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Does David Cameron really follow this green guru? | Andrew Simms

He may be in fashion in Downing Street, but EF Schumacher would have been horrified by its policy on the environment

It was a surprise to read in the Observer that the late economist EF Schumacher, author of the seminal 1973 book Small is Beautiful, was not only back in fashion, but apparently also a guru for those within Downing Street.

For many, myself included, Schumacher never went out of fashion. His ideas inform several prominent organisations and movements active in creating better, more climate-friendly food and energy systems. His understanding that the economy must know its junior place next to the biosphere, dependent not dominant, has gained influence over decades. It’s a paradigm-shifting insight with profound implications for economics and other disciplines.

Which is why, leaving aside a little political mood music, it is hard to believe that he is a guru to the current government. The coalition is rushing to restore a very old-style deregulated market economy, where finance comes first and making it easier for the already rich to get richer is meant to benefit all. Schumacher’s impressive eyebrows would have shot skyward at this thought, so very far from his “economics as if people mattered”.

Similarly, he would have been horrified to see the proceeds of taxing big oil companies, being used to subsidise consumption of their product, oil, a nonrenewable resource. He would also have dismissed Downing Street’s enthusiasm for nuclear power and other big, centralised, capital intensive technologies that lack human scale, or fight against nature rather than co-operate with it.

Schumacher was full of ideas on rethinking both work itself and the places where we do it. He advocated “trusteeship” as a radical form of economic governance, something also directly applicable to our management of natural resources.

In particular he praised the model adopted by a manufacturing company called Scott Bader Commonwealth that still operates successfully today. Once it was a conventionally run, profit-maximising business. Now it has no shareholders and the maximum differential between highest and lowest paid is 1:7. A democratic members assembly made up of staff committed to the firms ethos holds the board to account, in line with their founding principles.

The company is immune to takeover and has long-term planning horizons. Sixty per cent of profits are reinvested and each generation at the company is obliged to work to ensure the long-term sustainability of the firm, in order that future generations may benefit.

Godric Bader, descended from the firm’s founder, says this has “a direct parallel as to how we now urgently have to look at our earthly home”.

Schumacher thought the key to success was developing “responsibility for a bundle of assets – not ownership”. The approach, he wrote, overcame “the reductionism of the private ownership system and uses industrial organisations as a servant of man, instead of allowing it to use men simply as means to the enrichment of the owners of capital”.

The current rush to re-privatise Britain’s bailed-out banks and privatise afresh everything from the blood donation service to, well, almost everything, would have left Schumacher exercising the most vividly colourful corners of his vocabulary. The transformation of ownership into a sense of long-term trusteeship over common assets, rather than its mere changing of hands from company founder to workers was, he thought a “necessary, but not sufficient, condition for the achievement of higher aims”. Explicit tasks that are useful in economic, but also social and environmental ways, need to be written into the principles of “commonwealth”.

News that the UK’s greenhouse gas emissions rose by nearly 3% last year would have presented Schumacher with just such an explicit task. For the UK to play its part in preventing dangerous climate-change emissions, cuts of around 10% per year are needed. Just as the 10:10 campaign is trying to do, Schumacher would have written this goal into the principles of commonwealth in such a way that it became an economic purpose of the company to achieve it.

Ironically, the title that helped make the book successful, Small is Beautiful, was forced on to a reluctant Schumacher by his publisher Anthony Blond. Schumacher didn’t think everything should be small, but of an appropriate scale. But he thought:

“There is wisdom in smallness if only on account of the smallness and patchiness of human knowledge, which relies on experiment far more than on understanding. The greatest danger invariably arises from the ruthless application, on a vast scale, of partial knowledge such as we are currently witnessing in the application of nuclear energy, of the new chemistry in agriculture, of transportation technology, and countless other things.”

“Ruthless application on a vast scale” accurately describes the current government’s programme of cuts, and the use of a narrow, failed and discredited version of market economics. If that message creeps from the pages of the copies of Small is Beautiful allegedly to be found in Downing Street, the guru can take a bow. © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds