Small Is Beautiful: Book Review

This book by EF Schumacher was first published in 1973 without much fanfare. No one noticed when it was released. But if people celebrated its 25^th anniversary and is still being referred to by serious economists, then it speaks of its volume & its relevance even today. By size it is just 250 pages, but is packed with lot of punches. The beauty is, it just not lists the ills of the present day modern economics, but gives simple solutions for those ills. I am highly influenced by its simple analogies and solution oriented arguments. Most of my blogs and readings are influenced in this same direction. It is also closer to Hindu & any other religious way of life prescribed giving a lot of importance to the individual spiritual quest.

The author quotes Gandhiji in several occasions. Hence I can say it hinges on the principles Gramodyoga & Grama swarajya - of people employment, empowerment. It is principled on - If people are empowered to rule themselves; then economy will take care of itself. But if economy is primary concern, then people care takes back seat.

The Modern Economics: Something Bad

Modern economics is the primary driver of the politics today all over the world. (Except may be Bhutan.  Bhutan has taken the Pledge to remain carbon neutral & measure their success by Gross National Happiness, which makes me believe they are on the right path & can be a guiding force & light for the rest of the world).

The politics is always about people, eradicating poverty, hunger, establishing peace & permanence. So while politics is all about people, modern economics derails it from focusing on people happiness to people prosperity.

The basic tenet of modern economics is: Peace is attained by prosperity. So get rich and then get others rich. The easy reason is once they get rich why would rich go to war? They gain less and lose a lot.

The author quotes Lord Keynes a noted modern day economist – ‘Until we reach universal prosperity we pretend “foul is fair and fair is foul” for foul is useful & fair is not’.

So basically the modern economics dictates to enrich yourself ‘somehow’, ‘anyhow’ for that is the road to peace.

The problem with this theory is while enriching oneself there is no definition of ‘enough’. So it creates enormous stress on limited world resources putting them on a collision course with not the poor but with other rich. So the rich go to war. Rich & the poor suffer. Peace is disturbed.

Gandhiji quotes “Earth has enough for every man’s need but not enough for every man’s greed”. It can be extended to say earth is not enough for even one man’s greed.

Ancient Wisdom: Need to seep through into politics

So what’s the solution? Author has a chapter called Buddhist economics. But he admits at the beginning, itself, that it is the same tenets from any other religion, be it Christian, Hindu or any other.

The religion preaches at individual level. The individuals make up society, society makes up nation & it makes the world etc.,

The religion preaches: ‘Liberate oneself from the cravings for material & obtain maximum human satisfaction with minimal consumption’.

Man’s needs are infinite & inifinitude can be achieved only in the spiritual realm and never in the material.

With this wisdom the economic policies and politics of managing nation, people & meeting their aspirations has to be undertaken. In that endeavor, the author precinctly argues chapter by chapter: Small is Beautiful. Small land ownership. Small production, minimal destruction. Minimal consumption. Small water tanks, small district units, local produce, local consumption. Etc.,

Unemployment: Growing concern

One of the blame for unemployment is on population growth. Author argues why additional people cannot do additional work? But that requires resources. So what? Earth is bounty. But there is a clash of rich who have control over the earth resources. So it boils down to how rich control economics & politics depriving poor of their land rights.

The modern day economics argues: Agri ‘culture’ is uneconomical, unviable. It has to be made Agri ‘business’ & Agri ‘Industry’. For economists anything culture is unviable. It has to be rooted out. They always argue politics has to be away from culture, and be secular.

The author argues, that the Agriculture when rightly done as in the ancient times with a bit of modern touch, provides, peace & permanence.

Agriculture has a wider aspect: 1. It keeps man in touch with living nature. 2. It will humanize and ennoble man’s wider habitat. 3. It produces food for self and to trade. Besides it provides maximum employment. Especially it is true for our country.

So the right solution from government should be – Instead of drift away from Agi, 1. Reconstruct rural culture & 2. Reopen land for gainful occupation to large number of working people, making Agri viable and attractive.

This will yield land use towards ideal health, beauty & permanence. This will yield maximum employment too. Agriculture combined with vocational work like Khadi weaving, art, temple building, sculpture, handi-crafts can bring about long lasting peace. This has been our ancient wisdom in our country.

Intermediate Technology: Right solution of technology for Humanity

The counter argument to the Small is Beautiful is that it kills innovation and limits scientific utility to the world. But this argument only by the rich. The poor just need basic necessities to be met first.

The author puts forth the need for intermediate technology to help alleviate worker’s effort.

I would like to draw a simple analogy from the author’s this particular thought process. It is like Charaka of the Gandhiji’s Khadi Gramodyoga.

