are
being taught without any awareness of the presupposi-
tions of science, of the meaning and significance of sci-
entific laws, and of the place occupied by the natural
sciences within the whole cosmos of human thought. The
result is that the presuppositions of science are normally
mistaken for its findings. Economics is being taught with-
out any awareness of the view of human nature that
underlies present-day economic theory. In fact, many
economists are themselves unaware of the fact that such a
view is implicit in their teaching and that nearly all their
theories would have to change if that view changed. How
could there be a rational teaching of politics without
pressing all questions back to their metaphysical roots?
Political thinking must necessarily become confused and
end in "double-talk" if there is a continued refusal to

admit the serious study of the metaphysical and ethical

problems involved. The confusión is already so great that
it is legitímate to doubt the educational valué of studying

many of the so-caUed humanistic subjects. I say

**so-called" because a subject that does not make explicit
its view of human nature can hardly be called humanistic.

All subjects, no matter how specialised, are connected

with a centre; they are like rays emanating from a sun.
The centre is constituted by our most basic convictions, by
those ideas which really have the power to move us. In
other words, the centre consists of metaphysics and ethics,
— —
of ideas that whether we like it or not transcend the
world of facts. Because they transcend the world of facts,
they cannot be proved or disproved by ordinary scientific
method. But that does not mean that they are purely
"subjective" or "relative" or mere arbitrary conventionsi
They must be true to reality, although they transcend the
—
world of facts an apparent paradox to our positivistic
thinkers. If they are not true to reality, the adherence to
such a set of ideas must inevitably lead to disaster.

94
 Education can help us only if it produces "whole men."
The tnily educated man is not a man who knows a bit of
everything, not even the man who knows all the details of
all subjects (if such a thing were possible) the "whole :

man," in fact, may have little detailed knowledge of facts

and theories, he may treasure the Encyclopaedia Britan-
nica because "she knows and he needn't," but he will be
truly in touch with the centre. He will not be in doubt
about his basic convictions, about his view on the mean-
ing and purpose of his life. He may not be able to explain
these matters in words, but the conduct of his life will
show a certain sureness of touch which stems from his
inner clarity.

I shall try to explain a little bit further what is meant by

"centre." All human activity isa striving after somethíng
thought of as good. This is not more than a tautology, but
it helps US to ask the right question: "Good for whom?"
Good for the striving person. So, unless that person has
sorted out and coordinated his manifold urges, impulses,
and desires, his strivings are likely to be confused, contra-
dictory, self-defeating,and possibly highly destructive.
The "centre," obviously, is the place where he has to
créate for himself an orderiy system of ideas about him-
self and the world, which can regúlate the direction of his
various strivings. If he has never given any thought to this
(because he is always too busy with more important
things, or he is proud to think "humbly" of himself as an
agnostic), the centre will not by any means be empty: it
will be filled with all those vital ideas which, in one way or
another, have seeped into his mind during his Dark Ages.
I have tried to show what these ideas are likely to be

today: a total denial of meaning and purpose of human

existence on earth, leading to the total despair of anyone
who really believes in them. Fortunately, as I said, the
heart is often more intelligent than the mind and refuses
to accept these ideas in their full weight. So the man is

95
saved from despair, but landed in confusión. His funda-
mental convictions are confused; henee his actions, too,
are confused and uncertain. If he would only allow the
light of consciousness to fall on the centre and face the
question of his fundamental convictions, he could créate
order where there is disorder. That would "edúcate" him,
in the sense of leading him out of the darkness of his
metaphysical confusión.
I do not think, however, that this can be successfully

—
done unless he quite consciously accepts even if only pro-
visionally —
a number of metaphysical ideas which are
almost directly opposite to the ideas (stemming from the
nineteenth century) that have lodged in his mind. I shall
mention three examples.
While the nineteenth-century ideas deny or oblitérate
the hierarchy of levéis in the universe, the notion of an
hierarchical order is an indispensable instniment of under-
standing. Without the recognition of "Levéis of Being" or
"Grades of Significance" we cannot make the world intel-
ligible to ourselves ñor have we the slightest possibility
to define our own position, the position of man, in the
scheme of the universe. It is only when we can see the
world as a ladder, and when we can see man's position on
the ladder, that we can recognise a meaningful task for
—
man's life on earth. Maybe it is man's task or simply, if
—
you like, man's happiness to attain a higher degree of
realisation of his potentialities, a higher level of being or
"grade of significance" than that which comes to him
"naturally": we cannot even study this possibilty except
by recognising the existence of a hierarchical stnicture. To
the extent that we interpret the world through the great,
vital ideas of the nineteenth century, we are blind to these
differences of level, because we have been blinded.
As soon, however, as we accept the existence of "levéis
of being," we can readily understand, for instance, why
the methods of physical science cannot be applied to the
study of politics or economics, or why the findings of

96
physics — as Einstein recognised —have no phUosophical
implications.
If we accept the Aristotelian división of metaphysics
into ontology and epistemology, the proposition that there
are levéis of being is an ontological proposition; I now
add an epistemológica! one: the nature of our thinking is

such that we cannot help thinking in opposites.

It is easy enough to see that all through our lives we
are faced with the task of reconciling opposites which, in
logical thought, cannot be reconciled. The typical prob-
lems of life are insoluble on the level of being on which
we normally find ourselves. How can one reconcile the
demands of freedom and discipline in education? Count-
less mothers and teachers, in fact, do it, but no one can

write down a solution. They do it by bringing into the

situation a forcé that belongs to a higher level where
opposites are transcended —the power of love.

G. N. M. Tyrell has put forward the terms "divergent"

and "convergent" to distinguish problems which cannot be
solved by logical reasoning from those that can. Life is
being kept going by divergent problems which have to be
"lived" and are solved only in death. Convergent problems
on the other hand are man's most useful invention; they do
not, as such, exist in reality, but are created by a process
of abstraction. When they have been solved, the solution
can be written down and passed on to others, who can
apply it without needing to reproduce the mental effort
necessary to find it. If this were the case with human
relations — in family life, economics, politics, education,
—
and so forth well, I am at a loss how to finish the sen-
tence. There would be no more human relations but only
mechanical reactions; life would be a living death. Diver-
gent problems, as it were, forcé man to strain himself to a
level above himself; they demand, and thus provoke the
supply of, forces from a higher level, thus bringing love,
beauty, goodness, and truth into our lives. It is only with

97
the help of these higher forces that the opposites can be
reconciled Ln the living situation.
The physical sciences and mathematics are concerned
exclusively with convergent problems, That is why they
can progess cumulatively, and each new generation can
begin just where their forbears left ofií. The pnce, how-
ever, is a heavy one. Dealing exclusively with conver-
gent problems does not lead into life but away from it.

Up to the age of thirty, or beyond it [wrote Charles Darwin

in his autobiography], poetry of many kinds . . . gave me
great pleasure, and even as a schoolboy I took intense de-
light in Shakespeare, especially in the histórica! plays. Ihave
also said that formerly pictures gave me considerable, and
music very great, delight. But now for many years I cannot
endure to read a line of poetry: I have tried lately to read
Shakespeare, and found it so intolerably dull that it nauseated
me. I have also lost almost any taste for pictures or music.
. My mind seems to have- become a kind of machine for
. .

grinding general laws out of large collections of fact, but

why this should have caused the atrophy of that part of the
brain alone, on which the higher tastes depend, I cannot
conceive. . . . The loss of these tastes is a loss of happiness,
and may possibly be injurious to the intellect, and more
probably to the moral character, by enfeebling the emotional
part of our nature.2

This improverishment, so movingly described by Dar-

win, will overwhelm our entire civilisation if we permit
the current tendencies to continué which Gilson calis "the
extensión of positive science to social facts." All divergent
problems can be tumed into convergent problems by a
process of "reduction." The result, however, is the loss of
all higher forces to ennoble human life, and the degrada-

tion not only of the emotional part of our nature, but

also, as Darwin sensed, of our intellect and moral charac-
ter. The signs are everywhere visible today.

The true problems of living in politics, economics, —

education, marriage, etc. —
are always problems of over-

98
coming or reconciling opposites. They are divergent prob-
lems and have no solution in the ordinary sense of the
word. They demand of man not merely the employment
of his reasoning powers but the commitment of his whole
personality. Naturally, spurioiis solutions, by way of a
clever formula, are always being put forward; but they
never work for long, because they invariably neglect one
of the two opposites and thus tose the very quality of
human life. In economics, the solution offered may pro-
vide for freedom but not for planning, or vice versa. In
industrial organisation, it may provide for discipline but
not for workers' participation in management, or vice
versa. In politics, it might provide for leadership without
democracy or, again, for democracy without leadership.
To have to grapple with divergent problems tends to
be exhausting, worrying, and wearisome. Henee people
try to avoid it and to run away from it. A busy executive
who has been dealing with divergent problems all day
long will read a detective story or solve a crossword
puzzle on his journey home.He has been using his brain
all day; why does he go on using it? The answer is that
the detective and the crossword puzzle present
story
convergent problems, and thai is the relaxation. They
require a bit of brainwork, even difficult brainwork, but
they do not cali for this straining and stretching to a
higher level whichis the specific challenge of a divergent

problem, a problem in which irreconcilable opposites have

to be reconcUed. It is only the latter that are the real
stufT of life.
Finally, I turn to a third class of notions, which really
belong to metaphysics, although they are normally con-
siderad separately: ethics.
The most powerful ideas of the nineteenth century, as
we have seen, have denied or at least obscured the whole
concept of "levéis of being" and the idea that some things
are higher than others. This, of course, has meant the
destruction of ethics, which is based on the distinction of

99
good and evil, claiming that good is higher than evil.

Again, the sins of the fathers are being visited on the

third and fourth generations who now find themselves
growing up without moral instniction of any kind. The men
who conceived the idea that "morality is bunk" did so
with a mind well-stocked with moral ideas. But the minds
of the third and fourth generations are no longer well-
stocked with such ideas: they are well-stocked with ideas
conceived in the nineteenth century, namely, that "moral-
ity is bunk," that everything that appears to be "higher" is

really nothing but something quite mean and vulgar.

The resulting confusión is indescribable. What is the
Leitbild, as the Germans say, the guiding image, in
accordance with v/hich young people could try to form
and edúcate themselves? There is none, or rather there is
such a muddle and mess of images that no sensible
guidance issues from them. The intellectuals, whose func-
tion it would be to get these things sorted out, spend
their time proclaiming that everything is relative — or
something to the same effect. Or they deal with ethical
matters in terms of the most unabashed cynicism.
I shall example already alluded to above. It is
give an
signiíicant it comes from one of the most influen-
because
tial men of our time, the late Lord Ke^nes. "For at least

another hundred years," he wrote, "we must pretend to

ourselves and to every one that fair is foul and foul is
fair; for foul is useful and fair is not. Avarice and usury

and precaution must be our gods for a little longer still."

When great and brilliant men talk like this, we cannot
be surprised if there arises a certain confusión between
fair and foul, which leads to double talk as long as things
are quiet, and to crime when they get a bit more lively.
That avarice, usury, and precaution {i.e. economic secur-
ity) should be our gods was merely a bright idea for

Keynes; he surely had nobler gods. But ideas are the most
powerful things on earth, and it is hardly an exaggeration

100 .
to say that by now the gods he recommended have been
enthroned.
In ethics, as in so many other fields, we have recklessly
and wilfully abandoned our great classical-Christian herit-
age. We have even degraded the very words without
which cannot carry on, words like "virtue,'*
ethical discourse
"love," "temperance." As a result, we are totally ignorant,
totally uneducated in the subject that, of all conceivable
subjects, is the most important. We have no ideas to think
with and therefore are only too ready to believe that
ethics is a field where thinking does no good. Who knows
anything today of the Seven Deadly Sins or of the Four
Cardinal Virtues? Who could even ñame them? And if
these venerable, oíd ideas are thought not to be worth
bothering about, what new ideas have taken their place?
What is to take the place of the soul- and life-destroy-
ing metaphysics inherited from the nineteenth century?
The task of our generation, I have no doubt, is one of
metaphysical reconstruction. It is not as if we had to
invent anything new; at the same time, it is not good
enough merely to revert to the oíd formulations. Our task
—and the task of all education — is to understand the
present world, the world in which we Uve and make our
cholees.
The problems of education are merely reflections of the
deepest problems of our age. They cannot be solved by
organisation, administration, or the expenditure of money,
even though the importance of all these is not denied. We
are suffering from a metaphysical and the cure
diseasc,
must therefore be metaphysical. Education which fails to
clarify our central convictions is mere training or indul-
gence. For it is our central convictions that are in disorder,
and, as long as the present anti-metaphysical temper per-
sists, the disorder will grow worse. Education, far from

ranking as man's greatest resource, will then be an agent

of destniction, in accordance with the principie corruptio
optimi pessima.

101
 2
The Proper Use oí Land

Among material resources, the greatest, unquestionably, is

the land. Study how a society uses its land, and you can
come to pretty reliable conclusions as to what its future
will be.
The land carries the topsoil, and the topsoil carries an
immense variety of living beings including man. In 1955,
Tom Dale and Vemon Gilí Cárter, both highly experienced
ecologists, published a book called Topsoil and Civilisa-
tion. Icannot do better, for the purposes of this chapter,
than quote some of their opening paragraphs:

Civilised man was nearly always able to become master

of his environment temporarily. His chief troubles came
from his delusions that his temporary mastership was per-
manent. He thought of himself as "master of the world,**
while failing to understand fully the laws of nature.
Man, whether civilised or savage, is a child of nature
—he is not the master of nature. He must conform his
actions to certain laws if he is to maintain his
natural
dominance over his environment. When he tries to cir-
cunivent the laws of nature, he usually destroys the natural
environment that sustains him. And when his environment
deteriorates rapidly, his civilisation declines.
One man has given a brief outline of history by saying
that "civilised man has marched across the face of the earth
and left a desert in his footprints." This statenftent may be
somewhat of an exaggeration, but it is not without founda-
tion. Civilised man has despoiled most of the lands on which

102
 he has lived for long. This is the main reason why his pro-
gressive civilisations have moved from place to place. It has
bcen the chief cause for the decline of his civilisations in
older settled regions. It has been the dominant factor in
determining all trends of history.
The writers of history have seldom noted the importance
of land use. They seem not to have recognised that the
destinies of most of man's empires and civilizations were
determined largely by the way the land was used. While
recognising the influence of environment on history, they
fail to note that man usually changed or despoiled his
environment.
How did civilised man despoil this favourable environ-
ment? He did it mainly by depleting or destroying the
natural resources. He cut down or bumed most of the
usable timber from forested hillsidcs and valleys. He over-
grazed and denuded the grasslands that fed his livestock.
He killed most of the wildlife and much of the fish and
other water Ufe. He permitted erosión to rob his farm land
of its productive topsoil. He allowed eroded soil to clog the
streams and fill his reservoirs, irrigation cañáis, and harbours
with silt. In many cases, he used and wasted most of the
easily mined metáis or other needed minerals. Then his
civilisation declined amidst the despoliation of his own crea-
tion or he moved to new land. There have been from ten
to thirty different civilisations that have followed this road
to ruin (the number depending on who classifies the civil-
isations ).i

The "ecológica! problem," it seems, is not as new as it is

frequently made out Yet there are two decisive

to be.
differences: the earth is now much more densely popu-
lated than it was in earlier times and there are, generally
speaking, no new lands to move to; and the rate of change
has enormously accelerated, particularly during the last
quarter of a century.
All the same, it is still the dominant belief today that,
may have happened with
whatever earlier civilisations, our
own modem, Western civilisation has emancipated itself
from dependence upon nature. A representative voice is

103
that of Eugene Rabinowitch, editor-in-chief of the Bulletin
of Atomic Scientists.

The only animáis [he says (in The Times of 29 April, 1972)],
whose disappearance may threaten the biological viability of
man on earth are the bacteria normally inhabitíng our bodies.
For the rest there is no convincing proof that mankind could
not survive even as the only animal species on earth! If
economical ways could be developed for synthesising food
—
from inorganic raw materials which is likely to happen
—
sooner or later man may even be able to become inde-
pendent of plants, on which he now depends as sources of
his food. . . .

I personally —
and, I suspect, a vast majority of mankind
—would shudder at the idea [of a habitat without animáis
and But millions of inhabitants of "city jungles**
plants].
of New
York, Chicago, London or Tokyo have grown up
and spent their whole lives in a practically "azoic" habitat
(leaving out rats, mice, cockroaches and other such ob-
noxious species) and have survived.

Eugene Rabinow^itch obviously considers the above a

"rationally justifiable" statement. He deplores that "many
rationally unjustifiable things have been written in recent
years —some by very reputable scientists —
about the
sacredness of natural ecológica! systems, their inherent
stability and the danger of humant interference with
thera."

What is "rational" and what is "sacred"? Is man the

master of nature or its child? If it becomes "economical"

to synthesise food from inorganic materials "which is
—
likely to happen sooner or later'* —
if we become independ-

ent of plants, the connection between topsoil and civilisa-

tion will be broken. Or will it? These questions suggest
that "The Proper Use of Land" poses, not a technical
ñor an economic, but primarily a metaphysical problem.
The problem obviously belongs to a higher level of

104
rational thinking than that represented by the last two
quotations.
There are always some things which we do for their
own sakes, and there are other things which we do for
some other purpose. One of the most important tasks for
any society is to distinguish between ends and means-to-
ends, and to have some sort of cohesive view and agree-
ment about this. Is the land merely a means of production
or is it something more, something that is an end in itself?
And when I say "land," I include the creatures upon it.

Anything we do just for the does not

sake of doing it

lend itself to utilitarian calculation. For instance, most of

US try to keep ourselves reasonably clean. Why? Simply
for hygienic reasons? No, the hygienic aspect is secondary;
we itself. We do not
recognise cleanliness as a valué in
calcúlate its economic calculus simply does not
valué; the
come in. It could be argued that to wash is uneconomic:
it costs time and money and produces nothing except —
cleanliness. There are many activities which are totally
uneconomic, but they are carried on for their own sakes.
The economists have an easy way of dealing with them:
they divide all human activities between "production" and
"consumption.** Anything we do under the heading of
"production" is subject to the economic calculus, and
anything we do under the heading of "consumption" is
not. But real life is very refractory to such classifica-
tions, because man-as-producer and man-as-consumer is
in fact the same man, who is always producing and con-
suming at the same time. Even a worker in his factory
consumes certain "amenities," commonly referred to as
"working conditions," and when insufficient "amenities"
are provided he cannot —
or refuses to —
carry on. And
even the man who consumes water and soap may be said
to be producing cleaniness.
We produce in order to be able to -afford certain ameni-
ties and comforts as "consuméis." If, however, somebody

105
demanded these same amenities and comforts while he
was engaged in "production," he would be told that this
would be uneconomic, that it would be inefficient, and
that society could not afford such ineñiciency. In other
words, everythmg dependa on whether it is done by man-
as-producer or by man-as-consumer. If man-as-producer
travels first-class or uses a luxurious car, this is called a
waste of money; but if the same man in his other incama-
tion of man-as-consumer does the same, this is called a
sign of a high standard of lif e.

Nowhere is this dichotomy more noticeable than in con-

nection with the use of the land. The farmer is considered
simply as a producer who must cut his costs and raise his
efficiency by every possible device, even if he thereby
destroys — —
man-as-consumer the health of the soil
for
and the beauty of the landscape, and even if the end effect
is the depopulation of the land and the overcrowding of

cities. There are large-scale farmers, horticulturists, food

manufacturers and fruit growers today who would never

think of consuming any of their own products. "Luckily,"
they say, "we have enough money to be able to afford to
buy products which have been organically grown, without
the use of poisons." When they are asked why they them-
selves do not adhere to organic methods and avoid the
use of poisonous substances, they reply that they could
not afford to do so. What man-as-producer can afford is
one thing; what man-as-consumer can afford is quite
another thing. But since the two are the same man, the
— —
question of what man or society can really afford gives
rise to endless confusión.
There is no escape from this confusión as long as the
land and the creatures upon it are looked upon as nothing
but "factors of production." They are, of course, factors
of production, that is to say, means-to-ends, but this is
their secondary, not their primary, nature. Before every-
thing else, they are ends-in-thfemselves; they are meta-
economic, and it is therefore rationally justifiable to say,

106
as a §tatement of fact, that they are in a certain sense
sacred. Man made them, and it is irrational for him
has not
to treat things that he has not made and cannot make and
cannot recréate once he has spoilt them, in the same
manner and spirit as he is entitled to treat things of his
own making.
The higher animáis have an economic valué because of
have a meta-economic valué in them-
their utility; but they
selves. If I have a car, a man-made thing, I might quite
legitimately argüe that the best way to use it is never to
bother about maintenance and simply run it to ruin. I may
indeed have caJculated that this is the most economical
method of use. If the calculation is correct, nobody can
criticise me for acting accordingly, for there is nothing
sacred about a man-made thing like a car. But if I have
an animal —be it only a calf or a hen —
a living, sensitivo
creature, am I allowed to treat it as nothing but a utility?
Am I allowed to run it to ruin?
It no use trying to answer such questions scientif-
is

ically. They are metaphysical, not scientific, questions. It is

a metaphysical error, likely to produce the gravest prac-

tical consequences, to equate "car" and "animal" on

account of their utility, while failing to recognise the niost

fundamental difference between them, that of "level of
being." An irreligious age looks with amused contempt
upon the hallowed statements by which religión helped our
forbears to appreciate metaphysical truths. "And the Lord
God took man and put him in the Carden of Edén" not —
to be idle, but "to dress it and keep it." "And he also gave
man dominión over the fish in the sea and the fowl in the
air, and over every living being that moves upon the
earth." When he had made "the beast of the earth after
his kind, and cattle after their kind, and everything that
creepeth upon the earth after his kind," he saw that it was
"good." But when he saw everything he had made, the
entire biosphere, as we say today, "behold, it was very
good." Man, the highest of his creatures, was given

107
"dominión," not the right to tyrannise, to ruin and
exterminate. It is no use talking about the dignity of man
without accepting that noblesse oblige. For man to pul
himself into a wrongful relationship with animáis, and
particularly those long domesticated by him, has always,
been considered a horrible and infinitely
in all traditions,
dangerous thing to do. There have been no sages or holy
men in our or in anybody else's history who were cruel to
animáis or who looked upon them as nothing but Utilities,
and innumerable are the legends and stories which link
sanctity as well as happiness with a loving kindness
towards lower creation.
It is interesting to note that modem man is being told,
in the nam.e of science, that he is really nothing but a
naked ape or even an accidental collocation of atoms.
*'Now we can define man," says Professor Joshua Leder-
berg. "Genotypically at least, he
is six feet of a particular

molecular sequence of carbón, hydrogen, oxygen, nitrogen

and phosphorus atoms. "^ As modera man thinks so
"humbly" of himself, he thinks even more "humbly" of
the animáis which serve his needs: and treatsthem as if
they were machines. Other, less sophisticated or is it —
less depraved? —people take a diflíerent attitude. As
H. Fielding Hall reported from Burma:
To him [the Burmese] men are men, and animal are animáis,
and men are far the higher. But be docs no deduce from this
that man's superiority gives him permission to iU-treat or
kill animáis. It is just the reverse. It is because man is so
much higher than the animal that he can and must observe
towards animáis the very greatest care, feel for them the
very greatest compassion, be good to them in every way he
can.The Burmese's motto should be noblesse oblige. He
knows the meaning, if he knows not the words.3

In Proverbs we read that the just man takes care of his

beast, but the heart of the wicked is merciless, and St.

Thomas Aquinas wrote: "It is evident that if a man prac-

tises a compassionate affection for animáis, he is all the

108
more disposed to feel compassion for his fellowmen.'* No
one ever raised the question of whether they could afford
to live in accordance with these convictions. At the level
of valúes, of ends-in-themselves, there is no question of
"affording."
What applies to the animáis upon the land applies
equally, and without any suspicion of sentimentality, to the
land itself. Although ignorance and greed have again and
again destroyed the fertility of the soil to such an extent
that whole civilisations foundered, there have been no
traditional teachings which failed to recognise the meta-
economic valué and significance of "thé generous earth."
And where these teachings were heeded, not only agricul-
ture but also all other factors of civilisation achieved
health and wholeness. Conversely, where people imagined
that they could not "afford" to care for the soil and work
with nature, instead of against it, the resultant sickness of
the soil has invariably imparted sickness to all the other
factors of civilisation.
In our time, the main danger to the soil, and therewith
not only to agriculture but to civilisation as a whole, stems
from the townsman's determination to apply to agriculture
the principies of industry. No more typical representative
of this tendency could be found than Dr. Sicco L.
Mansholt, who, as Vice-President of the European Eco-
nomic Community, launched the Mansholt Plan for
European Agriculture. He believes that the farmers are
"a group that has still not grasped the rapid changes in
society." Most of them ought to get out of farming and
become industrial labourers in the cities, because "factory
workers, men on building sites and those in administra-
tive Jobs —have week and two weeks' annual
a five-day
hoüday already. Soon they may have a four-day week
and four weeks' holiday per year. And the farmer: he is
condemned to working a seven-day week because the five'
day cow has not yet been invented, and he gets no holiday
at all.''* The Mansholt Plan, accordingly, is designed to

109
achieve, as quickly as humanely possible, the amalgama-
tion of many small family farms into large agricultural
units operated as if they were faetones, and the máximum
rate of reduction in the community's agricultural popula-
tion. Aid is to be given "which would enable the older as
well as the younger f armers to leave agriculture."^
In the discussion of the Mansholt Plan, agriculture is
generally referred to as one of Europe's "industries." The
question arises of whether agriculture is, in fact, an indus-
try, or whether it might be something essentially differ-
ent. Not surprisingly, as this is a metaphysical or meta- —
—
economic question, it is never raised by economists.
Now, the fundamental "principie" of agriculture is that
it deals with life, that is to say, with living substances. Its
products are the results of processes of life and its means
of production is the living soil. cubic centimetre ofA
fertile soil contains milliards of living organisms, the full
exploration of which is far beyond the capacities of man.
The fundamental "principie" of modera industry, on the
other hand, is that it deals with man-devised processes
which work reliably only when applied to man-devised,
non-living materials. The ideal of industry is the elimina-
tion of livmg substances. Man-made materials are prefer-
able to natural materials, because we can make them to
measure and apply perfect quality control. Man-made
machines work more reliably and more predictably than
do such living substances as men. The ideal of industry is
to eliminate the living factor, even including the human
factor, and to turn the productive process over t<$

machines. As Alfred North Whitehead defined life as "an

offensive directed against the repetitious mechanism of
the universe," so we may define modera industry as "an
offensive against the unpredictability, unpunctuality, gen-
eralwaywardness and cussedness of living nature, includ-
ingman."
In other words, there can be no doubt that the funda-
mental "principies" of agriculture and of industry, far

110
from being compatible with each other, are in opposition.
Real life produced by the incom-
consists of the tensions
patibility of opposites, each of which is needed, and just
as life would be meaningless without death, so agrículture
would be meaningless without industry. It remains true,
however, that agrículture is primary, whereas industry
is secondary, which means that human life can continué

without industry, whereas it cannot continué wjithout

agrículture. Human life at the level of civilisation, how-
ever, demands the balance of the two prínciples, and this
balance is ineluctably destroyed when people fail to appre-
ciate the essential difference between agrículture and
industry —a difference as great as that between life and
death —and attempt to treat agrículture as just another
industry.
The argument is, of course, a familiar one. It was put

succinctly by a group of intemationally recognised experts

in A Future for European Agrículture:

Diíterent parís of the worid possess widely differing advan-

tages for the production of particular producís, depending
on and the cost
difFerences in climate, the quality of the soil
of labour. All would gain from a división of
countríes
labour which enabled them to concéntrate production on
their most highly productive agricultural operations. This
would result both in higher income for agrículture and
lower costs for the entire economy, particularly for industry.
No fundamental justification can be found for agricultural
protectiomsm.6

If this were so it would be totally incomprehensible that

agricultural protectionism, throughout history, has been
the rule rather than the exception.Why are most coun-
tríes,most of the time, unwilling to gain these splendid
rewards from so simple a prescríption? Precisely because
there is more involved in "agricultural operations" than
the production of incomes and the lowering of costs: what
is involved is the whole relationship between man and
nature, the whole life-style of a society, the health, happi-

111
 ness and harmony of man, as well as the beauty of his
habitat. If all these things are left out of the experts'
considerations, man himself is left out —even if our
experts try to bring him in, as it were, after the event, by
pleading that the community should pay for the "social
consequences" of their policies. The Mansholt Plan, say
the experts, "represents a bold initiative. It is based on
the acceptance of a fundamental principie: agricultural
income can only be maintained if the reduction in the
agricultural population is accelerated, and if farms rapidly
reach an economically viable size."'' Or again: "Agricul-
ture, in Europe at least, is essentially directed towards
food-production. . . . It is well known that the demand for
food increases relatively slowly with increases in real
income. This causes the total incomes eamed in agricul-
ture to rise more slowly in comparison with the incomes
eamed in industry; to maintain the same rate of growth of
incomes per head is only possible if there is an adequate
rate of decline in thenumbers engaged in agriculture."^
. ."The conclusions seem inescapable: under circum-
.

stances which are normal in other advanced countries,

the community would be able to satisfy its own needs
with only one-third as many farmers as now.'*®
No serious exception can be taken to these statements
if we adopt — as the experts have adopted — the metaphysi-
which money
cal position of the crudest materialism, for
costs and money incomes are the ultímate criteria and
determinants of human action, and the living world has
no significance beyond that of a quarry for exploitation.
On a wider view, however, the land is seen as a priceless
asset man's task and happiness "to dress and to
which it is

keep.'* We can say that man's management of the land

must be primarily orientated towards three goals health, —
beauty, and permanence. The fourth goal— the only one
accepted by the experts productivity, will then be —
attained almost as a by-product. The crude materialist view
sees agriculture as "essentially directed towards food-

112
production." A wider view sces agriculture as having to
fuL6J at least three tasks:

— tokeep man in touch with living nature, of which he

ísand remains a highly vulnerable part;
— to humanise and ennoble man's wider habitat; and
— to bríng forth the foodstuflFs and other materíals which
are needed for a becoming life.

I do not believe that a civilisation which recognises only

the third of these tasks, and which pursues it with such
ruthlessnessand violence that the other two tasks are not
merely neglected but systeraatically counteracted, has any
chance of long-term survival.
Today, we take pride in the fact that the proportion of
people engaged in agriculture has fallen to very low levéis
and continúes to fall. Great Britain produces some sixty
per cent of its food requirements while only three per cent

of working population are working on farms. In the

its

United States, there were still twenty-seven per cent of the

nation's workers in agriculture at the end of World War I,
and fourteen per cent at the end of World War II; the
estimate for 1971 shows only 4.4 per cent. Thcse declines
in the proportion of workers engaged in agriculture are
generally associated with a massive flight from the land
and a burgeoning of cities. At the same time, however, to
quote Murray Bookchin:

Metropolitan life is breaking down, psychologicany, eco-

nomically and biologically. Millions of people have acknowl-

edged this breakdown by voting with their feet, they have
picked up their belongings'and left. If they have not been
able to sever their connections with the metrópolis, at least
they have tried. As a social symptom the effort is significant.io

In the vast modem towns, says Mr. Bookchin, the urban

dweller more isolated than his ancestors were in the
is

countryside: "The city man ia a modem metrópolis has

reached a degree of anonymity, social atomisation and

113
 —

spiritual isolaticm that ís virtually unprecedented in human

history.""

So what does he do? He tries to get into the suburbs and

becomes a commuter. Because rural culture has broken
down, the rural people are fleeing from the land; and
because metropolitan life is breaking down, urban people
are fleeing from the cities. "Nobody," according to Dr.
Mansholt, "can afford the luxury of not acting economi-
cally,'**2 ^th the result that evcrywhere life tends to
become intolerable for anyone except the very rich,
I agree with Mr. Bookchin's assertion that "reconciliation
of man with the natural world is no longer merely desir-
able, it has become a necessity." And this cannot be
achieved by tourism, sightseeing, or other leisure-time
activities, but only by changing the structure of agriculture
proposed by Dr.
in a direction exactly opposite to that
Mansholt and supported by the experts quoted abo ve:
instead of searching for means to accelerate the drift out
of agriculture, we should be searching for policies to
reconstruct rural culture, to open the land for the gainful
occupation to larger numbers of people, whether it be on
a full-time or a part-time basis, and to oriéntate all our
actions on the land towards the threefold ideal of health,
beauty, and permanence.
The social structure of agriculture, which has been pro-
—
duced by and is generally held to obtain its justification
—
from large-scale mechanisation and heavy chemicalisa-
tion, makes it impossible to keep man in real touch with
living natura; in fact, it supports all the most dangerous
modern tendencies of violence, alienation, and environ-
mental destruction. Health, beauty, and permanence are
hardly even respectable subjects for discussion, and this is
yet another example of the disregard of human valúes
and this means a disregard of man which inevitably —
results from the idolatry of economism.
If "beauty is the splendour of truth," agriculture cannot

114
 its second task, which is to humanise and ennoble
fulfil

man*s wider habitat, unless it clings faithfully and assidu-

ously to the truths revealed by nature's living processes.
One of them is the law of retum; another is diversification
— as against any kind of monoculture; another is decen-
tralisation, so that some use can be found for even quite
inferior resources which it would never be rational to
transport over long distances. Here again, both the trend
of things and the advice of the experts is in the exactly
—
opposite direction ^towards the industrialisation and
depersonalisation of agriculture, towards concentration,
specialisation, and any kind of material waste that promises
to save labour. As a result, the wider human habitat, far
from being humanised and ennobled by man's agricultural
activities, becomes standardised to dreariness or even
degraded to ugliness.
All this is being done because man-as-producer cannot
afíord "the luxury of not acting economically," and there-
fore cannot produce the very necessary "luxuries" like —
health, beauty, and permanence —
which man-as-consumer
desires more than anything else. It would cost too much;
and the richer we become, the less we can "afford." The
aforementioned experts calcúlate that the "burden" of
agricultural support within the Community of the Six
amounts to "neariy three per cent of Gross National
Product," an amount they consider "far from negligible."
With an annual growth rate of over three per cent of
Gross National Product, one might have thought that such
a "burden'* could be carried without difficulty; but the
experts point out that "national resources are largely com-
mitted to personal consumption, investment and public
services. . . . By using so large a proportion of resources to
prop up declining enterprises, whether in agriculture or in
industry, the Community foregoes the opportunity to
undertake . . . necessary improvements"^^ in these other
fíelds.

Nothing could be clearer. If agriculture does not pay, it

115
is just a "declining enterprise." Why prop it up? There are
no "necessary improvements'* as the land, but
regarás
only as regards farmers* incomes, and these can be made if
there are f ewer f armers. This is the philosophy of the
townsman, alienated from living nature, who promotes his
own scale of priorities by arguing in economic terms that
we cannot "afford" any other. In fact, any society can
afford to look after its land and keep it healthy and beauti-
ful in perpetuíty. There are no technical difficulties and
there is no lack of relevant knowledge. There is no need
to consult economic experts when the question is one of
priorities. We know too much about ecology today to have
any excuse for the many abuses that are currently going
on in the management of the land, in the management of
animáis, in food storage, food processing, and in heedless
urbanisation. If we permit them, this is not due to poverty,
as if we could not afford to stop them; it is due to the
fact that, as a society, we have no firm basis of belief in
any meta-economic valúes, and when there is no such
belief the economic calculus takes over. This is quite
inevitable. How could it be otherwise? Nature, it has been
said, abhors a vacuum, and when the available "spirit-
ual space" is not filled by some higher motivation, then it
will necessarily be filled by something lower —
by the small,
mean, calculating attitude to life which is rationalised in
the economic calculus.
I have no doubt that a callous attitude to the land and to
the animáis thereon is connected with, and symptomatic
of a great many other attitudes, such as those producing a
,

fanaticism of rapid change and a fascination with novel-

ties —
technical, organisational, chemical, biological, and
so forth —which insists on their application long before
their long-term consequences are even remotely under-
stood. In the simple question of how we treat the land,
next to people our most precious resource, our entire way
of life is involved, and before our policies with regard to
the land will really be changed, there will have to be a

116
í great deal of philosophical, not to say religious, change.
It is not a question of what we can afford but of what we

choose to spend our money on. If we could retura to a

generóus recognition of meta-economic valúes^ our land-
scapes would become healthy and beautiful again and our
people would regain the dignity of man, whó knows him-
self as higher than the animal but never forgets that
noblesse oblige.

