Saul Wainwright

Pol 4044F
Final Essay
Prof. Nash

Introduction
Vaclav Havel and E.F. Schumacher are both critically concerned with how the
functioning of the modern nation-state and its economy has become dislocated from
humanity and its relationship to nature. They are both equally concerned with the ways in
which nature and humanity are ignored by this system and they believe that, placing the
importance of nature and humanity center stage, is the only way that our society can and
ought to operate. Havel sees the role of individuals’ acceptance of the injustices of the
system as the site for change. He believes that by operating from a basis of personal truth,
derived from the recognition of the “mystery of nature”, is the only way to create space
for political alternatives. E. F. Schumacher believes economics in its current incarnation –
a price mediated through money markets – ignores the difference between things that
hold economic or non-economic values. Schumacher believes the change will be based
out of a change in the “meta-economics” of society. He therefore believes that by
reorienting the focus, or expanding the terrain of economics to recognize qualitative
differences, rather then just quantitative differences, will result in a “people centered”
economics. Havel and Schumacher’s arguments are both based off the same starting point
– a critique of the dehumanizing and impersonal nature of our economy and political
system, which is leading to environmental destruction and by rational conclusion, the
destruction of human life. They both believe that the only way to rectify this situation is
by operating, as individuals and society, from a place of truth. Despite the very different
conclusions for agency, Havel’s ideas compliment Schumacher’s work and give a
political agency to his argument that had previously being lacking, and at the same time
Schumacher’s work gives a terrain for the truth to be expressed in very concrete ways
that contribute to a building up of material (understood as based in nature) alternative
ways of living.

Schumacher
Schumacher’s focus on the philosophy (or lack thereof) of economics is central to his
critique of modern society. Schumacher says that, “[T]o say that our economic future is
being determined by the economists would be an exaggeration; but that their influence, or

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Final Essay
Prof. Nash

in any case the influence of economics, is far-reaching can hardly be doubted”.1 He

essentially associates economics with the “central role” of determining what is
“‘economic’ and what is ‘uneconomic’” and that these criteria, are above all other
criteria, in their ability to “influence over [sic] the actions of individuals and groups as
well as over those of governments.”2 Schumacher sees the political dominance of
economic ideas and says, “It is hardly an exaggeration to say that, with increasing
affluence, economics has moved into the very centre of public concern,” and that through
this dominance of economic thought and through the act of condemnation of something
as “uneconomic, its right to existence is not merely questioned but energetically denied.”3
This concern with the dominance of economics then leads Schumacher to explore what is
determining the distinction between what is economic verse uneconomic. Schumacher
recognizes that in order to get at this question he needs to engage ideas outside of the
normal realm of economic thought – moving towards the importance of qualitative verse
quantitative distinctions is critically important to this move.

For Schumacher the central role that economics plays in society is not a problem, in fact
he by no means supposes to replace “economics” with something else. What he wants to
highlight is that economics is a function of something else. That, in essence, economics
does not operate distinct from its surroundings or philosophical roots that dominate the
society at any one stage. What he is concerned with is the overtly scientific focus of
economics and its obsession with the quantitative that leads to an “economist– turned-
econometrician,” and that they, economists, fail to pay attention to the “primacy of
qualitative distinctions”.4 In other words our understanding of economics does not
encompass a large enough spectrum of life. Schumacher has to expand the understanding
of economics to one that embeds it into a larger philosophy of society. Schumacher,
quoted John Stuart Mill as saying that, the political-economy is “not a thing by itself, but
as a fragment of a greater whole; a branch of social philosophy, so interlinked with all the

1
E. F. Schumacher, Small is Beautiful: A Study of Economics as if People Mattered, (London: Abacus,
1974), p. 33.
2
Ibid., p. 33.
3
Ibid., p. 34.
4
Ibid., p. 40.

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Final Essay
Prof. Nash

other branches that its conclusions, even in its own peculiar province, are only true
conditionally, subject to interference and counteraction from causes not directly within its
scope”.5 What are these other causes and from where do they originate? In an effort to get
at this Schumacher introduces a concept of meta-economics.