A simple comparison is: The power loom employs thousands of people at a particular place; it also consumes a lot of earthly resources from land, water, electricity. It requires a lot of capital forcing only rich to fund and run it employing others. It requires enormous transportation, distribution, marketing, inventory management process for consumption of the produce. It becomes unviable to reach the hinterlands of India. Instead it gets exported and made available at cheaper rates only in cities forcing city people to consume more than what they need.

The handloom on the other hand requires very minimal capital affordable by anyone. It can be established across all 5 lakh villages across the country. It provides employment across length and breadth of the nation and not constrained to a particular factory place. Its earthly resource needs are zilch. Consumer is right at the door step or maximum in a town nearby.

The author generalizes the Intermediate Technology as:

1.       Must be indigenous meeting the needs of the locals by the locals

2.       Very easily accessible and affordable

3.       Equipment and operational harm to the nature should be within the limits of the nature’s recuperative force.

One must understand that the colonial powers who shaped today’s modern economics was primarily interested in supplies & profits from the colonies & not in development & sustenance of the natives. Hence the modern economics is ‘Export oriented & Import dependent’.

Summary

The book has a lot more to offer and ponder. It deep dives into the ills of nuclear energy and argues that the solution lies in ‘altering our pattern of living with lesser energy needs’. The modern economic performance metrics like GNP, GDP are ripped apart based on its inhuman centric approaches. Energy, fossil fuel, our dependence on it is deeply discussed. Some solutions by way of real scenario case study are provided for new patterns of ownership of factories. Interesting analogy of how man likes predictable output & hence eliminates all ‘living’ elements in industry approach, implementing same ideology on Agri – making it business than culture is described well. The ‘living’ elements are unpredictable & hence to be eliminated is the modern way of thinking and it is dangerous for all ‘living’ including humans.

The only additional thing that I would like to add from my side is, while common man should live within limits, the country needs to defend itself against great many odds of the bad world. So the destructive technologies like nuclear energy, warships, war planes need to be developed and maintained to ensure peace for the people within the country.

One of the interesting further reads on the ills of GDP centric growth is in the below article by Devinder Sharma:

http://devinder-sharma.blogspot.in/2015/02/the-fetish-for-higher-gdp.html

All in all, entire book is an interesting eye opener for someone who ponders why with great technological advancement and scientific achievements we have not been able to address world hunger and poverty. What is wrong with the world current economics, policies and present day politics guided only by economics and not by humane centric religious tenets?  

Series 2.2: Idea of India: Labor Oriented Economy

This is in continuation of the previous blog in which we discussed the western economy idea for India. In this series, we discuss the Labor oriented Economy, which is purely an Idea of India which made the civilization here survive for many millennia and was in harmony with nature and people.

India like all other countries is rich in population. That is labor is available in plenty. And as humans, we are compassionate towards other humans. So says Dharma that we have to be compassionate to each other. Manava Dharma is basically to maintain basic human rights and dignity.

Basic human right is: to live & let live;

NOT live at the expense of others.

To live, god has given a beautiful earth to man. To live man’s basic needs are Air, Water, and Food. For growing food land is a basic need. Man’s civilization has always developed along where fresh water is available. Because after Air which is available all across globe in plenty, Water is basic need, without which a man cannot survive for more than a day or two.

So a civilization grown in a region around particular fresh water automatically becomes the custodian of that region. The wealth of the region belongs to the people of the region. The wealth could be water wealth, land wealth, fisheries, forest around it, minerals, animals, plants etc.,

They produce products from the region’s wealth. The livelihood of the region people depends on the region’s wealth. Hence they protect it. They worship it. That’s how the culture of worshipping a tree, mountain, goddess of forest, etc., come into being. They trade their produce with others only after taking care of themselves. They trade only that much which can be regenerated, re harvested. This creates a sustainable growth & development of the region.

So the people of the region collectively own and utilize the wealth of the region in a sustainable manner.

Loss of First Right Over the Produce

In the modern world, however that is not so. There is nothing called people of a region collectively owning the region’s wealth. All that is not private to a person belongs to the state. Everything is privatized, especially the land & water. So a river flowing or land rich with minerals belongs to no one, but the state. The state auction’s that wealth. It goes to an entrepreneur who bids highest. He then rises “Capital = Future Money = Loan” from the bank. Whose father what goes? The bank prints money and gives it as loan. He becomes single owner of all that wealth. It is called concentration of wealth with few. He then employs the people of the region.

So in this process you see, the people of the region loose the first right over their produce. They get employed. Enslaved. Earlier they used to utilize what they produce first and then trade what was excess. Now what they produce doesn’t belong to them at all. They get monthly “Salary”. And they are told to buy what they want from the market. Their own produce they have to buy from the market at a price manipulated by the “owner”.