117
 3
Resources for Industry

The most striking thing about modem industry is that it

requires so much and accomplishes so little. Modem

industry seems to be inefficient to a degree that surpasses
one's ordinary powers of imagination. Its inefficiency
therefore remains unnoticed.
Industrially, the most advanced country today is
undoubtedly the Uniíed States of America. With a popula-
tion of about 207 million, it contains 5.6 per cent of man-
kind; with only about fifty-seven people per square mile
— as against a world average of over seventy and being—
situated wholly within the northern températe zone, it
ranks as one of the great sparsely populated áreas of the
world. It has been calculated that if the entire world
population were put into the United States, its density of
population would then be just about that of England now.
This may be thought to be an "unfair" comparison; but
even if we take the United Kingdom as a whole, we find a
population cjensity that is more than ten times that of the
United States (which means that the United States could
accommodate more than half the present world popula-
tion before it attained a density equal to that of the
United Kingdom now), and there are many other indus-
trialised countries where densities are even higher. Taking
the whole of Europe, exclusive of the U.S.S.R., we find a
population density of 242.7 persons per square mile, or
4V4 times that of the United States. It cannot be said,

118
 —

therefore, that — relatively speaking —the United States is

disadvantaged by having too many people and too little
space.
Ñor could it be said that the temtory of the United

States was poorly endowed with natural resources. On the

contrary, in all human history no large temtory has ever
been opened up which has more excellent and wonderful
resources, and, although much has been exploited and
ruined since, this still remains true today.
All the same, the industrial system of the United States
cannot subsist on intemal resources alone and has there-
fore had to extend its tentacles right around the globe to
secure its raw material supplies. For the 5.6 per cent of
the world population which Uve in the United States
require something of the order of forty per cent of the
world*s primary resources to keep going. Whenever esti-
mates are produced which relate to the next ten, twenty,
or thirty years, the message that emerges is one of ever-
increasing dependence of the United States economy on
raw material and fuel supplies from outside the coimtry.
The National Petroleum Council, for instance, calculates
that by 1985 the United States will have to cover fifty-
seven per cent of its total oil requirements from imports,

—
which would then greatly exceed at 800 million tons
the total oil imports which Western Europe and Japan
currently obtain from the Middle East and África.
An industrial system which uses forty per cent of the
world's primary resources to supply less than six per cent
of the world's population could be called efl&cient only if it
obtained strikingly successful results in terms of human
happiness, well-being, culture, peace, and harmony. I do
not need to dwell on the fact that the American system
fails to do this, or that there are not the slightest prospects
that it could do so // only it achieved a higher rate of
growth of production, associated, as it must be, with an
ever-greater cali upon the world's finite resources. Pro-
fessor Walter Heller, former Chairman of the U.S. Presi-

119
dent's Council of Economic Advisers, no doubt reflected
the opinión of most modem economists when he expressed
this view:

We need expansión to fulfil our natíon's aspirations. In a

fully employed, high-growth cconomy you have a better
chance to free public and prívate resources to fight the battle
of land, air, water and noise pollution than in a low-growth
economy.

"I cannot conceive,*' he says, "a successful economy with-

out growth." But if the United States' economy cannot
conceivably bé successful without further rapid growth,
and if growth depends on being able to draw ever-
that
increasing resources from the rest of the world, what
about the other 94.4 per cent of mankind which are so far
"behind" America?
If a high-growth economy is needed to fight the battle
against pollution, which itself appears to be the result of
high growth, what hope is there of ever breaking out of
this extraordinary circle? In any case, the question needs
to be asked whether the earth's resources are likely to be
adequate for the further development of an industrial sys-
tem that consumes so much and accomplishes so little.
More and more volees are being heard today which
claim that they are not. Perhaps the most prominent
among these voices is that of a study group at the Massa-
chusetts Institute of Technology which produced The
Limits to Growthy a report for the Club of Rome's project
on the predicament of mankind. The report contains,
among other material, an interesting table which shows
the known global reserves; the number of years known
global reserves will last at current global consumption
rates; the number of years known global reserves will last
with consumption continuing to grow exponentially; and
the number of years they could meet growing consumption
if they were five times larger than they are currently

120
known to be: all this for nineteen non-rene wable natural
Of
resources of vital importance to industrial societies.
particular interest is column of the table which
the last
shows "U.S. Consumption as % of World Total." The
figures are as follows:

Aluminura
 American mines and successful Middie Eastem pressures to
raise oil pnces suggest that the political question may arise
long before the ultímate economic one.

It was perhaps useful, but hardly essential, for the

M.I.T. group to make so many elabórate and hypothetical

calculations. In the end, the group's conclusions derive
from its assiimptions, and it does not require more than a
simple act of insight to realise that infinite growth of
material consumption in a finite worid is an impossibility.
Ñor ^oes it require the study of large numbers of com-
modities, of trends, feedback loops, system dynamics, and
so forth, to come to the conclusión that time is short.
Maybe was useful to employ a computer for obtaining
it

results which any intelligent person can reach with the

help of a few calculations on the back of an envelope,
because the jnodem worid believes in computéis and
masses of facts, and it abhors simplicity. But it is always
dangerous and normally self-defeating to try and cast out
devils by Beelzebub, the prince of the devils.
For the modem industrial system is not gravely threat-
ened by possible scarcities and high pnces of most of the
materials to which the M.I.T. study devotes such ponder-
ous attention. Who could say how much of these com-
modiíies there might be in the cnist of the earth; how
much will be extracted, by ever more ingenious methods,
before it is meaningful to talk of global exhaustion; how
much might be won from the oceans; and how much
might be recycled? Necessity is indeed the mother of
invention,and the inventiveness of industry, marvellously
supported by modem science, is unlikely to be easily
defeated on these fronts.
It would have been better for the furtherance of insight
if the M.I.T. team had concentrated its analysis on the one
material factor the availability of which is the precondi-
tion of all others and which cannot be recycled energy. —
I have already alluded to the energy problem in some of

122
the earlier chapters. It is impossible to get away from iL
It is impossible to overemphasise its centrality. It might be
said that energy is for the mechanical world what con-
sciousness is for the human world. If energy fails, every-
thing fails.

As long is enough primary energy

as there at tolerable —
prices — no reason to believe that bottlenecks in
there is

any other primary materials cannot be either broken or

circumvented. On the other hand, a shortage of primary
energy would mean that the demand for most other pri-
mary products would be so curtailed that a question of
shortage with regard to them would be unlikely to arise.
Although these basic facts are perfectly obvious, they
are not yet sufficiently appreciated. There is still a tend-
ency, supported by the excessively quantitative orientation
of modera economics, to treat the energy supply problem
as justone problem alongside countless others as indeed —
was done by the M.I.T. team. The quantitative orientation
is so bereft of qualitative understanding that even the

quality of "orders of magnitude*' ceases to be appreciated.

And this, in fact, is one of the main causes of the lack of
realism with which the energy supply prospects of modem
industrial society are generally discussed. It is said, for
instance, that "coal is on the way out and will be replaced
by oil,** and when it is pointed out that this would mean
the speedy exhaustion of all proved and expected {i.e.

yet-to-be-discovered) oil reserves, it is blandly asserted

that "we are rapidly moving into the nuclear age," so that
there is no need to worry about anything, least of all
about the conservation of fossil fuel resources, Countless
are the leamed produced by national and Inter-
studies,
national agencies, committees, research institutes, and so
forth, which purport to demónstrate, with a vast array of
subtle calculation, that the demand for westem European
coal is declining and will continué to decline so quickly
that the only problem is how to get rid of coal miners
fast enough. Instead of looking at the total situation,

123
which has been and still is highly predictable, the authors
of these studies almost invariably look at innumerable con-
stituent parís of the total situation, none of which is
separately predictable, since the parts cannot be under-
stood unléss the whole is understood.
To give only one example, an elabórate study by the
European Coal and Steel Community, undertaken in
1960/61, provided precise quantitative answers to virtu-
ally every question anyone might have wished to ask about
fuel and energy in the Common Market countries up to
1975. I had occasion to review this report shortly after
publication, and it may not be out of place to quote a
few passages from this review ¡^

It may seem astonishlng enough that anyone should be able

to predict the development of minera' wages and produc-
tivity in his own coimtry fifteen yeara ahead: it is even more
astonishing to find him predicting the pnces and transatlantic
freight ratea of American coal. A certain quality of U.S.
coal, we are told, will cost "about $14.50 per ton" free North
Sea port in 1970, and "a little more,* in 1975. "About $14.50,'*
the report says, be taken as meaning "anything
should
betwecn $13.75 and $15.25," a margin of unccrtainty of
$1.50 or ± five per cent.

(In fact, the c.i.f.* pnce of U.S. coal in European ports

rose to between $24 and $25 per ton for new contracts
concluded in October 1970!)

Similarly, thepnce of fuel oil will be something of the

order of $17-19 per ton, while estimates of various kinds
are given for natural gas and nuclear energy. Being in
the possession of these (and many other) "facts," the
authors find it an easy matter to calcúlate how much of

the Community's coal production will be competitive in

1970, and the answcr is "about 125 million, i.e. a little ovcr
half the pr^sent production."
It is fashionable today to assume that any figures about

* Carriage, Insurance, freight; i.e. pnce on delivery.

124
 thc future are bettcr than none. To produce figures about
the unknown, the current method is to make a guess about
—
something or other called an "assumption" and to derive —
an estímate from it by subtle calculation. The estímate is
then presented as the result of scíentific reasoníng, some-
thLng far superior to mere guesswork. This is a pernícious
practice whích can only lead to the most colossal planníng
crrors, because ít offers a bogus answer where, ín fact, an
entrepreneurial judgment is required.
The study here under review employs a vast array of
arbitrary assumptions, which are then, as it were, put into a
calculating machine to produce a "scientific" result. It would
havc been cheaper, and indeed more honest, simply to
assume the result.

As it happened, the "pemicious practice" did maximise

the planning errors; the capacity of the westem European
coal industry was virtually cutdown to half its former
size, not only in the Community but in Britain as well.
Between 1960 and 1970 the dependence on fuel imports
of the European Community grew from thirty per cent to
over sixty per cent, and that of the United Kingdom, from
twenty-five per cent to forty-four per cent. Although it
was perfectly possible to foresee the total situation that
would have to be met during the 1970s and thereafter,
the govemments of westem Europe, supported by the
great majority of economists, deliberately destroyed nearly
half of their coal industries, as if coal was nothing but one
of innumerable marketable commodities, to be produced
as long as it was profitable to do so and to be scrapped
as soon as production ceased to be profitable. The question
of what was to take the place of indigenous coal supplies
in the long term was answered by assurances that there
would be abundant supplies of other fuels at low prices
"for the foreseeable future," these assurances being based
on nothing other than wishful thinking.
It is not as if there was—o? is now —
a lack of Informa-
tion, or that the policy-makers happened to have over-
looked important facts. No, there was perfectly adequate

125
knowledge of the current situation and there were per-
fectly reasonable and realistic estimates of future trends.
But the policy-makers were incapable of drawing correcta
conclusions frora what they knew to be true. The argu-
ments of those who pointed to the likelihood of severe
energy shortages in the foreseeable future were not taken
up and refuted by counter-arguments but simply derided
or ignored. did not require a great deal of insight to
It

realise whatever the long-term future of nuclear

that,
energy might be, the fate of world industry during the
remainder of this century would be determmed primarily
by oil. What could be said about oil prospects a decade or
so ago? I quote from a lecture delivered in April 1961.

To say anything about the long-term prospects of crude oil

availability is made invidious by the fact that soma thirty or
fifty years ago somebody may have predicted that oil supplies
would give out quite soon, and, look at it, they didn't. A
surprising number of people seem to imagine that by pointing
to erroneous predictions made by somebody or other a long
time ago they have somehow established that oil will never
give out no matter how fast is the growth of the annual take.
With regard to future oil supplies, as with regard to atomic
energy, many people manage to assume a position of limitless
optimism, quite impervious to reason.
I prefer tobase myself on Information coming from the
oil people themselves. They are not saying that oil will
shortly give out; on the contrary, they are saying that very
much more oil is still to be found than has been found to
date and that the world's oil reserves, recoverable at a reason-
able cost, may well amount to something of the order of
200,000 milUon tons, that is about 200 times the current
annual take. We know that the so-called "proved" oil
reserves stand at present at about 40,000 million tons, and
we certainly do not fall into the elementary error of think-
ing that thatis aíl the oil there is likely to be. No, we are

quite happy to beheve that the almost unimaginably large

amount of a further 160,000 million tons of oil will be
discovered during the next few decades. Why almost un
imaginable? Because, for instance, the great recent discovery
I
126
of large oil deposits in the Sahara (which has induced many
people to believc that the future prospects of oil have been
fundamentally changed thcreby) would hardly afFect this
figure one way or another. Present opinión of the experts
appear to be that the Saharan oil fields may ultimately yield
as much as 1000 milJion tons. This is an impressive figure
when held, let us say, against the present annual oil require-
ments of France; but it is quite insignificant as a contribution
to the 160,000 milliou tons which we assume will be dis-
covered in the foreseeable future. That is why I said "almost
unimaginable," because 160 such discoveries as that of
Saharan oil are indeed difficult to imagine. All the same, let
US assume that they can be made and will be made.
It looks therefore as if proved oil reserves should be

enough for forty years and total oil reserves for 200 years
— at the current rate ofconsumption. Unfortunately, how-
ever, the rate of consumption is not stable but has a long
history of growth at a rate of six or seven per cent a year.
Indeed, if this growth stopped from now on, there could be
no question of oil displacing coal; and everybody appears
to be quite confident that the growth of oil —
we are speaking
on a world scale —
^will continué at the established rate.

Industrialisation spreading right across the world and is

is

being carried forward mainly by the power of oil. Does any-

body assume that this process would suddenly cease? If not,
it might be worth our while to consider, purely arithmetically,
how long it could continué.
What I propose to make now is not a prediction but
simply an exploratory calculation or, as the engineers might
cali it, a feasibility study. A growth rate of seven per cent
means doubling in ten years. In 1970, therefore, world oil
consumption might be at the rate of 2000 million tons per
annum. [In the event, it amountcd to 2273 million tons.]
The amount taken during the decade would be roughly
15,000 million tons. To maintain proved reserves at 40,000
million tons new provings during the decadé would have to
amount to about 15,000 million tons. Proved reserves, which
are at present forty times annual take, would then be only
twenty times, the annual take having doubled. There would
be nothing inherently absurd or impossible in such a develop-

127
 ment. Ten years, however, is a very short time when we are
dealing with problems of fuel supply. So let us look at the
following ten years leading up to about 1980. If ^1 con-
sumption continued to grow at roughly seven per cent per
annum, it would rise to about 4000 million tons a year in
1980. The total take during this second decade would be
roughly 30,000 million tons. If the "life" of pro ved reserves
were to be maintained at twenty years and few people —
would care to engage in big investments without being able
to look to at least twenty years for writing them off it —
would not suffice merely to replace the take of 30,000 million
tons; it would be necessary to end up with proved reserves
at 80,000 million tons (twenty times 4000). New discoveries
during that second decade would therefore have to amount
to not less than 70,000 million tons. Such a figure, I sug-
gest, already looks pretty fantastic. What is more, by that
time we would have used up about 45,000 million tons out of
our original 200,000 million tons total. The remaining
155,000 million tons, and not-yet-discovered,
discovered
would allow a continuation of the 1980 rate of consump-
tion for than forty years. No further arithmetical
less
dcmonstration needed to make us realise that a continua-
is

tion of rapid growth beyond 1980 would then be virtually

impossible.
This, then, is the result of our "feasibility study": if

there any truth at all in the estimates of total oil reserves

is

which have been published by the leading uil geologists,

there can be no doubt that the oil industry will be able to
sustain its established rate of growth for another ten years;
there is considerable doubt whether it will be able to do so
for twenty years; and there is almost a certainty that it will
not be able to continué rapid growth beyond 1980. In that
year, or rather around that time, world oil consumption
would be greater than ever before and proved oil reserves, in
absolute amount, would also be the highest ever. There is
no suggestion that the world would have reached the end of
its oil resources; but it would have reached the end of oil

growth. As a matter of interest, I might add that this very

point appears to have been reached already today with.
natural gas in the United States. It has reached its all-time

128
hígh; but thc relation of current take to remaining reserves
is such that it may now be impossible for it to grow any
further.
As far as Britain is concemed —a highly industríalised
country with a high rate of consumption but without oil
indigenous supplies the oil —
crisis will come, not when
all the world's oil is exhausted, but when world oil sup-

plies cease to expand. If this point is reached, as our

exploratory calculation would suggest that it might, in
about twenty years' time, when industríalisation will have
spread right across the globe and the underdeveloped
countries have had their appetite for a higher standard of
living thoroughly whetted, although still finding themselves

¡n diré poverty, what be the result but an intense

else could
struggle for oil supplies, cven a violent struggle, in which
any country with large needs and negligible indigenous sup-
plies will find itself in a very weak position.
You can elabórate the exploratory calculation if you
wish, varying the basic assumptions by as much as fifty
per cent: you will find that the results do not become
significantly different. If you wish to be very optimistic,
you may find that the point of máximum growth may not
be reached by 1980 but a few years later. What does it
matter? We, or our children, will merely be a few years
older,
All this means that the National Coal Board has one
overriding task and responsibility, being the írustees of the
nation's coal reserves: to be able to supply plenty of coal
when the world-wide scramble for oil comes. This would not
be possible if it permitted the industry, or a substantial part
of the industry, to be liquidated because of the present glut
and cheapness of oil, a glut which is due to all sorts of
temporary causes. . . .

What, then, will be the position of coal in, say, 1980?

All indications are that the demand for coal in this country
will then be larger than it is now. There will still be plenty
of oil, but not necessarily enough to meet all requirements.
There may be a world-wide scramble for oil, reflected
possibly in greatly enhanced oil pnces. We must all hopc
that the National Coal Board will be able to steer the

129
 industry safely through the difficult years that lie ahead,
maintaining as well as possible its power to produce efficiently
something of the order of 200 million tons of coal a year.
Even if from time to time it may look as if less coal and
more imported oil were cheaper or more convenient for
certain users or for the economy as a whole, it is the longer-
term prospect that must rule national fuel policy. And this
longer-term prospect must be seen against such world-wide
developments as population growth and industrialisation. The
indications are that by the 1980s we shall have a world
population at least one-third bigger than now and a level of
world industrial production at least two-and-a-half times
as high as today, with fuel use more than doubled. To
pennit a doubling of total fuel consumption it will be
necessary to increase oil fourfold; to double hydroelectricity;
to maintain natural gas production at least at the present
level; to obtain a substantial (though still modest) contribu-
tion from nuclear energy, and to get roughly twenty per
cent more coal than now. No doubt, many things will happen
during the next twenty years which we cannot foresee today.
Some may increase the need for coal and some may decrease
it. Policy cannot be based on the unforeseen or unforesee-

able. If we base present policy on what can be foreseen at

present, it will be a policy of conservation for the coal
industry, not of liquidation. . . .

These wamings, and many others uttered throughout

the I960s, did not merely remain unheeded but were
treated with derision and contempt —
until the general fuel
supplies scare of 1970. Every new discovery of oil, or of
natural gas, whether in the Sahara, in the Netherlands, in
the North Sea, or in Alaska, was hailed as a major event
which "fundamentally changed all future prospects," as if
the type of analysis given above had not already assumed
that enormous new discoveries would be made every year.
The main can today be made of the explora-
criticism that
tofy calculations of 1961 is that all the figures are slightly
understated. Events have moved even faster than I
expected ten or twelve years ago.

130
 Even today, soothsayers are still at work suggesting that
there is no problem. During the 1960s, it was the oil
companies who were the main dispensers of bland assur-
ances, although the figures they provided totally disproved
their case. Now, and much
after nearly half the capacity
more than workable reserves of the western
half the
European coal industries have been destroyed, they have
changed their tune. It used to be said that O.P.E.C. the —
Organisation of Petroleum Exporting Countries would —
never amount to anything, because Arabs could never
agree with each other, let alone with non- Arabs; today it
is clear that O.P.E.C. is the greatest cartel-monopoly the

world has ever seen. It used to be said that the oil export-
ing countries depended on the oil importing countries just
as much depended on the former; today it is
as the latter
clear that this is based on nothing but wishful thinking,
because the need of the oil consuméis is so great and their
demand so inelastic that the oil exporting countries, acting
in unisón, can in fact raise their revenues by the simple
device of curtailing output. There are still people who say
that if oil prices rose too much (whatever that may mean)
oil would price itself out of the market; but it is perfectly
obvious that there is no ready substitute for oil to take its

place on a quantitatively significant scale, so that oil, in

fact, cannot price itself out of the market.
The oil producing countries, meanwhile, are beginning
to realise that money alone cannot build new sources of
livelihood for their populations. To build them needs, in
addition to money, immense eíTorts and a great deal of time.
Oil is a "wasting asset," and the faster it is allowed to
waste, the shorter is the time available for the develop-
ment of a new basis of economic existence.The conclu-
sions are obvious: it is in the real longer-term interest of
both the oil exporting and the oil importing countries that
the "life-span" of oil should be prolonged as much as possi-
ble. The former need time to develop altemative sources
of livelihood and the latter need time to adjust their oil-

131
dependent economies to a situation —which is absolutely
certain to arise within the lifetime of most people living
—
today when oil will be scarce and very dear. The greatest
danger to both is a continuation of rapid growth in oil
production and consumption throughout the world.
Catastrophic developments on the oil front could be
avoided only if the basic harmony of the long-term inter-
ests of both groups of countries carne to be fully realised
and concerted action were taken to stabilise and gradually
reduce the annual flow of oil into consumption.
As far as the oil importing countries are concemed, the
problem is obviously most serious for westem Europe and
Japan. These two áreas are in danger of becoming the
"residuary legatees" for oil imports. No elabórate com-
puter studies are required to establish this stark fact. Until
westem Europe lived in the comfortable
quite recently,
"we are entering the age of limitless, cheap
illusion that
energy" and famous scientists, among others, gave it as
their considered opinión that in future "energy will
be a
drug on the market." The British White Paper on Fuel
Policy, issued in November 1967, proclaimed that

The discovery of natural gas in the North Sea is a major

event in the evolution of Britain's energy supplies. It follows
closely upen the coming of age of nuclear power as a
potential major source of ehergy. Together, these two
developments will lead to fundamental changes in the pattem
of energy demand and supply in the coming years.

Five years needs to be said is that Britain is

later, all that
more dependent on imported oil than ever before. A
report presented to the Secretary of State for the Envi-
ronment in February 1972, introduces its chapter on
energy with the words:

There is deejvseated unease rcvcaled by the evidence sent

to US about the future energy resources, both for this country
and for the world as a whole. Assessments vary about the
length of time that will elapse before fossil fuels are ex-

132
 hausted, but it is increasingly recognised that their life is

limjted and satisfactory alternativés must be foiind. The huge

incipient needs of developing countries, the mercases in
populatíon, the ratc at which some sources of cnergy are
being used up without much apparent thought of the conse-
quences, the belief that future resources will be available
only at ever-increasing economic cost and the hazards which
nuclear power may bring in its train are all factors which
contribute to the growing concern.

It is a pity that the "growing concern" did not show itself

in the 1960s, during which nearly half the British coal
industry was abandoned as '"uneconomic" —and, once
abandoned, it is virtually lost for ever —and it is astonish-
ing that, despite "growing concern," there is continuing
pressure from highly influential quarters to go on with pit
closures for "economic" reasons.

133
 4
Nuclear Energy —
Salvation or Damnation?

The main cause of the complacency —now gradually dimin-

ishing —about future energy was undoubtedly the
supplies
emergence of nuclear energy, which, people felt, had
arrived just in time. Little did they bother to inquire pre-
cisely whaí was that had arrived. It was new, it was
it

astonishing, was progress, and promises were freely

it

given that it would be cheap. Since a new source of energy

would be needed sooner or later, why not have it at
once?
The following statement was made six years ago. At the
time, it seemed highly unorthodox.

The religión of economics promotes an idolatry of rapid

change, unaffected by the elementary tmism that a change
which is not an unquestionable improvement is a doubtful
blessing. The burden of proof is placed on those who take
the "ecological viewpoint": unless they can produce evidence
of marked injury to man, the change will proceed. Common
sense, on the contrary, would suggest that the burden of
proof should lie on the man who wants to introduce a change;
he has to demónstrate that there cannot be any damaging
consequences. But this would take too much time, and would
therefore be uneconomic. Ecology, indeed, ought to be a
compulsory subject for all economists, whether professionals
or laymen, as this might serve to restore at least a modicum
of balance. For ecology holds "that an environmental settíng

134
 developed over míllions of years must be considered to havc
some merit. Anything so complicated as a planet, inhabited
by more than a million and a half species of plants and
animáis, all of them living together in a more or less balanced
equilibríum in which they continuously use and re-use the
same molecules of the soil and air, cannot be improved by
aimless and uninformed tinkering. All changes in a complex
mechanism involve some risk and should be undertaken only
after careful study of all the facts available. Changes should
be made on a small se ale first so as to provide a test before
they are widely applied. When
Information is incomplete,
changes should stay cióse to the natural processes which
have in their favour the indisputable evidence of having
supported life for a very long time."i

The argument, six years age, proceeded as foUows:

Of all the changes introduced by man inte the household
of nature, large-scale nuclear fission is undoubtedly the

most dangerous and profound. As a result, ionising radia-

tion has become the most serious agent of pollution of the
environment and the greatest threat to man's survival on
earth. The attention of the layman, not surprisingly, has
been captured by the atom bomb, although there is at
least a chance that it may never be used again. The
danger to humanity created by the so-called peaceful uses
of atomic energy may be much greater. There could
indeed be no clearer example of the prevailing dictator-
ship of economics. Whether to build conventional power
stations, based on coal or oil, or nuclear stations, is being
decided on economic grounds, with perhaps a small ele-
ment of regard for the "social consequences" that might
arise from an over-speedy curtailment of the coal mdustry.
But that nuclear fission represents an incredible, incom-
parable, and unique hazard for human life does not enter
any calculation and is never mentioned. People whose
business it is to judge hazards, the Insurance companies,
are reluctant to insure nuclear power stations anywhere
in the world for third party risk, with the result that spe-
cial legislation has had to be passed whereby the State

135
accepts big liabilities.^ Yet, insured or not, the hazard
remains, and such is the thraldom of the religión of eco-
nomics that the only question that appears to interest
either goveraments or the public is whether *'it pays."
It is not as if there were any lack of authoritative voices

to wam US. The effects of alpha, beta, and gamma rays on

living tissues are perfectly well known: the radiation
an organism, and the
particles are like bullets tearing into
damage they do depends primarily on the dosage and the
type of cells they hit.^ As long ago as 1927, the American
biologist H. J. Muller published his famous paper on
genetic mutations produced by X-ray bombardment,* and
since the eariy 1930s the genetic hazard of exposure has
been recognised also by non-geneticists.^ It is clear that
here is a hazard with a hitherto unexperienced "dimen-
sión," endangering not only those who might be directly
affected by this radiation but their offspring as well.
Anew "dimensión" is given also by the fact that while
—
man now can and does créate radioactive — elements,
there nothing he can do to reduce their radioactivity
is

once he has created them. No chemical reaction, no physi-

cal interference, only the passage of time reduces the
once it has been set going. Carbón- 14
intensity of radiation
has a half-life of 5900 years, which means that it takes
nearly 6000 years for its radioactivity to decline to one-
half of what it was before. The half-life of strontium-90 is

twenty-eight years. But whatever the length of the half-

life, some radiation continúes almost indefinitely, and
there is nothing that can be done about it, except to try
and put the radioactive substance into a safe place.
But what is a safe place, let us say, for the enormous
amounts of radioactive waste products created by nuclear
reactors? No place on earth can be shown to be safe. It
was thought at one time that these wastes could safely be
dumped into the deepest parts of the oceans, on the
assumption that no life could subsist at such depths.^ But
this has since been disproved by Soviet deep-sea explora-

136
tion. Wherever there is life, radioactive substances are
absorbed into the biological cycle. Within hours of deposit-
ing these materials in water, the great bulk of them can be
found in living organisms. Plankton, algae, and many sea
animáis have the power of concentrating these substances
by a factor of 1000 and in some cases even a million. As
one organism feeds on another, the radioactive materials
climb up the ladder of life and find their way back to
man.''
No interaational agreement has yet been reached on
The conference of the Interaational Atomic
waste disposal.
Energy Organisation at Monaco, in November 1959,
ended in disagreement, mainly on account of the violent
objections raised by the majority of countries against the
American and British practice of disposal into the
oceans.s "High level" wastes continué to be dumped into
the sea, while quantities of so-called "intermediate" and
"low-level" wastes are discharged into rivers or directly
into the ground. An A.E.C. report observes laconically that
the liquid wastes "work their way slowly into ground
water, leaving all or part [sicl] of their radioactivity held
either chemically or physically in the soil."®
The most massive wastes are, of course, the nuclear
reactors themselves aftcr they have become unserviceable.
There is a lot of discussion on the trivial economic question
of whether they will last for twenty, twenty-five, or thirty
years. No one discusses the humanly vital point that they
cannot be dismantled and cannot be shifted but have to
be left standing where they are, probably for centuries,
perhaps for thousands of years, an active menace to all
life, silently leaking radioactivity into air, water and soil.

No one has considered the number and location of these

satanic milis which will relentlessly accumulate. Earth-
quakes, of course, are not supposed to happen, ñor wars,
ñor civil disturbances, ñor riots like those that infested
American cities. Disused nuclear power stations will stand
as unsightly monuments to unquiet man's assumption that

137
nothing but tranquillity, from now on, stretches before
—
him, or else that the future counts as nothing compared
with the slightest economic gain now.
Meanwhile, a number of authorities are engaged in
"máximum permissible concentrations" (MPCs)
defining
and "máximum permissible levéis" (MPLs) for various
radioactive elements. The MPC
purports to define the
quantity of a given radioactvie substance that the human
body can be allowed to accumulate. But it is known that
any accumulation produces biological damage. "Since we
don't know that these effects can be completely recovered
from," observes the U.S. Naval Radiological Laboratory,
"we have to fall back on an arbitf ary decisión about how
much we will put up with; Le. what is "acceptable" or "per-
missible" —
not a scientific finding, but an administrative
decision."^^^ We can hardly be surprised when men of
outstanding intelligence and integrity, such as Albert
Schweitzer, refuse to accept such administrative decisions
with equanimity: "Who has given them the right to do this?
Who is even entitled to give such a permission?"^^ The
history of these decisions is, to say the least, disquieting.
The British Medical Research Council noted some twelve
years ago that

The máximum permissible level of strontium-90 in the

human by the International Commission
skeleton, accepted
on Radiological Protection, corresponda to 1000 micro-micro-
curies per gramme of cálcium (=1000 S.U.). But this is the
máximum permissible level for adults in special occupations
and is not sUitable for application to the population as a
whole or to the children with their greater sensitivity to
radiation.i2

A little later, the MPC for strontium-90, as far as the

general population was concemed, was reduced by ninety
per cent, and then by another third, to sixty-seven S.U.
Meanwhile, the MPC for workers in nuclear plants was
raised to 2000 S.U.^s

138
 We must be careful, however, not to get lost in the
jungle of controversy that has grown up in this field. The
point is that very serious have already been
hazards
created by the "peacefiil uses of atomic energy," affect-
ing not merely the people alive today but all future
generations, although so far nuclear energy is being used
only on a statistically insignificant scale. The real develop-
ment is yet to come, on a scale which few people are
capable of imagining. If this is really going to happen,
there will be a continuous traffic of radioactive sub-
stances from the "hot" chemical plants to the nuclear
stations and back again; from the stations to waste-
processing plants; and from there to disposal sites. A
serious accident, whether during transport or production,
can cause a major catastrophe; and the radiation levéis
throughout the world will rise relentlessiy from generation
to generation. Unless all living geneticists are in error,
there will be an equally relentless, though no doubt some-
what delayed, increase in the number of harmful muta-
tions. K. Z. Morgan, of the Oak Ridge Laboratory,
emphasises that the damage can be very subtle, a
deterioration of all kinds of organic qualities, such as
mobility, fertility, and the efficiency of sensory organs. "If
a small dose has any effect at all at any stage of the life
cycle of an organism, then chronic radiation at this level
can be more damaging than a single massive dose. . . .

Finally, stress and changes in mutation rates may be pro-

duced even when there is no immediately obvious effect on
survival of irradiated individuáis."^*
Leading geneticists have given their waraings that
everything possible should be done to avoid any increases
in mutation rates ;^5 men have insisted
leading medical
that the future of nuclear energy must depend primarily
on researches into radiation biology which are as yet still
totally incomplete;^® leading physicists have suggested
that "measures much less heroic than building . . . nuclear
reactors" should be tried to solve the problem of future

139
 '
:
;

energy supplies —
a problem which is in no way acute at
present;^^ and leading students of strategic and political
problems, at the same time, have warned us that there is
really no hope of preventing the proliferation of the atom
bomb, if there is a spread of plutonium capacity, such as
was "spectacularly launched by President Eisenhower in
his 'atoms for peace proposals* of 8th December,
1953."i8
Yet all these weighty opinions play no part in the debate
on whether we should go immediately for a large "second I

nuclear programme" or stick a bit longer to the conven-

tional fuels which, whatever may be said for or againsti
thera, do not involve us in entirely novel and admittedly
incalculable risks. None of thcm are even mentioned: the
whole argument, which may vitally affect the very future
of the human race, is conducted exclusively in tenns of
immediate advantage, as if two rag and bone merchanta
were trying to agree on a quantity discount
What, after all, is the fouling of air with smoke com-
pared with the pollution of air, water, and soil witl
ionising radiation? Not that I wish in any way to belittl<
the evils of conventional air and water pollution; but w<
must recognise "dimensional differences" when we
encounter them: radioactive pollution is an evil of an
incomparably greater "dimensión" than anything mankind
has known before. One might even ask: what is the point
of insisting on clean air, if the air is laden with radioactive
particles? And even if the air could be protected, what isj
the point ofit, if soil and water are being poisoned? !
Even an economist might well ask: what is the point of
economic progress, a so-called higher standard of living,
when the earth, the only earth we have, is being contamin-
ated by substances which may cause malformations in our
children or grandchildren?Have we leamed nothing from i

the thalidomide tragedy? Can we deal with matters of

such a basic character by means of bland assurances or
official admonitions that "in the absence of proof that

140
[this or that innovation] is in any way deleterious, it

would be the height of irresponsibility to raise a public

alarm"?^® Can we deal with them simply on the basis of a
short-term profitability calculation?

It might be thought [wrote Leonard Beatón] that all the

resources of those who fear the spread of nuclear weapons
would have been devoted to heading off these developments
for as long as possible. The United States, the Soviet Union
and Brítain might be expected to have spent large sums of
money trying to prove that conventional fuels, for example,
had been underrated as a source of power. In fact
. . . . . .

the efforts which have foUowed must stand as one of the

most inexplicable political fantasies in history. Only a social
psychologist could hope to explain why the possessors of
the most terrible weapons in history have sought to spread
the necessary industry to produce them. . Fortunatcly,
. .

. .power reactora are still fairly scarce.20

.

In fact, a prominent American nuclear physicist, A. W.

Weinberg, has given some sort of explanation: *There is,**
he says, "an understandable drive on the part of men of
good wül to build up the positivo aspects of nuclear energy
simply because the negative aspects are so distressing.**
But he also adds the waming that "there are very com-
pelling personal reasons why atomic scientists sound
optimistic when writing about their impact on world
affairs. Each of us must justify to himself his preoccupa-

tion with instniments of nuclear destruction (and even we

reactor people are only slightly less beset with such guilt
than are our weaponeering colleagues)."^!
Our instinct of self-preservation, one should have
thought, would make us inmiune to the blandishments of
guilt-ridden scientific optimism or the unproved promises
of pecuniary advantages. "It is not too late at this point
for us to reconsider oíd decisions and make new ones,**
says a recent American commentator. "For the moment
at least, the choice is available."22 Once many more cen-
tres of radioactivity have been created, there will be no

141
more choice, whether we can cope with the hazards or
not.
It is clear that certain scientific and technological
advances of the last thirty years have produced, and are
continuing to produce, hazards of an altogether intolerable
kind. At the Fourth National Cáncer Conference in Amer-
ica in September 1960, Lester Breslow of the California
State Department of Public Health reported that tens of
thousands of trout in westem hatcheries suddenly acquired
liver cancers, and continued thus:

Technological changes affecting man*s environment are

being introduced at such a rapid rate and with so little
control that it is a wonder man has thus far escaped the
type of cáncer epídemic occurring this year among the
trout.23

To mention these things, no doubt, means laying oneself

open to the charge of being against science, technolog^
and progress. Let me therefore, in conclusión, add a few
words about future scientific research. Man cannot live
without science and technology any more than he can live
against nature. What needs the most careful considera-
tion, however, is the direction of scientific research. We
cannot leave this to the scientists alone. As Einstein him-
self said,24 "almost all scientists are economically com-
pletely dependent" and "the number of scientists who
possess a sense of social responsibüityis so small" that

they cannot determine the direction of research. The lat-

ter dictum applies, no doubt, to all specialists, and the
task therefore falls to the intelligent layman, to people like
those who form the National Society for Clean Air and
other, similar societies concemed with conservation. They
must work on public opinión, so that the politicians,
depending on public opinión, will free themselves from
the thraldom of economism and attend to the things that
really matíer. What matters, as I said, is the direction of
research, that the direction should be towards non-

142
violence rather than violence; towards an harmonious
cooperation with nature rather than a warfare against
nature; towards the noiseless, low-energy, elegant, and
economical solutions normally applied in nature rather
than the noisy, high-energy, brutal, wasteful, and clumsy
solutions of our present-day sciences.
The continuation of scientific advance in the direction
of ever-increasing violence, culminating in nuclear fission
and moving on to nuclear fusión, is a prospect of terror
threatening the abolition of man. Yet it is not written in
the stars that this must be the direction. There is also a
life-giving and life-enhancing possibility, the conscious
exploration and cultivation of all relatively non-violent,
harmonious, organic methods of cooperating with that
enormous, wonderful, incomprehensible system of God-
given nature, of which we are a part and which we cer-
tainly have not made ourselves.
This statement, which was part of a lecture given before
the National Society for Clean Air in October 1967, was
received with thoughtful applause by a highly responsible
audience, but was subsequently ferociously attacked by
the authorities as "the height of irresponsibility." The most
priceless remark was reportedly made by Richard Marsh,
then Her Majesty's Minister of Power, who felt it neces-
sary to "rebuke" the author. The lecture, he said, was one
of the more extraordinary and least profitable contribu-
tions to the current debate on nuclear and coal cosí.
{Daily Telegraphy 21 October 1967.)
However, times change. A report on the Control of
PoUution, presented in February 1972 to the Secretary of
State for the Environment by an oñicially appointed
Working Party, published by Her Majesty's Stationery
Office and entitled PoUution: Nuisance or Nemesis? has y

this to say:

The main worry is about the futura, and in the interaational

context. The economic prosperity of the world seems to be
linked with nuclear energy. At the moment, nuclear energy

143
 provides only one per cent of the total electricity generated
in the worid. By the year 2000, if present plans go aheád,
this will have increased to well over fifty per cent and the
equivalent of two new 500 reactorsMWeeach of the —
size of the one at Trawsfynydd in Snowdonia — will be
open every day.25

On radioactive wastes of nuclear reactors:

The biggest cause of worry for the future is the storage of

the long-lived radioactive wastes. . Unlike other poUutants,
. ,

there no way of destroying radioactivity. ... So there is

is

no alternative to permanent storage. . . .

