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Could Small Still Be Beautiful?

In the mid-1970s, an economist named E.F. Schumacher argued that our push for endless growth was doomed to fail. His book, “Small Is Beautiful,” soon became a classic, inspiring a generation of idealists. While largely forgotten since then, Schumacher’s ideas might speak to the working class’s troubles today more than ever.

By BRYCE T. BAUER

  1. “Economics as a Form of Brain Damage”
  2. The Schumacher Center For a New Economics
  3. The New Economics of Land Ownership
  4. The New Economics of Business Financing
  5. The New Economics of Currency
  6. The New Economics of Entrepreneurship
  7. Challenges to the New Economy

Issues: Fall 2019

Authors: Bryce T. Bauer

Topics: ,

Locations: ,

In 1980, a team of idealists who wanted to carry on E.F. Schumacher’s philosophies founded an organization in New England called the E.F. Schumacher Center for a New Economics. Photo courtesy of the Schumacher Center.

Four decades ago, just as some of the forces that have caused today’s problems with globalization and inequality began to take hold, a British economist by the name of E.F. Schumacher took America by storm with a set of contrary ideas about how an economy should work.

Schumacher aimed squarely at supporting everyday people and the communities where they lived. For a brief period in the mid-1970s, his name enjoyed headline status — and his book, “Small Is Beautiful: Economics as if People Mattered,joined a pantheon of powerful, call-to-action works of the time. Schumacher’s book was taken so seriously that, a few years after its publication, it was listed alongside such enduring critiques as Rachel Carson’s “Silent Spring” and Paul R. Ehrlich’s “The Population Bomb.”

“Economics is nothing more than human ingenuity organizing labor to transform the natural world into products for one another,” says Susan Witt, who runs the center carrying on E.F. Schumacher’s work. “That activity can either be dignifying of people, land, and community, or it can be degrading.” Photo by Christina Lane.

While “Small Is Beautiful” hasn’t endured with quite the same power those works have enjoyed, its ideas have still seeped into the thinking of some of the nation’s latter-day acolytes of social and environmental sustainability, including Wendell Berry, Jane Jacobs, and Bill McKibben. Schumacher’s work also inspired a small think-tank focused on turning the small towns and bucolic countryside of the Massachusetts Berkshires into a laboratory for further exploration of his theories.

Given how rarely Schumacher’s once-popular ideas are discussed today, one can’t help but wonder—were his perceptions all wrong? Or, as the director of the institute focused on sustaining his ideas, and as Schumacher himself also said, was their time yet to come? If the latter, might that time be now? Every day, it seems, more and more experts join the argument that the accelerating dominance of global companies — in a world struggling with income inequality, resource depletion, and the growing ravages of climate change — has put us on an unsustainable path. If that bleak outlook is correct, maybe it’s time to give Schumacher’s ideas a second look.

“ECONOMICS AS A FORM OF BRAIN DAMAGE”

When “Small Is Beautiful” came out, in 1973, Schumacher had already worked for several decades as an economist. In the years after its publication, he toured the United States speaking to crowds across the country and meeting with political leaders, including an address before 50 members of Congress and a meeting with President Jimmy Carter. At the time, America was being wrenched by many of the ills he said modern economics would cause. The 1970s was a decade marked by oil and gas shocks, labor unrest and stagflation, a growing concern over the environment, and the discord of the Vietnam War. Schumacher was attuned to what it all portended. (In fact, the first use of the term “global warming” occurred just two years after Schumacher’s book was published.) Schumacher wrote “we do well to ask why it is that all these terms — pollution, environment, ecology, etc. — have so suddenly come into prominence…is this a sudden fad, a silly fashion, or perhaps a sudden failure of nerve?”

The Berkshire Mountains of Massachusetts, where the Schumacher Center is based, has become a center of arts and culture. At the Magic Fluke Co., owners Dale and Phyllis Webb have been making ukuleles and other string instruments for more than two decades. Photo by Bryce T. Bauer.