The coal block allocation, iron, bauxite, gold, silver and various other metal mining is all privatized. Big hills are privatized for Tea, Coffee estates. Granite, marble quarrying is privatized. Even water is getting privatized diverting the tributaries and streams for accumulation in large dams. Rivers become dry. Canals are built instead which need high maintenance. And it gets utilized more by the rich setting up factories along.

In few cases, like Tata Tea estates in Nilgiris, to quell any upraise, the owner makes the employees shareholders. The company gains a lot of goodwill by this gesture. It is eyewash. Because, the locals don’t have first right over their produce. They don’t have any say in the financials, reporting etc., where there are many unethical deeds possible within the legal framework. So the state cannot do much, but the local stakeholder is deceived. And he doesn’t even realize because he never claimed his rights in the beginning when all this exploitation of his region and wealth started happening.

Hope: Locals have a say:

Every problem has a solution. Provided we acknowledge and understand the problem.

What is given to private properties for earth exploitation cannot be reversed suddenly. India is still very rich. What is still to be exploited should be left to the locals to decide.

For example, recently, Vedanta mining company was given rights over Niyamagiri hills in Orissa for Bauxite extraction by both state and center governments. The locals got educated about it by citizen activists. They brought Supreme Court intervention to seek 14 local panchayat sabha approval. All 14 sabha s unanimously ruled against the region’s exploitation.

Similarly, the silent valley, in Kerala, was saved by the active resistance from the locals from the exploitation. It is one of the richest bio diversity sites maintained today.

Kudremukha hill range in Karnataka was mined for several years before the local activists bringing Supreme Court intervention and bringing a halt to the mindless exploitation.

These examples show that through strong citizen awareness & involvement, procedural intervention is possible in the country’s wealth looting. Taking up arms against the state is not the only solution.

It is a shame, that the state colludes with rich to exploit the region. The state is run by politicians. The politicians are elected by people only. Still they sell their own people’s wealth. That means there is a disconnect between the people and people’s representatives. This means that people are indifferent to the governance. This is dangerous for the republic. People have to involve in governance. People have to create Sangha/ Panchayat at village level/ area level and have regular connect sessions with their representatives at Assembly and Parliament. Assert their views and seek information on what decisions are being taken by their representatives. 

 Hope: Local Cooperative Based Economy:

It is however important to create an economy for the region. Not just resist the exploitation and stagnate the economy. So people of the region should know their wealth and form Cooperative Society to en-cash upon that.

For example, in Tamilnadu, in one of the Granite quarrying areas, multiple village panchayats of the area formed together a cooperative society for the quarrying. Women self-help groups were part of it. Everyone participated in various aspects of the operation of the quarrying from extraction, transportation, machinery, and financials in rotation. So there is clarity, simplicity (most important factor in gaining confidence), transparency, accountability. The tax collection was highest amongst all equal areas. There was of course big lobby by the private contractors to get the license for quarrying. At that time CM was Jayalalitha. When the renewal for contract came about, against much pressure of the private contractor lobbyists, the contract was renewed for 5 long years for the cooperative society. This kind of people oriented decision making by the government heads, ministers is much desired.

The Operation Flood architected by Dr. Verghese Kurien is a great success. It is emulated by almost all states in India. A perishable goods like Milk has transformed the country, that too at the country side. It is such a great case study for many reasons for the country to emulate it. Firstly it creates self-reliance for a large rural population. Producer reserves the first right over his produce. It creates multiple cooperative societies at village grass root level. It requires all people to be educated & involved & question each other & follow certain defined discipline. It meets the urban demand in a controlled manner.

Another recent example is the implementation of the PDS (Public Distribution System) through cooperatives, panchayats, women self help groups (SHGs) in Chattisghad. This is a great success. While the India average leakage in PDS is 25%, in this state it is reduced to less than 5%.

The Kerala government has highest allocation by any state towards Panchayatiraj. Kudumbashree mission (http://www.kudumbashree.org/ ) of women empowerment through village panchayats has seen great success for it to force government to make such good financial commitments. Healthcare, education, agriculture, sanitary, water, urban slum development, products, marketing, almost everything related to people and their wellbeing is covered by this initiative. It is an amazing and successful initiative; It is an absolute prescription for entire India.

There are many such good examples in pockets across country. The point is there is hope of doing it right. Few important things stand out:

1.       All large mining projects, water diversion projects, non-perishable & perishable produce especially the raw materials, should be handled by the locals. Very widely participative Cooperative societies should be formed who handle everything from production, transportation, marketing and finance.

2.       Meet the local market needs first and limit the exposure to outside markets. It will force all regions to find solutions to their needs indigenously not go for easy option of exploiting other regions.