In the United Kingdom, strontium-90 is at the present

time stored as a liquid in huge stainless steel tanks at Wind-
scale in Cumberland. They have to be continually cooled
with water, since the heat given off by the radiation would
otherwise raise the temperature to above boiling point. We
shall have to go on cooling these tanks for many years, even
if we build no more nuclear reactors. But with the vast

increase of strontium-90 expected in the future, the problem

may prove far more difficult. Moreover, the expected switch
to fast breeder reactors will aggravate the situation even
further, for they produce large quantities of radioactive
substances with very long half-lives.
In effect, we are consciously and deliberately accumulating
a toxic substance on the off-chance that it may be possible
to get rid of it at a later date. We are conmiitting future
generations to tackle a problem which we do not know how
to handle.

FinaUy, the report issues a very clear waming:

The evident danger is that man may have put all his eggs
in the nuclear basket before he discovers that a solution
cannot be found. There would then be powerful political
pressures to ignore the radiation üazards and continué using
the reactors which had been built. It wuld be only prudent
to slow down the nuclear power programme until we have
solved the waste disposal problem. Many responsible . . .

people would go further. They feel that no more nuclear

144
 reactora should be built until we know how to control their
wastes.

And how is the ever-increasing demand for energy to be

satisfíed?

Since planned demand for electricíty cannot be satisfied

without nuclear power, they consider mankind must develop
societies which are less extravagant in their use of elec-
tricíty and other forms of energy. Moreover, they see the
need for this change of direction as immediate and urgent.

No degree of prosperity could justify the accumulation

of large amounts of highly toxic substances which nobody
knows how to raake "safe" and which remain an incalcu-
lable danger to the whole of creation for historical or
even geological ages. To do such a thing is a transgression
against life itself, a transgression infinitely more serious
than any crime ever perpetrated by man. The idea that a
civilisation could sustain itself on the basis of such a trans-
gression is an ethical, spiritual, and metaphysical mon-
strosity. It means conducting the economic affairs of man
as if people really did not matter at all.

145
 —

5
Technology with a
Human Face

The modem world has been shaped by its metaphysiCs,

which has shaped its education, which in turn has brought
forth its science and technology. So, without going back to
metaphysics and education, we can say that the modera
world has been shaped by technology. It tumbles from
crisis to crisis; on all sides the re are prophecies of disaster

and, indeed, visible signs of breakdown.

If that which has been shaped by technology, and con-
tinúes to be so shaped, looks sick, it might be wise to have
a look at technology itself. If technology is felt to be
becoming more and more inhuman, we might do well to
consider whether it is possible to have something better
a technology with a human face.
Strange to say, technology, although of course the pro-
duct of man, tends to develop by own laws and prin-
its

cipies, and these are very different from those of human

nature or of living nature in general. Nature always, so to
speak, knows where and when
to stop, Greater even than
the mystery of growth is the mystery of the
natural
natural cessation of growth. There is measure in all
natural things — in their size, speed, or violence. As a
result, the system of nature, of which man is a part, tends
to be self-balancing, self-adjusting, self-cleansing, Not so
with technology, or perhaps I should say: not so with

146
man dominated by technology and specialisation. Technol-
ogy recognises no self-limiting principie in terms, for —
instance, of size, speed, or violence. It therefore does not
possess the virtues of being self-balancing, self-adjusting,
and self-cleansing. In the subtle system of natura, tech-
nology, and in particular the super-technology of the-
modem world, acts like a foreign body, and there are
now numerous signs of rejection.
Suddenly, if not altogether surprisingly, the modem
world, shaped by modem technology, finds itself involved
in three crises simultaneously. First, human nature revolts
against inhuman technological, organisational, and politi-
cal pattems, which it experiences as suffocating and
debilitating; second, the living environment which supports
human life aches and groans and gives signs of partial
breakdown; and, third, it is clear to anyone fully knowl-
edgeable in the subject matter that the inroads being made
into the non-renewable resources, particularly
world's
those of fossil fuels, are such that serious bottlenecks and
virtual exhaustion loom ahead in the quite foreseeable
future.
Any one of these three crises or illnesses can tum out
to be deadly. I do not know which of the three is the most
likely to be the direcl cause of collapse. What is quite
clear is that a way of life that bases itself on
materialism, i.e. on permanent, limitless expansionism in a
finite environment, cannot last long, and that its life

expectation is the shorter the more successfuUy it pursues

its expansionist objectives.
we ask where the tempestuous developments of
If
world industry during the last quarter-century have taken
US, the answer is somewhat discouraging. Everywhere the
problems seem to be growing faster than the solutions.
This seems to apply to the rich countries just as much as
to the poor. There is nothing in the experience of the last
twenty-five years to suggest that modern technology, as we
know it, can really help us to alleviate world poverty, not

147
to mention the problem of unemployment which already
reaches levéis like thirty per cent in many so-called
developing countries, and now threatens to become
endemic also in many of the rich countries. In any case,
the apparent yet illusory successes of the last twenty-five
years cannot be repeated: the threefold crisis ©f which I

have spoken So we had better face the

will see to that.
—
question of technology ^what does it do and what should
it do? Can we develop a technology which really helps us

to solve our problems— a technology with a human face?

The primary task of technology, it would seem, is to
lighten the burden of work man has to carryin order to
stay alive and develop his potential. It is easy enough to
see that technology fulfíls this purpose when we watch any
particular piece of machinery at work —
a computer, for
instance, can do in seconds what it would take clerks or
even mathematicians a very long time, if they can do it at
all. It is more convince oncself of the truth of
diflacult to
this simple proposition when one
looks at whole societies.
When I first began to travel the worid, visiting rich and
poor countries alike, I was tempted to formúlate the first
law of economics as follows: *The amount of real leisure
a society enjoys tends to be in inverse proportion to the
amount of labour-saving machinery it employs.** It might
be a good idea for the professors of economics to put this
proposition into their examination papers and ask their
pupils to discuss it. However that may be, the evidence is
very strong indeed. If you go from easy-going England to,
say, Germany or the United States, you ñnd that people
therc Uve under much more strain than here. And if you
move to a country like Burma, which is very near to the
botíom of the league table of industrial progress, you find
that people have an enormous amount of leisure really to
enjoy themselves. Of course, as there is so much less
labour-saving machinery to help them, they "accomplish"
much less than we do; but that is a different pomt. The

148
fact remains that theburden of living rests much more
lightly on than on ours.
their shoulders
The question of what technology actually does for us is
therefore worthy of investí gation. It obviously greatly
work while it increases other kinds.
reduces sorae kinds of
The type of work which modem technology is most suc-
cessful in reducing or even eliminating is skilful, produc-
tive work of human hands,in touch with real materials of
one kind or another. In an advanced industrial society,
such work has become exceedingly rare, and to make a
decent living by doing such work has become virtually
impossible. A great part of the modem neurosis may be
due to this very fact; for the human being, defined by
Thomas Aquinas as a being with brains and hands,
enjoys nothing more than to be creatively, usefully, pro-
ductively engaged with both his hands and his brains.
Today, a person has to be wealthy to be able to enjoy this
simple thing, this very great luxury: he has to be able to
afford space and good tools; he has to be lucky enough
to find a good teacher and plenty of free time to leam
and practise. He really has to be rich enough not to need
a Job; for the number of jobs that would be satisfactory
in these respects is very small indeed.
The extent to which modem technology has taken over
the work of human hands may be illustrated as follows.
We may ask how much of **total social time" —that is to
say, the time all of us have together, twenty-four hours a
—
day each ^is actually engaged in real production. Rather
less than one-half of the total population of this country is,
as they say, gainfully occupied, and about one-third of
these are actual producéis in agriculture, mining, con-
struction, and industry. I do mean actual producers^ not

people who tell other people what to do, or account for

the past, or plan for the future, or distribute what other
people have produced. In other words, rather less than
one-sixth of the total population is engaged in actual

149
production; on average, each of them supports five oíhers
beside himself, of which two are gainfully employed on
things other than real production and three are not gain-
fully employed. Now, a fully employed person, allowing
for holidays, sickness, and other absence, spends about
one-fifth of bis total time on his job. It foUows that the
proportion of "total social time" spent on actual produc-
tion —
in the narrow sense in which I am using the term
— roughly, one-fifth of one-third of one-half, /.e. 3 Vi
is,

per cent. The other 96Vi per cent of "total social time" is
spent in other ways, including sieeping, eating, watching
televisión, doing jobs that are not directly productive, or
just killing time more or less humanely.
Although this bit of figuring work need not be taken
too literally, it quite adequately serves to show what
technology has enabled us to do: namely, to. reduce the
amount of time actually spent on production in its most
elementary sense to such a tiny percentage of total social
time that it pales into insignificance, that it carnes no real

weight, let alone prestige. When you look at industrial

society in this way, you cannot be surprised to ñnd that
prestige is carried by those who help fill the other 96 Vi per
cent of total social time, primarily the entertainers but
also the executors of Parkinson's Law. In fact, one might
put the following proposition to students of sociology:
'*The prestige carried by people in modern industrial soci-
ety varies in inverse proportion to their closeness to actual
production."
There is a further reason for this. The process of con-
fining productive time to 3 Vi per cent of total social time
has had the inevitable effect of taking all normal human
pleasure and satisfaction out of the time spent on this
work. Virtually all real production has been turned into an
inhuman chore which does not enrich a man but empties
him. "From the factory," it has been said, "dead matter
goes out improved, whereas men there are corrupted and
degraded."

150
 We may say, therefore, that modera technology has
deprived man of the kind of work that he enjoys most,
Creative, useful work with hands and brains, and given
him plenty of work of a fragmented kind, most of which he
does not enjoy at all. It has multiplied the number of
people who are exceedingly busy doing kinds of work
which, if it is all, is so only in an indirect or
productive at
**roundabout" way, and much of which would not be
necessary at all if technology were i^ather less modem.
Karl Marx appears to have foreseen much of this when he
wrote: "They want production to be limited to useful
things, but they forget that the production of too many
useful things results in too many useless people,** to which
we might add: particularly when the processes of produc-
tion are joyless and boring. All this confirms our suspicion
that modera technology, the way it has developed, is

developing, and promises further to develop, is showing an

increasingly inhuman face, and that we might do well to
take stock and reconsider our goals.
Taking stock, we can say that we possess a vast accu-
mulation of new knowledge, splendid scientific techniques
to increase it further, and immense experience in its
application.All this is truth of a kind This truthful
knowledge, as such, does not conmiit us to a technology
of giantism, supersonic speed, violence, and the destruc-
tion of human wprk-enjoyment. The use we have made of
our knowledge is only one of its possible uses and, as is

now becoming ever more apparent, often an unwise and

destnictive use.
As I have shown, directly productive time in our society
has already been reduced to about 3 Vi per cent of total
social time, and the whole drift of moderai technological
development is to reduce it further, asymptotically* to
zero. Imagine we set outselves a goal in the opposite

* Asymptote: A mathematical line continually approaching

some curve but never meeting it within a fínite distance.

151
direction — to mercase it sixfold, to about twenty per cent,
so that twenty per cent of total social time would be used
for actually producing things, employing hands and brains
and, naturally, excellent tools. An incredible thoughtl
Even children would be allowed to make themselves use-
ful, even oíd people. At one-sixth of present-day produc-
tivity, we should be producing as much as at present.
There would be six times as much time for any piece of
work we chose to undertake —enough to make a really
good Job of it, to enjoy oneself, to produce real quality,
even to make things beautiful. Think of the therapeutic
valué of real work; think of its educational valué. No one
would then want to raise the school-leaving age or to
lower the retirement age, so as to keep people off the
labour market. Everybody would be welcome to lend a
hand. Everybody would be admitted to what is now the
rarest privilege, the opportunity of working usefully, crea-
tively, with his own hands and brains, in his own time, at
his own pace —
and with excellent tools. Would this mean
an enormous extensión of working hours? No, people
who work in this way do not know the difference between
work and leisure. Unless they sleep or eat or occasionally
choose to do nothing at all, they are always agreeably,
productively engaged. Many of the "on-cost jobs" would
simply disappear; I leave it to the reader's imagination to
identify them. There would be little need for mindless
entertainment or other drugs, and unquestionably much
less illness.
Now, it might be said that this is a romantic, a utopian,
visión. True enough. What we have today, in modem
industrial society, is not romantic and certainly not
utopian, as we have it right here. But it is in very deep
trouble and holds no promise of survival. We jolly well
have to have the courage to dream if we want to survive
and give our children a chance of survival. The threefold
crisis of which I have spoken will not go away if we sim-
ply carry on as before. It will become worse and end in

152
disaster, until or unless we develop a new life-stylc

which compatible with the real needs of human nature,

is

with the health of living nature around us, and with the
resource endowment of the world.
Now, this is indeed a tall order, not because a new life-

style to meet these critical requirements and facts is

impossible to conceive, but because the present consumer

society is like a drug addict who, no matter how miserable
he may feel, finds it extremely difíicult to get off the hook.
The problem children of the world —from this point of
view and in spite of many other considerations that could
—
be adduced are the rich societies and not the poor.
It is almost like a providential blessing that we, the rich

countries, have found it in our heart at least to consider

the Third World and to try to mitígate its poverty. In
spite of the mixture of motives and the persistence of
exptoitative practices, I think that this fairly recent
development an honourable
in the outlook of the rich is

one. And it could save us; for the poverty of the poor
makes it in any case impossible for them successfuUy to
adopt our technology. Of course, they often try to do so,
and then have to bear the most diré consequences in terms
of mass unemployment, mass migration into cities, rural
decay, and intolerable social tensions. They need, in fact,
the very thing I am talking about, which we also need: a
different kind of technology, a technology with a human
making human hands and brains
face, which, instead of
redundant, helps them to become far more productivo
than they have ever been before.
As Gandhi said, the poor of the world cannot be helped
by mass production, only by production by the masses.
The system of mass production, based on sophisticated,
highly capital-intensive, high energy-input dependent, and
human labour-saving technology, presupposes that you are
already rich, for a great deal of capital investment is

needed to establish one single workplace. The system

of production by the masses mobilises the priceless

153
 a

resources which are possessed by all human beings, their

clever brains and skilful hands, and supports them with
first-class tools. The technology of mass production is
inherently violent, ecologically damaging, self-defeating in
terms of non-renewable resources, and stultifying for the
human person. The technology of production by the
masses, making use of the best of modeni knowledge and
experience, is conducive to decentralisation, compatible
with the laws of ecology, gentle in its use of scarce
resources, and designed to serve the human person instead
of making him the servant of machines. I have named it

intermedíate technology to signify that it is vastly superior

to the primitive technology of bygone ages but at the same
time much simpler, cheaper, and freer than the super-
technology of the rich. One can also cali it self-help
technology, democratic or people*s technology
or —
techology to which everybody can gain admittance and
which is not reserved to those already rich and powerful.
be more fully discussed in later chapters.
It will

Although we are in possession of all requisite knowl-

edge, it still requires a systematic, creative effort to bring

this technology into active existence and make it generally

visible and available. It is my experience that it is rather
more difficult to recapture directness and simplicity than to
advance in the direction of ever more sophistication and
complexity. Any third-rate engineer or researcher can
increase complexity; but it takes a certain flair of real
insight to make things simple again. And this insight does
notcome easily to people who have allowed themselves to
become alienated from real, productive work and from
the self-balancing system of nature, which never fails to
recognise measure and limitation. Any activity which fails

to recognise a self-limiting principie is of the devil. In our

work with the developing countries we are at least forced
to recognise the limitations of poverty, and this work can
therefore be a wholesome school for all of us in which.

154
while genuinely trying to help others, we may also gain
knowledge and experience of how to help ourselves.
I think we can already see the conflict of attitudes
which will decide our future. On the one side, I see the
people who
think they can cope with our threefold crisis
by the methods current, only more so; I cali them the
people of the forward stampede. On the other side, there
are people in search of a new who
life-style, seek to retum
to certain basic truths about man and his worid; I cali

them home-comers. Let us admit that the people of the

forward stampede, like the devil, have all the best tunes or
at least the most popular and familiar tunes. You cannot
stand still, they say; standing still means going down; you
must go forward; there is nothing wrong with modem
technology excepí that it is as yet incomplete; let us com-
plete Dr. Sicco Mansholt, one of the most prominent
it.

chiefs of the European Economic Community, may be

quoted as a typical representative of this group. "More,
he says, "are the watchwords of
further, quicker, richer,"
present-day society." And he thinks we must help people
to adapt, "for there is no alternative." This is the
authentic voice of the forward stampede, which talks in
much the same tone as Dostoyevsky's Grand Inquisitor:
"Why have you come to hinder us?" They point to the
population explosión and to the possibilities of world
hunger. Surely, we must take our flight forward and not
be fainthearted. If people start protesting and revolting,
we shall have to have more pólice and have them better
equipped. If there is trouble with the environment, we
shall need more stringent laws against pollution, and
faster economic growth to pay for antipollution measures.
If there are problems about natural resources, we shall
tum to synthetics; if there are problems about fossil fuels,
we shall move from slow reactors to fast breeders and
from fission to fusión. There are no insoluble problems.
The slogans of the people of the forward stampede burst

155
into the newspaper headlines every day with the message,
*'abreakthrough a day keeps the crisis at bay."
And what about the other side? This is made up of
people who are deeply convinced that technological devel-
opment has taken a wrong tum and needs to be redi-
rected. The term "home-comer" has, of course, a reli-
gious connotation. For it takes a good deal of courage to
say "no" to the fashions and fascinations of the age and to
question the presuppositions of a civilisation which appears
destined to conquer the whole world; the requisita
strength can be derived only from deep convictions. If it
were derived from nothing more than fear of the futura,
it would be likely to disappear at the decisive moment

The genuine "home-comer" does not have the best tunes,

but he has the most exalted text, nothing less than the
Gospels. For him, there could not be a more* concise
statement of his situation, of our situation, than the parable
of the prodigal son. Strange to say, the Sermón on the
Mount gives jíretty precise instructions on how to con-
struct an outlook that could lead to an Economics of
Survival.

—How who know

blessed are those that they are peor:
Kingdom of Heaven
the is theirs.
—How blessed are the sorrowful;
they shall find Consolation.
—How blessed are those
of a gentle spirit;
they shall have the earth for their possession.
'—^How blessed are those who hunger and thirst to see
right prevail;
they shall be satisfied;
—How blessed are the peacemakers;
God shall cali them his sons.

It may seem daring to connect these beatitudes with mat-

ters of technology and economics. But may it not be that
we are in trouble precisely because we have failed for so

156
long to make this connection? It is not difficult to díscern
what these beatitudes may mean for us today:

—We are poor, not demigods.

—^We have plenty be soirowful about, and not
to are
emerging a golden
into age.
—^We need approach, a non-violent
a gentle and spirit,

small is beautiful.
—We must concern ourselves with and justice see right
prevail.
—^And all onlythis, can enable us
this, become to
peacemakers.

The home-comers base themselves upon a different pie-

ture ofman from that which motivates the people of the
forward stampede. It would be very superficial to say that
the latter believe in "growth" while the former do not. In
a sense, everybody believes in growth, and rightly so,
because growth is an essential feature of life. The whole
point, however, is to give to the idea of growth a qualita-
tive determination; for there are always many things that
ought to be growing and many things that ought to be
diminishing.
Equally, it would be very superficial to say that the
home-comers do not believe in progress, which also can be
said to be an essential feature of all life. The whole point
is to determine what constitutes progress. And the home-

comers believe that the direction which modem technol-

ogy has taken and is continuing to pursue towards —
ever-greater size, ever-higher speeds, and ever-increased
violence, in defiance of all laws of natural harmony — is

the opposite of progress. Henee the cali for taking stock

and finding a new orientation. The stocktaking indicates
that we are destroying our very basis of existence, and
the reorientation is based on remembering what human
life is really about.
In one way or another everybody will have to take sides

157
in this great cónflict. To "leave it to the experts*' means to
side with the people of the forward stampede. It is widely
accepted that politics is too important a matter to be left
to experts. Today, the main contení of politics is eco-
nomics, and the main content of economics is technology.
If politics cannot be left to the experts, neither can

economics and technology.

The case for hope rests on the fact that ordinary people
are often able to take a wider view, and a more "human-
istic" view, than is normally being taken by experts. The

power of ordinary people. who today tend to feel utterly

powerless, does not lie in starting new lines of action, but
in placing sympathy and support with minority
their
groups which have already started. I shall give two exam-
ples relevant to the subject here under discussion. One
relates to agriculture, still the greatest single activity of
man on earth, and the other relates to industrial technol-
ogy.
Modem agriculture relies on applying to soil, plants,
and animáis ever-increasing quantities of chemical pro-
ducts, the long-term effect of which on soil fertility and
health is subject to very grave doubts. People who raise
such doubts are generally confronted with the assertion
that the cholee lies between "poison or hunger." There
are highly successful farmers in many countries who
obtain excellent yields without resort to such chemicals
and without raising any doubts about long-term soil
fertility and health. For the last twenty-five years, a

prívate, voluntary organisation, the Soil Association, has

been engaged in exploring the vital relationships between
soil, plant, animal, and man; has undertaken and assisted

relevant research; and has attempted to keep the pub-

lic informed about developments in these fields. Neither

the successful farmers ñor the Soil Association have been

able to attract official support or recognition. They have
generally been dismissed as "the muck and mystery peo-
ple," because they are obviously outside the mainstream of

158
modem technological progress. Their methods bear the
mark of non-violence and humility towards the infinitely
subtle system of natural harmony, and this stands in oppo-
sition to the life-style of the modem world. But if we
now realise that the modem life-style is putting us inte
mortal danger, we may find it in our hearts to support
and even join these pioneers rather than to ignore or
ridicule them.
On the industrial side, there is the Intemiediate Tech-
nology Development Group. It is engaged in the system-
atic study on how to help people to help themselves. While
its work is primarily concemed with giving technical
assistance to the Third World, the results of its research
are attracting increasing attention alsofrom those who
are concemed about the future of the rich societies. For
they show that an interaaediate technology, a technology
with a human face, is in fact possible; that it is viable;
and that it reintegrates the human being, with his skilful
hands and creative brain, into the productive process. It
serves production by the masses instead of mass produc-
tion. Like the Soil Association, it is a prívate, voluntary
organisation depending on public support.
I have no doubt that it is possible to give a new direo-
tion to technological development, a direction that shall
lead back to the real needs of man, and that also
it

means: to the actual size of man. Man is small, and,

therefore, small is beautiful. To go for giantism is to go
for self-destmction. And what is the cost of a reorienta-
tion? We
might remind ourselves that to calcúlate the cost
of survival is perverse. No doubt, a pnce has to be paid
for anything worth while; to redirect technology so that it
serves man instead of destroying him requires primarily an
effort of the imagination and an abandonment of fear.

159
 1

PART 1 1

The Third World

I
 7
Development

A British Goverament White Paper on Overseas Develop-

ment some years ago stated the aims of foreign aid as
follows:

To do what lies within our power to help the developing

coimtríes to provide their people with the material oppor-
tunities for using their talents, of living a full and happy
life and steadily improving their lot

It may be doubtful whether equally optimistic language

would be used today, but the basic philosophy remains the
same. There is, perhaps, some disillusiomnent: the task
turas out to be much harder than may have been thought
— and the newly independent countries are finding the
same. Two phenomena, in particular, are giving rise to
—
world-wide concern mass unemployment and mass
migration into cities. For two-thirds of mankind, the aim
of a "full and happy life" with steady improvements of
their lot, if not actually receding, seems to be as far away
as ever. So we had better have a new look at the whole
problem.
Many people are having a new look and some say the
trouble isthat there is too little aid. They admit that there
are many unhealthy and disrupting tendencies but suggest
that with more massive
aid one ought to be able to over-
compensate them. If the available aid cannot be massive
enough for everybody, they suggest that it should be

163
concentrated on the countries where the promise of suc-
cess seems most credible. Not surprisingly, this proposal
has failed to win general acceptance.
One of the unhealthy and disniptive tendencies in virtu-
ally all the developing countries is the emergence, in an
ever more accentuated form, of the "dual economy," in
which there are two different pattems of living as widely
separated from each other as two different worlds. It is
not a matter of some people being rich and others being
poor, both being united by a common way of life: it is a
matter of two ways of life existing side by sidc in such a
manner that even the humblest member of the one dis-
poses of a daily income which is a high múltiple of the
income acctning to even the hardest working member of
the other. The social and political tensions arising from
the dual economy are too obvious to require description.
In the dual economy of a typical developing country,
we may find fifteen per cent of the population in the
modera sector, mainly confined to one or two big cities.
The other eighty-five per cent exists in the rural áreas
and small towns. For reasons which will be discussed, most
of the development effort goes into the big sities, which
means that eighty-five per cent of the population are
largely bypassed. What isbecome of them? Simply to
to
assume that the modera sector in the big cities will grow
until it has absorbed almost the entire population —which
is, of course, what has happened in many of the highly
—
developed countries is utterly imrealistic. Even the rich-
est countries are groaning under the burden which such a
maldistribution of population inevitably imposes.
In every branch of modera thought, the concept of
"evolution" plays a central role. Not so in development
economics, although the words "development" and "evolu-
tion'* would seem to be virtually synonymous. Whatever
may be the merit of the theory of evolution in specific
cases, it certainly reflects our experience of economic and
technical development. Let us imagine a visit to a modera

164
 industrial establishment, say, a great refinery. As we walk
around in its vastness, through all its fantastic complexity,
we might well wonder how it was possible for the human
mind to conceive such a thing. What an immensity of
knowledge, ingenuity, and experience is here incaraated in
equipment! How is it possible? The answer is that it did
not spring ready-made out of any person's mind it came —
by a process of evolution. It started quite simply, then
this was added and that was modifíed, and so the whole
thing became more and more complex. But even what
we actually see in this refinery is only, as we might say, the
tip of an iceberg.
What we cannot see on our visit is far greatcr than what
we can see: the immensity and compiexity of the arrange-
ments that allow crude oil to flow into the refinery and
ensure that a muhitude of consignments of refined prod-
ucts, properly prepared, packed and labelled, reaches
innumerable consumers through a most elabórate distríbu-
tion system. All this we cannot see. Ñor can we see the
intellectual achievements behind the planning, the organis-
ing, the financing and marketing. Least of all can we see
the great educational background which is the precondition
of all, extending from primary schools to universities and
specialised research establishments, and without which
nothing of what we actually see would be there. As I said,
the visitor sees only the tip of the iceberg: there is ten
times as much somewhere else, which he cannot see, and
[without the "ten," the "one" is worthless. And if the "ten"
is not supplied by the country or society in which the
Refinery has been erected, either the refinery simply does
not work or it is, in fact, a foreign body depending for
most of its life on some other society. Now, all this is
easily forgotten, because the modem tendency is to see
and become conscious of only the visible and to forget
the invisible things that are making the visible possible and
keep it going.
Could it be that the relatíve failure of aid, or at least

165
our disappointment with the efFectiveness of aid, has some-
thing to do with our materialist philosophy which makes iis
Hable to overlook the most important preconditions of
success, which are generally invisible? Or if we do not
entirely overlook them, we tend to treat them just as we
treat material things —things that can be planned and
scheduled and purchased with money according to some
all-comprehensive development plan. In other words, we
tend to think of development, not in terms of evolution,
but in terms of creation.
Our scientists incessantly tell us with the utmost assur-
ance that everything around us has evolved by small muta-
tions sieved out through natural selection. Even the
Almighty is not credited with having been able to créate
anything complex. Every complexity, we are told, is the
result of evolution. Yet our development planners seem to
think that they can do better than the Almighty, that they
can créate the most complex things at one throw by a pro-
cess called planning, letting Athene spring, not out of the
head of Zeus, but out of nothingness, fuUy armed,
resplendent, and viable.
Now, of course, extraordinary and imfitting things can
occasionally be done. One can successfuUy carfy out a
project here or there. always possible to créate small
It is

ultra-modem But such

islands in a pre-industrial society.
islands will then have to be defended, like fortresses, and
provisioned, as it were, by helicopter from far away, or
they will be flooded by the surrounding sea. Whatever
happens, whether they do well or badly, they produce the
"dual economy'* of which I have spoken. They cannot be
integrated into the surrounding society, and tend to
destroy its cohesión.
We may observe in passing that similar tendencies are
at work even in some of the richest countries, where they
manifest as a trend towards excessive urbanisation,
towards "megalopolis," and leave, in the midst of affluence,

166
large pockets of poverty-stricken people, "drop-outs,**
unemployed and unemployables.
Until recently, the development experts rarely referred
to the dual economy and its twin evils of mass imemploy-
ment and mass migration into cities. When they did so,
they merely deplored them and treated them as transi-
tíonal. Meanwhile, it has become widely recognised that
time alone will not be the healer. On the contrary, the
dual economy, unless consciously counteracted, produces
what I have called a "process of mutual poisoning,**
whereby successful industrial development in the cities
destroys the cconomic stnicture of the hinterland, and the
hinterland takes its revenge by mass migration into the
cities, poisoning them and making them utterly unman-

ageable. Forward estimates made by the World Health

Organisation and by experts like Kingsley Davies predict
cities of twenty, forty, and even sixty million inhabitants, a

prospect of "immiseration" for multitudes of people that

beggars the imagination.
Is there an altemative? That the developing countries
cannot do without a modem sector, particularly where
they are in direct contact with the rich countries, is hardly
open to doubt. What needs to be questioned is the implicit
assumption that the modem sector can be expanded to
absorb viríually the entire population and that this can be
done fairly quickly. The ruling philosophy of development
over the last twenty years has been: "What is best for
the rich must be best for the poor." This belief has been
carried to tnily astonishing lengths, as can be seen by
inspecting the list of developing countries in which the
Americans and their allies and in some cases also the
Russíans have found it necessary and wise to establish
"peaceful" nuclear reactors —
^Taiwan, South Korea, Phil-
ippines, Vietnam, Thailand, Indonesia, Irán, Turkey,
Portugal, Venezuela —
all of them countries whose over-

whelming problems are agriculture and the rejuvenation

167
 —
of rural life, since the great majority of their poverty-
stricken peoples live in rural áreas.
The starting point of all our considerations is poverty,
or rather, a degree of poverty which raeans misery, and
degrades and stultifies the human person; and our first
task is to recognise and understand the boundaries and
limitations which this degree of poverty imposes. Again,
our crudely materialistic philosophy makes us Hable to see
only "the material opportunities" (to use the words of the
White Paper which I have already quoted) and to over-
look the immaterial factors. Among the causes of poverty,
I am sure, the material factors are entirely secondary
such things as a lack of natural wealth, or a lack of capi-
tal, or an insufficiency of infrastructure. The primary
causes of extreme poverty are immaterial, they lie in
certain deficíencies in education, organisation, and
discipline.
Development does not start with goods; it starts with
people and their education, organisation, and discipline.
Without these three, all resources remain latent, untapped,
potential. There are prosperous societies with but the
scantiest basis of natural wealth, and we have had plenty
of opportunity to observe the primacy of the invisible
factors after the war. Every country, no matter how
devastated, which had a high level of education, organisa-
tion, and discipline, produced an "economic miracle." In
fact, these were miracles only for people whose attention
is focused on the tip of the iceberg. The tip had been

smashed to pieces, but the base, which is education, orga-

nisation, and discipline, was still there.
Here, then, lies the central problem of development
If the primary causes of poverty are deficiencies in these
three respects, then the alleviation of poverty depends
primarily on the removal of these deficiencies. Here lies
the reason why development cannot be an act of creation,
why it cannot be ordered, bought, comprehensively
planned: why it requires a process of evolution. Educa-

168
tion does not "jump"; ¡t is a gradual process of great
subtlety. Organisation does not **jump"; must gradually
it

evolve to fit changing circumstances. And much

the same
goes for discipline. All three must evolve step by step, and
the foremost task of development policy must be to speed
this evolution. All three must become the property not
merely of a tiny minority, but of the whole society.
If aid is given to introduce certain new economic activ-
ities, these will be beneficial and viable only if they can be

sustained by the already existing educational level of

fairly broad groups of people, and they will be truly valu-
able only if they promote and spread advances in educa-
tion, organisation, and discipline. There can be a process
of stretching — ^never a process of jumping.If new eco-
nomic activities are introduced which depend on special
education, special organisation, and special discipline, such
as are in no way inherent in the recipient society, the
activity will notpromote healthy development but will be
more likely to hinder it. It will remain a foreign body that
cannot be integrated and will further exacérbate the prob-
lems of the dual economy.
It follows from this that development is not primarily

a problem for economists, least of all for economists

whose expertise is founded on a crudely material philos-
ophy. No doubt, economistsof whatever philosophical
persuasión have their usefulness at certain stages of
development and for strictly circumscribed technical jobs,
but only if the general guidelines of a development policy
to involve the entire population are already firmly
established.
The new thinking that is required for aid and develop-
ment will be different from the oíd because it will take
poverty seriously. It will not go on mechanicaUy, saying:
"What is good for the rich must also be good for the
poor.** It will care for people —
from a severely practical
point of view. Why care for people? Because people are
the primary and ultímate source oí any wealth whatso-

169
ever. If they are left out, if they are pushed around by

self-styied experts and high-handed planners, then nothing

can ever yield real fruit.
The following chapter
is a slightly shortened versión of

a paper prepared in 1965 for a Conference on the Appli-

cation of Science and Technology to the Development of
Latin America, organised by UNESCO in Santiago, Chile.
At that time, discussions on economic development almost
invariably tended to take technology simply as "given";
the question was how to transfer the given technology to
those not yet in possession of it. The latest was obviously
the best, and the idea that might not serve the urgent
it

needs of developing countries because it failed to fit into

the actual and limitations of poverty, was
conditions
treated with However, the paper became the
ridicule.
basis on which the Intermediate Technology Development
Group was set up in London.

170
 —

2
Social and Economic Problems
Calling for the Development of
Intermedíate Technology

INTRODUCTION
In many places in the world today the poor are getting
poorer while the rich are getting richer, and the estab-
lished processes of foreign aid and development planning
appear to be unable to overeóme this tendency. In fact,
they often seem to promote it, for it is always easier to
help those who can help themselves than to help the
helpless. Nearly all the so-called developing countries have
a modem sector where the pattems of living and working
are similar to those of the developed countries, but they
also have a non-modem sector, accounting for the vast
majority of the total population, where the pattems of liv-
ing and working are not only profoundly unsatisfactory but
also in a process of accelerating decay.
I am concemed here exclusively with the problem of
helping the people in the non-modem sector. This does
not imply the suggestion that constmctive work in the
modem sector should be discontinued, and there can be
no doubt that it will continué in any case. But it does
imply the conviction that all successes in the modem sec-
tor are likely to be illusory unless there is also a healthy
growth—or at least a healthy condition of stability

171
among the very great numbers of people today whose lífe
is characterised not only by dire poverty but also by
hopelessness.

THE NEED FOR INTERMEDÍATE TECHNOLOGY

The Condition of the Poor

What is the typical condition of the poor in most of the

so-called developing countries? Their work opportunities
are so restricted that they cannot work their way out of
misery. They are underemployed or totally imemployed,
and when they do find occasional work their productivity
is exceedmgly low. Some of them have land, but often too
little. Many have no land and no prospect of ever getting
any. There is no hope for them in the rural áreas and
henee they drift into the big cities. But there is no work
for them in the big cities either and, of course, no housing.
All the same, they flock into the because the chancescities
of fínding some work appear to be greater there than in
the villages, where they are nil.

The open and disguised imemployment in the rural

áreas often thought to be due entirely to population
is

growth, and no doubt this is an important contributory

factor. But those who hold this view still have to explain
why additional people cannot do additional work. It is

said that they cannot work because they lack "capital.**

But what is "capital"? It is the product of human work.
The lack of capital can explain a low level of productivity,
but cannot explain a lack of work opportunities.
it

Thefact remains, however, that great nimibers of peo-

ple do not work or work only intermittently, and that they
are therefore poor and helpless and often desperate
enough to leave the village to search for some kind of
existence in the big city; Rural unemployment produces

172
mass migration into cities, leading to a rate of urban
growth which would tax the resources of even the richest
societies. Rural unemployment becomes urban unemploy-
ment.

Help to Those Who Need It Most

The problem may therefore be stated quite simply thus:
what can be done to bring health to economic life outside
the big cities, in the small towns and villages which still

contain — in most cases — eighty to ninety per cent of the

total population? As long as the development effort is

concentrated mainly on the big cities, where it is easiest

to estabüsh new industries, to staff them with managers
and men, and to find fínance and markets to keep them
going, the competition from these industries will further
disrupt and destroy non-agricultural production in the rest
of the country, will cause additional unemployment out-
side, and will further accelerate the migration of destitute
people into towns that cannot absorb them, The "process
of mutual poisoning" will not be halted.
It is necessary, therefore, that at least an important part
of the development effort should by-pass the big cities and
be directly concemed with the creation of an "agro-
industrial stnicture" in the rural and small-town áreas. In
this connection it is necessary to emphasise that the pri-
mary need is workplaces, literally millions of workplaces.
No ene, of course, would suggest that output-per-man is
unimportant; but the primary consideration cannot be to
maximise output per man; it must be to maximise work
opportunities for the unemployed and imder-employed.
For a poor man the chance to work is the greatest of all
needs, and even poorly paid and relatively unproductive
work is better than idleness. "Coverage must come before
perfection," to use the words of Mr. Gabriel Ardant.^

173
 It ¡s important that there should be enough work for all

becausc that is the only way to elimínate anti-productive

reflexes and créate a new state of mind —
that of a country
where labour has becomc precious and must be put to the
best possible use.