Born in Bonn, Germany, Schumacher had fled Nazi Germany to England in 1937. During the Second World War, when Great Britain began interning Germans, including Jewish refugees, Schumacher and his family moved to the countryside, where he worked on a farm until his writing caught the notice of John Maynard Keynes, the British economist who launched the 20th century’s activist alternative to unfettered, free-market economics.

The core of Schumacher’s argument lay in his book’s subtitle: “Economics as if People Mattered.” For far too long, economists had approached the problem of development in a way that focused too much on goods over people, emphasizing the elimination of labor instead of job creation. He accused these experts of treating consumption as the end itself, always to be maximized.

In Schumacher’s view, the economy would not benefit from the standard methods of stimulation; if anything, it should be de-intensified. If this could be managed, Schumacher believed, it would allow time “for any piece of work — enough to make a really good job of it, to enjoy oneself, to produce real equality, even to make things beautiful.”

The opportunity to work this way — which is central to any artisan or tradesman, and to his or her ability to produce top-notch, innovative work — clearly has only declined further in the years since Schumacher made this observation. And if anything, his critique might be even more timely today. In a new book, “Tightrope: Americans Reaching for Hope,” veteran New York Times journalists Nicholas Kristof and Sheryl WuDunn argue that the growing scarcity of jobs that offer such visceral satisfactions is part of what’s plunged America’s working class into unprecedented levels of despair, drug addiction, and suicide.

The Schumacher Center was co-founded by Susan Witt and Bob Swann, who was known for pioneering the concept of Community Land Trusts in the American South in the 1960s. Photo courtesy The Schumacher Center for a New Economics.

To be truly helpful, Schumacher argued, development funds in poor areas should be spent on “intermediate technology” — that is, technology that’s cheap, resilient, and simple enough to be used by workers in areas that lack access to education, ready capital, and sophisticated infrastructure. Technology that’s too expensive, and too complex to be readily used in developing economies, he said, destroys “the possibilities of self-reliance.”

“I think the Schumacher Center has been the most important laboratory for social invention that serves the local economy in the world,” says economist Michael H. Shuman.

Whenever he traveled to speak about these ideas in the U.S., crowds met his stops — 2,000 in Chicago, 500 in Minneapolis, 200 at the Colorado School of the Mines in Golden, 600 in an overflow crowd at the Helena, Montana Civic Center — and his book was, at one point, reportedly selling 30,000 copies a month. His ideas also inspired a government “Office of Appropriate Technology” in California, where then-governor Jerry Brown introduced Schumacher during a 1977 tour of America. (That organization is still in existence, in slightly altered form in Montana, as the National Center for Appropriate Technology.) During Gov. Brown’s more idealistic days, he once said, “if you want to understand my philosophy, read this,” as he brandished a copy of “Small Is Beautiful.”

“The 60s was a generation that wanted to do things different…and there was Schumacher saying I was a conventional economist and I was mistaken,” says Susan Witt, who became the executive director and co-founder of what’s now called the E.F. Schumacher Center for a New Economics. “I didn’t take into account human beings. I didn’t take into account their spiritual lives. I didn’t take into account concern for the earth and I’ve had to re-think my economics. Those essays in ‘Small Is Beautiful’ touched a generation.”

One of those touched by Schumacher’s ideas was the entrepreneur and author Peter Barnes, who discovered Schumacher when he reviewed his book for the The New Republic, where Barnes was on staff at the time. A few years after doing so, Barnes quit his job to found a worker-owned solar cooperative; and, later, the Working Assets telephone company (now Credo Mobile). “I changed my life because of Schumacher you could say,” Barnes told me.

Susan Witt’s views on land were influenced by Henry George, a 19th-century American economist who saw profits from land as an “unearned increment” to be shared by an entire community. George also inspired Leo Tolstoy, whose novel Resurrection is about a nobleman who decides that his land holdings are immoral. Photo courtesy Schumacher Center for a New Economics.

Unfortunately, a few months after Schumacher ended his U.S. tour, he died while traveling in Switzerland. In the wake of his death, the decade seemed to rush past him. The 1980s ushered in the “greed is good” era;  Governor Brown, swept up in California-sized ambitions, walked back his original praise; international tension over oil eased; and Carter was replaced by Reagan, who tore his predecessor’s solar panels off the White House roof. The new economic creed was Reaganomics and Thatcherism. Schumacherism, such as it was, suddenly seemed quaint — an ideology not of future sustainability, but of antediluvian thinking and defeat.

