Ernst Friedrich (Fritz) Schumacher, Small is Beautiful
German-born British economist (pictured right) who worked for the National Coal Board before this world famous
It is based upon Buddhist economics that put people and the environment first in organizations.
Schumacher died in 1977.
Ernst Friedrich (Fritz)
Schumacher in the Management Gurus section.
People at work
People’s potential, creativity and spiritual growth must be maximized at work and leisure through:
(the “greatest resource”).
b) fulfilling and enjoyable work
(the “humanization of work”).
c) small, self-managing groups and communities
(pursuing common aims)
d) technology suited to people’s needs
(“technology with a human face”)
Autonomy and control over decision making at work.
Ethics and the environment
a) consume less
This is vital to:
- conserve the environment.
- reduce resource consumption.
Greed and excessive materialism must be avoided without stagnating the economy.
b) find wisdom
(through spiritual and moral development).
c) seek the “purification of character”
This is achieved through virtues like:
- temperance (self-control and beauty).
d) make sure science is ethical
(so that it can be applied in the right way).
The best way to help the world’s poor is “intermediate technology” where technology and production methods
a) cheap and simple
(so virtually everyone can use it and expensive imported machinery is unnecessary).
b) suitable for small-scale application
So people can use it where they live, so:
- avoiding migration to cities.
- helping the environment and rural communities.
This small-scale production:
- achieves what Gandhi (pictured right) called
“production by the masses”.
- avoids the dehumanizing and environmentally damaging effects of mass production.
c) people centred
Intermediate technology develops people’s:
d) locally sourced
(mainly using local materials).
Organizations must balance:
- order and control (for efficiency), and
- freedom (for creativity and innovation).
The best way to do this is to “achieve smallness within large organization” through five
1. The Principle of Subsidiarity
If smaller units lower down the organizational hierarchy can do something, they should do
2. The Principle of Vindication
Every organizational activity must justify itself through results like profitability.
3. The Principle of Identification
Each business unit should have its own accounting systems, so that its profitability and
success can be identified.
4. The Principle of Motivation
Employees must be motivated through:
5. The Principle of the Middle Axiom
Senior managers should give business units:
- freedom to carry them out.
Economics is destructive because it:
- ignores “man’s dependence on the natural world”.
- believes that resources are allocated through markets, money and
So we need Buddhist economics that seeks:
a) spiritual health
(as well as material wealth).
b) the right balance
(between enjoyable work and leisure).
c) non-violence and simple living
Key quotes on organization structure
Man is small, and, therefore, small is beautiful.
The fundamental task is to achieve smallness within large organization.
Key quote on work
Next to the family, it is work and the relationships established by work that are the true foundations of
Key quote on stress and pain
It [materialism] speaks to us in the language of terrorism, genocide, breakdown, pollution, exhaustion.
Key quotes on technology
The primary task of technology...is to lighten the burden of work man has to carry in order to stay alive and
develop his potential.
It is the sin of greed that has delivered us over into the power of the machine.
Key quote on learning and wisdom
Man is far too clever to be able to survive without wisdom.
Key quote on nature and climate change
If we squander the capital represented by living nature around us, we threaten life itself.