In other words, the economic calculus which measures

success in terms of output or income, without consideration
of the number of jobs, is quite inappropriate in the con-
ditions here under consideration, for it implies a static
approach to the problem of development. The dynamic
approach pays heed to the needs and reactions of people:
their first need is to start work of some kind that brings
some reward, however small; it is only when they experi-
ence that their time and labour is of valué that they can
become interested in making it more valuable. It is there-
foremore important that everybody should produce some-
thing than that a few people should each produce a great
deal, and this remains true even if in some exceptional
cases the total output under the former arrangement
should be smaller than it would be under the latter
arrangement. It will not remain smaller, because íhis is a
dynamic situation capable of generating growth.
An unemployed man is a desperate man and he is prac-
tícally forced into migraíion. This is anoíher justification
for the assertion that the provisión of work opportunities
is the primary need
and should be the primary objective
of economic planning. Without it, the drift of people into
the large cities cannot be mitigated, let alone halted.

The Nature of the Task

The task, then, is to bring into existence millions of new

workplaces in the rural áreas and small towns. That
modem industry, as it has arisen in the developed coun-
tries,cannot possibly fulfil this task should be perfectly
obvious. It has arisen in societies which are rich in capital

174
 .

and short of labour and íherefore cannot possibly be

appropriate for socie.ies short of capital and rich in
labour. Puerto Rico fumishes a good illustration of the
point. To quote from a recent study:

Development of modera factory-style manufacturing makes

only a limited contribution to employment. The Puerto Rican
development programme has been unusually vigorous and
successful; but from 1952-62 the average increase of em-
ployment in E.D.A.-sponsored plants was about 5000 a year.
With present labour forcé participation rates, and in the
absence of net emigration to the mainland, annual addi-
tions to the Puerto Rican labour forcé would be of the
order of 40,000. . .

Within manufacturing, therc should be imaginative ex-

ploration of small-scale, more decentralised, more labour-
using forms of organisation such as have persisted in the
Japanese economy to the present day and have contributed
materíally to its vigorous growth.2

Equally powerful illustrations could be drawn from many

other countries, notably India and Turkey, where highly
ambitious five-year plans regularly show a greater volume
of unemployment at the end of the five-year period than
at the beginning, even assuming that the plan is fuUy
implemented.
The real task may be formulated in four propositions:

First, that workplaces have to be created in the

áreas where the people are living now, and
not primarily in metropolitan áreas into which
they tend to migrate.
Second, that these workplaces must be, on average,
cheap enough so that they can be created in
large numbers without this calling for an un-
attainable level of capital formation and
imports.
Third, that the production methods employed must
be relatively simple, so that the demands for

175
 high skills are minimised, not only in the
production process itself but also in matters
of organisation, raw material supply, finano
ing, marketing, and so forth.
Fourth, that production should be mainly from local
materiais and mainly for local use.

These four requirements can be met only if there is a

"regional" approach to development and, second, if there
is a conscious effort to develop and apply what might be
called an "intermedíate technology." These two conditions
will now be considered in tum.

The Regional or District Approach

A given political unit is not necessarily of the ríght size

for economic development to benefit thpse whose need is

the greatest. In some cases it may be too small, but in the

generality of cases today it is too large. Take, for exam-
ple, the case of India. It is a very large political unit, and
it is no doubt desirable from many points of view that
this unity should be maintained. But if development policy
is —
conceraed merely or primarily with "India-as-a —
whole," the natural drift of things will concéntrate devel-
opment mainly in a few metropolitan áreas, in the modera
sector. Vast áreas within the country, containing eighty
per cent of the population or more, will benefit little and

may indeed suífer. Henee the twin evils of mass unemploy-

ment and mass migration into the metropolitan áreas. The
result of "development" is that a fortúnate minority have
their fortunes greatly increased, while those who really
need help are left more helpless than ever before. If the
purpose of development is to bring help to those who need
it most, each "región" or "district" within the country
needs its own development. This is what is meant by a
"regional" approach.

176
 A may be drawn from Italy, a rela-
further illustration
tivelywealthy country. Southern Italy and Sicily do not
develop merely as a result of successful economic growth
in "Italy-as-a-whole." Italian industry is concentrated
mainly in the north of the country, and its rapid growth
does not diminish, but on the contrary tends to intensify,
the problem of the south. Nothing succeeds like success
and, equally, nothing fails like failure.Competition from
the north destroys production in the south and drains all
talented and enterprising men out of.it. Conscious efforts
have to be made to counteract these tendencies, for if the
population of any región within a country is by-passed by
development it becomes actually worse off than before, is
thrown into mass unemployment, and forced into mass
migration. The evidence of this truth can be found all
over the world, even in the most highly developed
countries.
In this matter is not possible to give hard and fast
it

definitions. Much depends on geography and local circum-

stances. A few thousand people, no doubt, would be too
few to constitute a "district" for economic development;
but a few hundred thousand people, even if fairly widely
scattered, may well deserve to be treated as such. The
whole of Switzerland has less than six million inhabitants;
yet it is divided into more than twenty "cantons," each of
which is a kind of development district, with the result
that there is a fairly even spread of population and of
industry and no tendency towards the formation of exces-
sive concentrations.
Each "district," ideally speaking, would have some sort
of inner cohesión and identity and possess at least one
town to serve as a district centre.There is need for a
"cultural structure" just as there need for an "economic
is

structure"; thus, while every village would have a primary

school, there would be a few small market towns with
secondary schools, and the district centre would be big
enough to carry an institution of higher leaming. The

177
 —
bigger the country, the greater is the need for internal

"structure** and for a decentralised approach to develop-

ment. If this need is neglected, there is no hope for the
poor.

The Need for an Appropriate Technology

It is obvious that this "regional" or "district" approach has
no chance of success iinless based on the employment
it is

of a suitable technology. The establishment of each work-

place in modem industry costs a great deal of capital
something of the order of, say, £2000 on average. A poor
country, naturally, can never afford to establish more than
a very limited number of such workplaces within any given
period of time. A "modem" workplace, moreover, can be
really productive only within a modem environment, and
for this reason alone is unlikely to fit into a "district" con-
sisting of rural áreas and a few small towns. In every
"developing country" one can find industrial estates set up
in rural áreas, where high-grade modern equipment is
standing idle most of the time because of a lack of orga-
nisation, finance, raw material supplies, transport, market-
ing and the like. There are then complaints and
facilities,

recriminations; but they do not alter the fact that a lot of

scarce capital resources —
^nornjally imports paid from
scarce foreign exchange —
are virtually wasted.
The distinction between "capital-intensive" and "labour-
intensive" industries is, of course, a familiar one in devel-
opment theory. Although it has an imdoubted validity, it
does not really make contact with the essence of the
problem; for it normally induces people to accept the
technology of any given line of production as given and
unalterable. If it is then argued that developing countries
should give preference to "labour-intensive" rather than
"capital-intensive" industries, no mtelligent action can fol-
low, because the cholee of industry, in practice, will be

178
determined by quite other, much more powerful criteria,
such as raw material base, markets, entrepreneurial inter-
est, etc. The cholee of industry is one thing; but the choice

of technology to be employed after the choice of industry

has been made, is quite another. It is therefore better to
speak directly of technology, and not cloud the discussion
by choosing terms like "capital intensity" or "labour inten-
sity" as one's point of departure. Much the same applies
to another distinction frequently made in these discussions,
that between "large-scale" and "small-scale" industry. It is
true that modern industry is often organised in very large
units, but "large-scale" is by no means one of its essential
and universal features. Whether a given industrial activity
is appropriate to the conditions of a developing district
does not directly depend on "scale," but on the technology
employed. A
small-scale enterprise with an average cost
per workplace of £2000 is just as inappropriate as a large-
scale enterprise with equally costly workplaces.
I believe, therefore, that the best way to make contact
with the essential problem by speaking of technology:
is

economic development in poverty-stricken áreas can be

fruitful only on the basis of what I have called "interme-
díate technology." In the end, intermedíate technology
will be "labour-intensive" and will lend itself to use in
small-scale establishments. But neither "labour-intensity'*
ñor "small-scale" implies "intermedíate technology."

iDefinition of Intermedíate Technology

íí we define the level of technology in terms of "equip-

¡ment cost per workplace," we can cali the indigenous tech-
nology of a typical developing country —symbolicaUy
speaking —a £ 1 -technology, while that of the developed
countries could be called a £.1000-technology. The gap
between these two technologies ís so enormous that a
transition from the one to the other is simply impossible.

179
In fact, the current attempt of the developing countries
to infíltrate the £ 1 000-technoIogy into their economies
inevitably kills off the £.l-technology at an alarming rate,
destroying traditional workplaces much faster than mod-
ero workplaces can be created, and thus leaves the poor
in a more desperate and helpless position than ever before.
If effective help is to be brought to those who need it
most, a technology is required which would range in some
intermedíate position between the <£ 1 -technology and the
—
£1 000-technology. Let us cali it again symbolically
speaking —a £ 1 00-technology.
Such an intermediate technology would be inmiensely
more productive than the indigenous technology (which is

often in a condition of decay), but it would also be

immensely cheaper than the sophisticated, highly capital-
intensive technology of modern industry. At such a level
of capitalisation, very large numbers of workplaces could
be created within a fairly short time; and the creation of
such workplaces would be "within reach" for the more
enterprising minority within the district, not only in finan-
cial terms but also in terms of their education, aptitude,
organising skill, and so forth.
This last point may perhaps be elucidated as follows:
The average annual income per worker and the average
capital per workplace in the developed countries appear at
present to stand in a relationship of roughly 1:1. This
knplies, in general terms, that it takes one man-year to
créate one workplace, or that a man would have to save
one month's earnings a year for twelve years to be able to
own a workplace. If the relationship were 1:10, it would
require ten man-years to créate one workplace, and a man
would have to save a month's earnings a year for 120
years before he could make himself owner of a workplace.
This, of course, is an impossibility, and it follows that the
£1000-technology transplanted into a district which is
stuck on the level of a £ 1-technoolgy simply cannot spread
by any procesa of normal growth. It cannot have a positive

180
"demonstration effect**; on
contrary, as can be
the
observed all over the world,
"demonstration effect" is
its

wholly negative. The people, to whom the £.1000-tech-

nology is ¡naccessible, simply "give up" and often cease
doing even those things which they had done previously.
The intermedíate technology would also fit much more
smoothly into the relatively unsophisticated environment
in which it is to be utilised. The equipment would be fairly
simple and therefore understandable, suitable for mainte-
nance and repair on the spot. Simple equipment is ñor-
mally far less dependent on raw materials of great purity
or exact specificatíons and much more adaptable to mar-
ket fluctuations than highly sophisticated equipment. Men
are more easily trained; supervisión, control, and organisa-
tion are simpler; and there is far less vulnerability ta'
unforeseen difficulties.

Objections Raised and Discussed

Since the idea of intermedíate technology was first put

forward, a number of objections have been raised. The
most inmiediate objections are psychological: "You are
trying to withhold the best and make us put up with some-
thing inferior and outdated.'* This is the voice of those
who are not in need, who can help themselves and want
to be assisted in reaching a higher standard of living at
once. It is not the voice of those with whom we are here
concemed, the poverty-stricken multitudes who lack any
real basis of existence, whether in rural or in urban áreas,
who have neither "the best" ñor "the second best** but go
short of even the most essential means of subsistence. One
sometimes wonders how many "development economists*'
have any real comprehension of the condition of the poor.
There are economists and econometricians who believe
that development policy can be derived from certain
allegedly fixed ratios, such as the capital/ output ratio.

181
Their argument runs as follows: The amount of available
capital is given, Now, you may concéntrate it on a small
number of highly capitalised workplaces, or you may
spread it thinly over a large number of cheap workplaces.
If you do the latter, you obtain less total output than if
you do the former; you therefore fail' to achieve the
quickest possible rate of economic growth. Dr. Kaldor,
for instance, claims that "research has shown that the
most modern machinery produces much more output per
unit of capital invested than less sophisticated machinery
which employs more people."^ Not only "capital" but also
"wages goods" are held to be a given quantity, and this
quantity determines "the limits on wages employment in
any country at any given time."

If we can employ only a limited number of people in wage

labour, then let us employ them in the most productive way,
so that they make the biggest possible contribution to the
natíonal output, because that will also give the quickest rate
of economic growth. You should not go deliberately out of
your way to reduce productivity in order to reduce the
amount of capital per worker. This seems to me nonsense
because you may find that by increasing capital per worker
tenfold you increase the output per worker twentyfold. There
is no question from every point of view of the superiority of
the latest and more capitalistic technologies.*

The first thing that might be said about these arguments

is that they are evidently static in character and fail to
take account of the dynamics of development. To do
justice to the real situation it is necessary to consider the
reactions and capabilities of people, and not confine one-
self to machinery or abstract concepts. As we have seen
before, it is wrong to assume that the most sophisticated
equipment, transplanted into an unsophisticated environ-
ment, will be regularly worked at full capacity, and if
capacity utilisation is low, then the capital/ output ratio
is also low. It is therefore fallacious to treat capital/

182
output ratios as technological facts, when they are so
largely dependent on quite other factors.
The question must be asked, moreover, whether there
¡s such a law, as Dr. Kaldor asserts, that the capital/
output ratio grows if capital is concentrated on fewer
workplaces. No one with the slightest industrial experience
would ever claim to have noticed the existence of such a
"law," ñor is there any foundation for it in any science.
Mechanisation and automation are introduced to increase
the productivity of labour, Le. the worker/ output ratio,
and their effect on the capital/ output ratio may just as

well be negative as it may be positive. Countless examples

can be quoted where advances in technology elimínate
workplaces at the cost of an additional input of capital
without affecting the volume of output. It is therefore quite
imtrue to assert that a given amount of capital invariably
and necessarily produces the biggest total output when it
is concentrated on the smallest number of workplaces.

The weakness of the argument, however, lies in

greatest
taking "capital" —
and even 'Vages goods" as "given —
quantities" in an under-employed economy. Here again,
the static outlook inevitably leads to erroneous conclu-
sions. The central concern of development policy, as I
have argued already, must be the creation of work oppor-
tunities for those who, being unemployed, are consumera
— —
on however miserable a level without contributing
anything to the fund of either "wages goods" or "capital."
Employment is the very precondition of everything else.
The output of an idle man is nil, whereas the output of
even a poorly equipped man
can be a positive contribu-
tion, and can be to "capital" as well as
this contribution
to "wages goods." The distinction between those two is by
no means as definite as the econometricians are inclined
to think, because the definition of "capital" itself depends
decisively on the level of technology employed.
Let us consider a very simple example. Some earth-

183
moving Job has to be done in an área of high unemploy-
ment. There is a wide choice of technologies, ranging
from the most modem earth-moving equipment to purely
manual work without tools of any kind. The "output" is
^ed by the nature of the job, and it is quite clear that
tflfe capital/ output ratio will be highest if the input of
"capital" is kept lowest. If the job were done without any
tools, the capital/ output ratio would be inftnitely large,
but the productivity per man would be exceedingly low.
If the job were done at the highest level of modem tech-
nology, the capital /output ratio would be low and pro-
ductivity per man very high. Neither of these extremes is

desirable, and a middle way has to be found. Assume some

of the unemployed men were first set to work to make a
variety of tools, including wheelbarrows and the like, while
others were made to produce various "wages goods." Each
of these lines of production in tum could be based on a
wide range of different technologies, from the simplest to
the most sophisticated. The task in every case would be
to find an intermedíate technology which obtains a fair
level of productivity withouthaving to resort to the pur-
chase of expensive and sophisticated equipment. The out-
come of the whole venture would be an economic
development going far beyond the completion of the initial
earth-moving project. With a total input of "capital" from
outside which might be much smaller than would have
been involved in the acquisition of the most modem earth-
moving equipment, and an input of (previously unem-
ployed) labour much greater than the "modem" method
would have demanded, not only a given project would
have been completed, but a whole community would have
been set on the path of development.
I say, therefore, that the dynamic approach to develop-

ment, which treats the choice of appropriate, intemiediate

technologies as the central issue, opens up avenues of
constructive action, which the static, econometric
approach totally f ails to recognise.

184
 This leads to thc next objection which has been raised
against the ¡dea of intermediate technology. It is argued

that all this might be quite promising if it were not for a

notorious shortage of entrepreneurial ability in the under-
developed countries. This scarce resource should there-
fore be utilised in themost concentrated way, in places
where it has the best chances of success, and should be
endowed with the finest capital equipment the world can
offer. Industry, it is thus argued, should be established in
or near the big cities, in large integrated units, and on the
highest possible level of capitalisation per workplace.
The argument hinges on the assumption that "entre-
preneurial ability" a fixed and given quantity, and thus
is

again betrays a purely static point of view. It is, of course,

neither fixed ñor given, being largely a function of the
technology to be employed. Men quite incapable of acting
as entrepreneurs on the level of modem technology may
nonetheless be fully capable of making a success of a
small-scale enterprise set up on the basis of intermediate
technology — ^for reasons already explained above. In fact,
it seems to me that the apparent shortage of entrepre-
neurs in many developing countries tcday is precisely the
result of the "negative demonstration effect" of a sophis-
an unsophisticated envi-
ticated technology infiltrated into
ronment The introduction of an appropriate, intermediate
technology would not be likely to founder on any shortage
of entrepreneurial ability. Ñor would it diminish the sup-
ply of entrepreneurs for enterprises in the modem sector;
on the contrary, by spreading familiarity with systematic,
technical modes of production over the entire population,
it would undoubtedly help to increase the supply of the

required talent.
Two further arguments have been advanced against the
idea of intermediate technology —
products would
that its

would be unsuit-
require protection within the country and
able for export. Both arguments are based on mere
surmise. In fact a considerable number of design studies

185
and costings, made for specific producís in specific dis-
tricts,have universally demonstrated that the producís of
an intelligently chosen intermediate technology could actu-
al ly be cheaper than those of modera faetones in the

nearest big city. Whether or not such products could be

exportad is an open question; the unemployed are not
contributing to exports now, and the primary task is to
put them to work so that they wiil produce useful goods
from local materials for local use.

Applicability of Intermedíate Technology

The applicability of intermediate technology is, of course,

not universal. There are products which are themselves
the typicaloutcome of highly sophisticated modera indus-
try and cannot be produced except by such an industry.
These products, at the same time, are not noraially an
urgent need of the poor. What the poor need most of all is
simple things — building materials, clothing, household
goods, agricultural implements —and a better retum for
their agricultural products. They also most urgently need
in many places: trees, water, and crop storage facilities.
Most agricultural populations would be helped immensely
if they could themselves do the first stages of processing
their products. All these are ideal fields for interaiediate
technology.
There are, however, also numerous applications of a
more ambitious kind. I quote two examples from a recent
report:

The first relates to the recent tendency [fostered by the

policy of most African, Asían and Latin American govem-
ments of having oil refineríes in their own territories, how-
ever small their markets] for International firms to design
small petroleum refineríes with low capital investment per
unit of output and a low total capacity, say from 5000 to
30,000 barréis daily. These imits are as efficient and low-cost

186
 as the much bigger and more capital-intensive refineries
corresponding to conventional design. The second example
relates to "package plants" for ammonia production, also
recently designed for small markets. According to some
provisional data, the investment cost per ton in a "package
plant" with a sixty-tons-a-day capacity may be about 30,000
dollars,whereas a conventionally designed unit, with a daily
capacity of 100 tons [which is, for a conventional plant, very
small] would require an investment of approximately 50,000
dollars per ton.5

The idea of intermediate technology dees not imply

simply a "going back" in history to methods now out-
dated, although a systematic study of methods employed
in the developed countries, say, a hundred years ago could
indeed yield highly suggestive results. It is too often
assumed that the achievement of westem science, puré
and applied, lies mainly in the apparatus and machinery
that have been developed from it, and that a rejection of
the apparatus and machinery would be tantamount to a
rejection of science. This is an excessively superficial view.
The real achievement lies in the accumulation of precise
knowledge, and this knowledge can be applied in a great
variety of ways, of which the current application in mod-
em industry is only one. The development of an interme-
díate technology, therefore, means a genuine forward
movement into new territory, where the enormous cost and
complication of production methods for the sake of labour
saving and job elimination is avoided and technology is

made appropriate for labour-surplus societies.

That the applicability of intermediate technology is

extremely wide, even if not universal, will be obvious to

anyone who takes the trouble to look for its actual appli-
cations today. Examples can be found in every developing
country and, indeed, in the advanced countries as well.
What, then, is missing? It is simply that the brave and
able practitioners of intermediate technology do not know
of one another, do not support one another, and cannot

187
be of assistance to those who want to follow a similar
road but do not know how to get started. They exist, as
it were, outside the mainstream of official and popular
interest. 'The catalogue issued by the European or United
States exporter of machinery is still the prime source of
technical assistance"* and the institutional arrangements
for dispensing aid are generally such that there is an
unsurmountable bias in favour of large-scale projects on
the level of the most modem technology.
If we could tum oflBcial and popular interest away from
the grandiose projects and to the real needs of the poor,
the battle could be won. A study of intermedíate technol-
ogies as they exist today already would disclose that there
is enough knowledge and experience to set everybody to

work, and where there are gaps, new design studies could
be made very quickly. Professor Gadgil, director of the
Gokhale Instituto of Politics and Economics at Poona, has
outlined three possible approaches to the development of
intermedíate technology, as follows:

One approach may be to start with existing techniques in

traditional industryand to utilise knowledge of advanced
techniques to transform them suitably. Transformation im-
plies retaining some elements in existing equipment, skills
and procedures. This process of improvement of tradi-
. . .

tional technology is extremely important, particularly for

that part of the transition in which a holding operation for
preventing added technological unemployment appears
necessary. . . .

Another approach would be to start from the end of the

most advanced technology and to adapt and adjust so as to
meet the requirements of the intermedíate. In some . . .

cases, the process would also involve adjustment to special

local circumstances such as type of fuel or power available.
A third approach may be to conduct experimentation and
research in a direct effort to establish intermedíate tech-
nology. However, for this to be fniitfully undertaken it would
be necessary to define, for the scientist and the technicían.

188
 the limiting economic circumstances. These are chiefly the
aimed at and the relative costs oí capital
scale of operations
and labour and the scale of their inputs poísible or dssir-—
able,Such direct effort at establishing intermedíate technol-
ogy would undoubtedly be conducíed against the background
of knowlcdge of advanced technology in the field. However,
it could cover a much wider range of posaibilities than the
effort through the adjustment and adaptation approach.

Professor Gadgil gees on to plead that:

The main attention of the personnel on the applied side

of National Laboratories, technical institutes and the large
university departments must be concentrated on this work.
The advancenrent of advanced techiiology in every field is

being adequately pursued in the developed countries; the

special adaptations and adjustments required in India are not
and are not be given attention in any oíher country.
likely to
They our plans.
raust, therefore, obtain the highest priority in
Intermedíate technology should become a national concern
and not, as at present, a neglected field assigned to a small
number of specíalists, set apartJ

A similar plea might be made to supranational agencies

which would be well-placed to coUect, systematise, and
develop the scattered knowledge and experience already
existing in this vitally important field.
Id summary we can conclude:

1. The "dual economy" in the developing countries

willremain for the foreseeable future. The modem sector
wül not be able to absorb the whole.
2. If the non-modem sector is not made the object of
special development efforts, it wül continué to disinte-
grate; this disintegration will continué to manifest itself
in mass unemployment and mass migration into metro-
politan áreas; and this will poison economic life in the
modern sector aS weU.
3. The poor can be helped to help themselves, but only

189
 by making available to them a technology that recog-
economic boundaries and limitations of poverty
nises the
—an intermedíate technology.
4. Action programmes on a national and supranational
basis are needed to develop intermedíate technologies
suitable for the promotion of full employment in devel-
oping countries.

190
 —

3
Two Million Villages

The results of the second development decade will be no

better than those of the first unless there is a conscious
and determined shift of emphasis from goods to people.
Indeed, without such a shift the results of aid will become
increasingly destructive.
If we promoting development, what have we in
talk of
mind —goods or people?If it is people —
which particular
people? Who are they? Where are they? Why do they need
help? If they cannot get on without help, what, precisely,
is the help they need? How do we communicate with

them? Concern with people raises countless questions Uke

these. Goods, on the other hand, do not raise so many
questions. Particularly when econometricians and statisti-
cians deal with them, goods even cease to be anything
identifiable, and become GNP, imports, exports, savings,
investment, infrastructure, or what not Impressive models
can be built out of these abstractions, and it is a rarity for
them to leave any room for actual people. Of course,
"populations" may figure in them, but as nothing more
than a mere quantity to be used as a divisor after the
divideñd, i.e. the quantity of available goods, has been
determined. The model then shows that "development,"
that is, the growth of the divideñd, is held back and
frustrated if the divisor grows as well.
much easier to deal with goods than with people
It is

if only because goods have no minds of their own and

191
ríase no problems of communication. When the emphasls
is on people, Communications problems become para-
mount. Who are the helpers and who are those to be
helped? The helpers, by and large, are rich, educated (in
a somewhat specialised sense), and town-based. Those
who most need help are poor, uneducated, and rurally
based. This means that three tremendous gulfs sepárate
the former from the latter: the gulf between rich and
poor; the gulf between educated and uneducated; and the
gulf between city-men and country-folk, which includes
that between industry and agriculture. The first problem
of development aid is how to bridge these three gulfs. A
great effort of imagination, study, and compassion is
needed to do so. The methods of production, the pattems
of consumption, the systems of ideas and of valúes that
suit relatively affluent and educated city people are
unlikely to suit poor, semi-illiterate peasants. Poor peas-
ants cannot suddenly acquire the outlook and habits of
sophisticated city people. If the people cannot adapt them-
selves to the methods, then the methods must be adapted
to the people. This is the whole crux of the matter.
There are, moreover, many features of the rich man*s
economy which are so questionable in themselves and, in
any case, so inappropriate for poor communities that
successful adaptation of the people to these features would
spell ruin. If the nature of change is such that nothing is
left for the fathers to teach their sons, or for the sons to
accept from their fathers, family life collapses. The life,

work, and happiness of all depend on certain

societies
"psychological structures" which are infinitely precious and
highly vulnerable. Social cohesión, cooperation, mutual
respect, and above all, self-respect, courage in the face of
adversity, and the ability to bear hardship —
all this and

much else disintegrates and disappears when these "psy-

chological structures" are gravely damaged. A man is
destroyed by the inner conviction of uselessness. No
amount of economic growth can compénsate for such

192
 —
losses —though may be an idle reflection, since eco-
this
nomic growth normally inhibited by them.
is

None of these awesome problems figure noticeably in

the cosy theories of most of our development economists.
The failure of the first development decade is attributed
simply to an insufficiency of aid appropriations or, worse
still, to certain alleged defects inherent in the societies and
populations of the developing countries. A study of the
current literature could lead one to suppose that the deci-
sive question was whether aid was dispensed multilaterally
or bilaterally, or that an improvement in the terms pf
trade for primary commodities, a removal of trade bar-
riers, guarantees for prívate investors, or the effective
introduction of birth control, were the only things that
really mattered.
Now, I am from suggesting that any of these items
far
are irrelevant, but they do not seem to go to the heart of
the matter, and there is in any case precious little con-
structive action flowing from the innumerable discussions
which concéntrate on them. The heart of the matter, as I
see it, is the stark fact that world poverty is primarily a
probiem of two million villages, and thus a problem of
two thousand million villagers. The solution cannot be
found in the cities of the poor countries. Unless life in the
hinterland can be made tolerable, the problem of world
poverty is insolubíe and will inevitably get worse.
All important insights are missed if we continué to think
of development mainly in quantitative terms and in those
vast abstractions —like GNP, investment, savings, etc.
which have their usefulness in the study of developed coun-
tries but have virtually no relevance to development prob-

lems as such. (Ñor did they play the slightest part in the
actual development of the rich countries!) Aid can be
considered successful only if it helps to mobilise the
labour-power of the masses in the receiving country and
raises productivity without "saving" labour. The common
criterion of success, namely the growth of GNP, is utteriy

193
misleading and, in fact, must of necessity lead to phenom-
ena which can only be described as neocolonialism.
I hesitate to use this term because it has a nasty sound

and appears to imply a delibérate intention on the part of

the aid-givers. Is there such an intention? On the whole, I
think, there is not. But this makes the problem greater
instead of smaller. Unintentional neocolonialism is far
more insidious and infinitely more diflBcult to combat than
neocolonialism intentionally pursued. It results from the
mere drift of things, supported by the best intentions.
Methods of production, standards of consumption, criteria
of success or failure, systems of valúes, and behaviour
pattems establish themselves in poor countries which,
being (doubtfully) appropriate only to conditions of afflu-
ence already achieved, fix the poor countries ever more
inescapably in a condition of utter dependence on the
rich. The most obvious example and symptom is increas-
ing indebtedness. This is widely recognised, and well-
meaning people draw the simple conclusión that grants are
better than loans, and cheap loans better than dear ones.
True enough. But increasing indebtedness is not the most
serious matter. After all, if a debtor cannot pay he ceases
to pay —
a risk the creditor must always have had in mind.
Far more serious is the dependence created when a
poor country falls for the production and consumption
pattems of the rich. A textile mili I recently visited in
África provides a telling example. The manager showed
me with considerable pride that his factory was at the
highest technological level to be found anywhere in the
world.Why was it so highly automated? "Because," he
"African labour, unused to industrial work, would
said,
make mistakes, whereas automated machinery does not
make mistakes. The quality standards demanded today,"
he explained, "are such that my product must be perfect
to be able to find a market." He summed up his policy
by saying: "Surely, my task is to eliminate the human
factor." Ñor is this all. Because of inappropriate quality

194
standards, allequipment had to be imported from the
his
most advanced the sophisticated equipment
countries;
demandad that all higher management and maintenance
personnel had to be imported. Even the raw materials had
to be imported because the locally grown cotton was too
short for top quality yarn and the postulated standards
demanded the use of a high percentage of man-made
fibres. This is not an untypical case. Anyone who has
tak'en the trouble to look systematically at actual "devel-
—
opment" projects instead of merely studying development
plans and econometric models —
knows of countless such
cases: soap faetones producing luxury soap by such sensi-
tive processes that only highly refined materials can be
used, which must be imported at high pnces while the
local raw materials are exported at low prices; food-
processing plants; packing stations; motorisation, and so
—
on all on the rich man's pattem. In many cases, local
fnilt goes to waste because the consumer allegedly
demands quality standards which relate solely to eye-
appeal and can be met only by fniit imported from
Australia or California, where the application of an
immense science and a fantastic technology ensures that
every apple is of the same size and without the slightest
visible blemish. The examples could be multiplied without
end. Poor countries slip —
and are pushed into the adop- —
tion of production methods and consumption standards
which destroy the possibilities of self-reliance and self-
help. The results are untntentional neocolonialism and
hopelessness for the poor.
How, then, is it possible to help these two million
villages? First, the quantitative aspect. If we take the total
of westem aid, after eliminating certain items which have
nothing to do with development, and divide it by the
number of people living in the developing countries, we
arrive at a per-head figure of rather less than £.2 a year.
Considered as an income supplement, this is, of course,
negligible and derisory. Many people therefore plead that

195
 —
the rich countries ought to make a much bigger financial
effort —and would be perverse to refuse to support this
it

plea. But what is it that one could reasonably expect to

achieve? A per-head figure of £3 a year, or £4 a year?
As a subsidy, a sort of "public assistance" payment, even
£4 a year is hardly less derisory than the present figure.
To problem further, we may consider the
illustrate the
case of a small group of developing countries which
receive supplementary income on a truly magnificent scale
— the oil producing countries of the Middle East, Libya,
and Venezuela. Their tax and royalty income from the oil
companies in 1968 reached £.2349 million, or roughly
£50 per head of their populations. Is this input of funds
producing healthy and stable societies, contented popula-
tions, the progressive elimination of rural poverty, a flour-
ishing agriculture, and widespread industrialisation? In
spite of some very limited successes, the answer is cer-
tainly no. Money alone does not do the trick. The quanti-
tative aspect is quite secondary to the qualitative aspect.
If the policy is wrong, money will not make it right; and
if the policy is right, money may not, in fact, present an
unduly difficult problem.
Let US tum then to the qualitative aspect. If we have
learnt anything from the last ten or twenty years of devel-
opment effort, it is that the problem presents an enormous
intellectual challenge. The aid-givers — rich, educated,
town-based —know
how to do things in their own way;
but do they know how to assist self-help among two
million villages, among two thousand million villagers
poor, uneducated, country-based? They know how to do a
few big things in big towns; but do they know how to do
thousands of small things in rural áreas? They know how
to do things with lots of capital; but do they know how
to do them with lots of labours — initially untrained
labour at that?
On the whole, they do not know; but there are many
experienced people who do know, each of them in their

196
 own limited field of experience. In other words, the neces-
sary knowledge, by and large, exists; but it does not exist
in an organised, readily accessible form. It is scattered,
unsystematic, unorganised, and no doubt also incomplete.
The best aid to give is intellectual aid, a gift of useful
knowledge. A gift of knowledge is infinitely preferable to

a gift of material things. There are many reasons for this.