THE SCHUMACHER CENTER FOR A NEW ECONOMICS

Schumacher’s ideas didn’t go away entirely, however. In some areas they continued percolating, spinning into a number of institutions in the United Kingdom and the U.S. One was an eponymous organization called the E.F. Schumacher Center.

At Indian Line Farm, the Community Land Trust lease stipulates the land must be used for a working farm that follows organic principals. Photo by Clemens Kalischer.

Located in the undulating hills of the Southern Berkshires, off the charmingly named Jug End Road near Great Barrington, Massachusetts, the center is a living emblem of Schumacherian modesty and elegance. When I arrived there for a visit of several days, to check up on what has become of Schumacher’s ideas in the four decades since his death, Witt, the center’s director, began her answer by touring me through two of the center’s buildings — its library and her own house.

Both had been designed and partially built by the center’s co-founder and her late partner Bob Swann, a carpenter who had previously worked on houses designed by Frank Lloyd Wright. And both displayed the famous architect’s human-scale gracefulness. The grounds feature a large garden, surrounded by an extensive apple orchard.

After “Small Is Beautiful” came out, Swann helped organize Schumacher’s 1977 tour of the United States; Schumacher, in turn, asked Swann to help carry out his ideas in America. Originally designed to be the forum for a Schumacher-inspired lecture series, the scope of the organization grew over the years, as did the intellectual spheres from which it drew. Critical among the ideas it subsumed were those of the great urban development theorist, Jane Jacobs, who spoke at the center in 1984. In one of her books, “The Economy of Cities,” Jacobs argued that places develop when they start to produce products locally that they previously imported from far away. Following her speech, Jacobs became a supporter of the center and wrote about its projects in her later books.

When I asked Michael Shuman, an economist and consultant who has written several books on local economies, how he viewed the center’s work, he said, “I think the Schumacher center under Susan’s leadership has been the most important laboratory for social invention that serves the local economy in the world.” Shuman credits the center with helping to push forward ideas that have now become mainstream, like crowd funding, and for keeping work on local economies anchored in an intellectual context.

Swann considered private land ownership one of the causes of war, and land costs a significant impediment to building diverse communities. During the Second World War, Swann declared himself a conscientious objector, leading to his imprisonment. Photo courtesy Schumacher Center for a New Economics.

Today, the Schumacher Center operates primarily as a library and think-tank, focused on three broad areas: helping communities gain greater control over their land; supporting businesses that provide products and services for local consumption, so that profits stay at home; and fostering face-to-face relationships to offset, or even reverse, the harms of scale that Schumacher identified. Much of this work is focused on the Berkshires, the center’s local proving ground of sorts.

On the surface, the Berkshires seem to be thriving. Covering a swath of Western Massachusetts that touches Vermont, New York, and Connecticut, the region has long been an escape from the city for New Yorkers, and home to the small towns the Northeast does so well: charming downtowns, quirky shops, splendid restaurants. The area is also renowned for its cultural life, playing home to Tanglewood, a well-known classical music center, and the influential Jacob’s Pillow dance center, among other attractions.

Despite all these advantages, the area has not escaped the challenges that have beset so many small or rural communities around the country. Once a stronghold of paper and textile manufacturing and home to a large General Electric plant, the regional economy has gradually shifted from manufacturing to services. During the last few decades, the GE plant closed and the paper and textile and industries have dwindled, decimating the town of Pittsfield, Massachusetts, in the heart of the Berkshires. Overall, the region is poorer than surrounding areas in New York and Massachusetts. As in so many quaint rural areas, much of the local economy today is built on tourism.

That atmosphere, and the region’s proximity to big cities, has kept housing costs high, an obstacle that tends drive off ambitious young people, says Rachel Moriarty, the 26-year-old director of operations at the Schumacher Center. “There are a lot of people who come back after age 30, but the 20- to-30-year-old population is slim pickings around here,” she says. “Mostly they go somewhere else and make money to be able to afford the cost of living here.”

