Dr. Schumacher is here in this country at the invitation of the International Independence Institute, and other groups are participating in the arrangements in different parts of the country. Can you come down a little closer, perhaps? There are some seats down here on the front row. For people that can't hear very well, why don't you come down, and we'll have a talk. Just looking around the room and extrapolating from the people that I know here, it's clear

[01:23]

that probably not many in this room need to have this evening's speaker introduced to them. Most of us know him, at least recently, by reading his book Small is Beautiful, a book which illuminates the growing misgivings that many of us have about a society built on unlimited growth and a high level of material consumption, and a book which presents a vision of another way, a middle way. Others here will know him through the pages of that remarkable little journal, Manus, which has been one of the few places in the United States, one of the few places that his work and ideas and words have appeared over the past years. Those who have followed his work more closely may know him as the founder and the president of the Intermediate Technology Development Group, which is dedicated to developing tools,

[02:27]

small-scale machines, and methods of production appropriate to developing countries, or as the president of Britain's Soil Association, a well-known organic farming organization, or perhaps as a director of the Scott Bader Company, a pioneer in worker control and ownership in England, or perhaps a sponsor of the Fourth World Movement, a campaign for political decentralization and regionalism which originated in England. Dr. Schumacher was one of the world's few economists who took Gandhi's economic program seriously, and in articles such as Buddhist Economics, he has explored the Buddhist goal of right livelihood and the economic arrangements which flow from it. There are other facets of Dr. Schumacher's experience which may be less well-known to this audience. In 1930, he became the first German Rhodes Scholar after World War I, and he studied economics

[03:28]

and political science in the New College at Oxford, where he was to return later as a member of the Oxford University Institute of Statistics. During this period, he was also a feature writer for The Times, The Economist, and The Observer. He was economic advisor for the British Control Commission in post-World War II Germany, and for 20 years prior to 1971, he served as economic advisor to the British Coal Board. During his final years on that board as director of statistics and then as head of planning. In these positions, he played a significant role in transforming an enormous government-controlled monolith into a well-coordinated confederation of human-scale units. The value of his work was publicly recognized this past June in England when he was awarded Commander of the Order of the British Empire. Among the experiences which seem to have strongly influenced the direction of his work were his assignment as economic advisor to the Prime Minister in Burma in 1952 and his work

[04:32]

with the Planning Commission of Delhi, where he served as advisor on world development in 1962. Peter Barnes, in his review of Small is Beautiful in the June issue of New Republic, wrote that reading this book left him wishing that somehow an economist of Schumacher's vision could be scooped from his subterranean hideaway and ushered into the White House disguised as Arthur Burns. Well, I'm afraid that's wishing too much, and besides the transformations that Schumacher is talking about will depend upon all of us, not only presidential advisors. It is a very special privilege to introduce Dr. E. F. Schumacher, who will speak with us this evening about an economics as if people matter. Dr. Schumacher. Mr. Chairman, ladies and gentlemen, it's 41 years since I last had the privilege of

[05:45]

visiting San Francisco, and at that time I picked up a little story which enchanted me so much that I can still remember it. It was about a little woman working as a housemaid. You can see it was 41 years ago. And she was an absolute pearl, utterly reliable, most devoted. She was married, and her husband did not find the approval of the woman who employed her because he could never really hold a job, didn't seem to have a career. And one day her lady said to her, how can you put up with this husband of yours? He's no good.

[06:48]

And she said, it's like this, ma'am, I make the living, but he makes the living worthwhile. And this, to me as an economist, was a sort of germinal experience, and from that moment I knew that it's not enough to make a living, but the living must be made worthwhile. I think the title that the organizers have chosen for me, a snappy title, Economics as if People Mattered, can't think how they hit on it, this title is indicating that the way economics and economic activities have developed may be described as making a living, perhaps an increasing living, but the living becoming less and less worthwhile.