Nothing becomes truly "one's own" except on the basis of

some genuine eífort or sacrifice. A gift of material goods
can be appropriated by the recipient without effort or
sacrifice; it therefore rarely becomes "his own" and is all

too frequently and easily treated as a mere windfall. A

gift of intellectual goods, a gift of knowledge, is a very

different matter. Without a genuine effort of appropria-

tion on the part of the recipient there isno gift. To appro-
priate the gift and to make it one's own is the same thing,
and "neither moth ñor rust doth comipt." The gift of
material goods makes people dependent, but the gift of
—
knowledge makes them free provided it is the right kind
of knowledge, of course. The gift of knowledge also has
far more lasting effects and is far more closely relevant
to the concept of "development" Give a man a fish, as the
saying goes, and you are helping him a little bit for a very
short while; teach him the art of ñshing, and he can help
himself all his Ufe. On a higher level: supply him with
fishing tackle; this will cost you a good deal of money,
and the result remains doubtful; but even if fniitful, the
!
man's continuing iivelihood will still be dependent upon
! you for replacements. But teach him to make his own
fishing tackle and you have helped him to become not only
self-supporting, but also self-reliant and independent.
This, then, should become the ever-increasing preoccu-
Ipation of aid —
programmes to make men self-reliant and
independent by the generous supply of the appropriate
intellectual gifts, gifts of relevant knowledge on the
í methods of self-help. This approach, incidentally, also has
the advantage of being relatively cheap, that is to say, of

197
making money go a very long way. For £100 you may
be able to equip one man with certain means of produc-
tion; but for the same money you may well be able to
teach a hundred men to equip themselves. Perhaps a little
"pump-priming" by way of material goods will in some
cases be helpful to speed the process; but this would be
purely incidental and secondary, and if the goods are
rightly chosen, those who need them can probably pay for
them.
A fundamental reorientation of aid in the direction I
advócate would require only a marginal reallocation of
funds. If Britain is currently giving aid to the tune of
about £250 million a year, the diversión of merely one
per cent of this sum to the organisation and mobilisation
of "gifts of knowledge" would, I am certain, change all
prospects and open a new and much more hopeful era in
the history of "development." One per cent, after all, is
—
about £2Vi million a sum of money which would go a
very, very long way for this purpose if intelligently
employed. And it might make the other ninety-nine per
cent immensely more fruitful.
Once we see the task of aid as primarily one of supply-
ing relevant knowledge, experience, know-how, etc. — that
is to say, intellectual rather than material goods — it is

clear that the present organisation of the overseas develop-

ment from adequate. This is natural as long
effort is far
as the main task seen as one of making funds available
is

for a variety of needs and projects proposed by the recipi-

ent country, the availability of the knowledge factor being
more or less taken for granted. What I am saying is sim-
ply that this availability cannot be taken for granted, that
it is precisely this knowledge factor which is conspicu-
ously lacking, that this is the gap, the "missing link," in
the whole enterprise. I am not saying that no knowledge
is currently being supplied: this would be ridiculous. No,
there is a plentiful flow of know-how, but it is based on
the implicit assumption that what is good for the rich must

198
obviously be good for the poor. As I have argued above,
this assumption is wrong, or at least, only very partially
right and preponderantly wrong.
So we get back to our two million villages and have to
see how we can make relevant knowledge available to
them. To do so, we must first possess this knowledge
ourselves. Before we can we must
talk about giving aid,
have something to give. We
do not have thousands of
poverty-stricken villages in our country; so what do we
know about effective methods of self-help in such circum-
stances? The beginning of wisdom is the admission of
one'sown lack of knowledge. As long as we think we
know, when in fact we do not, we shall continué to go to
the poor and demónstrate to them all the marvellous
things they could do if they were already rich. This has
been the main failure of aid to date.
But we do know something about the organisation and
we do have
systematisation of knowledge and experience;
facilities to do almost any job, provided only that we
clearly understand what it is. If the job is, for instance, to
assemble an effective guide to methods and materials for
low-cost building in tropical countríes, and, with the
aid of such a guide, to train local builders in developing
countríes in the appropriate technologies and methodolo-
gies, there is no doubt we can do this, or — to say the least
— that we can inmiediately take the steps which will
enable us to do this in two or three years' time. Similarly,
if we cleariy understand that one of the basic needs in

many developing countríesis water, and that millions of

villagers would benefit enormously from the availability

of systematic knowledge on low-cost, self-help methods of
water-storage, protection, transport, and so on if this is —
cleariy understood and brought into focus, there is no
doubt that we have the ability and resources to assemble,
organise and communicate the required information.
As I have said already, poor people have relatively
simple needs, and it is primaríly with regard to their basic

199
requirements and activities that they want assistance. If
they were not capable of self-help and self-reliance, they
would not survive today. But their own methods are all

too frequently too priniitive, too inefficient and ineffective;

these methods require up-grading by the input of new
knowledge, new to them, but not altogether new to every-
body. It is quite wrong to assume that poor people are
generally unwilling to change; but the proposed change
must stand in some organic relationship to what they are
doing akeady, and they are rightly suspicious of, and
resistant to, radical changes proposed by town-based and
office-bound innovators who approach them in the spirit
of: "You just get my way and I shall show you
out of
how useless you are and how splendidly the job can be
done with a lot of foreign money and outlandish
equipment."
Because the needs of poor people are relatively simple,
the range of studies to be undertaken is fairly liraited. It

is a perfectly manageable task to tackle systematically,

but it requires a different organisational set-up from what
we have at present (a set-up primarily geared to the dis-
bursement of funds). At present, the development effort
is mainly carried on by government officials, both in the

donor and in the recipient country; in other words, by

administrators. They are not, by training and experi-
ence, either entrepreneurs or innovators, ñor do they
possess specific technical knowledge of productive proc-
esses, commercial requirements, or communication prob-
lems. Assuredly, they have an essential role to play, and
— —
one could not and would not attempt to proceed
without them. But they can do nothing by themselves
alone. They must be closely associated with other social
groups, with people in industry and conmierce, who are
trained in the "discipline of viability" ^if —
they cannot
pay their wages on Fridays, they are out! and with —
professional people, academics, research workers, jour-
nalists, educa tors, and so on, who have time, facilities,

200
ability, and Lnclination to think, write, and communicate.
Development work is far too difficult to be done succcss-
fully by any one of these three groups working in isola-
tion. Both in the donor countries and in the recipient
countries it is necessary to achieve what I cali the A-B-C
combination, where A stands for administrators; B stands
for businessmen; and C stands for communicators that is, —
intellectual workers, professionals of various descriptions.
It is only when this A-B-C combination is effectively

achieved that a real impact on the appallingly difficult

problems of development can be made.
In the rich countries, there are thousands of able peo-
pie in all these walks of life who would like to be involved
and make a contribution to the fight against worid pov-
erty, a contribution that goes beyond forking out a bit of
money; but there are not many outlets for them. And in
the poor countries, the educated people, a highly privil-
eged minority, all too often foUow the fashions set by the
rich societies —another aspect of unintentional neo-
colonialism —and attend to any problem except those
directly concemed with the poverty of their fellow-
countrymen. They need to be given strong guidance and
inspiration to deal with the urgent problems of their own
societies.
The mobilisation of relevant knowledge to help the
poor to help themselves, through the mobilisation of the
willing helpers who exist everywhere, both here and
overseas, and the tying together of these helpers jn
"A-B-C-Groups," is a task that requires some money, but
not very much. As I said, a mere one per cent of the
British aid programme would be enough more than —
—
enough to give such an approach all the financial
strength it could possibly require for quite a long time to
come. There is therefore no question of turning the aid

programmes upside down or inside out. It is the thinking

that has to be changed and also the method of operating.
It is not enough merely to have a new policy: new meth-

201
ods of organisation are required, because the policy is in
the imple mentation.
To implement the approach here advocated, action
groups need to be formed not only in the donor coun-
tries but also, and this is most important, in the developing

countries themselves. These action groups, on the A-B-C

pattem, should ideally be outside the govemment
machine, in other words, they should be non-govemmental
voluntary agencies. They may well be set up by voluntary
agencies already engaged in development work.
There are many such agencies, both religious and
secular, with large numbers of workers at the "grass roots
level," and they have not been slow in recognising that
"intermediate technology*' is precisely what they have
been trying to practise in numerous instances, but that
they are lacking any organised technical backing to this
end. Conferences have been held in many countries to
discuss their common problems, and it has become ever
more apparent that even the most self-sacrificing efforts of
the voluntary workers cannot bear proper fniit unless
there is a systematic organisation of knowledge and an
equally systematic organisation of Communications in —
other words, unless there is something that might be
called an "intellectual infrastructure."
Attempts are being made to créate such an infrastruc-
ture, and they should receive the fullest support from
govemments and from the voluntary fund-raising orga-
nisations. At least four main functions have to be fulfilled:

—
The function of Communications to enable each field
worker or group of field workers to know what other
work is going on in the geographical or "functional'*
territory in which they are engaged, so as to facilitate the
direct exchange of Information.
The function of information brokerage — to assemble
on a systematic basis and to disseminate relevant infor-
mation on appropriate technologies for developing coun-

202
 tries, particularly on low-cost methods relating to build-
ing, water and power, crop-storage and processing,
small-scale manufacturing, health services, transporta-
tion and so forth. Here the essence of the matter is not
to hold all the information in one centre but to hold
"information on information" or "know-how on know-
how.'*
The function of "feed-back," that is to say, the trans-
mission of technical problems from the field workers in
developing coimtries to those places in the advanced
coimtries where suitable facilities for their solution exist.
The function of creating and coordinating "sub-struc-
tures," that is to say, action groups and verification
centres in the developing countries themselves.

These are matters which can be fuUy clarified only by

trial and error. In all this one does not have to begin
—
from scratch a great deal exists already, but it now
wants to be puUed together and systematically developed.
The future success of development aid will depend on the
organisation and communication of the right kind of
—
knowledge a task that is manageable, definite, and whoUy
within the available resources.
Why is it so difficult for the rich to help the poor? The
all-pervading disease of the modem
world is the total
imbalance between city and countryside, an imbalance in
terms of wealth, power, culture, attraction, and hope. The
former has become over-extended and the latter has
atrophied. The city has become the universal magnet,
while rural life has lost its savour. Yet it remains an
unalterable truth that, just as a sound mind depends on a
sound body, so the health of the cities depends on the
health of the rural áreas. The cities, with all their wealth,
are merely secondary producers, while primary produc-
tion, the precondition of all economic life, takes place in
the countryside. The prevailing lack of balance, based on
the age-old exploitation of countryman and raw material

203
producer, today threatens all countries throughout the
world, the rich even more than To restore a the poor.
proper balance between city and rural life is perhaps the
greatest task in front of modem man. It is not simply a
matter of raising agricultura! yields so as to avoid world
hunger. There is no answer to the evils of mass unemploy-
ment and mass migration into cities, unless the whole
level of rural life can be raised, and this requires the
development of an agro-industrial culture, so that each
district, each community, can offer a colourful variety of
occupations to its members.
The crucial task of this decade, therefore, is to make
the development effort appropriate and thereby more
effective, so that it will reach down to the heartland of
world poverty, to two million villages. If the disintegration
of rural life continúes, there is no way out —no matter
how much money is being spent. But if the rural people of
the developing countries are helped to help themselves, I
have no doubt that a genuine development will ensue,
without vast shanty towns and misery belts around every
big city and without the cruel frustrations of bloody
revolution. The task is formidable indeed, but the
resources that are waiting to be mobilised are also
formidable.
Economic development is something much wider and
deeper than economics, let alone econometrics. Its roots
he outside the economic sphere, in education, organisa-
beyond that, in political independence
tion, discipline and,
and a national consciousness of self-reliance. It cannot
be "produced" by skilful grafting operations carried out
by foreign technicians or an indigenous élite that has lost
contact with the ordinary people. It can succeed only if it
is carried forward as a broad, popular "movement of
reconstruction" with primary emphasis on the full utilisa-

tion of the drive, and labour

enthusiasm, intelligence,
power of everyone. Success cannot be obtained by some

204
form of magic produced by scientists, technicians, or
economic planners. It can come only through a process of
growth involving the education, organisation, and disci-
pline of the whole population. Anything less than thi5 must
end in failure.

205
 4
The Probiem of
Unemployment in India

A Talk to the India Development Group in London

When speaking of unemployment I mean the non-utilisa-

tion or gross under-utilisation of available labour. We may
think of a productivity scale that extends from zero, i.e.

the productivity of a totally unemployed person, to 100

per cent, i.e. the productivity of a fully and most effec-
tively occupied person. The crucial question for any poor
society is how to move up on this scale. When consid-
ering productivity in any society it is not sufficient to take
account only of those who are employed or self-employed
and to leave out of the reckoning all those who are unem-
ployed and whose productivity therefore is zero.
Economic development is primarily a question of get-
ting more work done. For this, there are four essential
conditions. First, there must be motivation; second, there
must be some know-how; third, there must be some
capital; and fourth, there must be an outlet: additional
output requires additional markets.
As far as the motivation is concerned, there is little to
be said from the outside. If people do not want to better
themselves, they are best left alone —
this should be the
first principie of aid. Insiders may take a different view,
and they also carry different responsibilities. For the aid-
giver, there are always enough people who do wish to

206
better themselves, but they do not know how to do it. So
we come to the question of know-how. If there are mil-
lions of people who want to better themselves but do not
know how to do it, who is going to show them? Consider
the size of the problem in India. We are not talking about
a few thousands or a few millions, but rather about a few
hundred millions of people. The size of the problem puts
it beyond any kind of little amelioration, any little reform,

improvement, or inducement, and makes it a matter of

basic political philosophy. The whole matter can be
summed up in the question: what is education for? I
think it was the Chinese, before World War II, who
calculated that it took the work of thirty peasants to keep
one man or woman at a university. If that person at the

university took by the time he had

a five-year course,
finished he would have consumed 150 peasan -work-years.
How can this be justified? Who has the right to appro-
priate 150 years of peasant work to keep one person at
university for five years, and what do the peasants get
back for it? These questions lead us to the parting of the
ways: is education to be a "passport to privilege" or is it
something which people take upon themselves almost like
a monastic vow, a sacred obligation to serve the people?
The first road takes the educated young person into a
fashionable district of Borabay, where a lot of cjther highly
educated people have already gone and where he can
join a mutual admiration society, a "trade unión of the
privileged," to see to it that his privileges are not eroded
by the great masses of his contemporaries who have not
been educated. This is one way. The other way would be
embarked upon in a different spiritand would lead to a
different destination. Itwould take him back to the people
who, after all, directly or indirectly, had paid for his edu-
cation by 150 peasant-work-years; having consumed the
fniits of their work, he would feel in honour bound to
retum something to them.
The problem is not new. Leo Tolstoy referred to it

207
when he wrote: "I sit on a man*s back, choking him, and
making him carry me, and yet assure myself and others
that I am very sorry for him and wish to ease his lot by
any means possible, except getting off his back." So this is
the first question I suggest we have to face. Can we
establish an ideology, or whatever you like to cali it, which
insists that the educated have taken upon themselves an
obligation and have not simply acquired a "passport to
privilege"? This ideology is of course well supported by all
the higher teachings of mankind. As a Christian, I may be
permitted to quote from St. Luke: "Much will be expected
of the man to whom much has been given. More will be
asked of him because he was entmsted with more." It is,
you might well say, an elementary matter of justice.
If this ideology does not prevail, if it is taken for
granted that education is a passport to privilege, then the
content of education will not primarily be something to
serve the people, but something to serve ourselves, the
educated. The privileged minority will wish to be edu-
cated in amanner that sets them apart and will inevitably
learn and teach the wrong things, that is to say, things
that do set them apart, with a contempt for manual
labour, a contempt for primary production, a contempt
for rural life, etc., etc. Unless virtually all educated people
see themselves as servants of their country —and that
means after all as servants of the common —
people ^there
cannot possibly be enough leadership and enough com-
munication of know-how to solve this problem of unem-
ployment or unproductive employment in the half million
villages of India. It is a matter of 500 million people. For
helping people to help themselves you need at least two
persons to look after 100 and that means an obligation to
raise ten million that is, the whole educated
helpers,
population of India. Now
you may say this is impossible,
but if it is, it is not so because of any laws of the universe,
but because of a certain inbred, ingrained selfishness on
the part of the people who are quite prepared to receive

208
and not prepared to give. As a matter of fact, there is
evidence thatthis probiem is not insoluble; but it can be
solved only at the political level.
Now let me tura to the third factor, after motivation
and after know-how, the factor I have called capital,
which is of course closely related to the matter of know-
how. According to my estimates there is in India an
immediate need for something like fifty million new jobs.
If we agree that people cannot do productive work unless
they have some capital —
in the form of equipment and
also of working capital —
the question arises: how much
capital can you afford to establish one new job? If it costs
£10 to establish a job you need £500 million for fifty
million jobs. If it costs £100 to establish a job you need
£5000 million, and if it costs £5000 per job, which is
what it might cost in Britain and the U.S.A., to set up
fifty million jobs you require £250,000 million.

The national income of the country we are talking

about, of India, is about £15,000 million a year. So
the first question is how much can we afford for each
job? and the second question, how much time have we to
do it in? Let us say we want fifty million jobs in ten years.
What proportion of national income (which I identify as
about £15,000 million) can one reasonably expect to be
available for the establishment of this capital fund for
job creation? would say, without going into any details,
I

you are lucky if you can make it five per cent. Therefore,
if you have five per cent of £15,000 million for ten years

you have a total of £7500 million for the establishment

of jobs. If you want fifty million jobs in those ten years,
you can afford to spend an average of £150 per work-
place. At that level of capital investment per workplace,
in other words, you could afford to set up five million
workplaces a year. Let us assume, however, that you say:
"No, £ 150 is too mean; it will not buy more than a set of
tools; we want £1500 per workplace" then you cannot
have five million new jobs a year but only half a million.

209
And you say: "Only the best is good enough; we want
if

all little Americans right away, and that means

to be
£5000 per workplace," then you cannot have half a mil-
lion new jobs a year, let alone five million, but only about
170,000. Now, you have no doubt noticed already that I

have simplified this matter very much because, in the

ten years with investment in jobs, you would have an
increase in the national income; but I have also left out
the increase in the population, and I would suggest that
these two factors cancel one another in their effect on my
calculation.
It follows, I suggest, that the biggest single coUective
decisión that any country in the position of India has to
take is the cholee of technology. I am not laying down the
law of what ought to be. I am simply saying that these are
the hard facts of life. A lot of things you can argüe against,
but you cannot argüe against arithmetic. So you can have
a few jobs at a high level of capitalisation or you can have
many jobs at a relatively low level of capitalisation.
Now, all this of course links up with the other factors I
have mentioned, with education, motivation, and know-
how. In India there are about fifty million pupils in pri-
mary schools; almost fifteen million in secondary schools;
and roughly one and a half million in institutions of higher
leaming. To maintain an education al machine on this kind
of scale would of course be pointless unless at the end of
the pipeline there was something for them to do, with a
chance to apply their knowledge. If there is not, the
whole thing is nothing but a ghastly burden. This rough
picture of the educational effort suffices to show that one
really does have to think in terms of five million new jobs
a year and not in terms of a few hundred thousand jobs.
Now, until quite recently, that is to say, some fifty to
seventy years ago, the way we did things was, by present
standards, quite primitive. In this connection, I should like
to refer to Chapíer II of John Kenneth Galbraith's The
New Industrial State. ^ It contains a fascinating report on

210
the Ford Motor Company. The Ford Motor Company
was set up on 16 June 1903 with an authorised capital of
$150,000, of which $100,000 were issued but only $28,500
were paid for in cash. So the total cash which went into
this enterprise was of the order of $30,000. They set up
in June 1903 and the first car to reach the market
appeared in October 1903, that is to say, after four
months. The employment in 1903, of course, was small
— 125 people, and the capital investment per workplace
was somewhat below £100. That was in 1903. If we now
move sixty years forward, to 1963, we find that the Ford
Motor Company decided to produce a new model, the
Mustang. The preparation required three and a half years.
Engineering and styling costs were $9 million; the costs
of tooling up for this new model were $50 million. Mean-
while the assets employed by the Company were $6000
million, which works out at almost £10,000 per person
employed, about a hundred times as much as sixty years
earlier.

Galbraith draws certain conclusions from all this which

are worth studying. They describe what happened over

these sixty years. The first is that a vastly increased span
of time now separates the beginning of an enterprise from
the completion of the job. The first Ford car, from the
beginning of the work to its appearance on the market,
took four months, while a mere change of model now
takes four years. Second, a vast increase in capital com-
mitted to production. Investment per unit of output in the
original Ford factory was infinitesimal; material and parts
were there only briefly; no expensive specialists gave them
attention; only elementary machines were used to assem-
ble them into a car; it helped that the frame of the car
could be lifted by only two men. Third, in those sixty
years, a vast increase of inflexibility. Galbraith comments:
"Had Ford and his associates [in 1903] decided at any
point to shift from gasoline to steam power, the machine
shop could have accommodated itself to the change in a

211
few hours." If they now try to change even one screw, it
takes that many months. Fourth, increasingly specialised
manpower, not only on the machinery, but also on the
planning, the foreseeing of the future in the uttermost
detall. Fifth, a vastly different type of organisation to
intégrate all numerous specialists, none of whom
these
can do anything more than just one small task inside the
complicated whole. "So complex, indeed, will be the job
for organising specialists that there will be specialists of
organisation. More even than machinery, massive and
complex business organisations are being tangible manifes-
tations of advanced technology." Finally, the necessity for
long-range planning, which, I can assure you, is a highly
sophisticated job, and also highly frustrating. Galbraith
comments: "In the early days of Ford, the future was very
nearat hand. Only days elapsed between the commitment
of machinery and materials to production and their
appearance as a car. If the future is near at hand, it can
be assumed to be very much like the present," and the
planning and forecasting is not very difficult.
Now what is the upshot of all this? The upshot is that
the more sophisticated the technology, the greater in gen-
eral willbe the foregoing requirements. When the simple
things of life, which is all I am concerned with, are pro-

duced by ever more sophisticated processes, then the need

to meet these slx requirements moves ever more beyond
the capacity of any poor society. As far as simple products
are concemed —food, clothing, shelter and culture the —
greatest danger is that people should automatically assume
that only the 1963 model is relevant and not the 1903
model; because the 1963 way of doing things is inaccessi-
ble to the poor, as it presupposes great wealth. Now,
without wishing to be rude to my academic friends, I
should say that this point is almost universally overlooked
by them. The question of how mucU you can afford for
each workplace when you need millions of them is hardly
ever raised. To fulfil the requirements that have arisen

212
over the last fifty or sixty years in fact involves a quantum
jump. Everything was quite continuous in human history
till about the beginning of this century; but in the last
half-century there has been a quantum jump, the sort of
jump as with the capitalisation of Ford, from $30,000 to
$6000 million.
In a developing country enough to get
it is difficult

Henry Fords, at the 1903 Henry super-

level. To get
Fords, to move from practically nowhere on to the 1963
level, is virtually impossible. No one can start at this
level. This means that no one can do anything at this
level unless he is already established, is already operating
at that level. This is absolutely crucial for our understand-
ing of the modem world. At this level no creations are
possible, only extensions, and this means that thepoor are
more dependent on the rich than ever before in human
history, // they are wedded to that level. They can only
be gap-fillers for the rich, for instance, where low wages
enable them to produce cheaply this and that trifle. People
ferret around and say: "Here, in this or that poor coun-
try, wages are so low that we can get some part of a
watch, or of a carburettor, produced more cheaply than
in Britain. So let it be produced in Hong Kong or in
Taiwan or wherever it might be." The role of the poor is
to be gap-fillers in the requirements of the rich. It fol-
lows that at this level of technology it is impossible to
attain either full employment or independence. The cholee
of technology is the most important of all cholees.
It is a strange fact that some people say that there are
no technological choices. I read an article by a well-
known economist from the U.S.A. who asserts that there
is only one way of producing any particular commodity:

the way of 1971. Had these commodities never been pro-

duced before? The basic things of Ufe have been needed
and produced since Adam left Paradise. He says that the
only machinery that can be procured is the very latest.
Now that is a different point and it may well be that the
213
only machinery that can be procured easily is the latest.
It is true that at any one time there is only one kind of

machinery that tends to dominate the market and this

creates the impression as if we had no choice and as if the
amount of capital in a society determined the amount of
employment it could have. Of course this is absurd. The
author whom I ara quoting also knows that it is absurd,
and he then corrects himself and points to examples of
Japan, Korea, Taiwan, etc., where people achieve a high
level of employment and production with very modest
capital equipment.
The importance of technological choice is gradually
entering the consciousness of economists and development
planners. There are four stages. The first stage has been
laughter and scomful rejection of anyone who talked
about this. The second stage has now been reached and
people give lip service to it, but no action follows and the
drift continúes. The third stage would be active work in
the mobilisation of the knowledge of this technological
choice; and the fourth stage will then be the practica!
application. It is a long road, but I do not wish to hide the
fact that there are political possibilities of going straight
to the fourth stage. If there is a political ideology that

sees development as being about people, then one can

immediately employ the ingenuity of hundreds of millions
of people and go straight to the fourth stage. There are
indeed some countries which are going straight to the
fourth stage.
However, it is not for me to talk politics. If it is now
being increasingly understood that this technological
choice is how can we
of absolutely pivotal importance,
get from stage two namely from just giving
to stage three,
lip service to actually doing work? To my knowledge this
work is being done systematically only by one organisa-
tion, the Intermedíate Technology Development Group
(I.T.D.G.). I do not deny that some work is also being
done on a commercial basis, but not systematically.

214
I.T.D.G. set itself the task to find out what are the tech-
nological choices. I will only give one example out of the
many activities of this purely prívate group. Take foundry
work and woodworking, metal and wood being the two
basic raw materíals of industry. Now, what are the alter-
native technologies that can be employed, arranged the m
order of capital intensity from the most primitive, when
people work with the simplest tools, to the most compli-
cated? This is shown in what we cali an industrial profile,

and these industrial profiles are supported by instruction

manuals at each level of technology and by a directory
of equipment with addresses where it can be obtained
The only criticism that can be levelled against this activ-
ity is that it is too Httle and too late. It is not good enough
that in this crucial matter one should be satisfied with one
little group of private enthusiasts doing this work. There

ought to be dozens of solid, well-endowed organisations in

the worid doing it. The task is so great that even some
overiapping would not matter. In any case, I should hope
that this work will be taken up on a really substantial
scale in India, and I am delighted to see that already some
beginnings have been made.
I shall now turn to the fourth factor, namely, markets.

There is, of course, a very real problem here, because

poverty means that markets are small and there is very
little free purchasing power. All the purchasing power that

exists already, is, as it were, bespoken, and if I start a new

production of, say, sandals or shoes in a poor área, my
fellow-sufferers in the área will not have any money to
buy the shoes when I have made them. Production is
sometimes easier to start than it is to find markets, and
then, of course, we get very quickly the advice to produce
for export because exports are mainly for the rich coun-
tries and their purchasing power is plentiful. But if I start

from nothing in a rural área, how could I hope to be

competitive in the world market?
There are two reasons for this extraordinary preoccupa-

215
tion with exports, as far as I can see. One is real; the
other not so good. I shall first talk about the second one.
It is really a hangover of the economic thinking of the

days of colonialism. Of course, the metropolitan power

moved into a territory not because it was particularly
interested in the local population, but in order to open up
resources needed for its own industry. One moved into
Tanzania for sisal, into Zambia for copper, etc., and into
some other place for trade. The whole thinking was
shaped by these interests.
"Development" meant the developraent of raw material
or food supplies or of trading profits. The colonial powei
was primarily interested in supplies and profits, not in thí
development of the natives, and this meant it was primarily
interested in the colony's exports and not in its interna!
market. This outlook has stuck to such an extent that even
the Pearson Report considers the expansión of exports the
main criterion of success for developing countries. But, oí
course, people do not live by exporting, and what they
produce for themselves and for each other is of infinitely
greater importance to them than what they produce foi
foreigners.
The other point, however, is a more real one. If I pro-

duce for export into a rich country, I can take the avalla-
bility of purchasing power for granted, becarse my owi
little production is as nothing compared with what exists
already. But if I start new production in a poor country
there can be no local market for my products untess
divert the flow of purchasing power from some othei
product to mine. A dozen different productions should al
be started together: then for every one of the twelví
producéis the other eleven would be his market. There
would be additional purchasing power to absorb th(
additional output. But it is extremely diflBcult to start many
different activities at once. So the conventional advice is:
"Only production for export is proper development.*'
Such production is not only highly limited in scope, its

216
employment extremely limited. To compete
effect is also
in world markets, normally necessary to employ the
it is

highiy capital-intensiva and labour-saving technology of

the rich countries. In any case, there is no multipÜer
effect: my goods are sold for foreign exchange, and the
foreign exchange is spent on imports (or the repayment
of debt), and that is the end of it.

The need to start many complementary productive

activities simultaneously presents a very severe difficulty
for development, but the difficulty can be mitigated by
"pump-priming" through public works. The virtues of a
massive public works programme for job creation have
often been extolled. The oñly point I should like to make
in this context is the following: if you can get new pur-
chasing power into a rural community by way of a public
works programme financed from outside, see to it that the
fuUest possible use is made of the "multiplier effect." The
people employed on the public works want to spend their
wages on "wages goods," that is to say, consumers' goods
of all kinds. If these wages goods can be locally produced,
the new purchasing power made available through the
public works programme does not seep away but goes on
circulating in the local market, and the total employment
effect could be prodigious. Public works are very desirable
and can do a great deal of good; but if they are not
backed up by the indigenous production of additional
wages goods, the additional purchasing power will ñow
into imports and the country may experience serious for-
eign exchange diflBculties. Even so, it is misleading to
deduce from this truism that exports are specially impor-
tant for development. After all, for mankind as a whole
there are no exports. We did not start development by
obtaining foreign exchange from Mars or from the moon.
Mankind is a closed society. India is quite big enough to
—
be a relatively closed society in that sense a society in
which the able-bodied people work and produce what they
need.

217
 Everything sounds very difficult and in a sense it is very

difficult ifdone for the people, instead of by the

it is

people. But let us not think that development or employ-

ment is anything but the most natural thing in the world.
It oc¿urs in every healthy person's life. There comes a

point when he simply work. In a sense this is much

sets to
easier to do now than ithas ever been in human history.
Why? Because there is so much more knowledge. There
are so much better Communications. You can tap all this
knowledge what the Indian Development Group is
(this is
there for). So let*s not mesmerise ourselves by the difficul-
ties, but recover the commonsense view that to work is

the most natural thing in the world. Only one must not be
blocked by being too damn clever about it. We are always
having all sorts of clever ideas about optimising something
before it even exists. I think the stupid man who says
"something is better than nothing" is much more intelli-
gent than the clever chap who will not touch anything
unless it is optimal. What is stopping us? Theories, plan-
ning. I have come across planners at the Planning Com-
mission who have convinced themselves that even within
fifteen years it is not possible to put the wUling labour
power of India to work. If they say it is not possible in
fifteen months, I accept that, because it takes time to get
around. But to throw up the sponge and say it is not
possible to do the most elementary thing within fifteen
years, this is just a sort of degeneracy of the intellect.
What is the argument behind it? Oh! the argument is very
clever, a spiendid piece of model building. They have
ascertained that in order to put a man to work you need
on average so much electricity, so much cement, and so
much Steel. This isshould like to remind you
absurd. I

that a hundred years ago electricity, cement and steel did

not even exist in any significant quantity at all. (I should
like to remind you that the Taj Mahal was built without
electricity, cement and steel and that all the cathedrals of
Europe were built without them. It is a fixation in the

218
mind, that unless you can have the latest you can't do
anything at all, and this is the thing that has to be over-
eóme.) You may say, again, this is not an economic
problem, but basically a political problem. It is basically
a problem of compassion with the ordinary people of the
world. It is basically a problem, not of conscripting the
ordinary people, but of getting a kind of voluntary con-
scription of the educated.
Another example: we are told by theorists and planners
that the number of people you can put to work depends
upon the amount of capital you have, as if you could not
put people to work to produce capital goods. We are told
there is no choice of technology, as if production had
started in the year 1971. We are told that it cannot be
economic to use anything but the latest methods, as if any-
thing could be more uneconomic than having people doing
absolutely nothing. We are told that it is necessary to
"eliminate the human factor."
The greatest deprivation anyone can suffer is to have no
chance of looking after himself and making a livelihood.
There is no conflict between growth and employment. Not
even a conflict as between the present and the future. You
will have to construct a very absurd example to demón-
strate that by letting people work you créate a conflict
between the present and the future. No country that has
developed has been able to develop without letting the
people work. On the one hand, it is quite true to say that
these things are diíficult: on the other hand, let us never
lose sight of the fact that we are talking about man*s
most elementary needs and that we must not be prevented
by all these high-faluting and very diíficult considerations
from doing the most elementary and direct things.
Now, at the risk of being misunderstood, I will give you
the simplest of all possible examples of self-help. The
Good Lord has not disinherited any of his children and as
far as India is concemed he has given her a variety of
trees unsurpassed anywhere in the world. There are trees

219
for almost all human needs. One of the greatest teachers
of India was the Buddha, who included in his teachmg
the obligation of every good Buddhist that he should plant
and see to the establishment of one tree at least every five
years. As long as this was observed, the whole large área
of India was covered with trees, free of dust, with plenty
of water, plenty of shade, plenty of food and materials.
Just imagine you could establish an ideology which would
make it obligatory for every able-bodied person in India,
man, woman and child, to do that little thing to plant —
and see to the establishment of one tree a year, five years
running. This, in a five-year period, would give you 2000
mUlion established trees. Anyone can work it out on the
back of an envelope that the economic valué of such an
enterprise, intelligently conducted, would be greater than
anything that has ever been promised by any of India*s
five-year plans. It could be done without a penny of for-
eign aid; there is no problem of savings and investment
It would produce foodstuffs, fibres, building material,
shade, water, almost anything that man really needs.
I just leave this as a thought, not as the final answer to
India's enormous problems. But I ask: what sort of an
education is this if it prevents us from thinking of things
ready to be done immediately? What makes us think we
need electricity, cement, and steel before we can do any-
thing at all? The really helpful things will not be done
from the centre; they cannot be done by big organisations;
but they can be done by the people themselves. If we can
recover the sense that it is the most natural thing for
every person bom into this world to use his hands in a
productive way and that it is not beyond the wit of nian to
make this possible, then I think the problem of unem-
ployment will disappear and we soon be asking our-
shall
selves how we can get all the work done that needs to be
done.

220
 PART IV

Organisation and
Ownership
 7
A Machine to Foretell
the Future?

The reason for including a discussion on predictability in

this volume is that it represents one of the most important
metaphysical —
and therefore practical ^problems with—
which we are faced. There have never been so many
futurologists, planners, forecasters, and model-builders as
there are today, and the most intríguing product of tech-
nological progress, the computer, seems to offer untold
new possibilities. People talk freely about "machines to
foretell the future." Are not such machines just what we
have been waiting for? All men at all times have been
wanting to know the future.
The ancient Chinese used to consult the / Ching, also
called The Book of Changes and reputed to be the oldest
book of mankind. Some of our contemporaries do so even
today. The / Ching is based on the conviction that, while
everything changes all the time, change itself is imchang-
ing and conforms to certain ascertainable metaphysical
laws. *To everything there is a season," said Ecclesiastes,
"and a time to every purpose imder heaven . á time . .

to break down and a time to build up a time to cast

. . .

away stones and a time to gather stones together," or, as

we might say, a time for expansión and a time for con-
solidation. And the task of the wise man is to understand
the great rhythms of the Universe and to gear in with

223
them. While the Greeks — and
suppose most other natíons
I
—went to living oracles, to Pythias, Cassandras,
their
prophets and seers, the Chínese, remarkably, went to a
book and necessary pattera of
setting out the universal
changes, the very Laws of Heaven
to which all nature
conforms inevitably and to which man will conform freely
as a result of insight gained either from wisdom or from
suffering. Modem man goes to the computer.
Tempting as it may be to compare the ancient oracles
and the modem computer, only a comparison by contrast
is possible. The former deal exclusively with qualities; the
latter, with quantities. The inscription over the Delphic
temple was "Know Thyself," while the inscription on an
electronic computer is more likely to be: "Know Me,"
that "Study the Operating Instructions before Plugging
is,

In.** Itmight be thought that the / Ching and the oracles

are metaphysical while the computer model is "real"; but
the fact remains that a machine to foretell the future is
based on metaphysical assumptions of a very definite kind
It is based on the miplicit assumption that "the future is

already here," that it exists already in a determínate

form, so that it requires merely good Instruments and
good techniques to get it into focus and make it visible.
The reader will agree that this is a very far-reaching meta-
physical assumption, in fact, a most extraordinary assump-
tion which seems to go against all direct personal experi-
ence. It implies that human freedom
does not exist or, in
any case, that cannot alter the predetermined course of
it

events. We cannot shut our eyes to the fact, on which I

have been insisting throughout this book, that such an
assumption, like all metaphysical theses, whether explicit
or implicit, has decisive practical consequences. The ques-
tion is simply: is it true or is it untrue?
When the Lord created the world and people to Uve in it
— an enterprise which, according to modera science, took
—
a very long time I could well imagine that He reasoned
with Himself as foUows: "If I make everything predictable,

224
these human beings, whom I have endowed with pretty
good brains, will undoubtedly learn to predict everything,
and they will thereupon have no motive to do anything at
all, because they will recognise that the future is totally

determined and cannot be influenced by any human action.

On the other hand, if I make everything unpredictable,
they will gradually discover that there is no rational basis
for any decisión whatsoever and, as in the first case, they
will thereupon have no motive to do anything at all.
Neither scheme would make sense. I must therefore créate
a mixture of the two. Let some thlngs be predictable and
let others be unpredictable. They will then, amongst many
other things, have the very important task of finding out
which is which."
And this, indeed, is a very important task, particularly
today, wh^n people machines to foretell the
try to devise
future. Before anyone makes a prediction, he should be
able to give a convincing reason why the factor to which
his prediction refers is inherently predictable.
Planners, of course, proceed on the assumption that the
future is not "already here," that they are not dealing with
a predetermined —and therefore predictable —system, that
they can determine things by their own free will,and that
their plans will make the future dLfferent from what it
would have been had there been no plan. And yet it is the
planners, more than perhaps anyone else, who would like
nothing better than to have a machine to foretell the
future. Do they ever wonder whether the machine might
incidentally also foretell their own plans before they have
been conceived?

Need for Semantics

However this may be, it is clear that the question of pre-
dictability is not only important but also somewhat
involved. We talk happily about estimating, planning, fore-

225
casting, budgeting, about surveys, programmes, targets,
and so forth, and we tend to use these terms as if they
were freely interchangeable and as if everybody would
automatically know what was meant The result is a great
deal of confusión, because it is in fact necessary to make a
number of fundamental distinctions. The terms we use
may refer to the past or to the future; they may refer to
acts or to events; and they may signify certainty or uncer-
tainty. The number of combinations possible when there
are three pairs of this kind is 2^, or 8, and we really
ought to have eight different terms to be quite certain
of what we are talking about. Our language, however, is
not as perfect as that. The most important distinction is
generally that between acts and events. The eight possible
cases may therefore be ordered as follows:

1.
 —
to be necessary for our purpose, because, in fact, words
like "plan" or "estímate" are being used to refer to either.
If I say: "I shall not visit París without a plan," this can

mean: "I shall arm myseK with a street plan for orienta-
tion" and would therefore refer to case 5. Or it can mean:
"I shall arm myself with a plan which outlines in ad vanee
where I am going to go and how I am going to spend my
time and money" —
case 2 or 4. If someone claims that
"to have a plan is indispensable," it is not without interest
to find out whether he means the former or the latter.
The two are essentially diíferent.
Similarly, the word "estímate," which denotes uncer-
tainty, may apply to the past or to the future. In an ideal
world, it would not be necessary to make estimates about
things that had already happened. But in the actual
world, there is much even about matters
uncertainty
which, in principie, could be fuUy ascertained. Cases 3,
4, 7, and 8 represent four different types of estimates.
Case 3 relates to something I have done in the past; case 7,
to something that has happened in the past. Case 4 relates
to something I plan to do in the future, while case 8
relates to something I expect to happen in the future.
Case 8, in fact, is a forecast in the proper sense of the
term and has nothing whatever to do with "planning."
How often, however, are forecasts presented as if they
—
were plans and vice versal The British "National Plan"
of 1965 provides an outstanding example and, not sur-
prisingly, came to nothing.
Can we ever speak of future acts or events as certain
(cases 2 and 6)? If I have made a plan with full knowl-
edge of all the relevant facts, being inflexibly resolved to
carry it through — case 2 — I may, in this respect, consider
my future actions as certain. Similarly, in laboratory sci-
ence, dealing with carefully isolated deterministic systems,
future events may be described as certain. The real world,
however, is not a deterministic system; we may be able
to talk with certainty about acts or events of the past

227
cases 1 or 5 —but we can do so ahout future events only
on the basis of assumptions. In other words, we can for-
múlate conditional statements about the future, such as:
*7/ such and such a trend of events continued for another
X is where it would take us." This is not a fore-
years, this
cast or prediction, which must always be uncertain in the
real world, but an exploratory calculation, which, being
conditional, has the virtue of mathematical certainty.
Endless confusión results from the semantic muddle in
which we find ourselves today. As mentioned before,
"plans" are put forward which upon inspection tum out
to relate to events totally outside the control of the
planner. "Forecasts" are offered which upon inspection
tum out to be conditional sentences, in other words,
exploratory calculations. The latter are misinterpreted as
if they were forecasts or predictions. "Estimates" are put
forward which upon inspection tum out to be plans. And
so on and so forth. Our academic teachers would perform
a most necessary and really helpful task if they taught
their students to make the distinctions discussed above
and developed a tenninology which fixed them in words.

