wisdom to win

 Wisdom to Win
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Ernst Friedrich (Fritz) Schumacher, Small is Beautiful (1973)Ernst Friedrich (Fritz) Schumacher, Small is Beautiful (1973)


German-born British economist (pictured right) who worked for the National Coal Board before this world famous book

It is based upon Buddhist economics that put people and the environment first in organizations.

Schumacher died in 1977.


See also...

Ernst Friedrich (Fritz) Schumacher in the Management Gurus section. 


Book summary


People at work

People’s potential, creativity and spiritual growth must be maximized at work and leisure through:

 Ernst Friedrich (Fritz) Schumacher, Small is Beautiful (1973)

a) education 

(the “greatest resource”).


b) fulfilling and enjoyable work

(the “humanization of work”).

 Ernst Friedrich (Fritz) Schumacher, Small is Beautiful (1973)

c) small, self-managing groups and communities 

(pursuing common aims)


d) technology suited to people’s needs

(“technology with a human face”)Ernst Friedrich (Fritz) Schumacher, Small is Beautiful (1973)


e) freedom

Autonomy and control over decision making at work.


Ethics and the environment

People must:


a) consume lessErnst Friedrich (Fritz) Schumacher, Small is Beautiful (1973)

This is vital to:

  • conserve the environment.
  • reduce resource consumption.

Greed and excessive materialism must be avoided without stagnating the economy.


b) find wisdom

(through spiritual and moral development).Ernst Friedrich (Fritz) Schumacher, Small is Beautiful (1973)


c) seek the “purification of character”

This is achieved through virtues like:

  • justice (truth). 
  • prudence (wisdom). 
  • temperance (self-control and beauty).
  • courage.


d) make sure science is ethical

(so that it can be applied in the right way).


Intermediate technology

The best way to help the world’s poor is “intermediate technology” where technology and production methods are:

 Ernst Friedrich (Fritz) Schumacher, Small is Beautiful (1973)

a) cheap and simple

(so virtually everyone can use it and expensive imported machinery is unnecessary).


b) suitable for small-scale application

So people can use it where they live, so:

  • avoiding migration to cities. Ernst Friedrich (Fritz) Schumacher, Small is Beautiful (1973)
  • helping the environment and rural communities.

This small-scale production:

  • achieves what Gandhi (pictured right) called “production by the masses”.
  • avoids the dehumanizing and environmentally damaging effects of mass production.


c) people centredErnst Friedrich (Fritz) Schumacher, Small is Beautiful (1973)

Intermediate technology develops people’s:

  • creativity.
  • human potential.


d) locally sourced

(mainly using local materials).


Organization structure

Organizations must balance:

  • order and control (for efficiency), and
  • freedom (for creativity and innovation).

The best way to do this is to “achieve smallness within large organization” through five principles:


1. The Principle of Subsidiarity

If smaller units lower down the organizational hierarchy can do something, they should do it.

 Ernst Friedrich (Fritz) Schumacher, Small is Beautiful (1973)

2. The Principle of Vindication

Every organizational activity must justify itself through results like profitability.


3. The Principle of Identification

Each business unit should have its own accounting systems, so that its profitability and success can be identified.

 Ernst Friedrich (Fritz) Schumacher, Small is Beautiful (1973)

4. The Principle of Motivation

Employees must be motivated through:

  • money.
  • interesting work.


5. The Principle of the Middle Axiom

Senior managers should give business units:

  • broad objectives.
  • freedom to carry them out.


EconomicsErnst Friedrich (Fritz) Schumacher, Small is Beautiful (1973)

Economics is destructive because it:

  • ignores “man’s dependence on the natural world”.
  • believes that resources are allocated through markets, money and prices.

So we need Buddhist economics that seeks:


a) spiritual healthErnst Friedrich (Fritz) Schumacher, Small is Beautiful (1973)

(as well as material wealth).


b) the right balance

(between enjoyable work and leisure).


c) non-violence and simple living

(without greed).


Key quotes on organization structure

Man is small, and, therefore, small is beautiful.

The fundamental task is to achieve smallness within large organization.


Key quote on work

Next to the family, it is work and the relationships established by work that are the true foundations of society.


Key quote on stress and pain

It [materialism] speaks to us in the language of terrorism, genocide, breakdown, pollution, exhaustion.


Key quotes on technology

The primary task of technology...is to lighten the burden of work man has to carry in order to stay alive and develop his potential.

It is the sin of greed that has delivered us over into the power of the machine.


Key quote on learning and wisdom

Man is far too clever to be able to survive without wisdom.


Key quote on nature and climate change

If we squander the capital represented by living nature around us, we threaten life itself.



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