[07:53]

Somehow, all our economic thinking starts from goods, and if one starts from goods, then one becomes interested in, let's say, the mass production of goods. And the mass production of goods is most easily done with enormous machines, but to have these machines and enormous organizations, one needs an enormous infrastructure, as we economists say, a transport system, a huge array of educational institutions, even such things without which the world cannot carry on anymore, like special schools for computer

[08:57]

programmers, etc., etc., so that a superstructure and an infrastructure has to be created to make life extremely complex and extremely burdensome. There might be a different way, and today more and more people are looking for a different way. They're looking for alternatives. Well, now, why should one look for alternatives? Not to all people is it noticeable that life is becoming more and more burdensome. To some it's becoming lighter, and most people cannot even imagine that an alternative could exist or could be brought into existence. They think back to the early thirties, the Great Depression, and say, never again, we

[09:59]

don't want that. Or they think back to before the First World War, or the late nineteenth century, Dickensian England, oh, we don't want that, thank God we have that behind us. Or the early nineteenth century, when we had child labor and women's labor and the grossest kind of exploitation, and before that period they have learned from their school masters that life was hardly worth living for anyone. That really, life began with James Watt inventing the steam engine. That's how I've been brought up. It always struck me as very strange that all the great cultures had been produced evidently

[11:02]

by masses of people, not only in Europe but also in Asia, anywhere, before the Industrial Age. Whether you think of the Taj Mahal or the Durham Cathedral, the work of tens of thousands of exquisite craftsmen, who we have been told have been living in starvation and misery worrying about how to feed their children, and doing this exquisite work which hardly anyone can do today. These are very difficult things to swallow, and I don't want to indulge in any criticism of our school teachers. Now, one reason for looking for alternatives is that it seems that particularly any large units and large societies are becoming increasingly ungovernable.

[12:05]

The small societies don't suffer from this so much. Again, my school teachers didn't tell me that. My school teachers told me that the bigger the better, and that you've got to be very big to be wealthy. But with the perversity of a schoolboy, I made a list of all the wealthiest countries in the world, and I found most of them were very small. There are always some exceptions. And I made a list of all the biggest countries in the world, and I found that most of them were desperately poor. I'd also been told that the trend of history is first for families to get together into some tribal organization, then tribes to get together into some national organization, and then for nations to get together into bigger nations by one means or another, and

[13:13]

this won't all culminate in a world state. But then I noticed that the number of sovereign nations was not getting smaller but bigger all the time. And when the United Nations were set up, the number of sovereign nations in this world was half that which it is now. So, again, this posed a problem. Evidently, we have certain fixed ideas, and they need critical study. Is it really so? We have, in the United Kingdom, certain manifestations of regional nationalism. They are the Welsh. They say, why can't we be Welsh and run our own show? Why have we got to be run by London? And there are some people in Scotland who have never looked at England as anything as

[14:14]

a Scottish peninsula, who say, well, why can't we have Scottish Parliament? Why has government to be so far away? These are all very interesting trends, not confined to the United Kingdom. You can notice them everywhere. And then people are told that wouldn't be viable. If Bismarck had, in the Fruscian-Danish War, annexed the whole of Denmark, then today Copenhagen would be a minor provincial city, and you would have never heard of it. It's a capital city. It has its own character, everything. If then somebody had come and said the Danes don't like having to go to Germany to make a career, they want to do their own thing, then we would have been advised that Denmark, of course, couldn't exist.

[15:15]

It would not be viable. Denmark, as you may recollect, had an adjunct called Iceland, and the Icelanders one day not so very long ago decided that it was intolerable to have a government so far away and to be linked up with such a colossus like Denmark, and they made themselves independent, and lo and behold, they never looked back and are now one of the most prosperous and also upstanding societies of Europe. These are just a few stray thoughts and observations to, as it were, ease ourselves into a process of thinking together, alternatives to our fixed ideas. Now, these alternatives are necessary, as I said, because large units are becoming increasingly

[16:19]

ungovernable for reasons that we might wish to discuss later. I don't think I need to go into them. Another reason for thinking of alternatives, which I also do not want to enlarge upon, is that we are getting an increasing number of messages from nature that we are abusing her. She is telling us, well, there are tolerance margins, but if you so massively interfere with me, I'm breaking down the ecological problem. If you would do it more gently, I'm very patient. But you have chosen a very strange way of living. You, that's all of us. I'm not talking at the United States. But to quote a figure for the United States, I'm advised that 70 percent of the population of this immense country live in cities, which between them cover about 1 percent of the

[17:23]

surface area of the United States, which is certainly a strange pattern of the distribution of the population. A very widely known, world-famous student of the subject, Kingsley Davis, he said a little while ago, the world is not fully urbanized, but soon will be. One can wonder why he says that and how he knows that. Well, we have to study this. Is this really so? Or will it be 100 percent living on 1 percent of the surface area? But certainly, there is an increasing awareness of the question of resources. Now, here I speak, I claim to speak with some long experience. As you, Mr. Chairman, said for 20 years, this was my job to study this as the economist

[18:32]

of the National Coal Board. And we see a situation where, for instance, the average per head consumption of fuel and energy in the United States is over 10 tons of coal equivalent, maybe in the form of oil or gas, but coal equivalent, 10 tons per person per head. And projections are being made that before long it will be 15 tons. Now, anyone can work it out on the back of an envelope that that is not a model that the rest of mankind could follow. That just isn't enough. Or to put it differently, the United States, with 5.8 percent of the world population, is consuming something of the order of 35 percent of all the world's raw materials.

[19:39]

In order to mobilize them, it has been necessary to extend the tentacles of the United States around the globe. Mind you, I do not criticize the United States because we in Western Europe are going exactly the same road and are, in a manner of speaking, only less successful Americans. But for less than 6 percent to require 35 percent, and not to have reached saturation point, but to say, we must have more and more, is a very dusty message to the rest of mankind. It's an awesome, a terrible message because, in a manner of speaking, one might say we can't afford the United States. Certainly not two of them. That would cover 12 percent of the world's population and use up something approaching

[20:44]

80 percent of all available raw materials. What about the rest? So we must look for another model. And for that we, of course, have to first think. But for those who happen to have read the Gospels, they know in the beginning indeed is the Word, but then the Word has to become flesh and dwell among us. So let's not just stop at the level of thinking. I know there are people who have made a big PR splash, who say that all this is nonsense and we are only in the beginning of a development. There is a very famous American who tours Europe giving lectures by the name of Herman Kahn, who freely predicted at the Royal Institution in Britain that in another 50 years the average

[21:49]

income per head throughout the world will be $50,000 a year. Now, all I can say is that when the Duke of Wellington was approached by a timid little man who asked him, excuse me, sir, are you Mr. Smith? The Duke said, if you are capable of believing that, you'll believe anything. Let us start at something very, very real and very much in the news, and that is the world oil situation. I'm astonished from reading the papers how, in my opinion, little understood this thing is. You know, people say this is a cartel and the cartel will break down.

[22:53]

People say these oil exporting countries are blackmailers and we have to call them to order. They sometimes even threaten them. They have not listened. The history of it, and I won't go too far back in the history, is that for many years the Organization of the Oil Exporting Countries have sent their General Secretary around the world pleading with the oil importing countries, for goodness sakes, mitigate your requirements. We are bleeding to death. They have made their own calculations, not on the basis of cancerful ideas, but on the basis of facts, and they have come to the conclusion on certain assumptions. You can never make calculations without certain assumptions. The oil in the oil exporting countries that they actually know about would be gone in between

[23:55]

17 and 25 years. And they have said, now you, oil importing countries, you may well imagine that you will find oil in Alaska, or in the North Sea, or under the South Pole, or that your marvelous science will find substitutes for oil. But while you are doing this, you're taking the oil away from us for good pay. But what's going to happen to us after 17 to 25 years? Back to sand and camels. And I say we can't tolerate this. We must have at least 50 years ahead of us. And that would mean we must reduce the flow of oil by 50 percent. Now, they have said this time and again, but nobody has listened.

