Fundamental Flaws

I recently read a book written by environmental economist Fritz Schumacher (1973) called: "Small is beautiful: Economics as if people mattered". My initial instinct is to tell everyone to read this beautifully explained book, but I realise this is unrealistic. Instead, I invite you to read my summaries of the key takeaways from each chapter in bite-sized chunks. This book covers so many vital ideas that I think are rarely discussed and often poorly explained, such as the modern economic system, which may sound horribly dull but it is the foundation of many problems that we face today. It may come as a shock that I am so interested in a book written 50 years ago, you'd think perhaps it is a bit outdated considering it is 2022. To this I say, it is eerily relevant to today's society, which goes to show how little progress we have made in our ways of thinking and how unsustainably we continue to live in this world. Anyway, enough of my thoughts... let's dive in!

The Problem of Modern-day Production

"The modern industrial system, with all its intellectual sophistication, consumes the very basis on which it was built. It runs on irreplaceable capital which we treat as disposable income."

One of the most fundamental issues with our modern economic system is that we fail to make the important distinction between INCOME and CAPITAL.

Natural resources are irreplaceable capital (e.g. fossil fuels). If we treated these as such we would be concerned with conservation to minimise their over-use.

The "income obtained from these natural assets should be devoted exclusively to the evolution of production methods and patterns of living which alleviates dependency on this resource." In reality, we consume our natural capital at an unsustainable rate, treating natural resources as expendable income, and rather than reducing their use and investing in alternative sources, we are constantly maximising their use for unlimited economic growth to feed our desire for evergrowing productivity.

In today's world, it is the people far removed from production lines that dictate the modern economic system and all that it yields. This includes 'experts', captains of industry, financial managers in global governments, economic journalists, and many more 'qualified' people who are more often than not unacquainted with the harsh realities produced by this majorly flawed system, or who are very much aware but choose to turn a blind eye. In the Western world, controversially (in my opinion) called the 'developed world', philosophical changes in attitudes toward nature have led us to believe that we are not part of nature but above it, and that it is ours to exploit with no means to an end. The problem is that if we choose a battle with nature, aiming to dominate it, and "we win, we will come out on the losing side".

"We have deemed valueless anything that we have not made ourselves"

The changes in the quality and quantity of industrial processes in the last few decades have created a situation where we are rapidly crossing the ecological boundaries that nature provides. We must make a conscious effort to understand the problems that we are faced with and to be proactive. We must find ways to reshape our consumption-centric society and invest in new models for sustainable development to create a lifestyle designed for permanence, not greed.