The life of Fritz Schumacher

This is Schumacher week here on Make Wealth History. To kick us off, a brief biographical post.

Fritz Schumacher was German, born in Bonn in 1911. His father was an economics professor at a time when economics really mattered in Germany. The inter-war years saw the infamous devaluation, a subsequent recovery and the rapid emergence of a new Germany. Schumacher was suspicious of this new Germany. He recognised that the oppressive peace terms negotiated at the end of the First World War were driving Germany towards nationalism and militarism in way that could only lead to war. After studying in Berlin, Oxford and New York under the Rhodes scholarship,  he decided he would settle in Britain with his wife Muschi.

With a good head for figures and an admirable work ethic, Schumacher worked as a financial advisor, in business, and then as a statistician and economist. He was always developing new ideas, speaking, publishing articles on economics and working up big proposals – how to maintain full employment in an economy, or an international clearing house for debt.

This work was interrupted by the outbreak of war. It was not a good time to be German, and like many of his countrymen he was arrested and interred in a hastily build prison camp on Prees Heath. Though the conditions were rudimentary and his health suffered, Fritz was voted head of the camp and assisted in running it. This was to be a formative experience, and his principles of putting ‘people first’ were forged in what he described as a ‘microcosm’ of society. He also shared a tent with an ardent socialist, and their long conversations were influential in shaping Fritz’s thought.

With some influential friends acquired through his journalism and Rhodes connections, Schumacher was only in the camp for a matter of months before his release was secured. He saw out the remainder of the war working as a farm labourer, which he loved, and writing in his spare time. That writing was getting noticed, and at one point he took a day off from the farm to go to London to discuss one of his papers with John Maynard Keynes.

After the war Schumacher returned to Germany to work on the reconstruction, but was drawn back to England and eventually to a job as chief economist at the National Coal Board. This was a huge and very important nationalised industry, and he was to work here for the next two decades, working on energy policy, trade, employment, and much more besides.

Energy was changing. Coal was becoming less important, and oil was replacing it. Schumacher realised that both were non-renewable resources, and that an economy could not run forever on a non-renewable basis. “Mankind has existed for many thousands of years and has always lived off income” he told a conference in Germany in 1954. “Only in the last hundred years has man forcibly broken into nature’s larder and is now emptying it out at a breathtaking speed which increases year to year.”

Invited to advise the government of Burma on development, Schumacher travelled to the country and it was here that he formulated the idea of ‘Buddhist Economics’ that was eventually to make him famous. Combining Gandhi’s economic ideas with aspects of socialism and early environmental thought, Buddhist Economics would be a system that recognised limits and was based on renewable energy. Reading Schumacher’s comments now, it is remarkable how far ahead of his time he was.

“A civilization built on renewable resources… is superior to one built on non-renewable resources, such as oil, coal, metal, etc. This is because the former can last, while the latter cannot last. The former co-operates with nature, while the latter robs nature. The former bears the sign of life, while the latter bears the sign of death. It is already certain beyond the possibility of doubt that the ‘0il-coal-metal-economies’ cannot be anything else but a short abnormality in the history of mankind – because they are based on non-renewable resources and because, being purely materialistic, they recognise no limits.”

This was 1955, seventeen years before the Limits to Growth report would bring this debate into the mainstream. Throughout those intervening years, Schumacher was something of a radical, but he always believed in focusing on what was possible. Rather than push ideas that the world wasn’t ready for, he got on with the solutions himself. He developed the idea of intermediate technology – simple technologies that improved people’s lives, but that were still cheap and accessible, founding what was eventually to become the charity . He experimented with organic gardening and became president of the Soil Association. He traveled extensively and was consulted as an economic adviser by the governments of India and Tanzania, among others.

Finally, approaching his sixties, he got around to writing the books he had been meaning to find time for. The first was called The Homecomers, and Fritz was very pleased with it: “Brilliant” he said after reading back his first draft. “It comes as a complete surprise to me that I have written this marvellous stuff.” The publisher agreed on all but the title, and discarded it in favour of Small is Beautiful, a phrase Schumacher had used years earlier in an essay on ‘Economics in a Buddhist country’. It was published in 1973 and was not an immediate success, but caught on slowly, was translated, reprinted, and within 12 months it was a major talking point. Awards, honorary degrees, and speaking engagements came tumbling in. His ideas connected with a whole generation of students, with those pioneering voluntary simplicity, and the first shoots of the environmental movement.

Schumacher finished his life on relentless speaking tours, somewhat neglecting his family. (Having married a much younger woman after his first wife died, he had a whole second family and eight children in total, something modern environmentalists may raise an eyebrow at.) He was sure that he had an urgent warning to deliver, especially as the West was hit by the fuel crises of the 1970s, and he spoke at universities, conferences and community projects around the world. He found time to complete a second book in 1977, A Guide for the Perplexed, which detailed his more spiritual and philosophical conclusions. He died as it was going to press, suffering a heart attack on a train in Switzerland.

Although he was influential in many important areas, Schumacher’s biggest ideas were really only recognised towards the end of his life. He began to put some of them into practice himself, but it fell to others to implement his ideas on the scale they deserved, and to push them forwards. Exploring that legacy will require another post.

  • I’m indebted to Barbara Wood’s biography Alias Papa: A life of Fritz Schumacher for much of the above. Book review later this week.

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