[24:55]

There was only one of the oil producing countries, Libya, which had become the main supplier of Western Europe in the course of a short stretch of time. And at the end of 1969, there was a change of government in Libya. The old king was kicked out, and a young colonel came in as head of state at the ripe old age of 28, Colonel Gaddafi. And he inquired about Libyan reserves, and he was told if the rate of growth goes on, as from the word go, from the beginning in Libya, we have another eight years of reserves. But if we can stabilize it, we have 20 years. And no doubt Colonel Gaddafi, age 28, said, 28 plus 20, what then?

[25:57]

I want to have at least 60 years like King Faisal, who is so much older than I. And so he had the guts to go to the countries and say you must mitigate requirements. And this produced an immediate increase in the world's price level of crude oil of 50% in 1970. Well, that lesson, once learned, could never be forgotten. Namely that this is in fact not something that man produces, but something that man just fetches out of the larder, and the faster he takes it out, the emptier the larder becomes. Many people still haven't understood this. No one wanted to offend the importing countries, because they're all scared of them anyhow.

[27:01]

But then came the great event, the 6th of October 1973, the 4th Arab-Israeli War, and then King Faisal got up and said, I'm going to use oil as a political weapon. He thought that is a language which the oil-importing countries can understand and approve of. And the importing countries fell over each other, bidding up the price of oil at oil auctions, and when they had bidded up fourfold, the oil-exporting countries said, that's fine. And now at first, for the first time, the market shows what the stuff is worth. And they fixed their official price at four times the level of 1973, and this means six times the level of 1970. For anyone who has a comprehension of the importance of oil in the world economy, the

[28:05]

modern economy, the volume, he knows that there is certainly no ready substitute, and that this is the biggest challenge to all the modern economic thinking that has met us in the history of the modern world. So I would say the 6th of October 1973 is the turning point and the need to think about alternatives is now more urgent. It has been urgent for a long time, but more clearly urgent than ever before. This logic of facts is still not understood, and people say the problem is how to persuade the Arabs and others to recycle their money. For every time when a problem arises that is easy to understand, somebody will invent words so that it becomes difficult to understand.

[29:05]

We never used to talk about recycling of money. We used to say they ought to lend us the money. Why should they? If they lend us the money, they said we can only lend you the money if we have a total guarantee against expropriation. Who can give such a guarantee? Who would be so foolish as to accept it? But once you remember that the whole starting point of the pressure is the urgent need for the oil-exporting countries to conserve the oil in order to lengthen the stretch of life they can see in front of them, do you really believe that now that the oil price is four to six times as high and they don't have to sell all this oil in order to make a living, that they say, oh yes, we'll let you have it on tick, so that the rate of oil extraction

[30:08]

should be maintained, the very opposite of what they're aiming at. So we must prepare ourselves, and of course for us in Western Europe and for Japan this is an even more serious matter than for the United States, who after all are still the world's biggest oil producer, we must prepare ourselves for a very substantial decrease in the availability of imported oil. I know that there are moves to pull out all stops to find substitutes. I don't want to go into it. I think that is an approach that even if it succeeded could only prolong the agony. The real question is not how can we substitute for the oil that in future we'll find more

[31:13]

and more difficult to find, to import. The question is why do we need so much. Now let's go into this and let's first look at the basic activity of man without which nothing can happen, agriculture. It is easy to calculate, and the calculations have been made in the United States, that if anybody thinks one could feed the whole of mankind on the system of agriculture developed in America and Western Europe and applied with the so-called Green Revolution, that that was the way to feed mankind, he'd better make this calculation. And it will show him that trying to feed all mankind with modern agricultural techniques would absorb all known oil reserves by agriculture alone within less than 30 years.

[32:21]

Now, of course, in any case, this system is not applicable to the great masses of subsistence peasants, so this is a purely theoretical calculation, but it should make one think and can convince one without a doubt that what we most urgently need is an alternative system of agriculture. Why is it that only 30 years ago, even in advanced countries, this oil dependence of agriculture did not exist? It was because we still had a traditional knowledge of how to let the microbes in the ground do the work which we now have handed over to the oil-exporting countries. And perhaps we find it in our hearts to realize that the microbes are more closely under our control than Arabs and other oil exporters.