From Left: E.F Schumacher, Bob Swann, and George Wald, co-winner of the 1967 Nobel Prize in Physiology or Medicine. Photo by Hilde Maingay.

THE NEW ECONOMICS OF LAND OWNERSHIP

Before Bob Swann founded the Schumacher Center, he had been pioneering an idea that became central to the institute’s mission: community land trusts. Swann had been a conscientious objector during the Second World War; he was imprisoned along with some leaders of the 20th century’s nonviolent movement, including the famous early 20th-century activist Bayard Rustin, in a segregated prison in the South. While there, Swann identified what he thought was one of the root causes of war: the private holding and capitalization of land, which he also saw as a key condition that perpetuated the oppression of African Americans.

In the late 1960s, working alongside civil rights activists Slater King and Fay Bennett, Swann helped set-up New Communities, Inc., a 5,000-acre, $1 million-dollar collective farm in southwest Georgia for African-American farmers. The project was not only one of the largest black-owned tracts of land in the country at the time, it was also the nation’s first articulation of the Community Land Trust model.

Using leases modeled on those used by the Jewish National Fund to keep land in Israel in Jewish possession, the central idea of a community land trust is to separate the ownership of the land, which would be held by the trust, from the ownership of the dwellings built on top of it, which would be held by the resident. The goal is to make the land affordable by removing its value from the cost, while also giving the community a say in how it is used.

The land-trust model has since been replicated around the country. When paired with the benefit of tax-exempt status, it has been used primarily as a conduit for affordable housing. But in some areas, it’s provided the key to preserving farmland from falling prey to commercial development. In 1999, the Schumacher Center took this very approach to save Indian Line Farm, in nearby South Egremont, Mass., one of the nation’s first farms to function as Community Supported Agriculture, or CSAs — a model that has since spread to hundreds of communities across the country.

In recent years, the center has developed the land-trust legal structure to accommodate a multitude of community needs: small businesses, shops or facilities for local industry, and so on. A good example, Witt said, would be “a group of knitters who wanted locally produced wool. If they collectively buy a suitable facility, they could then control the resulting manufacturing process, and where the wool would be marketed.”

The Berkshires was once a stronghold of manufacturing, including paper and textiles, but those jobs have dwindled. Today, food and agriculture are one of the region’s strengths. Photo by Bryce T. Bauer.

THE NEW ECONOMICS OF BUSINESS FINANCING

In 1981, the Schumacher Center staff helped start an organization called SHARE — the Self-Help Association for a Regional Economy. At the time, high interest rates were prohibiting local businesses from being able to afford loan financing. To remedy the situation, SHARE’s members, who were all from the local community, made a deal with a local bank. The bank would let these members direct the bank on where to make loans, with reduced interest rates; in exchange, SHARE members agreed to stand behind the loans, thereby assuming the bank’s risk. “What SHARE did was essentially separate out two functions of banking,” Witt says. “One is risk-taking, and one is a conservative role of being an accountant.”

Over the program’s decade-long run, it issued 23 loans, all of which were repaid. While the SHARE program shut down in 1992, after Clinton-era changes in banking regulations eased the market for small-business loans, the program helped the Schumacher Center establish key relationships with the area’s banks that would prove necessary for its next, much more ambitious foray into community economics: issuing the region’s very own money.

In 2006, the Schumacher Center launched a new, local currency, partly inspired by a conference hosted by the great-grandson of John D. Rockefeller Jr., who helped start the Federal Reserve.

This idea is not exactly new. Before the United States developed a national currency, in the 1860s, regions and banks around the nation issued their own scrip, a situation that made it onerous and expensive to move money from one area to another. Despite those difficulties, enthusiasm for local and alternative currencies have occasionally popped up in various areas since then, including in the Berkshires itself in a form known as “Deli Dollars.”

Originally issued in 1989 by a deli owner in Great Barrington, the Deli Dollars’ purpose was to fund the relocation of his business after he was denied bank financing. Deli Dollars, which were redeemable for deli products with a discount, garnered national attention when they started appearing around town, including in the collection plate of a local church. Eventually they became a shared unit of exchange, spurring other local businesses, including farms and restaurants, to issue their own notes. The Great Barrington “IOU Boom,” as The Washington Post labeled it at the time, joined more formal initiatives such as “Ithaca Hours” in Ithaca, New York and the “Constant” in Exeter, New Hampshire, which Swann had worked on before founding the Schumacher Center.

In 2006, the center launched its own currency, “BerkShares,” two years after it hosted a conference at Bard College called “Local Currencies in the 21st Century.” Interestingly, that conference was supported by Christopher Lindstrom, a great grandson of John D. Rockefeller Jr., who helped start the Federal Reserve.

In keeping with the Schumacher Center’s buy-local ethic, Berkshire Mountain Distillers opened in 2007, using local ingredients in some of its spirits. Photo by Bryce T. Bauer.

THE NEW ECONOMICS OF CURRENCY

As I sat with Witt one day at a picnic table in front of the Schumacher Center, eating lunch that I’d bought earlier with BerkShares at The Bistro Box (a burger stand in Great Barrington), she told me that, in her view, many previous currency initiatives hadn’t survived because they weren’t well-managed. Believing that the center would have only one shot at issuing a currency in the Berkshires, Witt held off doing so until adequate funding came through in the form of a $60,000 grant from RSF Social Finance. (The foundation got its name from its muse, Rudolf Steiner, the experimental German philosopher who founded the Waldorf School movement.)

When BerkShares were created, approximately $865,000 in value was issued. Today more than 400 locally owned businesses accept BerkShares, and the center estimates that about 10 million have been exchanged so far through the three community banks that honor them.

Businesses that take BerkShares accept them on a one-to-one equivalence with the U.S. dollar, but anyone who purchases a BerkShare from an issuing bank receives a 5 percent bonus in BerkShares. Later, if you convert the BerkShares back to dollars, that 5 percent comes back to bite you as a penalty. (When BerkShares were first issued, the exchange difference was 10 percent.)

This difference provides a slight nudge to keep one’s BerkShares in the Berkshires. When I was paying for my lunch, a person standing on line with me noticed my clutch of BerkShares, and quipped that if I were a visitor to the region, I’d better make sure to spend them all before I leave — when I returned home to New York City, 120 miles away, they’d be worthless. That lack of portability, of course, is the point. In a sense, BerkShares is a highly developed buy-local campaign, but they were never meant to be just that.

By growing some of its own ingredients, the distillery acts as proof-of-concept for “import replacement”—producing local products for local consumption, rather than relying on imports that carry extra financial and environmental costs. Photo by Bryce T. Bauer.

In 2013, the program received an additional grant of 350,000 euros from the Amsterdam-based Doen Foundation. The grant’s purpose was to help the currency achieve the center’s ultimate goal for it: financing local businesses with loans issued in new BerkShares — ones untethered to greenback reserves.

Shuman, the local economies expert, says the ability of a community to finance its own businesses is the ultimate promise of local-currency initiatives worldwide. However, he said, no currently operating currencies that he knows of have achieved that goal. Too many lack the scale, or sufficient buy-in from local businesses or government. But he said this is starting to change. In Bristol, England, for example, the local government is paying a portion of its employees’ salaries in the “Bristol Pound,” and accepting the currency for tax payments.

Small may indeed be beautiful, but is it feasible today? In an era of globalism, can capitalism be put back into a bunch of regional boxes?

“When you get that kicked in, that’s when a currency goes from Mickey Mouse to something more significant.” He pointed out that this did once happen in U.S., during the Depression. Shuman considers BerkShares to be the most successful of the local currencies in the United States. Which leads him to believe that a viable local currency “could happen again, and it could happen in the Berkshires again, but it hasn’t yet.”

Witt, of course, is undaunted. “We want to create money on the spot, out of nothing,” she says, “knowing that it will generate more products than the value of the loan itself. Five hundred to farmers in the spring is going to result in ten thousand or more of carrots and cauliflowers in the fall — a sound loan. We had all of that worked out with two different banks. We took it through their security departments. We took it through their lending departments. And they said, ‘Okay, we can do this. But we didn’t find the loans to make.”