Predictability

Let US now retum to our —

main subject ^predictability. Is
prediction or f orecasting — the two terms would seem to be
interchangeable — possible at all? The future does not
exist; how could there be knowledge about something non-
existent? This question is only too well justified. In the
strict sense of the word, knowledge can only be about the
past. The future is always in the making, but it is being
made largely out of existing material, about which a great
deal can be known. The future, therefore, is largely pre-
dictable, if we have and extensive knowledge of the
solid
past. Largely, but by no means wholly; for into the making

228
of the future there enters that mysterious and irrepressible
factor called human freedom. It is the freedom of a being
of which it has been said that it was made in the image of
God the Creator: the freedom of creativity.
Strange to say, under the mfluence of laboratory science
many people today seem to use their freedom only for the
purpose of denying its existence. Men and women of great
gifts find their purest delight in magnifying every "mecha-
nism," every "inevitability," everything where human free-
dom does not enter or does not appear to enter. great A
shout of triumph goes up whenever anybody has found
—
some further evidence in physiology or psychology or
sociology or economics or politics —of unfreedom, some
further indication that people cannot help being what they
are and doing what they are doing, no matter how inhu-
man their actions might be. The denial of freedom, of
course, is a denial of responsibility: there are no acts, but
only events; everything simply happens; no one is respon-
sible. And this is no doubt the main cause of the semantic

confusión to which I have referred above. It is also the

cause for the belief that we shall soon have a machine to
foretell the future.
To be sure, if everything simply happened, if there were
no element of freedom, cholee, human creativity and
responsibility, everything would be perfectly predictable,
subject only to accidental and temporary limitations of
knowledge. The absence of freedom would make human
affairs suitable for study by the natural sciences or at least
by their methods, and reliable results would no doubt
quickly foUow the systematic observation of facts. Profes-
sor Phelps Brown, in his presidential address to the Royal
Economic Society, appears to adopt precisely this point of
view when talking about "The Underdevelopment of Eco-
nomics." "Our own science," he says, "has hardly yet
reached its seventeenth century." Believing that economics
is metaphysically the same as physics, he quotes another

229
economist, Professor Morgenstern, approvingly, as
foUows:

The decisive break which carne in physícs in the séventeenth

century, specifically in the field of mechanics, was possible
only because of previous developments in astronomy. It was
backed by several millennia of systematic, scientific, astro-
nomical observation. . Ñothing of this sort has occurred
. .

in economic science. It would have been absurd in physics

to have expected Kepler and Newton without Tycho and —
there is no reason to hope for an easier development in
economics.

Professor Phelps Brown concludes therefore that we need

many, many more years of observations of behaviour.
"Until then, our mathematisation is prémature.**
It is the intrusión of human freedom and responsibility
that makes economics metaphysically different from phys-
ics and makes human affairs largely unpredictable. We
obtain predictability, of course, when we or others are
acting according to a plan. But this is so precisely because
a plan is the result of an exercise in the freedom of
cholee: the cholee has been made; have
all alternatives
been ellminated. If people stick to their plan, their behav-
iour is predictable simply because they have chosen to
surrender their freedom to act otherwise than prescribed
in the pían.
In principie, everything which is immune to the intru-
sión of human freedom, like the movements of the stars,
is and everything subject to this intrusión is
predictable,
unpredictable. Does that mean that all human actions are
impredictable? No, because most people, most of the time,
make no use of their freedom and act purely mechanically.
Experience shows that when we are dealing with large
numbers of people many aspects of their behaviour are
indeed predictable; for out of a large number, at any one
time, only a tiny minority are using their power of free-
dom, and they often do not significantly afíect the total

230
outcome. Yet all really important innovations and
changes normally start from tiny minorities of people who
do use their creative freedom.
It is true that social phenomena acquire a certain steadi-
ness and predictability from the non-use of freedom, which
means that the great majority of people responds to a
given situation in a way that does not alter greatly in
time, unless there are really overpowering new causes.
We can therefore distinguish as follows:

1. FuU predictability (in principie) exists only in the

absence of human freedom, i.e. in "sub-human" nature.
The limitations of predictability are purely limitations
of knowledge and technique.
2. Relative predictability exists with regard to the
behaviour pattern of very large numbers of people doing
"normar things (routine).
3. Relatively full predictability exists with regard to
human actions controUed by a plan which eliminates
freedom, e.g. railway timetable.
4. Individual decisions by individuáis are in principie
impredictable.

Short'Term Forecasts

In practice all prediction is simply extrapolatioo, modified

by known "plans." But how do you extrapólate? How many
years do you go back? Assuming there is a record of
growth, what precisely do you extrapólate the average —
rate of growth, or the increase in the rate of growth, or
the annual increment in absolute terms? As a matter of
fact, there are no rules:* it is just a matter of "feel" or
judgement
* When there are seasonal or cyclical pattems, it is, of course,
necessary to go back by at least a year or a cycle; but it is a
matter of judgement to decide how many years or cycles.

231
 It is good to know of all the different possibilities of

using the same time series for extrapolations with very

diíferent results. Such knowledge will prevent us from
putting undue faith in any extrapolation. At the same time,
and by the same token, the development of (what purport
to be) better forecasting techniques can become a vice. In
short-term forecasting, say, for next year, a refined tech-
nique rarely produces significantly different results from
those of a cnide technique. After a year of growth ^what —
can you predict?

1. that we have reached a (temporary) ceiling;-

2. that growth will continué at the same, or a slower,

or a fáster rate;
3. that there will be a decline.

Now, seems clear that the cholee between these three

it

basic made by "fore-

altemative predictions cannot be
casting technique" but only by informed judgement. It
depends, of course, on what you are dealing with. When
you have something that is normally growing very fast, like
the consumption of electricity, your thréefold cholee is
between the same rate of growth, a faster rate, or a
slower rate.
It is not so much forecasting technique, as a full under-
standing of the current situation that can help in the
formation of a sound judgement for the future. If the
present level of performance (or rate of growth) is known
to be influenced by quite abribrmal factors whlch are
unlikely to apply in the coming year, it is, of course,
necessary to take these into account. The forecast, "same
as last year," may imply
a "real" growth or a "real"
decline on account of exceptional factors being present
this year, and this, of course, must be made explicit by
the forecaster.
I believe, therefore, that all effort needs to be put into

understanding the current situation, to identify and, if

need be, elimínate "abnormal" and non-recurrent factors

232
from the current picture. This having been done, the
'

method of forecasting can hardly be crude enough. No

amount of refinement will help one come to the funda-
—
mental judgement is next year going to be the same as
last year, or better, or worse?
At this point, it may be objected that there ought to be
great possibilities of short-tenn forecasting with the help
of electronic computers, because they can very easily and
quickiy handle a great mass of data and fit to thera some
kind of mathematical expression. By means of "feedback"
the mathematical expression can be kept up to date almost
instantaneously, and once you have a really good mathe-
matical fit, the machine can predict the future.
Once again, we need to have a look at the metaphysical
basis of such claims. What
is the meaning of a "good

mathematical fit?'* Simply that a sequence of quantitative

changes in the past has been elegantly described in precise
mathematical language. But the fact that I or the —
machine —have been able to descnbe this sequence so
exactly by no means establishes a presumption that the
pattem will continué. It could continué only if (fl) there
were no human freedom and (b) there was no possibility
of any change in the causes that have given rise to the
observed pattem.
I should accept the claim that a very clear and very
strongly established pattem (of stability, growth, or
decline) can be expected to continué for a little longer,
unless there is definite knowledge of the arrival of new
factors likely to change it But I suggest that for the detec-
tion of such clear, strong and persistent patterns the non-
electronic human brain is normally cheaper, faster, and
more reliable than its electronic rival. Or to put it the
other way round: if it is really necessary to apply such
highly refined methods of mathematical analysis for the
detection of a pattem that one needs an electronic com-
puter, the pattem is too weak and too obscure to be a
suitable basis for extrapolation in real life.

233
 Crude methods of forecasting — after the current pie-
ture has been corrected for abnormalities — are not likely
to lead into the errors of spurious verisimilitude and
spurious detailing — the two greatest vices of the statisti-
cian. Once you have a formula and an electronic Com-
puter, there an awful temptation to squeeze the lemon
is

until it is dry and to present a picture of the future which

through its very precisión and verisimilitude carries con-
viction. Yet a man who uses an imaginary map, thinking it
a true one, is likely to be worse off than someone with
no map at all; for he will fail to inquire wherever he can,
to observe every detail on his way, and to search continu-
ously with all his senses and all his intelligence for indica-
tions of where he should go.
The person who makes the forecasts may still have a
precise appreciation of the assumptions on which they are
based. But the person who uses the forecasts may have
no idea at all that the whole edifice, as is often the case,
stands and falls with one single, unverifiable assumption.
He is impressed by the thoroughness of the job done, by
the fact that everything seems to "add up," and so forth.
If the forecasts were presented quite artlessly, as it were,
on the back of an envelope, he would have a much
better chance of appreciating their tenuous character and
the fact that, forecasts or no forecasts, someone has to
take an entrepreneurial decisión about the unknown
future.

Planning

I have already insisted that a plan is something essentially

different from a forecast. It is a statement of intention, of
what the planners —or their masters —intend to do. Plan-
ning (as I suggest the term should be used) is inseparable
from power. It is natural and indeed desirable that every-
body wielding any kind of power should have some sort of

234
a plan, that is to say, that he should use power deliber-

ately and consciously, looking some distance ahead in

time. In doing so he must consider what other people are
likely to do; in other words, he cannot plan sensibly with-
out doing a certain amount of forecasting. This is quite
straightforward as long as that which has to be forecast
is, in fact, "forecastable," if it relates either to matters
into which human freedom does not enter, or to the
routine actions of a very large number of individuáis, or
to the established plans of other people wielding power.
Unfortunately, the matters to be forecast very often
belong to none of these categories but are dependent on
the individual decisions of single persons or small groups
of persons. In such cases forecasts are little more than
"inspired guesses," and no degree of improvement in fore-
casting technique can help. Of course, some people may
tum.out to make better guesses than others, but this will
not be due to their possessing a better forecasting tech-
nique or better mechanical equipment to help them in
their computations.
What, then, could be the meaning of a "national plan" in
a free society? It cannot mean the concentration of aU
power at one point, because that would imply the end of
freedom: genuine planning is coextensive with power. It
seems to me that the only intelligible meaning of the
words "a national plan" in a free society would be the
fuUest possible statement of intentions by all people
wielding substantial economic power, such statements
being collected and collated by some central agency. The
very inconsistencies of such a composite "plan'* might
give valuable pointers.

Long-Term Forecasts and Feasibility Studies

Let US now tum to long-term forecastmg, by which I

mean producing estimates five or more years ahead. It

235
must be clear that, change being a function of time, the
longe^-term future iseven less predictable than the short-
term. In fact, aU long-term forecasting is somewhat pre-
sumptuous and absurd, unless it is of so general a kind
that it merely states the obvious. All the same, there is

often a practical necessity for "taking a view" on the

future, as decisions have to be taken and long-term com-
mitments entered. Is there nothing that could help?
Here I should like to emphasise again the distinction
between forecasts on the one hand and "exploratory calcu-
lations" or "feasibility studies" on the other. In the one
case I assert that this or that will be the position in, say,

twenty years' time. In the other case I merely explore the

long-term effect of certain assumed tendencies. It is unfor-
tunately tnie that in macro-economics feasibility studies
are very rarely carried beyond the most rudimentary
beginnings. People are content to rely on general fore-
casts which are rarely worth the paper they are written
on.
It may be helpful if I give a few examples. It is very
topical these days to talk about the development of under-
developed countries and countless "plans" (so-called) are
being produced to this end. If we go by the expectations
that are being aroused all over the world, it appears to be
assumed that within a few decades most people the world
over are going to be able to Uve more or less as the west-
ern Europeans are living today. Now, it seems to me, it
would be very instnictive if someone undertook to make a
might
proper, detailed feasibility study of this project. He
choose the year 2000 as the terminal date and work
backwards from there. What would be the required output
of foodstuffs, fuels, metáis, textile fibres, and so forth?
What would be the stock of industrial capital? Naturally,
he would have to introduce many new assumptions as he
went along. Each assumption could then become the object
of a further feasibility study. He might then find that he

236
could not solve his equations unless he introduced assump-
tions which transcended all bounds of reasonable probabU-
ity. This might prove highly instructive. It might conceiv-

ably léad to the conclusión Uiat, while most certainly

there ought to be substantial economic development
throughout the countries where great masses of people
Hve mabject misery, there are certain choices between
altemative patterns of development that could be made,
and that some types of development would appear more
feasible than others.
Long-term thmking, supported by conscientious feasi-
bility studies, would seem to be particularly desirable with
regard to all non-renewable raw materials of limited avail-
ability, that is to say, mainly fossil fuels and metáis. At
present, for instance, there is a replacement of coal by oil.
Some people seem assume that coal is on the way out.
to
A careful making use of all available evi-
feasibility study,
dence of coal, oil, and natural gas reserves, proved as
well as merely assumed to^ exist, would be exceedingly
instructive.
On the subject of population increase and food supplies,

we have had the nearest thing to feasibility studies so far,

coming mainly from United Nations organisations. They
might be carried much further, giving not only the totals of
food production to be attained by 1980 or 2000, but also
showing in much greater detall than has so far been done
the timetable of specific steps that would have to be taken
in the near future if these totals are to be attained.
In all this, the most essential need is a purely intellectual
one: a clear appreciation of the difference between a fore-
cast and a feasibility study. It is surely a sign of statistical

illiteracy to confuse the two. A

long-term forecast, as I
said, is presumptuous; but a long-term feasibility study is a
piece of humble and unpretentious work which we shall
neglect at our peril.
Again the question aríses whether this work could be

237
facilitated by more mechanical aids such as electronic
computers. Personally, I am inclined to doubt it. It seems

to me that the endless multipHcation of mechanical aids

in fields which require judgement more than anything else
is one of the chief dynamic forces behind Parkinson's

Law. Of course, an electronic computer can work out a

vast number of permutations, employing varying assump-
tions, within a few seconds or minutes, while it might take
the non-electronic brain as many months to do the same
Job. But the point is that the non-electronic brain need
never attempt to do that job. By the power of judge-
ment it can concéntrate on a few decisive parameters
which are quite sufficient to outline the ranges of reason-
able probability. Some people imagine that it would be
possible and helpful to set up a machine for long-range
forecasting into which current "news" could be fed con-
tinuously and which, in response, would produce continual
revisions of some long-term forecasts. No doubt, this
would be possible; but would it be helpful? Each item of
"news" has to be judged for its long-term releva nce, and a
sound judgement is generally not possible immediately.
Ñor can I see any valué in the continual revisión of long-

term forecasts, as a matter of mechanical routine. A

forecast is required only when a long-term decisión has to

be taken or reviewed, which is a comparatively rare event

even in the largest of businesses, and then it is worth while
deliberately and conscientiously to assemble the best evi-
dence, to judge each item in the light of accumulated
experience, and finally to come to a view which appears
reasonable to the best brains available. It is a matter of
self-deception that this laborious and uncertain process
could be short-circuited by a piece of mechanical
apparatus.
When it comes to feasibility studies, as distinct from
forecasts, it may occasionally seem useful to have appara-
tus which can quickly test the effect of variations in one's
assumptions. But I have yet to be convinced that a slide

238
rule and a set of compound interest tables are not quite
sufiicient for the purpose.

Unpredictability and Freedom

If I hold a rather negative opinión about the usefulness of

**automation*' in matters of economic forecasting and the
like, I do not underestimate the valué of electronic com-
puters and similar apparatus for other tasks, like solving
mathematical problems or programming production runs.
These latter tasks belong to the exact sciences or their
applications. Their subject matter is non-human, or per-
haps I should say, sub-human. Their very exactitude is a
sign of the absence of human freedom, the absence of
cholee, responsibility and dignity. As soon as human
freedom enters, we are in an entirely different world
where there is great danger in any proliferation of me-
chanical devices. The tendencies which attempt to oblitérate
the distinction should be resisted with the utmost determi-
nation. Great damage to human dignity has resulted from
the misguided attempt of the social sciences to adopt and
imítate the methods of the natural sciences. Economics,
and even more so, applied economics, is not an exact
Science; is in fact, or ought to be, something much
it

greater: a branch of wisdom. Mr. Colin Clark once

claimed "that long-period world economic equilibria
develop themselves in their own peculiar manner, entirely
independently of political and social changes." On the
strength of this metaphysical heresy he wrote a book, in
1941, entitled The Economics of 1960.^ It would be unjust
to say that the picture he drew bears no resemblance to
what actually came to pass; there is, indeed, the kíhd of
resemblance which simply stems from the fact that man
uses his freedom within an unchanged setting of physical
laws of nature. But the lesson from Mr. Clark's book is
that his metaphysical assumption is untrue; that, in fact,

239
 world economic equilibria, even in the longer nin, are
highly dependent on political and social changes; and that
the sophisticated and ingenious methods of forecasting
employed by Mr. Clark merely served to produce a work
of spurious verisimilitude.

Conclusión

I thus come to the cheerful conclusión that life, including

economic life, is still worth because it is sufficiently
living
unpredictable to be interesting. Neither the economist ñor
the statistician will get it "taped." Within the limits of the
physical laws of nature, we
are still masters of our individ-
ual and collective destiny, for good or ill.
But the know-how of the economist, the statistician, the
natural scientist and engineer, and even of the genuine
philosopher can help to clarify the limits within which our
destiny is confined. The future cannot be forecast, but it
can be explored. Feasibility studies can show us where we
appear to be going, and this is more important today than
ever before, since "growth" has become the keynote of
economics all over the world.
In his urgent attempt to obtain reliable knowledge
about his essentially indeterminate future, the modera
man of action may surround himself by ever-growing
armies of forecasters, by ever-growing mountains of
factual data to be digested by ever more wonderful me-
chanical contrivances: I fear that the result is little more
than a huge game of make-believe and an ever more
marvellous vindication of Parkinson's Law. The best
decisions will be based on the judgements of mature
still

non-electronic brains possessed by men who have looked

steadily and calmly at the situation and seen it whole.
*'Stop, look, and listen" is a better motto than "Look it up
in the forecasts.**

240
 2
Towards a Theory of
Large-Scale Organisation

Almost every day we hear of mergers and takeovers;

Britain enters the European Economic Community to
open up larger markets to be served by even larger orga-
nisations. In the socialist countries, nationalisation has
produced vast combines to rival or surpass anything that
has emerged in the capitalist countries. The great majority
of economists and business efficiency experts supports this
trend towards vastness.
In contrast, most of the sociologists and psychologists
insistently wam us of its inherent dangers —dangers to the
integrity of the individual when he feels as nothing more
than a small cog in a vast machine and when the human
working life become increasingly
relationships of his daily
dehumanised; dangers also to efficiency and productivity,
stemming from ever-growing Parkinsonian bureaucracies.
Modem literature, at the same time, paints frightening
pictures of a brave new worid sharply divided between us
and them, tora by mutual suspicion, with a hatred of
authorityfrom below and a contempt of people from
above. The masses react to their rulers in a spirit of sullen
keep things
irresponsibility, while the rulers vainly try to
moving by and coordination, fiscal
precise organisation
inducements, incentives, endless exhortations and threats.*
Undoubtedly this is all a problem of Communications.

241
But the only really effective communication is from man
to man, face to face. Frank Kafka's nightmarish novel,
The Castle, depicls the devastating effects of remote con-
trol. Mr. K., the land surveyor, has been hired by the
authorities, but nobody quite knows how and why. He
tries to get his position clarified, because the people he
meets all tell him: "Unfortunately we have no need of a
land surveyor. There would not be the least use for one
here.*'
So, making every effort to meet authority face to face,
Mr. K. approaches various people who evidently carry
some weight; but others tell him: "You haven't once up
till now come into real contact with our authorities. All
these contacts are merely illusory, but owing to your
ignorañce . you take them to be real."
. .

He fails utterly to do any real work and then receives a

letter from The Castle: "The surveying work which you
have.carried out thus far has my recognition. . . . Do not
slacken your efforts! Bring your work to a successful con-
clusión. Any intemiption would displease me. ... I shall
not forget you.*'
Nobody large-scale organisation; nobody
really likes
likes from a superior who takes orders
to take orders
from a superior who takes orders Even if the rules . . .

devised by bureaucracy are outstandingly humane, nobody

likes to be niled by rules, that is to say, by people whose
answer to every complaint is: "I did not make the rules: I
am merely applying them."
Yet, it seems, lajrge-scale organisation is here to stay.
Therefore it is all the more necessary to think about it
and to theorise aboitt it. The stronger the current, the
greater the need for skilful navigation.
The fundamental task is to achieve smallness within
large organisation.
Once a large organisation has come into being, it nor-
mally goes through alternating phases of centralising and
deceníralisingy like swings of a pendulum. Whenever one

242
encounters such oppositesy each of them with persuasivc
arguments in its favour, it is worth looking into the depth
of the problem for something more than compromise,
more than a half-and-half solution. Maybe what we really
need is not either-or but the-one'and-the-other'Ot'the
same-time.
This very familiar problem pervades the whole of real
life, although it is highly impopular with people who spend
most of their time on laboratory problems from which all
extraneous factors have been carefuUy eliminated. For
whatever we do in real life, we must try to do justice to a
situation which includes all so-called extraneous factors.
And we always have to face the simultaneous requirement
for order and freedom.
In any organisation, large or small, there must be a cer-
tain claríty and orderllness; if things fall into disorder,
nothing can be accomplished. Yet, orderliness, as such, is
static and lifeless; so there must also be plenty of elbow-
room and scope for breaking through the established
order, to do the thing never done before, never antici-
pated by the guardians of orderliness, the new, unpre-
dicted and unpredictable outcome of a man's creative
idea.
Therefore any organisation has to strive continuously
for the orderliness of order and the disorderliness of
creative freedom. And the specific danger inherent in
large-scale organisation is that its natural bias and tend-
ency favour order, at the expense of creative freedom.
We can associate many further pairs of opposites with
this basic pair of order and freedom. Centralisation is
mainly an idea of order; decentralisation, one of freedom.
The man of order is typically the accountant and, gen-
erally, the administrator; while the man of creative free-
dom is the entrepreneur, Order requires intelligence and
is conducive to efficiency; while freedom calis for, and
opens the door to, intuition and leads to innovation.
The larger an organisation, the more obvious and ines-

243
capable is the need for order. But if this need is looked

after with such efficiency and perfection that no scope

remains for man to exercise his creative intuition, for
entrepreneurial disorder, the organisation becomes mori-
bund and a desert of frustration.
These considerations form the background to an
attempt towards a theory of large-scale organisation
which I shall now develop in the form of five principies.
The first principie is called The Principie of Subsidianty
or The Principie of Subsidiary Function. A famous formu-
lation of this principie reads as follows: "Itis an injustice

and at the same time a grave and disturbance of right

evil
order to assign to a greater and higher association what
lesser and subordinate organisations can do. For every
social activity ought of its very natiire to fumish help to
the members of the body social and never destroy and
absorb them." These sentences were meant for society as a
whole, but they apply equally to the different levéis within
a large organisation. The higher level must not absorb the
functions of the lower one, on the assumption that, being
higher, it be wiser and fulfil them more
will automatically
efiBciently.Loyalty can grow only from the smaller units
to the larger (and higher) ones, not the other way round
—and loyalty is an essential element in the health of any
organisation.
The Principie of Subsidiary Function implies that the
burden of proof lies always on those who want to deprive
a lower level of its function, and thereby of its freedom
and responsibility in that respect; they have to prove that
the lower level is incapable of fulfilling this function satis-
factorily and that the higher level can actually do much
better. **Those in command [to continué the quotation]
should be sure that the more perfectly a graduated order
is preserved among the various associations, in observing

the principie of subsidiary function, the stronger will be

the social authority and effectiveness and the happier and
more prosperous the condition of the State."^

244
 The opposites of centralising and decentralising are
now far behind us: the Principie of Subsidiary Function
teaches us that the centre will gain in authority and effec-
tiveness if the freedom and responsibility of the lower

formations are carefully preserved, with the result that

the organisation as a whole will be "happier and more
prosperous.**
How can such a stracture be achievcd? From the
administrator*s point of view, from the poínt of view
i.e.

of orderliness, it will look untidy, comparíng most

unfavourably with the clear-cut logic of a monolith. The
large organisation will consist of many semi-autonomous
units, which we may cali quasi-firms, Each of them will

have a large amount of freedom, to give the greatest

possible chance to creativity and entrepreneurship.
The structure of the organisation can then be symbol-
ised by a man holding a large number of balloons in his
hand. Each of the balloons h^ its own buoyancy and lift,
and the man himself does not lord it over the balloons,
but stands beneath them, yet holding all the strings firmly
in his hand. Every balloon is not only an administrative
but also an entrepreneuricd unit. The monollthic orga-
nisation, by contrast, might be symbolised by a Christmas
tree, with a star at the top and a lot of nuts and other
useful things undemeath. Everything derives from the top
and depends on it. Real freedom and entrepreneurship
can exist only at the top.
Therefore, the task is to look at the organisation's
activitiesone by one and set up as many quasi-firms as
may seem possible and reasonable. For example, the British
National Coal Board, one of the largest conmiercial orga-
nisations in Europe, has found it possible to set up quasi-
ñrms under various ñames for its opencast mining, its
brickworks, and its coal products. But the process did not
end there. Special, relatively self-contained organisational
forms have been evolved for its road transport activities,
estates, and retail business, not to mention various enter-

245
prises under the heading of diversification. The
falling
board*s primary activity, deep-mined coal-getting, has
been organised in seventeen áreas, each of them with the
status of a quasi-firm. The source already quoted describes
the results of such a structurisation as foUows: "Thereby
[the centre] will more freely, powerfully and effectively
do all those things which belong to it alone because it
alone can do them: directing, watching, urging, restrain-
ing, as occasion requires and necessity demands."
For central control to be meaningful and effective, a
second principie has to be applied, which we shall cali
The Principie of Vindication. To vindícate means: to
defend against reproach or accusation; to prove to be tnie
and valid; to justify; to uphold; so this principie describes
very well one of the most important duties of the central
authority towards the lower formations. Good govern-
ment is always govemment by exception. Except for
exceptional cases, the subsidiary unit must be defended
against reproach and upheld. This means that the excep-
tion must be sufficiently cleariy defined, so that the quasi-
firm is able to know without doubt whether or not it is
performing satisfactorily.
Administrators taken as a pure type, namely as men of
orderiiness, are happy when they have everything under
control. Armed with computéis, they can indeed now do
so and can insist on accountability with regard to an
almost infinite number of items — output, productivity,
many dijfferent cost items, non-operational expenditure,
and so on, leading up to profit or loss. This is logical
enough: but real life is bigger than logic. If a large num-
ber of Gritería is laid down for accountability, every
on one item or another;
subsidiary unit can be faulted
govemment by exception becomes a mockery, and no one
can ever be sure how his unit stands.
In its ideal application, the Principie of Vindication
would permit only one criterion for accountability in a
conmiercial organisation, namely profitability. Of course,

246
such a criterion would be subject to the quasi-firm*s
observing general rules and policies laid down by the
centre. Ideáis can rarely be attained in the real world, but
they are none the less meaningful. They imply that any
departure from the ideal has to be specially argued and
Unless the number of criteria for accountability
justified.

is kept very small indeed, creativity and entrepreneurship

cannot flourish ¡n the quasi-fírm.

While profitability must be the final criterion, it is not
always permissible to apply it mechanically. Some subsidi-
ary units may be exceptionally well placed, others, excep-
tionally badly; some may have service functions with
regard to the organisation as a whole or other special
obligations which have to be fulfilled without primary
regard to profitability. In such cases, the measurement of
profitabilitymust be modifíed in advance, by what we
may and subsidies.
cali rents
If a unit enjoys special and inescapable advantages, it
must pay an appropriate rent, but if it has to cope with
inescapable disadvantages, it must be granted a special
credit or subsidy. Such a system can sufficiently equalise
the profitability chances of the various. units, so that profit
becomes a meaningful indication of achievement. If such
an equalisation is needed but not applied, the fortúnate
units will be featherbedded, while others may be lying on
a bed of nails. This cannot be good for either morale or
performance.
If, in accordance with the Principie of Vindication, an

organisation adopts profitability as the primary criterion

for accountability —
profitability as modified, if need be,
by rents —
and subsidies govemment by exception becomes
possible. The centre can then concéntrate its activities on
"directing, watching, urging, restraining, as occasion re-
quires and necessity demands," which, of course, must go
on all the time with regard to all its subsidiary units.
Exceptions can be defined clearly. The centre will have
two opportunities for intervening exceptionally. The first

247
occurs when the centre and the subsidiary unit cannot
come to a free agreement on the rent or subsidy, as the
case may be, which is to be applied. In such circumstances
the centre has to undertake a full efficiency audit Of the
unit to obtain an objective assessment of the unifs real
potential. The second opportunity arises when the unit
fails to eam a profit, after allowing for rent or subsidy.
The management of the unit is then in a precarious posi-
tion: if the centre*s eflSciency audit produces highly
unfavourable evidence, the management may have to be
changed.
The third principie is The Principie of Identification.
Each subsidiary unit or quasi-firm must have both a profit
and loss account and a balance sheet. From the point of
view of orderiiness a profit and loss statement is quite
sufficient, sincefrom this one can know whether or not
the unit is contributing financially to the organization. But
for the entrepreneur, a balance sheet is essential, even if it
is used only for interaal purposes. Why is it not sufficient

to have but one balance sheet for the organisation as a

whole?
Business operates with a certain economic substance,
and this substance diminishes as a result of losses, and
grows as a result of profit. What happens to the unit*s
profits or losses at the end of the financial year? They
ñow into the totality of the organisation's accounts; as far
as the unit is concemed, they simply disappear. In the

absence of a balance sheet, or something in the nature of a

balance sheet, the unit always enters the new financial
year with a nil balance. This cannot be ríght.
A unit's success should lead to greater freedom and
financial scope for the unit, while failure—in the form of
losses — should lead to restriction and disability. One wants
to reinforce success and discrimínate against failure. The
balance sheet describes the economic substance as aug-
mented or diminished by current results. This enables aU

248
concerned to follow the effect of operations qn substance.
Profits and losses are carried forward and not wiped out.
Therefore, every quasi-firm should have its sepárate bal-
ance sheet, in which profits can appear as loans to the
centre and losses as loans from the centre. This is a mat-
ter of great psychological importance.
I now tum to the fourth principie, which can be called
The of Motivation. It is a trite and obvious
Principie
truism that people act in accordance with their motives.
All the same, for a large organisation, with its bureaucra-
cies, its remote and impersonal controls, its many abstract
rules and regulations, and above all the relative incom-
prehensibility that stems from its very size, motivation is
the central problem. At the top, the management has no
problem of motivation, but going down the scale, the
,

problem becomes increasingly acute. This is not the place

to go into the details of this vast and diflScult subject.
Modem industrial society, typified by large-scale orga-
nisations, gives far too little thought to it. Managements
assume that people work simply for money, for the pay-
packet at the end of the week. No doubt, this is true up to
a point, but when a worker, asked why he worked only
four shifts last week, answers: "Because I couldn't make
ends meet on three shifts* wages,*' everybody is stunned
and feels check-mated.
Intellectual confusión exacts its pnce. We preach the
virtues of hard work and restraint while painting utopian
pictures of unlimited consumption without either work or
restraint. We complain when an appeal for greater effort

meets with the ungracious reply: "I couldn't care less,"

while promoting dreams about automation to do away
with manual work, and about the computer relieving men
from the burden of using their brains.
A recent Reith lecturer announced that when a minor-
ity will be "able to feed, maintain, and supply the major-
ity, it makes no sense to keep in the production stream

249
those who have no desire to be in it." Many have no
desire to be in because their work does not interest
it,

them, providing them with neither challenge ñor satisfac-

tion, and has no other merit in their eyes than that it leads
to a pay-packet at the end of the week. If our intellectual
leaders treat work as nothing but a necessary evil soon to
be abolished as far as the majority is conceraed, the urge
to minimise it right away is hardly a surprising reaction,
and the problem of motivation becomes insoluble.
However that may be, the health of a large organisa-
tion depends to an extraordinary extent on its ability to do
justice to the Principie of Motivation. Any organisational
structure that is conceived without regard to this funda-
mental tnith is unlikely to succeed.
My and last, principie is The Principie of the
fifth,

Middle Axiom. Top management in a large organisation

inevitably occupies a very difficult position. It carnes
responsibility for everythingor that happens, fails to
happen, throughout the organisation, although it is far
removed from the actual scene of events. It can deal with
many well-established functions by means of directives,
rules and regulations. But what about new developments,
new Creative ideas? What about progress, the entre-
preneurial activity par excellence?
We come back to our starting point: all real human
problems from the antinomy of order and freedom.
arise
Antinomy means a contradiction between two laws; a con-
flict of authority; opposition between laws or principies

that appear to be founded equally in reason.

Excellentl This is real Ufe, full of antinomies and bigger
than logic. Without order, planning, predictability, central
control, accountancy, instructions to the underiings, obedi-
ence, discipline —without these, nothing fruitful can hap-
pen, because everything disintegrates. And yet —without
the magnanimity of disorder, the happy abandon, the
entrepreneurship venturing into the unknown and incalcu-
lable, without the risk and the gamble, the creativo imagi-

250
nation rushing in where bureaucratic angels fear to tread
—without this, life is a mockery and a disgrace.
The centre can easily look after order: it is not so easy
to look after freedom and The centre has the
creativity.
power to establish order, but no amount of power evokes
the Creative contribution. How, then, can top management
at the centre work for progress and innovation? Assuming
that it knows what ought to be done: how can the man-
agement get it done throughout the organísation? This is
where the Principie of the Middle Axiom comes in.
An axiom is a self-evident truth which is assented to as
soon as enunciated. The centre can enunciate the truth it
has discovered —
that this or that is "the right thing to do."
Soma years ago, the most important truth to be enunci-
ated by the National Coal Board was concentration of
output, that is, to concéntrate coal-getting on fewer coal-
faces, with a higher output from each. Everybody, of
course, immediately assented to it, but, not surprisingly,
very little happened.
A change of this kind requires a lot of work, a lot of
new thinking and planning at every coUiery, with many
natural obstacles and difl&culties to be overeóme. How is

the centre, the National Board in this case, to speed the

change-over? It can, of course, preach the new doctrine.
But what is the use, everybody agrees anyhow? Preach-
if

ing from the centre maintains the freedom and responsi-

bility of the lower formations, but it incurs the valid
criticism that "they only talk and do not do anything."
Altematively, the centre can issue instructions, but, being
remote from the actual scene of operations, the central
management will incur the valid criticism that "it attempts
to run the industry from Headquarters," sacrificing the
need for freedom to the need for order and losing the
Creative participation of the people at the lower forma-
tions —the very people who are most closely in touch with
the actual job. Neither the soft method of government by
exhortation ñor the tough method of government by

251
 —
instruction meets the requirements of the case. What is

required something in between, a middle axiom, an

is

order from above which is yet not quite an order.

When it decided to concéntrate output, the National
Coal Board laid down certain minimum standards for
opening up new coalfaces, with the proviso that if any
Área found it necessary to open a coalface that would
fall short of these standards, a record of the decisión
should be entered into a book specially provided for the
purpose, and this record should contain answers to three
questions:

Why can this particular coalface not be laid out in such

a way that the required minimum size is attained?
Why does this particular bit of coal have to be worked
ataU?
What is the approximate profitability of the coalface as
planned?

This was a tnie and effective way of applying the Prin-

cipie of the Middle Axiom and it had an almost magical
effect. Concentration of output really got going, with
excellent results for the industry as a whole. The centre
had found a way of going far beyond mere exhortation,
yet without in any way diminishing the freedom and
responsibility of the lower formations.
Another middle axiom can be found in the device of
Impact Statistics. Normally, statistics are collected for the
benefit of the coUector, who needs —
or thinks he needs
certain quantitative Information. Impact statistics have a
different purpose, namely to make the supplier of the
statistic, a responsible person at the lower formation,
aware of certain which he might otherwise over-
facts
look. This device has been successfully used in the coal
industry, particularly in the field of safety.
Discovering a middle axiom is always a considerable
achievement. To preach is easy; so also is issuing instruc-
tions. But it is diñicult indeed for top management to

252
carry through its creative ideas without impairing the
freedom and responsibility of the lower formations.
I have expounded five principies which I believe to be

relevant to a theory of large-scale organisation, and have

given a more or less intriguing ñame to each of them.
What is the use of all this? Is it merely an intellectual
game? Scme readers will no doubt think so. Others and —
they are the ones for whom this chapter has been written
— might say: "You are putting into v/ords what I have
been trying to do for years." Excel lent! Many of us have
been struggling for years with the problems presented by
large-scale organisation, problems which are becoming
ever more acute. To struggle more successfully, we need a
theory, built up from principies. But from where do the
principies come? They come from observation and prac-
tical understanding.
The best formulation of the necessary interplay of
theory and practice, that I know comes from Mao
of,

Tse-tung. Go to the practical people, he says, and leam

from them: then synthesise their experience into principies
and theories; and then return to the practical people and
cali upon them to put these principies and niethods into
practice so as .to solve their problems and achieve freedom
and happiness.^

253
 —

3
Socialism

Both theoretical considerations and practical experience

have led me to the conclusión that socialism is of interest
solely for its non-economic valúes and the possibility it
creates for the overcoming of the religión of economics.
A society ruled primarily by the idolatry of enríchissez-
vous, which celébrales millionaires as its culture héroes,
can gain nothing from socialisation that could not also be
gained without it.

It is not surprising, therefore, that many socialists in

so-called advanced societies, who are themselves
—
whether they know it or not devotees of the religión of
economics, are today wondering whether nationalisation
is not really beside the point. It causes a lot of trouble
so why bother with it? The extinction of prívate owner-
ship, by itself, does not produce magnificeqt results:
everything worth while has to be worked for, devot-
still

edly and patiently, and the pursuit of financial viability,

combined with the pursuit of higher social aims, produces
many dilemmas, many seeming contradictions, and
imposes extra heavy burdens on management.
If the purpose of nationalisation is primarily to achieve
faster economic growth, higher efficiency, better planning,
and so forth, there is bound to be disappointment. The
idea of conducting the entire economy on the basis of
prívate greed, as Marx well recognised, has shown an
extraordinary power to transform the world.