3.       Educate the locals on the following points:

a.       The wealth of the region.

b.      To extract it in a sustainable, renewable manner; Not finish it off within one generation

c.       The purpose of extraction – Whether it is for providing security for the country or scientific development or Indulgence of the urban population or foreign population

d.      To involve all society members on rotation basis across functions in the cooperative society

e.      Wider involvement of the local society and community to bring out all differences and address it amicably

4.       What about Large Industries? They are the vehicles of countries economy?

a.       Large industry set up will claim large employment for a certain Taluq area or district. That will attract the locals to favor a large industry to be set up in their area. But education should be given to the locals of all the ills of it and wills of the owners of those industries. If industry set up makes sense due to the region’s wealth, then locals should demand making cooperative society to develop and maintain the industry themselves. We are very far from reaching this ideal situation. But at least for the raw material extraction, it should be controlled by the locals.

The basic of economy is Supply and Demand balancing. Consumption based economy spirals out of control to increase demand and create false demand only from urban self-indulgent population. The haves are going to have more and have nots are going to loose more of theirs.

The demand and the desire cannot be controlled. The supply needs to be controlled and checked.

If we shift the economy control over to the hands of the suppliers, it creates an equitable supply in a sustainable manner. Because it controls the earth exploitation in an acceptable manner by the locals:
-          It will check the rural to urban migration as it creates local employment
-          It will force lesser consumption & self-indulgence; It might result in enticing reverse migration to rural from urban
-          It will create rural employment, self-empowerment, dignity
-          It will give the producers first right over their produce
-          It will be labor oriented and creates large employment across India locally
-          It will bring down armed resistance to the state; Maoist menace is not good for country nor for the locals

Cottage Industries:

The idea of Charaka and Khadi Gramodyoga by Gandhiji was to create ‘Vocational’ Employment for the agricultural labors. There is very large landless agriculture labor population in the country. It was like that before and it is like that even today. The landless labors get work in agri fields only for 3-4 months of the year. The cottage industry is good way of keeping them occupied and creates an economy around it. Cottage industry is very wide spread. Examples include, Honey culture, Sericulture, saree weaving, Khadi, wool based industries, fresh water fisheries, art and artecrafts, bamboo, jute based products, etc.,

There was famous argument between Sir M Vishweshwaraya & Rajaji. Rajaji is Gandhian. Vishweshwaraya is a great Engineer who pioneered ‘modern state’ status for the Mysore state. Sir MV argued what 2-3 labors take 5-6 days to produce a set of clothes can be produced in a textile industry within a day. Rajaji’s argument was, so if it reduces so much employment what do they do? And besides who needs so much clothes?

Today we see the answer. All the cotton grown across India converges in Thirupur district of Tamilnadu. And the finished clothes get distributed to all urban clusters across the globe (not just India). They themselves can not afford some of the things they produce. Across India region specific textiles industry is shut. It brings in large scale migration to cities. Cities in India are about 3% land, housing 40% population, consuming about 75% resources, responsible for 70% energy consumption (Source: India Today, 17 March 2014 Edition). Of the 40% city population about 15% are slum dweller poor. That means the 75% produce is consumed by only 25% of our population. We are on a great quest to run the country like a tightly run company with maximum optimization in all ways. People are last priority. Productivity and output is first priority.

A cottage industry is one which is people oriented. It serves the people connecting their needs. It creates livelihood locally and services people locally not internationally.

For example, there is a low-cost Sanitary Napkin Revolution run by this simple man: http://www.bbc.com/news/magazine-26260978

Sanitary napkin is a hygiene factor. It is generally produced in Thirupur or in some Chinese export zone for the entire world. It is sold only in urban mid & upper class across the world at a high price.

The subject is a stigma in rural India (even in urban India). But this man struggles against all odds to create awareness. Not only does he create awareness of its hygiene factor but he takes the simple machine he created to be a vehicle of employment creation amongst the rural women. In India it will give a million jobs. Each serve about 300 women. That means 300 million rural women serviced. Compare that with industrial output of 300 million napkins coming out from a factory by about a 1000 workers. And it serves only the urban populace and doesn't reach out to the rural due to profitability concerns.  
He wants to create 10 million jobs across globe reaching out to all countries rural areas. There is no overarching brand. Women SHG s can create their own brands. He has not patented it to make millions for himself. It is for everyone to use and benefit.

If the people at the village unit level are educated, encouraged to build strong unions and assert their rights, the country becomes the strongest. It is our responsibility as educated to educate and build stronger society at the grass root level.

Series 3: In the next series on Idea of India and Idea for India, we’ll delve into the Religions. What religions from India say, and what Religions from foreign say. Religions play crucial role in social aspect of human life. Religion reaches an illiterate also. Religion is the most crucial educator for every human being on the earth. It is well trenched in the fabric of our life. It can create powerful self-sustainable society or a blood sucker society. We’ll also see what the concept of God in each religion.