Schumacher

[Guest guest]

Wise words!

Date: December 1, 2008 4:06:32 PM EST

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Subject: Scale Limitations/Shaping a Future Economy

Dear Marsh Fullerton described the current financial collapse in his May 2008essay "The Relevance of E. F. Schumacher in the 21st Century." It now seemsprophetic. In the same article he warned us not to look to the tweaking of currenteconomic systems to solve our problems, but rather to reach to the teachingsof our common wisdom traditions to find new ways of assessing the truth ofour situation and to collectively build new economic systems that are just,ecologically responsible, and permanent. In fact he names this rebuildingas the central task of concerned citizens in the first decades of thiscentury. We have posted his full article at the E. F. Schumacher Society's website(http://www.smallisbeautiful.org/publications/fullerton_08.html) and haveexcerpted sections of it below for your reading.Best wishes,Staff of the E. F. Schumacher Society140 Jug End RoadGreat Barrington, MA 01230www.smallisbeautiful.org********************************Excerpts from:"The Relevance of E. F. Schumacher in the 21st Century"By FullertonMay, 2008Our global economic system is broken not because of the credit crisis; it isbroken because it is predicated on perpetual, resource driven growth with norecognition of scale limitations.What we are not hearing, at least in the mainstream media, is a criticalreframing of the questions that address root causes. . . . . We arenot hearing a debate about the sustainability of a perpetually growingglobal economic system nested within our finite biosphere. We are nothearing a debate about the wisdom of allowing financial power (and systemicrisk) to be increasingly concentrated in the hands of a few financialinstitutions of increasing complexity and scale. We are not publiclyquestioning the wisdom of the system we have allowed to evolve in responseto capital's quest for ever increasing financial returns. Nor are wedebating where to look for creative responses.However, nothing could be more important at this critical time. What wemust grasp is that the financial crisis we are reacting to is but a cyclicalside show to the bigger issues we face regarding the sustainability of oureconomic system. We should see the present financial crisis as a wake upcall to this far greater challenge. We should search with an open mind forthe wisdom we need to transition our economic system onto a sustainablepath, grounded in ecological reality, with a respect for human justice and adeep appreciation for all life.What is needed is nothing less than a new economic myth, which incorporatesthe central issue of scale in order to supplant and transcend the "invisiblehand" of the free market. We need a "post-modern (post-materialist)economic theory". At the beginning of the 20th century, scale did not matter. At start of the21st century, scale redefines our economic challenge.In my personal quest for this new economic myth, I was stopped dead in mytracks after discovering E.F. Schumacher several years ago. Most who knowof Schumacher know him from his seminal work, Small is Beautiful - Economicsas if People Mattered (1973). The fortunate ones have also read his finalpublished work, A Guide for the Perplexed, a title that grabbed me and didnot disappoint. Most disciples of Schumacher probably encountered his clearthinking during the 70s. Many went on to become leaders in theenvironmental movement. I was in junior high school when Small is Beautifulwas published, and then was busy building a career in global finance duringthe 80s and 90s on the belief that finance rather than politics woulddominate international relations during my lifetime. I got that right, butnot in the way I expected. Seeing global finance, what I do, as a rootcause in fueling our unsustainable economic system, has shaken many of myprior beliefs on economics.. . . it is now time that we transcend to an economics built uponwisdom. Schumacher's instruction is clear and compelling. "From aneconomic view point, the central concept of wisdom is permanence. We muststudy the economics of permanence." This intention takes us in a profoundlydifferent direction than conventional, Cartesian thinking. "Permanence"suggests valuing durability over efficiency, stability over speed. Theseare different values from those typically celebrated in the marketplace.We need to think about what adjustments are necessary to "insure" thepermanence of our collective home, which must include a stable civilsociety. Such thinking must address the very nature of our economic system.Without a sustainable and just economic system, there is no permanence. Weneed to inject these ideas into the public debate by reframing the cyclicaleconomic concerns that preoccupy the mainstream media. We see little truerecognition of this profound challenge among our business, financial andgovernmental leadership, which remains absorbed with short-term tacticalissues.Following Schumacher's lead, we should look to the great wisdom traditionsfor direction in this truth. Where better to look than to the ideas andteachings from all cultures that have stood the test of time, rather thanrestrict ourselves to contemporary economic theories that we know arelimited and incomplete.Schumacher is relevant to our critical 21st century challenges precisely forthis reason. His philosophy, his concern about the limits of materialisticscientism, his distinctions between divergent and convergent problems, andhis ideas of decentralism, appropriate technology, and human scale to namebut a few, are all rooted in the great spiritual and philosophicalteachings. Not surprisingly, his ideas, in addition to being humane andjust, are aligned with nature and nature's sustainable way, the only trulysustainable system we know. They are, I believe, rooted in truth as best asSchumacher could discern it, and therefore they represent wisdom, the wisdomof permanence. If you examine Schumacher's personal library, which is carefully stewardedat the E. F. Schumacher Society in the Berkshires, you will find that most of thetexts are not about economics. Instead, they include the greatphilosophical and spiritual texts from all traditions. Schumacher's giftand genius was to derive economic principles and ideas from these teachings,to have the courage to speak the truth, despite knowing it often flew in theface of conventional economic thinking, and to make the truth accessiblewith his clear and witty prose. What emerges is certainly not the finalword on the economics of permanence. Some of his thinking is outdated, orsimply missed the mark. But as a foundation to build upon, it isinvaluable. The reason his ideas about economics ring true is because theyare built upon these wisdom traditions. The contradictions of moderneconomics are gone.Our challenge now is to refine and update this thinking and to chart apractical path of convergence between the reality that exists in oureconomic system today and the principles we strive to uphold and upon whichour long run prosperity undoubtedly depends. . . . The opening decadesof 21st century may be our best chance to launch the critical transformationof our economic system to an economics of permanence. We need to get itright, as only our collective consciousness will allow.Transitioning to a sustainable and just economic system is the ultimatechallenge of the 21st century. History no doubt will judge our generationby how well we acknowledge, embrace and take up this challenge.****************************** Fullerton is a former Managing Director of JP where he worked for18 years in New York, London, and Tokyo, and subsequently was CEO of anenergy focused hedge fund. He is now seeking to launch an investment fundfocused on investing in high impact sustainability initiatives, and isworking on The Purpose of Capital, a book about the role of investmentcapital in sustainable economics. He is a friend and supporter of the E. F.Schumacher Society in Great Barrington, Massachusetts. can be reachedat john@....Make your life easier with all your friends, email, and favorite sites in one place. Try it now.