I welcome Robert Leonard's vigorous defense of Schumacher.  It is an 
opportunity for me to drive home further the point I tried to make in my 
first response to John Médaille, but which he appears to have missed.

The United Nations sent several economists into third world countries 
(then sometimes called backward countries) in the 1950s to advise their 
governments about how to promote economic growth or development.  As 
John reports Schumacher to have learned,

> "I learned, for instance, that statistics can be very misleading. I 
> had looked at the figures before going to Burma and found that it was 
> one of the poorest countries in the world, with an annual per-capita 
> income of only $50. And being totally ignorant, I expected to find 
> poverty there as I had never seen it before. Instead, I found the 
> happiest people I’d ever met. They were well-fed, beautifully dressed, 
> and lived in houses that were suited to the climate. And they had 
> time! They had no laborsaving machinery, but they had great bags of 
> time in which to relax and be happy. There seemed to be no strain in 
> Burma. The people there were the most joyous you could possibly 
> encounter. They were living life as it should be lived. This 
> contrasted sharply with what I found in the United States and Germany. 
> There, in the two countries most cluttered with laborsaving machinery, 
> life was a constant agitation. I loved America but I was bothered by 
> the terrible pressure, the nervous strain, the number of people on 
> psychiatrists' couches. … This led me to formulate an idea that I was 
> tempted to release as the first law of economics: The amount of real 
> leisure a society enjoys tends to be in inverse proportion to the 
> amount of laborsaving machinery it employs."
>
Furthermore, John quotes Schumacher to have argued:

> "The implicit doctrine of development, which has been drummed into our 
> ears for the last half century or so and upon which all of modern 
> society is founded, holds up material wealth as the be-all, end-all of 
> existence. “Do you want to be happy?” it asks. “Then become rich. And 
> do you want to be happier still? Then become even richer. In fact you 
> have not only the right to become rich . . . but the duty! The faster 
> the better. And what is rich? Why material possessions—goods!—of 
> course. The more and the bigger of everything you possess—and the 
> faster you do it!—the better off you'll be. There is no such thing as 
> ‘enough.’ You must always have more, more, more!”
>
> This tenet of life, if anything, is applied even more stringently to 
> nations than to individuals. Which is why we now have this terrible 
> fetish of measuring the gross national product of a country and 
> dividing it by the number of people who live there to get the average 
> income per head. And that figure then becomes the final indicator of 
> the nation’s status in the world . . . while the prime object of 
> admiration is not the income level that has already been attained, but 
> its current rate of growth. In other words, more is always better . . 
> . and it’s even better yet if you can get that “more” faster than the 
> next country
> ​."
>
In the development economics literature, this debate over the meaning of 
development and whether it is consistent with economic growth continued 
for a very long time.  Humberto's quotation of Arthur Lewis's 
contribution to the debate is an excellent example of those who pointed 
to the misleading nature of the claims being made by the likes of 
Schumacher.  It is only recently that economic growth is fundamental to 
achieving economic development appears to have gained the upper hand.  
Part of this results from the phenomenal success in China with the 
millions of the population relieved from abject poverty since the 
economic policy reforms (market freedom) initiated by Deng Xiaoping from 
1976 onwards.  It used to be the case that some people (Westerners) 
would go into China, come out and write stories about how great life was 
in the communes, in contrast with the rat race in capitalist countries!

Even in modern macroeconomics, one still encounters the argument that 
GDP is not a measure of people's well-being because it doesn't include 
people's leisure time.  In guiding my students to reject the 
meaningfulness of the claim, I ask them to choose whether to live in an 
economy in which they have six hours of leisure time (not working) a 
day, sit on a wooden chair, sleep on mattress made of reeds and on the 
floor, in a room without electricity or air conditioning OR have only 
two hours of leisure time, sit on a plush sofa, sleep on a plush bed, 
have some beer or soft drink at the leisure time while watching 
flat-screen TV, be in a room with electricity and air conditioning?  Of 
course, they invariably choose the latter.  Why?  Because, they say, it 
is the more "comfortable" life, reflecting a higher level of well-being, 
which is also included in the calculation on a country's GDP.