For Schumacher, “[T]he main subject matter of economics is ‘goods’”.6 But, the
economics, as currently constituted, does not make clear distinctions between what are
“man-made or God-given” goods. This economy is not concerned with the qualitative
differences of these goods, whereas, for Schumacher, economists should insist on, “the
primacy of qualitative distinctions”.7 The meta-economy is where these distinctions or
lack of distinctions are first introduced, “differences may be called meta-economic…they
have to be recognised before economic analysis begins”.8 To illustrate these “fundamental
and vital differences”9 Schumacher divides ‘goods’ up into categories. He created the
following distinctions; ‘goods’ fall into two groups, primary and secondary. In order for
humanity to obtain the secondary goods they need access to the primary goods. These
primary goods originate as either renewable or non-renewable natural God-given
resources. The production of secondary goods is critically tied to the access to, or the
extraction of, primary goods. Therefore the manufactured and services goods that form
part of the secondary group are dependent on the primary group, “An expansion of man’s
ability to bring forth secondary products is useless unless preceded by an expansion of his
ability to win primary products from the earth, for man is not a producer but only a
converter”.10 The distinctions between these different ‘goods’ is lost in an economy that
brings all ‘goods’ to the market where “they are treated the same, as objects for sale” and
the “market knows nothing of these distinctions”.11 Schumacher does not see the current
economic system as fixed or based on some sort of natural laws, for him “economics is a

5
Ibid., p. 34.
6
Ibid., p. 40.
7
Ibid., p. 40.
8
Ibid., p. 42.
9
Ibid., p. 41.
10
Ibid., p. 41.
11
Ibid., p. 41.

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‘derived’ science which accepts instructions from what I call meta-economics”.12 The
logical conclusion of this argument is that the terrain of agency is to be found in the realm
of meta-economics.

To illustrate the way in which a shift in the meta-economics can change the broader
economic functioning Schumacher uses an idea of “Buddhist economics”. I am not going
to go into any detail of what Buddhist economics specifically results in, though in certain
circles there has been a latching onto the ideas that are highlighted as a methodological
solution to the problem of modern economics. The reason I don’t see the importance in
highlighting the specifics of Buddhist economics as expounded by Schumacher is
because even for him the choice is rather arbitrary, “The choice of Buddhism for this
purpose is purely incidental; the teachings of Christianity, Islam, or Judaism could have
been used just as well as those of any other of the great Eastern traditions.”13 What is
important about this argument is that Schumacher is trying to reiterate how the moral or
ethical codes that can be found in religions or ancient traditions that call attention to ideas
of wealth that extend beyond the material, can help guide and create alternative economic
systems, “No one seems to think that a Buddhist way of life would call for Buddhist
economics, just as the modern materialist way of life has brought forth modern
economics.”14 So, Schumacher shows that this other way of life calls forth, through the
meta-economy, different forms of economic functioning and ends.

Truth
At this point then we need to turn to Schumacher’s concept of truth, which also enables
me to bring in the ideas of Havel allowing me to extend Schumacher’s argument into a
place of political agency as defined by Havel. For Schumacher the idea of truth is what
creates a set of boundaries and guides us in our choices, “Mankind has indeed a certain
freedom of choice: it is not bound by trends, by the ‘logic of production’, or by any other
fragmentary logic. But it is bound by truth. Only in service to truth is perfect freedom”

12
Ibid., p. 43.
13
Ibid., p. 43.
14
Ibid., p. 44.

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from the “‘bondage of the existing system’” possible.15 Exploring ideas of truth is far
harder, after all the system that currently operates based on a meta-economics derived
from a “philosophy of materialism”, is operating based on the truth of materialism, or as
Havel says, might the economy not “function quite smoothly, after all, in the service of
total destruction?”16 Therefore both Havel and Schumacher need to ground the truth in a
particular argument that appeals to the concrete existence of people, today. They both use
the same basis, one derived from nature as a critical part of human existence and
something that has not been recognized or included in the current political-economic
system. For Schumacher, “Modern man does not experience himself as a part of nature
but as an outside force destined to dominate and conquer it”.17 This alienation is critical
and is enabled through the depersonalized and purely abstract nature of the money based
market system. This is something that I highlighted earlier in Schumacher’s
understanding of meta-economics. Economics, as currently constituted because of the
truths expressed through the meta-economy, “means that it is inherent in the methodology
of economics to ignore man’s dependence on the natural world.”18 This is because
economics has historically operated as if the “framework within which economic activity
takes place as given…as permanent and indestructible”.19 But in the modern age this is
being greatly questioned because of the “increasing evidence of environmental
destruction”.20 Havel makes a similar critique of the modern system highlighting the
“soiling of the heavens”.21 The system for Havel “must honor with the humility of the
wise the limits of that natural world and the mystery which lies beyond them”.22 This then
grounds the truth, of both Havel and Schumacher, into something concrete and appeals
to, they both believe, something that “exceeds all our competence”23 but highlights a truth

15
Schumacher, op. cit., p. 248.
16
Vaclav Havel, “Politics and Conscience,” in Open Letters: Selected Writings, 1965-2000 (New York:
Vintage, 1992), p. 264.
17
Schumacher, op. cit., p. 11.
18
Havel, op. cit., p. 36.
19
Schumacher, op. cit., p. 42.
20
Ibid., p. 42.
21
Havel, op. cit., p. 250.
22
Havel, op. cit., p. 267.
23
Havel, op. cit., p. 267.

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that cannot be denied. By placing the ends above the means there is hope of reorienting
the system towards a functioning that will enable the lasting permanence of humanity.
For Schumacher the obsession with “valuing means above ends… destroys man’s
freedom and power to choose the ends he really favours; the development of means, as it
were, dictates the choice of ends.”24 Havel highlights the same issue, “To what purpose a
system functions is, after all, more important than how it does so.”25

In this commonality between the two authors we are left with a similar question of
agency. How does one create the changes in the meta-economy that Schumacher
highlights as important? After all Schumacher believes that this is the site of agency but
he fails to discuss how one would implement this change in the meta-economic
environment. Schumacher never actually engages this question rather he goes on to
explain what Havel would call “technical or organizational trick [sic] designed to produce
better economic functioning”.26 Havel was not satisfied by these sorts of solutions; ideas
such as “intermediate technologies” or “a theory of large scale organisation". Havel
believed that, in grounding this truth in an understanding and recognition of the primacy
of nature – understood as the “mystery” – people must have the “ability personally to
guarantee something that transcends him and so to sacrifice, in extremis, even life itself to
that which makes life meaningful”.27 In Havel’s essay, Power of the Powerless, he states
that;

“if living within the truth is an elementary starting point for every attempt made
by people to oppose the alienating pressure of the system, if it is the only
meaningful basis of any independent act of political import, and if, ultimately, it is
also the most intrinsic existential source of the "dissident" attitude, then it is
difficult to imagine that even manifest "dissent" could have any other basis than
the service of truth, the truthful life, and the attempt to make room for the genuine