Before releasing “BerkShares,” the center’s trial run of local currency, its creators had to choose the faces that would appear on the bills. So they turned to the concept’s “heroes,” as Witt calls them. One was W.E.B. Du Bois, whose birthplace is near the Schumacher Center. Photo by Bryce T. Bauer.

THE NEW ECONOMICS OF ENTREPRENEURSHIP

Witt’s lesson from her experience searching for loan-worthy projects? “It was almost as if we’re out of the habit of being makers, of being producers, of being manufacturers. We were not only a country where every region had its own currency, but was producing the goods used in the region. That production has become more and more globalized.” Americans, she concluded, need “a retraining of being producers.”

To tackle the problem, the center started working on a concept early in this decade called Community Supported Industry (or CSI). The initiative aims to do for local business what Community Supported Agriculture did for small farmers, namely transferring some of the risk of the business to the consumers. A secondary goal was to get consumers more involved in the production of the goods that they buy by fostering the community’s culture of entrepreneurship. So far, the CSI initiatives have mostly focused on the latter.

In 2015, the center helped launch a program called Entry to Entrepreneurship to bring in experienced, and often retired, businesspeople from the community—accountants, lawyers, bankers, small-business owners—to teach people about entrepreneurship and serve as mentors.

Rachel Moriarty, the Schumacher Center’s 26-year-old Director of Operations, grew up in the Berkshires. While the area lacks job opportunities, she says housing prices in the area remain high. Photo by Bryce T. Bauer.

While no businesses have yet launched directly from the program, Moriarty, the center’s young director of operations, says, “Our goal right now is to educate our community and introduce these concepts of import replacement and community supported industry to get them thinking that it’s not one individual’s burden, it’s not a solo process.”

One of the center’s inspirations for CSI ventures, and economic development generally, is the Mondragon Corporation, a sprawling 80,000-person worker co-op in the Spanish Basque region that’s been operating, and largely thriving, since 1956. [For more on this remarkable venture, see Craftsmanship Quarterly’s 2019 profile of Mondragon, “Could Co-ops Solve Income Inequality?”] Mondragon has a fund to help develop new businesses — it currently operates nearly 150 — and Witt said it too struggled with where to deploy its capital. When entrepreneurs didn’t come to the co-op’s managers with a suitable businesses plan, Mondragon’s bank realized it had to develop their own new ventures. The Schumacher Center has been trying to do much the same, but at this point, its business plans have done little more than land on the center’s library shelves, with hopes that, someday, someone might have the desire, and the skill, to put them to work.

The center’s difficulties on fronts like this point to the myriad obstacles facing any organization aiming at fundamental economic change. “Everything has to do with business-to-business transactions,” says Tim Geller, the executive director of the Community Development Corporation of South Berkshire. “It’s one thing for me to be able to go to a dentist, or to get my tires changed, or to go to restaurant, or have my taxes done. I can do all of those things with BerkShares. But what does the dentist do with his BerkShares other than go to the co-op and buy food, you know?”

Geller and the Schumacher Center have not given up trying to develop the business-to-business connection, even though it has been attempted many times, “with very little impact,” Moriarty says. “Procurement officers would get into a room and everyone would get really excited about the opportunities to be purchasing from each other and reinforcing local supply chains, but when it came down to it, there was no one really ready to implement any of these potential changes. No contracts were signed. Internal policies weren’t changed.”

They have stumbled on one successful model, in a program that was begun in Eugene, Oregon, during the state’s economic recession in the early 1980s. After a local Community Development Corporation created a Buy Eugene campaign, the local television station began purchasing materials from a local printer, and the University of Oregon switched some its purchases (band uniforms) from a company in the Northeast to a local source, spurring the creation of four new jobs. While that might seem like only a microscopic step forward, in Buy Eugene’s first year alone $500,000 in spending that had previous left the region was instead kept in the local economy, according to RAIN, a Portland-based magazine that supports the “appropriate technology movement.”