254
 The bourgeoisie, wherever it has got the upper hand, has
put an end to all and has
feudal, patriarchal, idyllic relations
Icft no other nexus between man and maw than naked self-

interest. ...
The bourgeoisie, by the rapid improvement of all instru-
ments of production, by the immensely facilitated means of
communication, draws all, even the most barbarían, nations
into civilisation. [Communist Manifestó]

The strength of the idea of prívate enterprise lies in its

terrifying simplicity. It suggests that the totality of Ufe

can be reduced to one aspect — profits.The businessman,
as a prívate individual, may still be interested in other
aspects —
of life perhaps even in goodness, truth and
—
beauty but as a businessman he concems himself only
with profits. In this respect, the idea of prívate enterpríse
fits exactly into the idea of The Market, which. in an

earlier chapter, I called "the institutionalisation of individ-

ualism and non-responsibility." Equally, it fits perfectly
into the raodem trend towards total quantification at the
expense of the appreciation of qualitative differences; for
is not concerned with what it produces
prívate enterpríse
but only with what it gains from production.

Ever>'thing becomes crystal clear after you have

— —
reduced reality to one one only of its thousand aspects.
—
You know what to do whatever produces profits; you
—
know what to avoid whatever reduces thern or makes a
loss. And there is at the same time a perfect measuríng
rod for the degree of success or failure. Let no one befog
the issue by asking whether a particular action is condu-

cive to the wealth and well-being ofwhether it society,

leads to moral, aesthetic, or cultural enríchment. Simply
ñnd out whether it pays; simply investigate whether there
is an alternative that pays better. If there is, choose the

alternaíive.
It is no accident that successful businesmen are often
astonishingly primitive; they live in a world made primi-
tive by this process of reduction. They fit into this simpli-

255
fied versión of the world and are satisfied with it. And
when the real world occasionally makes its existence
known and attempts to forcé upon their attention a dif-
ferent one of its facets, one not provided for in their
philosophy, they tend to become quite helpless and con-
fused. They feel exposed to incalculable dangers and
"unsound" forces and freely predict general disaster. As a
result, their judgements on actions dictated by a more
comprehensive outlook on the meaning and purpose of life
are generally quite worthless. It is a foregone conclusión
for them that a different scheme of things, a business,
for instance, that is not based on prívate owhership, can-
not possibly succeed. If it succeeds all the same, there
—
must be a sinister explanation "exploitation of the con-
sumer," "hidden subsidies,'* "forced labour," "monopoly,"
"dumping," or some dark and dreadful accumulation of a
debit account which the future will suddenly present.
But this is a digression. The point is that the real
strength of the theory of prívate enterprise lies in this
which fits so admirably also into the
ruthless simplification,
mental pattems created by the phenomenal successes of
science. The strength of science, too, deríves from a
"reduction" of reality to one or the other of its many
aspects, primarily the reduction of quality to quantity. But
just as the powerful concentration of nineteenth-century
scienceon the mechanical aspects of reality had to be
'

abandoned because there was too much of reality that

simply did not fit, so the powerful concentration of busi-
ness on the aspect of "profits" has had to be modified
life

because it failed to do justice to the real needs of man. It

was the historical achievement of socialists to push this
development, with the result that the favourite phrase of
the enlightened capitalist today is: "We are all socialists
now."
That is to say, the capitalist
today wishes to deny that
the one aim of all his activities is profit. He says:
final
"Oh no, we do a lot for our employees which we do not

256
 really have to do; we try to preserve the beauty of the
countiyside; we engage in research that may not pay off,"
etc., etc. All these claims are very familiar; sometimes

they are justified, sometimes not

What concems us here is this: prívate enterpríse "oíd
style," let us say, goes simply for profits; it thereby
achieves a most powerful simplificatioii of objectives and
gains a perfect measuríng rod of success or failm-e. Prí-
vate enterpríse "new style," on the other hand (let us
assume), pursues a great varíety of objectives; it tríes to
consider the whole fulness of life and not merely the
móney-making aspect; it therefore achieves no powerful
simpUfication of objectives and possesses no reliable meas-
uríng rod of success or failure. If this is so, prívate enter-
príse "new style," as organised in large joint stock com-
panies, differs from public enterpríse only in one respect;
namely that it provides an uneamed income to its share-

holders.
Qearly, the protagonists of capitalism cannot have it
both ways. They cannot say "We are all socialists now"
and maintain at the same time that socialism cannot possi-
bly work. If they themselves pursue objectives other than
that of profít-making, then they cannot very well argüe
that it becomes impossible to administer the nation*s
means of production efficiently as soon as considerations
other than those of profit-making are allowed to enter. If
they can manage without the crude yardstick of money-
making, so can nationalised industry.
On the other hand, if all this is rather a sham and prí-
vate enterpríse works for profit and (practicaUy) nothing
else; if its pursuit of other objectives is in fact solely
dependent on profít-making and constitutes merely its own
cholee of what to do with some of the profits, then the
sooner this is made clear the better. In that case, prívate
enterpríse could still claim to possess the power of sim-
plicity. Its case against public enterpríse would be that the
latter is bound to be inefficient precisely because it

257
 —
attempts to pursue several objectives at the same time,
and the case of socialists against the former would be the
traditional case, which is not primarily an economic one,
namely, that it degrades life by its very simplicity, by

basing all economic activity solely on the motive of prívate

greed.
A total rejection of public ownership means a total

afíirmation of prívate ownership. This is just as great a

piece of dogmatism as the opposite one of the most
fanatical communist. But while all fanaticism shows intel-
lectualweakncíss, a fanaticism about the means to be
employed for reaching quite uncertain objectives is sheer
feeble-mindedness.
As mentioned before. the whole crux of economic life
—
and indeed of life in general is that it constantly requires
the living reconciliation of onposites which, in strict logic,
are irreconcilable. In macro-economics (the management
of whole societies) it is necessary always to ha ve both
planning and freedom —not by way of a weak and lifeless

compromise, but by a free recognition of the legitimacy of

and need for both. Equally in micro-economics (the man-
agement of individual enterpríses): on the one hand it is
essential that there should be full manageríal respon-
sibility and authority; yet it is equally essential that there
should be a democratic and free participation of the
workers in management decisions. Again, it is not a ques-
tion of mitigating the opposition of these two needs by
some half-hearted compromise that satisfies neither of
them, but to recognise them both. The exclusive concen-
tration on one of the opposites — say, on planning, pro-
duces Stalinism; while the exclusive concentration on the
The normal answer to either is a
other produces chaos.
swing of the pendulum to the other extreme. Yet the
normal answer is not the only possible answer. A gener-
ous and magnanimous intellectual eflíort the opposite of —
nagging, malevolent críticism —
can enable a society, at

258
least for a period, to find a middie way that reconciles the
opposites without degrading them both.
The same applies to the choice of objectives in business
life.One of the opposites —represented by prívate enter-
prise "oíd style" — is the need for simplicíty and measura-
bility, which is best fulfilled by a strict limitation of
outlook to "profitability" and nothing else. The other
opposite' —represented by the original "idealistic" concep-
tion of public enterprise — is the need for a comprehensive
and broad humanity in the conduct of economic affairs.
The former, if exclusively adhered to, leads to the total
destruction of the dignity of man; the latter, to a chaotic
kind of inefficiency.
There are no "final solutions" to this kind of problem.
There is only a living solution achieved day by day on a
basis of a clear recognition that both opposites are valid,
Ownership, whether public or prívate, is merely an
element of framework. It does not by itself settle the kind
of objectives to be pursued within the framework. From
this point of view it is correct to say that ownership is not
the decisive question. But it is also necessary to recognise
that ownership of the means of production is
prívate
severely limited in its freedom of choice of objectives,
because it is compelled to be profit-seeking, and tends to
take a narrow and selfish view of things. Public ownership
gives complete freedom in the choice of objectives and
can therefore be used for any purpose that may be chosen.
While prívate ownership an instniment that by itself
is

largely detennines the ends for which it can be employed,

public ownership is an instniment the ends of which are
undetermined and need to be consciously chosen.
There is therefore really no strong case for public
ownership if the objectives to be pursued by nationalised
industry are to be just as narrow, just as limited, as those
of capitalist production: profitability and nothing else.
Herein lies the real danger to nationalisation in Brítain at
the present time, not in any imagined inefl&ciency.

259
 —

The campaígn of the enemies of nationalisation consists

of two distinctly sepárate moves. The first move is an
attempt ío convince the public at large and the people
engaged in the nationalised sector that the only thing that
matters in the administration of the means of production,
distribution,and exchange is profitabüity; that any depar-
ture from this sacred standard and particulcrly a depar-
ture by nationalised industry —
imposes an intolerable
burden on everyone and is directly responsible for any-
thing that may go wrong in the economy as a whole.
This campaign is remarkably successful. The second move
is is really nothing special at
to suggest that since there
all behaviour of nationalised industry, and henee no
in the
promise of any progress towards a better society, any
further nationalisation would be an obvious case of dog-
matic inflexibility, mere "grab" organised by frustrated
a
politicians, untaught, unteachable, and incapable of intel-
lectual doubt. This neat litíle plan has all the more chance

of success can be supported by a govemmental price

if it

policy for the products of the nationalised industries which

makes it virtually impossible for them to eam a profit.
It must be admitted that this strategy, aided by a sys-

tematic smear campaign apainst the nationalised industries,

has not been without effect on socialist thinking.
The reason is neither an error in the original socialist
inspiration ñor any actual failure in the conduct of the
nationalised industry —accusations of that kind are quite
insupportable —but a lack of visión on the part of the
socialists themselves. They will not recover, and nationali-
sation will not fulfil its function, unless they recover their
visión.
What is at stake is not economics but culture; not the
standard of living but the quality of life. Economics and
the standard of living can just as well be looked after by a
capitalist system, moderated by a bit of planning and
redistributive taxation. But culture and, gencrally, the
quality of life, can now only be debased by such a system.

260
 Socialists should insist on using the nationalised indus-
tries not simply to out-capitalisethe capitalists —
an
attempt in which they may or may not succeed —but to
evolve a more democratic and dignified system of indus-
trial administration, a more humane employment of
machinery, and a more intelligent utilisation of the fniits
of human ingenuity and efiíort If they can do that, they
have the future in their hands. If they cannot, they have
nothing to offer that is worthy of the sweat of free-bora
men.

261
 4
Ownership

"It h obvious, indeed, that no change of system or

machinery can avert those causes of social malo.ise which
consist in the egotism, greed, or quarrelsomeness of human
nature. What it can do is to créate an environment in
which those are not the qualities which are encouraged.
It cannot secure that men Uve up to their principies. What
it can do is to establish their social order upon principies

to which, if they please, they can live up and not live

down. It cannot control their actions. It can offer them
an end on which to fix their minds. And, as their minds
are, so in the long run and with exceptions, their practical
activity will be."
These words of R. H. Tawney were written many dec-
ades ago. They have lost nothing of their topicality, except
that today we are concemed not only with social malaise
but also, most urgently, with a malaise of the ecosystem
or biosphere which threatens the very survival of the
human race. Every problem touched upon in the preced-
ing chapters leads to^the question of "system or machin-
ery," although, as I have argued all along, no system or

machinery or economic doctrine or theory stands on its

own feet: it is invariably built on a metaphysical founda-
tion, that is to say, upon man's basic outlook on life, its
meaning and its purpose. I have talked abouí the religión
of economics, the idol worship of material possessions, of
consumption and the so-called standard of living, and the

262
fateful propensity that rejoices in the fact that •'what were
luxuríes to our fathers have become necessitíes for us."
Systems are never more ñor less than incarnations of
man*s most basic altitudes. Some incamations, indeed, are
more perfect than others. General evidence of material
progress would suggest that the modern prívate enterprise
system is —or has been— the most perfect instrument for
the pursuit of personal enríchment. The modern prívate
enterpríse system ingeniously employs the human urges of
greed and envy as its motive power, but manages to over-

eóme most blatant deficiencies of laissez-faire by

the
means of Keynesian economic management, a bit of redis-
tríbutive taxation, and the "countervailing power** of the
trade unions.
Can such a system conceivably deal with the problems
we are now having to face? The answer is self-evident:
greed and envy demand continuous and limitless eco-
nomic growth of a materíal kind, without proper régard
for conservation, and this type of growth cannot possibly
fit into a finite environment. We must therefore study

the essential nature of the prívate enterpríse system and

the possibilities of evolving ari altemative system which
might fit the new situation.
The essence of prívate enterpríse is the prívate owner-
ship of the means of production, distríbution, and
exchange. Not surprísingly, therefore, the crítics of prívate
enterpríse have advocated and in many cases successfully
enforced the conversión of prívate ownership into
so-called public or collective ownership. Let us look, first
of all, meaning of "ownership** or "property."
at the
As first and most basic
regards prívate property, the
distinction is between (a) property that is an aid to
Creative work and (6) property that is an altemative to it
There is something natural and healthy about the fonner
— the prívate property of the working propríetor; and
there is something unnatural and unheaJthy about the
latter —
^the prívate property of the passive owner who lives

263
parasitically on the work of others. This basic distinction
was clearly seen by Tawney, who followed that "it is idle,

therefore, to present a case for or against prívate property

without specifying the particular forms of property to
which reference is made."

For it is not prívate ownership, but prívate ownership

divorced from work, which is corrupíing to the principie

of industry; and the idea of some socialists that prívate

property in land or capital is necessarily mischievous is a
piece of scholastic pedantry as absurd as that of those con-
servatives who would invest all property with some kind of
mysteríous sanctity.

Prívate enterprise carríed on with property of the first

category is automatically small-scale, personal, and local.

It carnes no wider social responsibilities. Its responsibili-
ities consumer can be safeguarded by the consumejT
to the
himself. Social legislation and trade unión vigilance can
protect the employee. No great prívate fortunes can be
gained from small-scale enterpríses, yet its social utility is
enormous.
It is immediately apparent that in this matter of prívate

ownership the question of scale is decisive. When we

move from small-scale to medium-scale, the connection
between ownership and work already becomes attenuated;
prívate enterpríse tends to become impersonal and also a
significant social factor in the locality; it may even assume
more than local significance. The very idea of prívate
property becomes increasingly misleading.

1. The owner, employing salaried managers, does not

need to be a proprietor to be able to do his work. His

ownership, therefore, ceases to be functionally necessary.
It becomes exploitative if he appropriates profit in ex-

cess of a fair salary to himself and a return on his capital

no higher than current rates for capital borrowed from
outside sources.
2. High profits are either fortuitous or they are the

264
 achievement not of the owner but of the whole orga-
nisation. It is therefore unjust and socially disruptive

if they are appropriated by the owner alone. They should

be shared with all members of the organisation. If they

are "ploughed back" they should be "free capital" col-
lectively owned, instead of accruing automatically to
the wealth of the original owner.
3. Médium size, leading to impersonal relationships,

poses new questions as to the exercise of control. Even

autocratic control is no serious problem in small-scale
enterprise which, led by a working proprietor, has
almost a family character. It is incompatible with human
dignity and genuine efficiency when the enterprise ex-
ceeds a certain —very modest— size. There is need, then,
for the conscious and systematic development of Com-
munications and consultation to allow all members of
the organisation some degree of genuine participation
in management.
4. The and weight of the firm in its
social significance
locality and wider ramifications cali for some degree
its

of "socialisation of ownership" beyond the members of

the firm itself. This "socialisation" may be effected by
regularly devoting a part of the fírm's profits to public
or charitable purposes and bringing in trustees from
outside.

There are prívate enterprise ñrms United King-

in the
dom and other capitalist which have carried
countries
these id;¿as into successful practice and have thereby over-
eóme the objcctionable and socially disruptive features
which are inherent in the prívate ownership of the means
of production when extended beyond small-scale. Scott
Bader & Co. Ltd., at Wollaston in Northamptonshire, is
ene of them, A more detailed descríption of their experí-
ences and experímentation will be given in a later chapter.
When we come to large-scale enterprises, the idea of
prívate ownership becomes an absurdity. The property is

265
not and cannot be prívate in any real sense. Again, R. H.
Tawney saw this with complete clarity:

Such property may be called passive property, or property

for acquisition, for exploitation, or for power, to distinguish
it from the property which is actively used by its owncr for
the conduct of bis professíon or tbe upkeep of bis household.
To the lawycr the first is, of course, as fully property as the
second. It is questionable, however, whether economista
should cali it "property** at all . since it is not identical
. .

with the rights which secure tbe owner the produce of bis
toil, but is the opposite of them.

The so-Called prívate ownership of large-scale enterprises

is no way analogous to the simple property of the small
in
landowner, craftsman, or entrepreneur. It is, as Tawney
says, analogous to "the feudal dues which robbed the
French peasant of part of bis produce till the revoluti^n
abolished them.**

All these rights — royalties, ground-rents, monopoly profits,

surpluses of all kinds —are "property.** The criticism most
fatal to them . . . is contained in the arguments by which
property is The meaning of the institution,
usually defended.
it is said, encourage industry by securing that the
is to
worker shall receive the produce of bis toil. But then, pre-
cisely in proportion as it is important to preserve the prop-
erty wliicb a man has in the results of bis labour, is it
important to abolish that which he has in the results of the
labour of someone else.

To sum up:

1. In small-scale enterpríse, prívate ownership is

natural, fruitful, and just.

2. In medium-scale enterpríse, prívate ownership is

already to a large extent functionally unnecessary. The

idea of "property" becomes strained, unfruitful, and
unjust. If there is only one owner or a small group of
owners, there can be, and should be, a voluntary sur-

266
 render of privilege to the wider group of actual workers
— as in the case of Scott Bader & Co. I td. Such an act
of generosity may be unlikely when there is a large
number of anonymous shareholders, but legislation could
pave the way even then.
3. prívate ownership is a
In large-scale enterprise,
fiction for the purpose of enabling functionless owners
to live parasitically on the labour of others. It is not
only unjust but also an irrational element which distorts
all relationships within the enterprise. To quote Tawney

again:

If every member of a group puts something into a common

pool on condition of taking something out, they may still
quarrel about the size of the shares but, if the total is . . .

known and the claims are admitted, that is all they can
quarrel about. . . . But in industry the claims are not all

admitted, for those who put nothing in demand to take

something out.

There are many methods of doing away with so-called

most prom-
prívate ownership in large-scale enterprise; the
inent one is generally referred to as "nationalisation."

But nationalisation is a word which is neither very felicitous

ñor free from ambiguity. Properly used it means merely
ownership by a body representing the -general public of
. . .

consumers. No language possesses a vocabulary to ex-

, . .

press neatly the finer shades in the numerous possible

varieties of organisation under which a public service may
be carried on.
The result has been that the singularly colourless word
"nationalisation" almost inevitably tends to be charged with
a highly specialised and quité arbitrary body of suggestions.
It has come in practice to be used as equivalent to a particu-

lar method of administration, under which officials employed

by the State step into the position of the present directors of
industry and exercise all the power which they exercised. So

267

!k
 —
those who desire to maintain the system under which industry
¡s carried on, not as a profcssion serving the public, but for
the advantage of shareholders, attack nationalisation on the
ground that State management is necessaríly inefficient

A number of large industries have been "nationalised** in

Brítain. They have demonstrated the obvious truth that
the quality of an industry depends on the people who run
it and not on abscntee owners. Yet the nationalised indus-

tries, in spite of their great achievements, are still being

pursued by the implacable hatred of certain privileged

groups. The incessant propaganda agarnst them tends to
mislead even people who do not share the hatred and
ought to know better. Private enterprise spokesmen never
tire of asking for more "accountability** of nationalised
industries. This may be thought to be somewhat ironic
since the accountability of these entennises, which work
solely in the public interest, is already very highly devel-
oped, while that of private industry, which works avoW'
edly for private profit, is practically non-existent.
Ownership is not a single right, but a bundle of rights.
"Nationalisation" is not a matter of simply transferring

this bundle of rights from A to B, that is to say, from

private persons to "the State," whatever that may mean:
it is a matter of making precise cholees as to where the

various rights of the bundle are to be placed, all of which,

before nationalisation, were deemed to belong to the
so-called private owner. Tawney, therefore, says suc-
cinctly: "Nationalisation [is] a problem of Constitution-
making." Once the legal device of private property has
been removed, there is freedom to arrange everything
—
anew to amalgámate or to dissolve, to centralise or to
decentralise, to concéntrate power or to diffuse it, to créate
large units or small units, a unified system, a federal
system, or no system at all. As Tawney put it:

The objection to public ownership, in so far as it is intelligent,

is in reality largely an objection to overcentralisation. But

268
 the remcdy for over-centralisation is not the maintenance of
functionless property in prívate hands, but the decentralised
ownership of public property.

"Nationalisation" extinguishes prívate próprietary rights

but does not, by créate any ncw "ownership" m the
itself,

existential- -as distinctfrom the legal sense of the word.—

Ñor does it, by itself, determine what is to become of the
original ownership rights and who is to exercise them. It is
therefore in a sense a purely negative measure which
annuls previous arrangements and creates the opporíiinity
and necessity to make new ones. These new arrange-
ments, made possible thrcugh "nationalisation," must of
course fit the needs of each particular case. A number of
principies may,
however, bs observed in all cases of
nationalised enterprises provid^ng public services.
First, 'it is dangerous to mix business and politics. Such a
mixing normally produces ineífioient business and corrupt
politics. The nationalisation act, therefore, should in every
case carefully enumérate and define the rights, if any,
which the political side, e.g. the minister or any other
organ of government, or parliament, can exercise over the
business side, thatis to say, the board of management.

This is of particular importance with regard to appoint-

ments.
Second, nationalised enterprises providing public serv-
ices should always aim at a profit — in the sense of eating

to live, not living to eat — and should build up reserves.

They should never distribute profits to anyone, not even to
the government. Excessive — and
profits that means the
building up of excessive reserves —should be avoided by
reducing prices.
Third, nationalised enterprises, nonetheless, should have
a statutory obligation "to serve the public interesí in all
respects." The interpretation of what is the "public inter-
est" must be left to the enterprise itself, which must be
structured accordingly. It is useless to pretend that the

269
nationalised enterprise should be concemed only with
profits, as if it worked for prívate shareholders, while the
interpretation of the public interest could be left to gov-
emment alone. This idea has únfortimately invaded the
theory of how to run nationalised industries in Brítain, so
that these industries are expected to work only for profit
and to deviate from this principie only if instnicted by
govemment to do so and compensated by govemment for
doing so. This tidy división of functions may commend
itself to theoreticians but hasno merit in the real worid,
for it destroys the very ethos of management within the
nationalised industries. "Serving the public interest in all
respects'* means nothing unless it permeates the everyday
behaviour of management, and this cannot and should not
be controlled, let alone financially compensated, by gov-
emment. That there may be occasional conflicts between
pijpfit-seekingand serving the public interest cannot be
denied. But this simply means that the task of running a
nationalised industry makes higher demands than that of
running private enterprise. The idea that a better society
could be achieved without making higher demands is self-
contradictory and chimerical.
Fourth, to enable the "public interest" to be recognised
and to be safeguarded in nationalised industries, there is
need for arrangements by which all legitímate interests
can find expression and exercise influence, namely, those
of the employees, the local community, the consumers,
and also the competitors, particularly if the last-named
are themselves nationalised industries. To implement this
principie effectively still requires a good deal of experi-
mentation. No perfect "models" are available anywhere.
The problem is always one of safeguarding these interests
without unduly impairing management's ability to manage.
Finally, the chief danger to nationalisation is the plan-
ner's addiction to over-centralisation. In general, small
enterprises are to be preferred to large ones. Instead of
creating a large enterprise by nationalisation — as has

270
invariably been the practice hitherto — and then attempt-
ing to decentralise power and responsibility to smaller
formations, normally better to créate semi-autono-
¡t is

mous small units first and then to centralise certain func-

tions at a higher level, // the need for better coordination
can be shown to be paramount.
No one has seen and understood these matters better
than R. H. Tawney, and it is therefore fitting to cióse this
chapter with yet another quotation from him:

So the organisation of society on the basis of functions, in-

stead of on that of rights, implies three things. It means,
first, that proprietary rights shall be maintained when they
are accompanied by the performance of service and aboUshed
when they are not. It means, second, that the producers
shall stand in a direct relation to the community for whom
production is carried on, so that their responsibility to it
may be obvious and unmistakable, not lost, as at present,
through their immediate subordination to shareholders whose
interest is not service but gain, It means, in the third place,
that the obligation for the maintenance of the service shall
restupon the professional organisations of those who perform
it,and that, subject to íht supervisión and criticism of the
consumer, those organisations shall exercise so much voice
in the govemment of indiistry as may be needed to secure
that the obligation is discharged.

271
 5
New Patterns of Ownership

J. K. Galbraith has spoken of prívate affluence and public

squalor. It is significant that he referred to the United

States, reputedly, and in accordance with conventional

measnrements, the ríchest country in the worid. How
could there be public squalor in the ríchest country, and, in
fact,much more of it than in many other countríes whose
Gross National Product, adjusted for size of population, is
markedly smaller? If economic growth to the present
American level has been imable to get ríd of public
squalor — maybe, has even been accompanied by
or, its

increasé —how could one reasonably expect further

that
"growth" would mitígate or remove it? How is it to be
explained that, by and large, the countríes with the highest
growth rates tend to be the most poUuted and also to be
afilictedby public squalor to an altogether astonishing
degree? If the Gross National Product of the United
—
Kingdom grew by, say, five per cent or about £2000
—
million a year could we then use all or most of this
money, this additional wealth, to "fulfil our nation*s
aspirations?"
Assuredly not; for under prívate ownership every bit of
wealth, as it aríses, is immediately and automatícally
privately appropríated. The public authoríties have hardly
any income of their own and are reduced to extracting
from the pockets of their citizens monies which the citi-
zens consider to be ríghtfully their own. Not surprisingly,

272
 an endless battie of wits between tax collectors
this leads to
and in which the rich, with the help of highly
citizens,
paid tax experts, normally do very much better than the
poor. In an effort to stop "loopholes" the tax laws become
ever more complicated and the demand for —
and there-
fore the income of —
tax consultants becomes ever larger.
As the taxpayers feel that something they have earned is
being taken away from them, they not only try to exploit
every possibility of legal tax avoidance, not to mention
practices of ülegal tax evasión, they also raise an insistent
cry in favour of the curtailment of public expenditure.
"More taxation for more public expenditure" would not
be a vote-catching slogan in an election campaign, no
matter how glaring may be the discrepancy between prí-
vate affluence and public squalor.
There is no way out of this dilemma unless the need for
public expenditure is recognised in the structure of owner-
ship of themeans of production.
not merely a question of public squalor, such as the
It is

squalor of many mental homes, of prisons, and of count-

less other publicly maintained services and institutions;
this is the negative side of the problem. The positive side
alises where large amounts of public funds have been and
are being spent on what is generally called the "infra-
stnicture," and the benefits go largely to prívate enterpríse
free of charge. This is well known to anyone who has
ever been involved in starting or running an enterpríse in
a poor society where the "infrastructure" is insufficiently
developed or altogether lacking. He cannot rely on cheap
transpon and other public services; he may have to pro-
vide at his own expense many things which he would
obtain free or at small expense in a society with a highly
developed infrastructure; he cannot count on being able
to recruit trained people: he has to train them himself;
and so on. All the educational, medical, and research insti-
tutions in any society, whether rich or poor, bestow incal-
culable benefits upon prívate enterpríse —^benefits for

273
which prívate enterprise does not pay directly as a matter
of course, but only indirectly by way of taxes, which, as
already mentioned, are resisted, resented, campaigned
against, and often skilfully avoided. It is highly illogical
and leads to endless complications and mystifications, that
payment for benefits obtained by prívate enterprise from
the "infrastructure" cannot be exacted by the public
authorities by a direct participation in profits but only
after the prívate appropriation of profits has taken place.
Prívate enterprise claims that its profits are being eamed
by its own efforts, and that a substantial part of them is

then taxed away by public authorities. This is not a correct

reflection of the truth — generally speaking. The truth is

that a large part of the costs of prívate enterpríse has

been borne by the public authoríties —because they pay
for the infrastructure —and that the profits of prívate
enterpríse therefore greatly overstate its achievement.
There is no practical way of reflecting the true situation,
unless the contríbution of public expenditure to the profits
of prívate enterpríse is recognised in the structure of
ownership of the means of production.
I shall therefore now present two examples of how the
structure of ownership can —or could—be changed so as
to meet the two fundamental críticisms made above. The
firstexample is of a medium-sized firm which is actually
operating on a reformed basis of ownership. The second
example is a speculative plan of how the structure of
ownership of large-scale firms could be reformed.

The Scott Bader Commonwealth

Emest Bader started the enterpríse of Scott Bader Co.

Ltd. in 1920, at the age of thirty. Thirty-one years later,
after many tríals and tríbulations duríng the war, he had a
prosperous medium-scale business employing 161 people,
with a tumover of about il 625,000 a year and net profits

274
 exceeding £72,000. Having started with virtually nothing,
he and his family had become prosperous. His firm had
I established itself as a leading producer of polyester resins
and also manufactured otber sophisticated producís, such
as alkyds, polymers, and plasticisers. As a young man he
had been deeply dissatisfied with his prospects of life as an
employee; he had rasen ted the very ideas of a "labour
market" and a "wages system," and particularly the
thought that capital employed men, instead of men
employing capital. Finding himself now in the position of
employer, he never forgot that his success and prosperity
were the achievements not of himself alone but of all his
collaborators and decidedly also of the society within
which he was privileged to opérate. To quote his own
words:

I realised that — as years ago when

I took the plirnge and
ceased to be an employee —
was up against the capitalist
I
philosophy of dividing people into the managed on the one
hand, and those that manage on the other. The real obstacle,
however, was Company Law, with its provisions for dicta-
torial powers of shareholders and the hierarchy of manage-
ment they control.

He decided to introduce "revolutionary changes" in his

firm, "based on a philosophy which attempts to fit industry
to human needs."

The problem was twofold: (1) how to organise or combine

a máximum sense of freedom, happiness and human dignity
ín our firm without loss of proñtability, and (2) to do this

by ways and means that could be generally acceptable to the

prívate sector of the industry.

Mr. Bader realised once that no decisive changes

at
could be made without two
things: first, a transformation
of ownership —
mere profit-sharing, which he had practised
from the very start, was not enough; and, second, the vol-
untary acceptance of certain self-denying ordinances. To
achieve the ñrst, he set up the Scott Bader Conunonwealth

275
in which he vested (in two steps: ninety per cent in 1951
and the remaining ten per cent in 1963) the ownership
of his firm, Scott Bader Co. Ltd. To implement the sec-
ond, he agreed with his new partners, that is to say, the
members of the Commonwealth, his former employees, to
establish a constitution not only to define the distribution
of the "bundle of powers" which prívate ownership implies,
but also to impose the following restrictions on the finn's
freedom of action:

Firsti the firm shallremain an undertaking of limited

size, so that every person init can embrace it in his

mind and imagination. It shall not grow beyond 350

persons or thereabouts. If circumstances appear to de-
mand growth beyond this limit. they shall be met by
helping to set up new, fuUy independent units organised
along the Unes of the Scott Bader Commonwealth.
Second, remuneration for work within the organisa-
tion shall not vary, as between the lowest paid and the
highest paid, irrespective of age, sex, function or ex-
perience, beyond a range of 1:7, before tax.
Third, as the members of the Commonwealth are part-
ners and not exployees, they cannot be dismissed by
their co-partners for any reason other than gross personal
misconduct. They can, of course, leave voluntarily at
any time, giving due notice.
Fourth, the Board of Directors of the firm, Scott
Bader Co. Ltd., shall be fully accountable to the Com-
monwealth. Under the rules laid down in the Constitu-
tion, the Commonwealth has the right and duty to
confirm or withdraw the appointment of directors and
also to agree to their level of remuneration.
Fifth, not more than forty per cent of the net profits
of Scott Bader Co. Ltd. shall be appropriated by the
Commonwealth — minimum
a per of sixty cent being
retained for taxation and for self-finance within Scott
Bader Co. Ltd. —and Commonwealth
the shall devote

276
 one-half of the appropriated profits to the payment of
bonuses to those working within the operating company
and the other half to charítable purposes outside the
Scott Bader organisation.
And finally, none of the products of Scott Bader Co.
Ltd. shall be sold to customers who are known to use
them for war-related purposes.

When Mr. Ernest Bader and his coUeagues introduced

these revolutionary changes, it was freely predicted that a
firm operating on this basis of collectivised ownership and
self-imposed restrictions could not possibly survive. In
fact, it went from strength to strength, although difiBcul-
ties, even crises and setbacks, were by no means absent. In
the highly competitive setting within which the firm is

operating, it has, between 1951 and 1971, increased its

sales from £625,000 to á^5 million; net profits have grown

from á: 72,000 to nearly á: 300,000 a year; total staff has
increased from 161 to 379; bonuses amounting to over
£150,000 (over the twenty-year period) have been dis-
tributed to the and an equal amount has been
staff,

donated by the Conmionwealth to charítable purposes

outside; and several small new firms have been set up.
Anyone who wishes to do so can claim that the com-
mercial success of Scott Bader Co. Ltd. was probably due
to "exceptional circumstances." There are, moreover, con-
ventional prívate enterprise firms which have been equally
successful or even more so. But this is not the point. If
Scott Bader Co. Ltd. had been a commercial faüure after
1951, it could serve only as an awful waming; its undeni-
able success, as measured by conventional standards does
not prove that the Bader "system" is necessaríly superíor
by these standards: it merely demónstrales that it is not
incompatible with them. Its merit lies precisely in the
attainment of objectives which lie outside the conmiercial
standards, of human objectives which are generally
assigned a second place or altogether neglected by ordi-

277
nary commercial practice. In other words, the Bader
"system" overcomes the reductionism of the prívate
ownership system and uses industrial organisation as a
servant of man, instead of allowing it to use men simply
as means to the enrichment of the owners of capital. To
quote Eraest Bader:

Common Ownership, or CommonweaUh, is a natural devel-

opment from Profit Sharing, Co-Partnership or Co-Owner-
ship, or any scheme where individuáis hold sectional interests
in a common enterprise. They are on the way to owning
things in common, and, as we shall see, Common-Owner-
ship has unique advantages.

While I do not intend to go into the details of the long

evolution of ideas and new styles of management and
cooperation during the more than twenty years since 1951,
it is useful Iiere to crystallise out of this experience certain
general principies.
The first is that the transfer of ownership from a person
or a family — in this case the Bader family — to a collectiv-
ity, the CommonweaUh, changes the existential character
of "ownership" in so fundamental a way that it would be
better to think of such a transfer as efifecting the extinc-
tion of prívate ownership rather than as the establishment
of collective The relationship between one
ownership.
person, or a very small number of persons, and a certain
assembly of physical assets is quite diíferent from that
between a Commonwealth, comprising a large number of
persons, and these same physical assets. Not surprisingly,
a drastic change in the quantity of owners produces a
profound change in the quality of the meaning of owner-
ship, and this is so particularly when, as in the case of
Scott Bader, ownership is vested in a collectivity, the
Commonwealth, and no individual ownership rights of
individual Commonwealth members are established. At
Scott Bader, it is legally correct to say that the operat-
ing company, Scott Bader Co. Ltd., is owned by the

278
Commonwealth; but it ís neither legally ñor existcntially
true to say that the Commonwealth members, as indi-
viduáis, establish any kind of ownership in the Conmion-
wealth. In truth, ownership has been replaced by specific
rightsand responsibilities in the administration of assets.
Second, while no one has acquired any property, Mr.
Bader and his family have nonetheless depríved them-
selves of their property. They have volimtarily abandoned
the chance of becoming inordinately rich. Now, one does
not have to be a believer in total equality, whatever that
may mean, to be able to see that the existence of inordi-
nately rich people in any society today is a very great evü.
Some of wealth and income are no doubt
inequalities
and functionally justifiable, and there are few
"natural**
people who do not spontaneously recognise this. But here
again, as in all human affaírs, 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 stand-
ards, and are set apart from common himianity. They
corrupt themselves by practising greed, and they corrupt
the rest of society by provoking envy. Mr. Bader drew
the consequences of these insights and refused to become
inordinately rich and thus made it possible to build a real
community.
Third, while the Scott Bader experiment demonstrates
with the utmost clarity that a transformation of ownership
is essential —without it everything remains make-believe
— ^it also demonstrates that the transformation of owner-
ship is merely, so to speak, an enabling act: it is a neces-
sary, but not a sufficient, condition for the attainment of
higher aims. The Commonwealth, accordingly, recognised
that the tasks of a business organisation m society are not
simply to make profits and to grow
and to maximise profits
and to become powerful: the Commonwealth recognised
four tasks, all of equal importance:

279
 : — ,

(A) The economic task: to secure ordera which can be

designed, made, and serviced in such a manner as to make
a profit.
(B) The technical task: to enable marketing to secure
profitable orders by keeping them supplied with up-to-date
product design.
(C) The social task: to provide members of the company
with opportunities for satisfaction and development through
their participation in the working community.
(D) The political task: to encourage other men and
women to change society by oflFering them an example by
being economically healthy and socially responsible.

Fourth: it is the fulfilment of the social task which

presents both the greatest challenge and the greatest
düñculties. In the twenty-odd years of its existence, the
Commonwealth has gone through several phases of consti-
tution-making, and we believe that, with the new constitu-
tion of 1971, it has now evolved a set of "organs" which
enable the Commonwealth to perform a feat which looka
hardly less impossible than that of squaring the circle,

namely, to combine real democracy ydih efficient manage-

ment. I refrain here from drawing diagrams of the Scotl
—
Bader organisation to show on paper ^how the various —
"organs" are meant to relate to one another; for the living
reality cannot be depicted on paper, ñor can it be
achieved by copying paper models. To quote Mr. Ernest
Bader himself

I would very much prefer to take any interested persoa

on a tour of our forty-five-acre, ancient Manor House
Estáte, interspersed with chemical plants and laboratories,
than to laboriously write [an] article which is bound to
raise as many questions as it answers.