24
Schumacher, op. cit., p. 42.
25
Havel, op. cit., p. 264.
26
Ibid., p. 264.
27
Havel, op. cit., p. 265.

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aims of life.”28

Havel does not spare modern politics in the same way that he does not spare modern
economics of his critique. However, he in certain ways extends a type of agency to
Schumacher’s argument and asks for a deeper commitment to the change. Havel asks for
a sacrifice, “for the sake of that which gives life meaning”.29 What Havel opens up is
something far deeper then the solutions, or the terrains of action that Schumacher
highlights. It is hard to not think of Schumacher’s solutions as “technical” or
“bureaucratic” fixes. In fact Schumacher’s ideas have led to a series of ongoing
experiments that are propagated and emphasized through the Schumacher Institute and
the New Economics Foundation. The work of these groups’ focuses on local economic
development using a series of economic tools including community based currencies,
local investment schemes, etc. Schumacher highlights the meta-economy as the source of
potential change – that this is where the economic decisions emanate from, however the
solutions that Schumacher proposes focus on the local and on alternatives that are hard to
see as impacting the meta-currency narrative. Perhaps it is something that I have missed
in the other works of Schumacher, or perhaps it is due to his singular focus on the
economy, to the extent that he doesn’t even see much relevancy in political shifts. In this
way then there is a tension between Havel and Schumacher. Havel is focused on a
completeness of the claiming of personal responsibility, a shift that calls people forth to
act from a position of “consciousness” and that the “seemingly powerless person who
dares to cry out the word of truth and to stand behind it with all his person and all his
life…has, surprisingly, greater power”.30

The solution, or the way to a solution, is through the dominance of this truth that both
Havel and Schumacher highlight. Without this truth becoming the central element in the
functioning of society then the continued destructive drive of the modern political
economy will continue to dominate. In order for this shift to occur both authors rely on a

28
Vaclav Havel, “The Power of the Powerless,” in Open Letters: Selected Writings, 1965-2000 (New York:
Vintage, 1992), p. 133.
29
Havel, op. cit., p. 263.
30
Havel, op. cit., p. 270.

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form of dissent. Havel is far more literal in his dissent, and it is a dissent that attempts to
challenge the political powers directly. This dissenter “has, surprisingly greater power,
though formally disfranchised, than do thousands of anonymous voters”.31 It is a political
question for Havel and the solution is a political one framed as “antipolitical politics”.
This concept of politics is one that seeks to not reinforce the politics of the “technology
of power and manipulation” but rather as a politics of “practical morality, as service to
the truth, as essentially human and humanly measured care for our fellow humans”.32 The
tension here, is that Havel defines politics as the definition of a “technology of power”
and his re-definition is nothing like politics, neither as he defined it nor as society
understands it. The same is true for Schumacher, his conceptualization of economics as if
people mattered, is one that is diametrically opposed to the definition of economics that
he defines as the current and dominant form. This is the central flaw in Schumacher’s
argument because he places the point of change on the level of meta-economy but his
conceptualization of an alternative is one grounded in the economy and pays limited
attention to the ways in which the meta-economy is changed. What Schumacher does
present are a bunch of smaller forms of dissent that are concretely manifested in forms of
alternative economics. The question that this leaves me with is how do these alternatives
lead to a change or help towards promoting a change in the meta-economy?

Conclusion
The contradiction that Schumacher is stuck with is that he believes that the modern
economy has come to take such a dominant place in determining the actions of
individuals and society, yet he places his solutions into the economic sphere. He does not,
in the end talk about a politics that may lead to shifts in the meta-economy. This is
something that Havel does far more, and places far more importance on this action. Havel
sees this as the only true way to express the truth that both he and Schumacher highlight.
Keynes said, “not to ‘overestimate the importance of the economic problem, or sacrifice
to its supposed necessities other matters of greater and more permanent significance’”.33

31
Ibid., p. 270.
32
Ibid., p. 269.
33
Schumacher, op. cit., p. 34.

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How then do Schumacher’s solutions escape this danger? I believe the only way that it
can is if it is aligned or articulated with a Havelian notion of “antipolitical politics”. With
this approach an agency that keeps the truth as central to the actions of dissenters and
reminds them of the ultimate sacrifice that they, as conscious individuals with a sense of
responsibility, may have to make. However, at the same time, Schumacher lands up
complimenting a Havelian argument because it opens up opportunities, in the very
concrete space of production and economics, to explore alternative ways of economic
sustenance that are in many ways opposed, or at the very least dissenting, from the
dominant form of modern economics and politics. Understanding how these two
philosophies – antipolitical politics & economics as if people mattered – can work
together opens up room for a strong alliance and prevents Schumacher’s arguments from
devolving into mere reforms or week experiments that don’t grow nor challenge the
larger macro-economic narrative.