Now, Leonard, missing all this rather invokes some credentials on behalf 
of Schumacher, as if they had any relevance to the issue at hand. He 
asserts:
> As son of economist Hermann Schumacher and as Rhodes Scholar in 
> political economy at Oxford, Schumacher knew his Smith, Marx, Mill and 
> many others besides.
My initial reaction was, John Maynard Keynes's father was Neville Keynes 
(an economist at Cambridge) and Maynard knew Alfred Marshall.  What did 
that matter for Keynes's understanding of classical economics or what 
Marshall explains in his /Principles/? Then it also struck me to point 
out that anyone familiar with Smith and Marshall, but writes a text in 
economics with the sub-title "a Study of Economics as if People 
Mattered," must have forgotten what these authors sought to teach.  
Economics is always about people.  It is the "study of men in their 
ordinary business of life," as Marshall writes in the /Princples/.  My 
quotation of Smith about the desire of people to better themselves never 
leaving them till they go into the grave also was to draw attention to 
what was missing in Schumacher's arguments against the pursuit of 
economic growth or material accumulation by people.

It is also irrelevant that Schumacher may have been "senior economist 
for over twenty years with the National Coal Board ... and knew a thing 
or two about large firms and profitability," as Leonard asserts.  It is 
not only large firms that may pose a threat to the environment.  Small 
firms may do so, if they can get away with it.  It is thus pointless to 
argue  that
> It was his concern for the human, social and environmental impact of 
> large-scale organization that led him to investigate the benefits of 
> smaller scale and alternative kinds of ownership.
A state enforcing private property rights or its environmental laws is 
rather the key to assuring environmental safety.

Leonard also argues:
> It should be noted that, when facing his detractors, many of whom were 
> arrogant economist-types with "all the answers", Schumacher showed 
> admirable restraint and charity. 
I rather think that it takes a bit of arrogance for anyone to be 
prescribing what Leonard suggests: "erring towards modest consumption 
and the preservation of traditional forms of society."  Someone well 
acquainted with Smith's writings, particularly his caution to the man of 
system, would rather be inclined to leave people alone to pursue their 
forms of well-being as they please.  So, my main critique of 
Schumacher's argument and those who sympathize with him is this:  
Happiness is a state of mind.  It is subjective.  It is also fleeting; 
it comes and goes. Contentedness is not the same thing as happiness.  
People in poverty may experience a state of happiness just as people in 
affluence may do.  Religion also can be a great moderator of one's 
mental condition.  Alas, Karl Marx had to undermine its usefulness by 
declaring it the opiate of the people!  Nevertheless, human nature is 
such that people want to increase their level of well-being or material 
comfort all the time.  Those who face more obstacles in their way to 
achieving the elevation of their state of material well-being my 
experience fewer occasions of declaring themselves to be happy.  Why do 
you think people risk death to enter the United States from its southern 
border, illegally?

And note that this is how the so-called happiness studies conduct their 
research.  They interview people at various periods in time.  If the 
declared results don't seem to show a positive correlation between per 
capita national income and the recorded answers to the happiness 
"measures," they declare the irrelevance of wealth to being happy.  Were 
they to record the number of times in a week or month that people felt 
"happy" (if anyone spent time recording that), they might conclude 
differently.  I therefore maintain my charge that Schumacer was not 
cognizant of these facts -- the subjective (and fleeting) nature of 
happiness and the desirability of pursuing material wealth for the 
betterment of people.

BTW, I don't think I need to turn Buddhist to feel happy.  I'm happy 
being a Roman Catholic.