The evolution of the Scott Bader organisation has been

and continúes to be —a learning processy and the essentiaj

280
 —

meaning of what has been happening there since 1951 is

that it has enabled everyone connected with Scott Bader
to leam and practise many things which go far beyond the
task of making a living, of earning a salary, of helping a
business to make a profit, of acting in an economically
rational manner "so that we shall all be better off."
Within the Scott Bader organisation, everybody has the
opportunity of raising himself to a higher level of
humanity, not by pursuing, privately and individualisti-
cally, certain aims of self-transcendence which have
nothing to do with the aims of the firm that he is able to
do in any setting, even the most degraded —but by, as it

were, freely and cheerfully gearing in with the aims of the

organisation itself. This has to be leamed, and the leam-
ing process takes time. Most, but not all, of the people
who joined Scott Bader have responded, and are respond-
ing, to the opportunity.
Finally, it can be said that the arrangement by which
one-half of the appropriated profits must be devoted to
charitable purposes outside the organisation has not only
helped to further many causes which capitalist society
tends to neglect — in work with the young, the oíd, the
handicapped, and the forgotten people — it has also served
to give Commonwealth membe^s a social consciousness
and awareness rarely found in any business organisation of
the conventional kind. In this connection, it is also worth

mentioning that provisión has been made to ensure, as far

as possible, that the Commonwealth should not become an
organisation in which individual selfishness is transformed
into group A
Board of Trustees has been set
selfishness.
up, somewhat in the position of a constitutional monarch,
in which personalities from outside the Scott Bader orga-
nisation play a decisive role. The Trustees are trustees of
the constitution, without power to interfere with manage-
mcnt. They are, however, able and entitled to arbitrate, if

there should arise a serious conflict on fundamental issues

281
between the democratic and the ñmctional organs of the
organisatíon.
As mentioned at the beginning of this account, Mr.
Emest Bader set out to make "revolutionary changes** in
his firm, but "to do this by ways and means that could be
generaUy acceptable to the prívate sector of industry.'* His
revoIutíoQ has been bloodless; no one has come to gríef,
not even Mr. Bader or his family; with plenty of strikes
all around them, the Scott Bader people can proudly

claim: **We have no strikes"; and while no one inside is

unaware of the gap that still exists between the aims of the
Commonwealth and its current achievements, no outside
observer could fairly disagree when Emest Bader claims
that:

the experíence gained during many years of effort to estab-

lish the Chrístian way of our business has been a great
life in
encouragement; it has brought us good results in our reía-
ticas with one another, as well as in the quality and quantity
of our production.
Now we wish to press on and coosummate what we have
so far achieved, making a concrete contributiqn toward a
better society in the scrvice of God and our fellowmen.

And yet, although Mr. Bader*s quiet revolution should

be "generally acceptable to the prívate sector of indus-
try," it has, in fact, not been accepted. There are thou-
sands of people, even in the business world, who look at
the trend of current affaírsand ask for a **new dispensa»
tion." But Scott Bader — —
and a few others remain as small
islands of sanity in a large society ruled by greed and
envy. It seems to be true that, whatever evidence of a new
way of doing things may be provided, "oíd dogs cannot
leam new tricks." It is also true, however, that "new
dogs** grow up all the time; and they will be well advised
to take notice of what has been shown to be possible by
The Scott Bader Conmionwealth Ltd.

282
New Methods of Socialisation

There appear to be three major cholees for a society in

which economic affairs necessarily absorb major attention
— the cboice between prívate ownership of the means of
production and, alternatively, various types of public or
coUectivised ownership; the choice between a market
economy and various arrangements of "planning**; and
the choice between "freedom" and "totalitarianism."
Needless to say, with regard to each of these three pairs
of opposites there will always in reality be some degree of
mixture —because they are to some extent complemen-
taries rather than opposites —but the mixture will show a
preponderance on the one side or on the other.
Now, it can be observed that those with a strong bias in
favour of private ownership almost invariably tend to
argüe that non-private ownership inevitably and necessarily
entails "planning" and "totalitarianism," while "freedom"
is unthinkable except on the basis of private ownership

and the market economy. Similariy, those in favour of

various forms of coUectivised ownership tend to argüe,
although not so dogmatically, that this necessarily
demands central planning; freedom, they claim, can only
be achieved by socialised ownership and planning, while
the alleged freedom of private ownership and the market
economy is nothing more than "freedom to diñe at the
Ritz and to sleep under the bridges of the Thames.*' In
other words, everybody claims to achieve freedom by his
own "system" and accuses every other "system" as
inevitably entailing tyranny, totalitarianism, or anarchy
leading to both.
The arguments along these lines generally genérate
more heat than light, as happens with all arguments which
derive "reality" from a conceptual framework, instead of
deriving a conceptual framework from reality, When
there are three major altematives, there are 2^ or 8

283
 :

possible combinations. It is always reasonable to expect

that real implements all possibilities at óne time or

life —
other, or even simultaneously in different places. The
eight possible cases, as regards the three choices I háve
mentioned, are as follows (I arrange them under the
aspect of freedom versas totalitarianisra, because this is
the major consideration from the metaphysical point of
view taken in this book)

1. Freedom 5. Totalitarianisra
Market Economy Market Economy
Prívate Ownership Prívate Ownership
2. Freedom 6. Totalitarianisra
Planning Planning
Prívate Ownership Prívate Ownership
3. Freedom 7. Totalitarianisra
Market Economy Market Economy
CoUectivised Ownership Ownership
Collectivised
4. Freedom 8. Totalitarianisra
Planning Planning
Collectivised Ownership Collectivised Ownership

It is absurd to assert that th,e only "possible" cases are

1 and 8: these are raerely the simplest cases frora the
point of view of concept-ridden propagandists. Reality,
thank God, is raore iraaginative; but I shall leave it to the
reader's diligence to identify actual or historical exaraples
for each of the eight cases indicated above, and I should
recommend to the teachers of political science that they
suggest this exercise to their students.
My and now, is to speculate
iraraediate purpose, here
on the an ownership "systera" for
possibility of devising
large-scale enterprise which would achieve a truly "mixed
economy"; for it is "mixture'* rather than "purity" which
is most likely to suit the manifold exigencies of the future,

if we are to start frora the actual situation in the indus-

trialised part of the world, rather than starting frora
zero, as if all options were still open.

284
 I have already argued that prívate enterprise in a
so-called advanced society derives very large benefits
from the infrastructure —
both visible and invisible which —
such a society has built up through public expenditure.
But the public hand, although it defrays a considerable
part of the cost of prívate enterprise, does not directly
particípate in its profits; all these profits are initially pri-
vately appropriated, and the public hand then has to try
to cover its own financial requirements by extracting a
part of these profits from prívate pockets. The modem
busínessman never of claiming and complainíng that,
tires
to a large extent, he "works for the state," that the state
is hís partner, inasmuch as profit taxes absorb a substan-

tial part of what he believes to be really due to him alone,

or to hís shareholders. This suggests that the public share

—
of prívate profits in other words, the company profits
taxes —might just as well be converted into a public share
of the equity of prívate business — in any case as far as
large-scale enterprises are concemed.
For the followíng exposítion I postúlate that the public
hand should receive one-half of the distributed profits of
large-scale prívate enterprise, and that it should obtain
this share not by means of profit taxes by by means of a
fifty per cent ownership of the equity of such enter-
príses.

1. To begin wíth, the minimum size of enterprises to

be included in the scheme must be defined. Since every
business loses its prívate and personal character and
becomes, in fact, a public enterprise once the number
of its employees rises above a certain limit, minimum

size probably best defined in terms of persons em-

is

ployed. In special cases it may be necessary to define size

in terms of capital employed or tumover.
2. All enterprises attaining this minimum size—or
exceeding it already —must be joínt-stock compañías.

3. It would be desirable to transfonn all shares of

285
 these companies into no-par shares after the American
pattem.
4. The niimber of shares issued, including preference
shares and any other pieces of paper which represent
equity, should be doubled by the issue of an eqnivalent
number of new shares, these new shares to be hdd by
"the public hand" so that for every privately held oíd
share one new share with identical ríghts will be held
publidy.

Under a scheme along these lines, no question of "com-

pensation" would arise, because there would be no expro-
priation in the strict sense of the word, but only a con-
versión of the public hand*s right to levy profít taxes
into a direct participation in the economic assets from the
use of which taxabíe profits are obtained. This conversión
would be an explicit recognition of the undoubted fact
that a major role in the creation of "prívate" economic
wealth is in any case played by the public hand, that is to
say, by non-capitalist social forces, and that the assets
created by the public contríbutíon should be recognised as
public, and not prívate, property.
The questions that would immediately aríse may be
divided into three groups. First, what precisely is meant by
the "public hand"? Where are the newly issued shares to
be placed and who is to be the representative of the
"public hand" in this context? Second, what ríghts of
ownership should possession of these new shares cany?
And, third, questions relating to the transition from the
existing system to the new, to the treatment of Interna-
tional and other combines, to the raising of new capital,
and so forth.
As regards the first set of questions, I should propose
that the newly created shares, representing fifty per cent
of the equity, should be held by a local body in the dis-
where the enterpríse in question is located. The pur-
tríct

pose would be to maximise both the degree of decen-

286
tralisation of public participation and the integration of
business enterprises with the social organism within whicb
they opérate and from which they derive incalculable
benefits. Thus, the half-share in the equity of a business
operating within District X should be held by a local body
generally representative of the populaíion of District X.
However, neither the locally elected (political) personali-
ties ñor the local civil servants are necessarily the most

suitable people to be entrusted with the exercise of the

ríghts associated with the new shares. Before we can go
further into the question of personnel, we need to define
these rights a little more closely.
I therefore tum to the second set of questions. In
principie, the rights associated with ownership can always
be divided into two groups —^manageriai rights and
pecuniary rights.
I am convinced that, in normal circumstances, nothing
would be gained and a great deal lost if a "public hand'*
were to interfere with or restrict the freedom of action
and the fuUness of responsibility of the existing business
managements. The "prívate" managers of the enterprises
should therefore remain fuUy in charge, while the mana-
gerial rights of the public half-share should remain dor-
mant, unless and until special circumstances arise. That is
to say, the publicly-held shares would normally carry no
voting rights but only the right to Information and obser-
vation. The "public hand" would be entitled to place an
— —
observer or several on the Board of Directors of an
enterprise, but the observer would not normally have any
powers of decisión. Only if the observer felt that the
public interestdemanded interference with the activities
of the existing management could he apply to a special
court to have the dormant voting rights activated. A
prima facie case in favour of interference would have to
be established in front of the court, which would then
actívate the publicly-held voting rights for a limited period.
In this way, the managerial rights of ownership associated

287
with the new, publicly-owned equity shares would nor-
mally remain a mere possibility in the background and
could becorae a reality only as a result of certain specific,
formal, and public steps baving been taken by the "public
hand." And even when in exceptional cases these steps
have been taken and the voting rights of the publicly-
owned shares have beren activated, the new situation
would persist only for a short time, so that there should
be no doubt as to what was to be considered a normal or
an abnormal división of functions.
It is often thought that "the public interest'* can be safe-

guarded in the conduct of prívate business by delegating

top or medium-grade civil servanfs into management. This
belief, often a main plank in proposals for nationalisa-
tion, seems to me to be both naíve and impractical. It is
not by dividing the responsibilities of management but by
ensuring public accountability and transparency that busi-
ness enterprises will be most effectively induced to pay
more regard to the "public interest" than they do at
The spheres of public administration on the one
present.
hand and of business enterprise on the other are poles
apart — often even with regard to the rejnuneration and
security offered —and only harm can result from trying to
mix them.
While the manageríal rights of ownership held by the
"public hand** would therefore normally remain dormant,
the pecuniary rights should be effective from the start and
all the time —obviously so, since they take the place of the
profits taxes that would otherwise be levied on the enter-
prise. One-half of all distributed profits would automati-
cally go to the "public hand** which holds the new shares.
The publicly-owned shares, however, should be, in princi-
pie, inalienable (just as the right to levy profit taxes
óannot be sold as if it were a capital asset). They could
not be tumed into cash; whether they could be used as
collateral for public borro wings may be left for later
consideration.

288
 Having thus briefly sketched the rights and duties asso-
ciated with the new shares, we can now retum to the
question oí personnel. The general aim of the scheme is to
intégrate large-scale business enterprises as closely as
possible with their social surroundings, and this aim must
govem also our solution of the personnel question. The
exercise of the pecuniary and manageríal ríghts and duties
arísing from industrial ownership should certainly be kept
out of party political controversy. At the same time, it
should not fall to civil servants, who have been appointed
for quite different purposes. I suggest, therefore, that it

should belong to a special body of citizens which, for the

purpose of this exposition, I shall cali the "Social Council."
This body should be formed locally along broadly fixed
lines without political electioneering and without the
assistance of any govemmental authority, as foUows: one-
quarter of council members to be nominated by the local
trade unions; one-quarter, by the local employers' orga-
nisations; one-quarter, by local professional associations;
and one-quarter to be drawn from local residents in a
manner similar to that employed for the selection of
persons for jury service. Members would be appointed for,
say, five years, with one-fifth of the membership retiring
each year.
The Social Council would have legally defined but
otherwise unrestricted rights and powers of action. It
would, of course, be publicly responsible and obliged to
publish reports of its proceedings. As a democratic
safeguard, might be considered desirable to give the
it

existing Local Authority certain "reserve powers" vis-á- .

vis the Social Council, similar to those which the latter

has vis-á-vis the managements of individual enterprises.
That is to say, the Local Authority would be entitled
to send its observer to the Social Coimcil of its district

and, in the event of serious conflict or dissatisfaction, to

apply to an appropriate "court" for temporary powers of
intervention. Here again, it should remain perfectly clear

289
that such interventionswould be the exception rather than
the rul^ and that in normal circumstanccs the Social
all

Council would possess fuU freedom of action.

The Social CoiincUs would have full control over the
revenues flowing to them as dividends on the publicly-
held shares. General guiding principies with regard to the
expenditure of these funds might have to be laid down by
legislation; but they on a high degree of local
should insist
independence and responsibility. The immediate objection
that the Social Councils could scarcely be relied upon to
dispose of their funds in the best possible way provokes
the obvious reply that neither could there by any guaran-
tee of this if the funds were controlled by Local Authori-
ties or, as generally at present, by Central Government.
On the contrary, it would seem safe to assume that local
Social Councils, being truly representative of the local
conmiunity, would be far more concemed to devote
resources to vital social needs than could be expected
from local or central civil servants.
To tvim now to our third set of questions. The transi-
tion from the present system to the one here proposed
would present no serious difficulties. As mentioned
already, no questions of compensation arise, because the
half-share in equity is being "purchased** by the aboli-
tion of company profits taxes and all companies above a
certain size are treated the same. The size definition can
be only a small number of very large
set so that initially
firms is affected, so that the "transition" becomes both
gradual and experimental. If large enterpríses under the
scheme would pay as dividends to the "public hand" a bit
more than they would have paid as profit taxes outside the
scheme, this would act as a socially desirable incentive to
avoid excessive size.

It is worth emphasising that the conversión of profit tax

into "equity share" significantly alters the psychological
climate within which business decisions are taken. If profit
taxes are at the level of (say) fifty per cent, the business-

290
man is always tempted to argüe that "the Exchequer will

pay half • of all marginal expenditures which could possi-

bly haVe been avoided. (The avoidance of such expendi-
ture would increase profits; but half the profits would
anyhow go as profit taxes.) The psychologjcal climate is
quite different when profit taxes have been abolished and
a public equity share has been introduced in their place;
for the knowledge that half the company's equity is
publicly owned does not obscure the fact that all avoid-
able expenditures reduce profits by the exact amount of
the expenditure.
Numerous questions would naturally arise in connection
with companies which opérate in many different districts,
including International companies. But there can be no
serious difiiculties as long as two principies are firmly
grasped: that profit tax is converted into "equity share,"
and that the involvement of the public hand shall be local,
that is, in the locality where the company employees
actually work, Uve, travel, and make use of public services
of all kinds. No doubt, in complicated cases of interlock-
ing company structures there will be interesting work for
accountants and lawyers; but there should be no real
difficulties.

How could a company falling under this scheme raise

additional capital? The answer, again, is very simple: for
every share issued to prívate shareholders, whether issued
against payment or issued free, a free share is issued to
the public hand. At first sight this might seem to be unjust
— if prívate invéstors have to pay for the share, why

should the public hand get it free? The answer, of course,

is that the company as a whole does not pay profit tax; the

profit attributable to the new capital funds, therefore, also

excapes profit tax; and the public hand receives its free
shares, as it were, in lieu oí the profit taxes which would
otherwise have to be paid.
Finally, there may be special problems in connection
with company reorganisations, takeovers, windings-up,

291
aüi& so forth. They are all perfectly soluble in accordance
with the principies already stated. In the case of wind-
ings-up, whether in bankruptcy or othenvise, the equity
holdings of the public hand would, of course, receive
same treatment as those in prívate hands.
exactly the
The above proposals may be taken as nothing more
than an exercise in the art of "constitution-making." Such
a scheme would be perfectly feasible; it would restructure
large-scale industrial ownership without revolution, expro-
priation, centralisation, or the substitution of bureaucratic
ponderousness for prívate flexibility. It could be intro-
duced in an experímental and evolutionary manner by —
starting with the biggest enterprises and gradually working
down the scale, until it was felt that the public interest
had been given sufficient weight in the citadels of business
enterpríse. All the indications are that the present struc-
ture of large-scale industríal enterprise, in spite of heavy
taxation and an endless proliferation of legislation, is not
conducive to the public welf are.

292
 Epilogue

In the excitement over the unfolding of his scientific and

technical powers, modem man has built a system of
production that ravishes natiire and a type of society that
mutilates man. If only there were more and more wealth,
everything else, it is thought, would fall into place.
Money is considered to be all-powerful;
if it conld not

actually buy non-material such as justice, har-

valúes,
mony, beauty or eyen health, it could circumvent the need
for them or compénsate for their loss. The development
of production and the acquisition of wealth have thus
become the highest goals of the modem world in relation
to which all other goals, no matter how much lip-service
may still be paid to them, have come to take second place.
The highest goals require no justification; all secondary
goals have finally to justify themselves in terms of the
service their attainment renders to the attainment of the
highest
This is the philosophy of materialism, and it is this
phüosophy —or —
metaphysic which is now being chal-
lenged by events. There has never been a time, in any
society in any part of the world, without its sages and
teachers to challenge materialism and plead for a diífer-
ent order of priorities. The langüages have differed, the
symbols have varied, yet the message has always been the
same: "Seek ye first the kingdom of God, and all these
things [the material things which you also need] shall be

293
added unto you." They shall be added, we are told, here
on earth where we need them, not simply in an after-life
beyond our imagination. Today, however, this message
reaches us not solely from the sages and saints but from
the actual course of physical events. It speaks to us in the
language of terrorism, genocide, breakdown, pollution,
exhaustion. We live, it seems, in a unique period of
convergence. It is becoming apparent that there is not

only a promise but also a threat in those astonishing

—
words about the kingdom of God the threat that "unless
you seek first the kingdom, these other things, which you
also need, will cease to be available to you."As a recent
writer put without reference to economics and politics
it,

but nonetheless with direct reference to the condition of

the modem world:

If it can be said that man collectively shrinks back more

and more from the Truth, it can also be said that on all sides
the Truth is closing in more and more upon man. It might
almost be said that, in order to receive'a touch of It, which
in the past required a lifetime of effort, all that is asked
of him now is not to shrink back. And yet how difl&cult
that is!i

We shrink back from the truth if we believe that the

modern world can be "brought
destructive forces of the
under control" simply by mobilising more resources of —
wealth, education, and research — to fight pollution, to
preserve wildlife, to discover new sources of energy, and
to arrive at more effective agreements on peaceful coexist-
ence. Needless to say, wealth, education, research, and
many other things are needed for any civilisation, but
what ismost needed today is a revisión of the ends which
these means are meant to serve. And this implies, above
all else, the development of a life-style which accords to
material things their proper, legitimate place, which is

secondary and not primary.

294
 The "logic of production** is neither the logic of life ñor
that of society. a small and subservient part of both.
It is

The destnictive forces unleashed by it cannot be brought

iinder control, unless the "logic of production" itself is
—
brought under control so that destnictive forces cease to
be unleashed. It is of little use trying to suppress terrorism
if the production of deadly devices continúes to be
deemed a legitimate employment of man*s creative pow-
ers. Ñor can the fight against pollution be successful if

the pattems of production and consumption continué to

be of a scale, a complexity, and a degree of violence
which, as is becoming more and more apparent, do not fit
into the laws of the universe, to which man is just as much
subject as the rest of creation. Equally, the chance of
mitigating the rate of resource depletion or of bringing
harmony into the relationshlps between those in possession
of wealth and power and those without is non-existent as
long as there is no idea anywhere of enough being good
and more-than-enough being evil.
It is a hopeful sign that some awareness of these deeper

issues is gradually — if exceedingly cautiously — ^fínding

expression even in some and semi-official utter-
official
ances. A report, written by a committee at the request of
the Secretary of State for the Environment, talks about
buying time during which technologically developed socie-
ties have an opportunity "to revise their valúes and to

change their political objectives."^ it is a matter of "moral

choices," says the report; "no amount of calculation can
alone provide the answers. The fundamental question-
. . .

ing of conventional valúes by young people all over the

world is a symptom of the widespread unease with which
our industrial civilisation is increasingly regarded.''^ Pollu-
tion must be brought under control and mankind*s
population and consumption of resources must be steered
towards a permanent and sustainable equilibrium. "Unless
this is done, sooner or later —and some believe that there

295
 — —

is little time left —

the downfall of civilisation will npt be a
matter of science fiction. It will be the experience of our
children and grandchiidren."*
But bow is it to be done? What are the "moral
choices"? Is it just a matter, as the report also suggests, of
deciding "bow much we are willing to pay for clean
surroundings"? Mankind has indeed a certain freedom
of choice: it is not bound by trends, by the **logic of
production," or by any other fragmentary logic. But it is

bound by truth. Only in the service of truth is perfect

freedom, and even those who today ask us "to free our
imagination from bondage to the existing system"'^ fail to
point the way to the recognition of truth.
It is hardly likely that twentieth-century man is called
lipón to discover truth that has never been discovered
before. In the Christian tradition, as in all genuine tradi-
tions of mankind, the truth has been stated in religious
terms, a language which has become well-nigh incompre-
hensible to the majority of modera men. The language
can be revised, and there are contemporary writers who
have done so, while leaving the truth inviolate. Out of the-
whole Christian tradition,perhaps no body of
there is

teaching which is moreand appropriate to the

relevant
modera predicament than the marvellously subtle and
realistic doctrines of the Four Cardinal Virtues prudentía,
justitia, fortitudOy and temperantia,

The meaning of prudentia, sigmficantly called the

"mother" of all other virtues prudentia dicitur genitrix
—
virtutum is not conveyed by the word "prudence,** as cur-
rently used. It signifies the opposite of a smaU, mean, cal-
culating attitude to life, which refuses to see and valué
anything that fails to promise an immediate utilitarian
advautage.

The pre-eminence of prudence means that realisation of the

good presupposes knowledge of reality. He alone can do
good who knows what things are like and what their situa-

296
 tion is. The pre-eminencc of prudcncc means that so-called
"good intentions" and so-caUed "meaning well** by no means
sufiBce. Realisation of the good presupposes that our actiona
are appropríate to the real sítuation, that is to the concrete
which form the "cnvironment" of a concrete human
realities
action; and that we therefore take this concrete reality
seriously, with clear-eyed object¡vity.«

This clear-eyed objectivity, however, cannot be achieved

and pnidence cannot be perfected exccpt by an attitude of
"silent contemplation" of reality, during vrhick the ego-
centric interests of man are at least temporarily silenced,
Only on the basis of this magnanimous kind of pnidence
can wc achieve justice, fortitude, and temperantioy which
means knowing when enough is enougk. **Pnidence implies
a transfonnation of the knowledge of truth into decisions
corresponding to reality.**^ What, therefore, could be of
greater importance today than the study and cultivation of
pnidence, which would abnost inevltably iead to a real
understanding of the three other cardinal virtues, all of
which are indispensable for the survival of civilisation?®
Justice relates to truth, fortitude to goodness, and /em-
perantia to beauty; while prudence, in a sense, comprises
all three. The type of realism which behaves as if the
good, the true, and the beautiful were too vague and
subjective to be adopted as the higkest aims of social or
individual life, or were the automatic spin-off of the suc-
cessful pursuit of wealth and power, has been aptly called
"crackpot-realism." Everywhere people ask: "What can 1
actually doT The answer is as simple as it is disconcert-
ing: we can, each of us, work to put our own inner
house in order. The guidance we need for this work can-
not be found in science or technology, the valué of which
utterly depends on the ends they serve; but it can still be
foimd in the traditional wisdom of mankind.

297
 Notes and Acknowledgments

PART I. THE MODERN WORLD

1. The Problem of Production
Based on a lecture givenat the Gottlieb Duttweiler Institute,
RüschliLon, Nr. Zürích, Switzerland, 4th Febniary 1972.

2. Peace and Permanence

First published in Resurgence, Journal of the Fourth
World, Vol. m, No. 1, May/June 1970.
1. Towards New Horizons by Pyarelal (Navajivan
Publishing House, Ahmedabad, India, 1959)
2. Creed or Chaos by Dorothy L. Sayere (Methuen &
Co. Ltd., London, 1947)

3. The Role of Economics

Partly based on The Des Voeux Memorial Lecture, 1967,
—
"Clean Air and Future Energy Economics and Conserva-
tion," published by the National Society for Clean Air,
London, 1967.

4. BuDDHisT Economics
First published in Asia: A Handbooky edited by Guy Wint,
published by Anthony Blond Ltd., London, 1966.
1. The New Burma (Economic and Social Board, Gov-
ernment of the Union of Burma, 1954)
2. Ibid.
3. Ibid.
4. Wealth of Nations by Adam Smith
5. Art and Swadeshi by Ananda K. Coomaraswamy
(Ganesh & Co., Madras)

299
 6. Economy of Permanence by J. C. Kumarappa (Sarva-
Seva Sangh Publicatíon, Rajghat, Kashi, 4th edn., 1958)
7. The Affluent Society by John Kenneth Galbraith
(Penguin Books Ltd., 1962)
8. A Philosophy of Indian Economic Development by
Richard B. Gregg (Navajivan Publishíng House, Ahmeda-
bad, India, 1958)
9. The Challenge of Man's Future by Hanison Brown
(The Viking Press, New York, 1954)

5. A. QUESTION OF SlZE
Based on a lecture given in London, August 1968, and first

published in Resurgence, Journal of the Fourth World,

VoL n, No. 3, Septembcr/October 1968.

PART n. RESOURCES
1. The Greatest Resource —Education
1. Note: Incidentally, the Second Law of TTiermo-
dynamics states that heat cannot of ¡tself paas from a
colder to a hotter body, or, more vulgarly, that "You
cannot warm yourself on something that is colder than
—
you" a familiar though not very inspiríng idea, which has
been quite illegitimately extended to the pseudo-scientific
notion that the universe must necessarily end in a kind of
**heat death** when all temperature differences will have
ceased.

Out, out brief candiel

Life's but a walking shadow; a poor player
That struts and hour upon the stage
frets his
And then is heard no more; it is a tale
Told by an idiot, full of sound' and fury,
Signifying nothing.

The words were Macbeth's when he met his final disaster.

They are repeated today on the authority of science when
the tríumphs of that same science are greater than ever
before.
2. Charles Darwin's Autobiography^ edited by Npra
Barlow (Wm. ColJins Sons & Co. Ltd., London, 1958)

300
2. The Propep. Use op Land
1. Topsoil and Civilisation by Tora Dale and Vernon
Gilí Cárter (University of Oklahoma Press, Norman, Okla.,
1955)
2. Man and His Future, edited by Gordon Wolsten-
holme (A Giba Foundation Volume, J. & A. Churchill Ltd.,
London, 1963)
3. The Soul of a PeopU by R
Ficlding HaU (Mao-
millan & Co., Ltd., London, 1920)
4. Our Accelerating Century by Dr. S. L. Mansholt
(The Roya] Dutch/Shell Lectures on Industry and Society,
London, 1967)
5. A Future far European Agriculture by D. Bergmann,
M. Rossí-Doría, N. Kaldor, J. A. Schnittker, H. B. Krohn,
C. Thomsen, J. S. March, H. Wilbrandt, Fierre Uri (The
Atlantic Institute, París, 1970)
6. Ibid,
7. Ibid,
8. Ibid,
9. Ibid.
10. Our SyntheticEnvironment by Murray Bookchin (Joña»
tfaan Cape Ltd., London, 1963)
11. ¡bid.
12. Op.ciU
13. Op, cit.

3. Resources por Industry

Long quotation from Prospect for Coal by E. F. Schu-
macher, published by the National Coal Board, London,
Aprfl 1961.
1. The Economic Journal, March 1964, p. 192

4. Nuclear Energy —Salvation or Damnation?

Based on The Des Voeux Memorial Lecturt, 1967, **Clean
—
Air and Future Energy ^Economics and Conservation,**
published by the National Society for Clean Air, London,
1967.
1. Bcaic Ecology by Ralph and MOdred Buchsbaum
(Boxwood Press, Pittsburgh, 1957)

301
 2. "Die Haftung für Strahlenscháden in Grossbrítan-
nicn" by C. T. Highton, in Die Átomwirtschaft: Zeitschrift
für wirtschaftliche Fragen der Kemumwandlung, 1959
3. Radiarion: What it h
and How It Affects You by
Jack Schubert and Ralph Lapp (The Vikíng Press, New
York. 1957). Also, Die Strahlengefáhrdung des Menschen
durch Atomenergie by Hans Marquardt and Gerhard Schu-
bert (Hamburg, 1959); Vol. XI oí Proceedings of thc
International Conference on the Peaceful Uses of Atomic
Energy, Geneva, 1955; and Vol. XXII of Proceedings oí
the Second United Nations International Conference on
the Peaceful Uses of Atomic Energy, Geneva, 1958
4. "Changing Genes: Their Effects on Evolution** by
H. J. Muller, in Bulletin of the Atomic ScientistSy 1947
5. Statement by G. Failla, Hearings before the Special

Sub-Committee on Radiation, of the Joint Conunittee on

Atomic Energy, 86th Congress of the United States, 1959.
"Fallout from Nuclear Weapons," VoL II (Washington,
D.C., 1959)
6. **Oceanic Research Needed for Safe Disposal of
Radioactivo Wastes at Sea** by R. Revelle and M. B.
Schaefer, and *'Conceming the Possibility of Disposing of
Radioactive Waste in Ocean Trenches** by V. G. Bogorov
and E. M. Kreps, both in VoL XVín of Proceedings,
Geneva Conference, 1958
7. *'Biological Pactors Detennining the Distríbution of
Radioisótopos in the Sea*' by B. H. Ketchum and V. T.
Bowen, ibid.

Conference Report by W. H. Lcvi, in Die Atomwirt'

8.

schaft, 1960
9. U.S. Atomic Energy Commission, Annual Report to

Congress, Washington, D.C., 1960

10. U.S. Naval Radiologícal Defense Laboratory State-
ment in Selected Materials on Radiation Protection Criteria
and Standards: Their Basis and Use
11. Friede oder Atomkrieg by Albert Schweitzer, 1958
12. The HazardsMo Man of Nuclear and Allied Radia-
tions (Brítish Medical Research Council)
13. Münray Bookchin, op. cit.

14. "Summary and Evaluation of Environmental Pactors

302
 That Must Be Conaidered in the Disposal oí Radioactive
Wastes** by K. Z. Morgan, in Industrial Radioactive Dis-
posal, Vol. m
15. und künstliche Erbandcnmgcn- by H.
**Natürliche
Marquardt, in Probleme der Mutationsforschung (Ham-
burg. 1957)
16. Schubert and Lapp, op. ciL
17. 'Today's Rcvolutíon" by A. M. Wcinbcrg, in BuUetin
of the Aíomic Scientists, 1956
18. Must the Bomb Spread? by Leonard Beatón (Pengiiin
Books Ltd., in association with the Institute of Strategic
Studies, London, 1966)
19. "From Bomb to Man" by W. O. Caster, in Fallout,
edited by John M. Fowler (Basic Books, New York, 1960)
20. Op. cit.

21. Op. cit.

22. *Thc Atom*s Poisonous Garbage" by Waitcr Schneir,

In* The Repórter, 1960
23. Murray Bookchin, op. cit.

24. on Peace, edited by O. Nathan and H.

Einstein
Norden (Schocken Books, New York, 1960)
25. Pollution: Nuisance or Nemesis? (HMSO, London,
1972)

5. Technology with a Human Face

Based on a lecture gíven at the Sixth Annual Conference
of the Teühard Centre for the Future of Man, London,
23rd October 1971.

PART ra. THE THIRD WORLD

L Development
Based on the Anniversary Address delivercd to the general
meeting of the África Bureau, London, Srd March 1966.

2. Social and Economic Problems Calling por the

Development of Intermedíate Technology
First published by UNESCO, Conference on the Application
of Science and Technology to the Development of Latín
America, organised by UNESCO with the cooperation of

303
 The Economic Commission for Latín America, Santiago,
Chile, September 1965.
1. "A Plan for FuU Employment in the Developing
Countríes" by Gabriel Ardant, in International Labour Re-
view, 1963
2. "Wages and Employment in the Labor-Surplus Econ-
omy" by L. G. Reynolds, in American Economic Review,
1965
3. ¡ndustrialisation in Developing Countries, edited by
Ronald Robinson (Cambridge University Overseaa Studies
Conmiittee, Cambridge, 1965)
4. Ibid.
5. Ibid., quoted from **Notes on Latín American Indus-
trial Development" by Ñuño F. de Figueíredo
6. Ibid.
7. 'Technologies Appropriate for the Total Develop-
ment Plan" by D. R. Gadgil, in Appropriate Technologies
for Iridian Industry (SIET Instítute, Hyderabad, India,
1964)

3. TWO MlLLION ViLLAOES

First published in Britain and the World in the Seventies:
A Collection of Fabián Essays, edited by George Cunning-
ham, published by George Weidenfeld & Nicolson Ltd,
London, 1970.

4. The Problem of Unemployment in India

A talk given to the India Development Group, London,
1971.
1. New Industrial State by John Kenneth Gal-
The
braith (Penguin Books Ltd., in associatíon with Hamish
Hamilton, Ltd., London, 1967)

PART IV. ORGANISATION AND OWNERSfflP

1. A Machine to Foretell the Future
Lecture delivered at the First British Conference on the
Social and Economic Effects of Automaüon, Harrogate,
June 1961.
1. The Economics of 1960 by Colín Clark (The Mac-
millan Co. of Canadá, Ltd., Toronto, 1940)

304
2. TowARDs A Theory of Laroe-Scale Organtsation
First published in "Management Decisión," Quarterly Re-
view of Management Technology, London, Autumn 1967.
1. Encyclical "Quadragesimo Anno"
2. Selected Works by Mao Tse-tung, Vol. m
3. SOCIALISM

4. OWNERSHIP
All quotations ín this chaptcr are from The Acquisitive
Society by R. H. Tawney.

5. New Patterns of Ownership

Epilogue
1. Ancient Beliefs and Modern Superstitions by Martin
Lings (Perennial Books, Lx)ndon, 1964)
2. Pollution: Nuisance or Nemesis? (HMSO, London,

1972)
3. Ibid,
4. Ibid.
5. Ibid.
6. Prudence by Joseph Pieper, translatcd by Richard
and Clara Winston (Faber and Faber Ltd., London, 1960)
7. Fortitude and Temperjance by Joseph Pieper, trans-
latcd by Daniel F. Coogan (Faber and Faber Ltd., London,
1955)
8. Justice by Joseph Pieper, translated by Lawrence E.

Lynch (Faber and Faber Ltd., London, 1957)

No better guide to the matchless Christian teaching of
the Four Cardinal Virtues could be found than Joseph
Pieper, of whom it has been rightly said that he knows
how to make what he has to say not only intelligible to
the general reader but urgently relevant to the reader's
problems and needs.

305
ECONOMICS

E. F Schumocher
SMALL IS BEAUTIFUL
Economics os lí People Mottered
Introduction byTheodore Roszok

"I had never heard of E. F. Schumacher before reading this

book. After reading it am ready to nomínate him for the

I

Nobel Prize in economics....

"Schumacher [is] an eminently practical, sensible and
eloquent chap, versant in the subtleties of large-scale
business management, yet equally in touch with the
down-to-earth realities of a simple Indian village. His book
is a most unusual economic treatise, enormously broad in

scope, pithily weaving together threads from Galbraith and i

Gandhi.capitalismandBuddhism.scienceandpsychology."
-PETER BARNES, The New Republic
j

"There something heartening in the fact that

is

E. F. Schumacher is an economist. It gives him room to i

talk, the wherewithal to speak against the spell of what he ]

calis the 'religión of economics' in modern life....

"Small Is Beautiful is a wonderful statement which will

hopefully be followed by more from Schumacher, as well I

as from others who find that his departure into 'economics

as if people mattered' makes the kind of common sense !

that could help the survival of life on earth become at least

a decent possibility."
-LARRY LACK, Liberation

Tperennialubrary
HARPER & ROW, PUBLISHERS ISBN D" D b - D ñD 3 SE'S
Cover design by Randall Richmond DflD3ñG75