It’s worth noting that the Buy Eugene program eventually morphed into another, called the Oregon Marketplace, which helped local businesses by connecting them to a global market. Other initiatives inspired by Schumacher’s philosophies have also scaled up in different ways. This raises uncomfortable questions about why an organization presumably founded to advance Schumacher’s ideas in pure form has had such trouble making tangible progress. Small may indeed be beautiful, but is it feasible today? In an era of globalism, can capitalism be put back into a bunch of regional boxes? 

CHALLENGES TO THE NEW ECONOMY

The Schumacher Center has been working on local economic issues now for nearly 40 years and they are hardly the only ones doing so. [For a glimpse at similar organizations, and the progress they have made, please see the adjacent sidebar, “The Wider World of E.F. Schumacher’s Legacy”] Yet in all that time, it is difficult to see that small is thriving. In nearly every year from 1998 to 2014, according to a December 2018 report from the U.S. Small Business Administration, the percentage of the U.S. GDP attributable to small businesses has fallen. In the most recent year of that series, it was down to 43.5 percent. Big, in other words, is winning.

Why is this happening? In their new book, “Tightrope,” Kristof and WuDunn point at what might be the underlying cause: the gradual shift of power in the U.S. from labor to corporations. [One critical piece in this shift—a decline in support structures for workers—is outlined in a companion story in this issue, “The New Workforce Dilemma.”] No wonder more and more working class Americans are, as Kristof and WuDunn put it, “dying of despair.” Not coincidentally, Schumacher seemed to predicted this. The quality of our approach to economic growth, he reasoned, might be best be measured in statistics on “symptoms of loss,” like “crime, drug addition, vandalism, mental breakdown…”

As I worked on this story, and thought about when the efflorescence of small, local businesses might arrive, and why it hadn’t yet, the answer I kept coming to was what I might call the Amazon conundrum. The major impediment to making small truly beautiful is not, of course, just Amazon, but all that Amazon represents as the mouth of the modern economic system: commerce that is globalized, de-personalized; ruthlessly efficiency-seeking, seductively convenient and inexpensive (at least when viewed in isolation from the costs that convenience and low prices provoke); and, crucially, divorced from place.

My name for this dilemma came, in part, from an anecdote relayed to me by Wendy Healey, a senior vice president at the Berkshires’ Lee Bank. During a Millennial Advisory Panel hosted by the bank, Healy said many of the panelists — young bankers and other community members — said they preferred to support local businesses. So she asked how many of them are on a first name basis with the UPS delivery person. Their answer: “Like all of them, because they are shopping at Amazon.”

Dale and Phyllis Webb originally founded the Magic Fluke Co. in Connecticut, but moved to the Berkshires in 2010. Phyllis said she thought the idea of a region having its own currency was “wicked cool.” She later served on the BerkShares, Inc. advisory board. Photo by Bryce T. Bauer.

A similar issue tripped me up while I was reading “Small Is Beautiful.” In one section, Schumacher writes, “local fruit goes to waste because the consumer allegedly demands quality standards which relate solely to eye-appeal and can be met only by fruit 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.” As a fanatic for local apple varieties, dappled though they may be, I understand his point, but I struggle with how you tell people not to buy the pristine fruit, or the cheap, manufactured furniture, or the poorly made but trendy garments that have earned the moniker “fast fashion.” A more difficult challenge is telling someone not to buy that foreign-made car with stellar crash-safety results, or one’s basic necessities at home, after a long day, with next-day delivery.

Barnes, the journalist-cum-entrepreneur for whom Schumacher was a signal inspiration, told me that he has dimmed on the power of small-scale economics to create a better economy alone.

“I tried for 20 years to apply Schumacher’s ideas in the actual reality of the capitalist world that we live in today and what did I learn from all of that…?” Barnes trailed off before getting to his point: “What I concluded is that capitalism as we know it is so darn powerful that it’s very hard. You can do these little things here and there, the Berkshires is certainly a good example, but unless you redesign the whole system in such a way that it actually encourages local — the stuff that Schumacher was talking about — rather than massively dis-incentivizing [the alternative] and all of these other things that are destructive, we’re not going to get very far.”