James Ahiakpor

  Leonard, Robert wrote:
> James Ahiakpor writes:
>
> "Schumacher clearly wasn't cognizant of the fact that happiness is a 
> state of mind.  Thus, one can be "happy" in relative poverty or 
> abundance."
>
> In contrast, Schumacher was acutely aware that "happiness" is a state 
> of mind.  Having wrestled with the matter of personal happiness since 
> at least 1939, and investigated it through various spiritual/esoteric 
> readings and practices, he decided to go to Rangoon in 1955, in part 
> as a UN economist, in part motivated by his wish to study Buddhism 
> with a local master.  His observation of conditions there led to him 
> to conclude that happiness was only in part dependent on material 
> wealth and that one could indeed be happy in conditions of what some 
> in the West regarded as relative poverty.  In short, Mr. Ahiakpor's 
> phrase becomes coherent if one changes "wasn't" to "was".
>
> Then Mr. Ahiakpor tells us:
>
> "From his uncritical observations, Schumacher also tried to popularize 
> the mythology of "small is beautiful," as if large firms could never 
> be more efficient and more profitable than small firms."
>
> In fact, as senior economist for over twenty years with the National 
> Coal Board, then one of the largest firms in the world, Schumacher 
> knew a thing or two about large firms and profitability.  It was his 
> concern for the human, social and environmental impact of large-scale 
> organization that led him to investigate the benefits of smaller scale 
> and alternative kinds of ownership.  His reading of Leopold Kohr's 
> 1957 /The Breakdown of Nations/ was important here, as were his 
> involvements with the English progressive industrialist Scott Bader.
>
> Mr. Ahiakpor continues:
>
> "Schumacher also failed to appreciate Adam Smith's observation that 
> the reason we (people) save is "the desire of bettering our condition 
> . . . "  If Schumacher had cared to look closely, he would have 
> discovered that, in their state of "happiness" amidst poverty, the 
> people of Burma were still striving to improve upon their material 
> conditions, including acquiring more beautiful clothing for the next 
> cultural festivals."
>
> As son of economist Hermann Schumacher and as Rhodes Scholar in 
> political economy at Oxford, Schumacher knew his Smith, Marx, Mill and 
> many others besides.  In retrospect, his work may be regarded as a 
> critical interrogation of precisely what it means to better one's 
> condition: is it by erring towards modest consumption and the 
> preservation of traditional forms of society or is it by aspiring to 
> unsustainably resource-hungry Western "lifestyles"?  Looking closely 
> at the people of Burma and India in the 1950's and 1960's, Schumacher 
> was led to create, with a modest pittance of his own, the Intermediate 
> Technology Development Group, the aim of which was to allow people to 
> modestly improve their material welfare without having to migrate to 
> the cities, employing agricultural and artisanal tools that were 
> relatively simple and non-violent.  The ITDG continues its work today, 
> under the name of Practical Action.  It should be noted that, when 
> facing his detractors, many of whom were arrogant economist-types with 
> "all the answers", Schumacher showed admirable restraint and charity.
>
> Mr. Ahiakpor goes on:
>
> "Would that John Médaille had taken a critical view of Schumacher's 
> claims regarding the alleged absence of any relation between 
> "happiness" and the material well-being of people. "
>
> and then, seeking clarity, writes:
>
> "Applying a critical mental faculty to his observations would not have 
> led Schumacher to the conclusion that the people of Burma he saw were 
> so happy (and content with their lot), they did not strive to improve 
> upon their material well-being"
>
> I'll leave it to Mr. Ahiakpor to show the thousand readers of this 
> list where E.F. Schumacher denies the existence of any relation 
> between happiness and material well-being.  In the meantime, John 
> Médaille is to be thanked for presenting a few simple, illustrative 
> quotations from the man.
>
> Steve Marglin's observations about village life in Burma are more 
> salient.  Schumacher's 1955 Rangoon essay, "Economics in a Buddhist 
> Country", later revised to become "Buddhist Economics", was written as 
> a personal response to the vision of development being promoted in 
> Burma by Robert Nathan and other Western economic advisors.  The essay 
> was first noticed by Gandhian follower J. P. Narayan, who published it 
> as an appendix to his 1959 book,/ A Plea for Reconstruction of Indian 
> Polity. / The latter was precisely a plea to restore the traditional 
> Indian village order undone through colonialism, and was connected to 
> prewar Indian debates on the "village question", to which Gandhi and 
> Joseph Kumarappa, and their All-India Village Industries Association, 
> were central.  Both Gandhi and Kumarappa, with their concern for 
> village preservation and for the "permanent", i.e., sustainable, 
> economy, were important sources of inspiration for Schumacher.
>
> "Buddhist Economics"  became the most-read chapter of his 1973 book, 
> /Small is Beautiful: a Study of Economics as if People 
> Mattered./  Read by millions, and often republished, the essay, like 
> the rest of Schumacher's book, continues to interest those concerned 
> with the relationship between happiness, material- and spiritual 
> well-being, economic growth and environmental preservation.
>
> Robert Leonard
>
>
-- 
James C.W. Ahiakpor, Ph.D.
Professor
Department of Economics
California State University, East Bay
Hayward, CA 94542
510-885-3137
510-885-7175 (Fax; Not Private)