In his 2006 book, “Capitalism 3.0,” Barnes argued that significant change to business-as-usual may come only after widespread calamity. “If you look at human history, you see the same pattern, that there is sort of this punctuated equilibrium,” he told me. The New Deal, for example, ushered in a period of Keynesian, aggressive government intervention. When hard times eventually hit, in the 1970s, the pendulum swung toward a more laissez-faire approach, where the free market was expected to take care of business “supply-side economic bullshit,” in Barnes’ opinion, “and that’s where we’ve been for the last 30 years or so.”

While the market for ukuleles might be small, the Magic Fluke Co. has become the largest manufacturer of this instrument on the mainland U.S. To source materials locally, the company buys injection-molded parts from Portland, Connecticut, and Pittsfield, Massachusetts; and necks from Norfolk, Connecticut and Millerton, New York. Photo by Bryce T. Bauer.

When the 2008 recession hit, people like Barnes thought it would become another redefining moment, that it could have been like 1932, bringing “the possibility for major structural change,” he said. “But it didn’t happen. It was sort of a wasted crisis.” So now we stumble on, widening income inequality as we go, and aggravating local economies’ powerlessness, which attaches stubbornly to inequality.

Nonetheless, Witt, still, remains resolute about the long-term prospects of small and local. So, this summer, when the Business Roundtable, an association of CEOs from many of America’s largest corporations, announced a shift in its views on the primary purpose of a corporation — from serving as a financial benefit to stockholders, to “compensating [employees] fairly” and fostering “diversity and inclusion, dignity and respect”; working “to protect the environment”; and “supporting the communities where we work”— I emailed Witt for her take.

“What is not included in the Business Roundtable article is a discussion of scale,” she replied. “Once beyond a certain scale the human element is replaced by systems — no matter how well intentioned the polices — the scale becomes the message.”

In Witt’s view, the shock to the system that might usher in a new economics doesn’t have to come from the economy itself. It could come from issues over climate, or political power, or social justice — many of the issues, in other words, that have been seething across the world as the overall economy has happily sailed along.

“This growing combined awareness is really pushing people to look at alternatives, to be willing to make changes,” she said. Along the way, she realizes, resistance is inevitable. When Robyn Van En started that early CSA, Witt says, she got pushback from people who didn’t want to deal with the disruption it would cause to their habits, and their convenience. After all, the standard CSA model means you only get produce once a week, and some of that produce is likely to be vegetables you’ve never cooked with before. Yet today, according to the USDA, more than 7,000 CSAs are successfully operating across the United States.

The Magic Fluke Co. is a living illustration of the difficulties inherent in creating a self-sufficient, regional economy. Because the company makes niche products that are made to last, it could not survive on local demand alone, says Dale Webb, one of the company’s founders. But the company survives on today’s online market, which brings in worldwide sales. Photo by Bryce T. Bauer.

Ultimately, though, it is not incremental change that Witt seems to be after. Baked into Schumacher’s theory is the belief that an economics based on perpetual growth, globalization, and accelerating intensification is, in the end, doomed to fail. When I asked Witt about the challenges involved in changing a massive economic system like ours, she said the center’s goal is actually more long-range. It’s to create the systems that will emerge from today’s system. That could occur once the current system runs its course, but ideally the concepts the Schumacher Center has been trying to build will transform today’s system before it disintegrates.

“Schumacher talked about building lifeboats,” she told me. “I don’t think of it in a negative way. I’d like to think of it as creating this jewel necklace, strung across countries of thriving local economies, where a majority of goods consumed in the region were produced in the region, where living wages were paid to those producers, where the arts flourished, where there was cultural diversity…”.

In this sense, Witt is echoing another formerly popular Schumacher argument. Regarding his belief that it’s possible to restore the dignity of work — founded on the opportunity to create something with your own hands that is useful for someone within your own community — Schumacher wrote, “Now, it might be said this is a romantic, a utopian vision. True enough. What we have today, in modern industrial society is not romantic and certainly not utopian… 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.”

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