[33:25]

Of course, a lot of attempts are already in train, and it has been mentioned that I have the burden of being the president of the Soil Association in Britain. We have worked on this subject for the last 27 years, and we know that the organic alternative is viable, but no one believes us. All official research goes in the other direction, and since it's not so jolly easy to make a living off the land and get good yields without reports, support from the human brain in terms of research and development, of course that branch of agriculture has a very, very severe struggle. They called us the muck and mystery people. I mean, I don't mind because I thought always that was an exquisitely well-chosen definition

[34:33]

of life in any case. I mention this to encourage anyone who is working along these lines that while previously it was his own, or her own, preference, an idea this would be better, maybe healthier, maybe more beautiful. But today there's added the argument, the inescapable argument, that it is needed, such an alternative system, that the people who've been denounced as muck and mystery people are the wave of the future. They are the people who can ensure survival. They're not faddists. We need them. We have to learn from them. Let's change to another major fuel consumer, transport.

[35:39]

Now, I recommend the negative theory of transport. That is a way of thinking that transport is a bad thing. We can't in this life avoid bad things, but everything depends on your starting point. If you think it's a wonderful thing, then you'll act differently from what you would do if you think it's a bad thing. The negative theory of transport, which indeed is the theory held by any production engineer. Inside the factory he tries to arrange matters so that transport requirements are minimized. In a strange way, the development of modern society has been to maximize transport. When I travel on the big motor road from London to Glasgow, I find myself surrounded by innumerable immense lorries polluting the air, creating a hell of a din, transporting biscuits from

[36:43]

London to Glasgow. When I look at the other carriageway, there's the same amount of lorries carrying biscuits from Glasgow to London. I'm not joking. I'm just reporting facts. I would add the comment that any impartial observer from another star would come to the infallible conclusion that to attain the real quality of biscuits, they have to be transported at least 600 miles. But let's see things as they really are. I come to the United States, and I find most people, certainly in California, drive foreign cars. Even in the heart of Detroit, there are cars that have been brought across the globe from Tokyo. That is not the negative theory of transport.

[37:48]

That's the positive theory of transport. So if we look at it through these ideas, we find, why do we need so much? Because of these extraordinary developments, which of course can be explained. They have evolved under their own logic, but in the totality it's a nonsense. And certainly it's very hard on the world's resources. Maybe certain corrections will be enforced with the price of oil, that is four times what it was a year ago. But I doubt it. I doubt it. I doubt it. I don't see that the economy automatically finds these adjustments. But that something can be done is no doubt. Perhaps it can't be done directly with regard to transport, because transport is still a

[38:50]

secondary phenomenon. We must come to the root of the matter. The root of the matter, I believe, is our development of technology. Now, this development over the last hundred years has been fed and made possible by cheap and plentiful oil. Without cheap and plentiful oil, it is unthinkable. Just as much as the development of these monster cities is unthinkable and never happened until we had cheap and plentiful oil. First coal, then oil. And as much as we now know that the period of cheap and plentiful oil is over or drawing to a close, so we must rethink our technology. Now, what is characteristic of modern technology? I would say four trends.

[39:52]

A trend towards what I call giantism, everything becoming bigger and bigger. It seemed to make sense in the 19th century, but now it has ceased to make sense, as I will try to explain. The second trend, it's something quite extraordinary when you come to think of it, towards ever increasing complexity. When I was in San Francisco 41 years ago, I traveled in a car which we as students could repair ourselves without the slightest difficulty, provided we got the spare parts. Since then, there has been so much progress that even post-graduates can't repair them because the engineers, instead of holding on to the basic simplicity of these various goods, have become playful in making them ever more complex. It is quite clear that it doesn't take more than a third-rate engineer to make a complicated

[41:03]

thing more complicated, but it takes a touch of genius to recapture the sort of basic simplicity. This is the second trend. The third trend, very closely connected with the first two, is that things have become unbelievably capital expensive. That is to say, the amount of capital you have to have in order to establish production. Well, what am I talking about even in order to get a house, let alone, not to mention, in order to become a farmer? The amount of capital you require has grown, grown, grown. Gal Braith, in his book, The New Industrial State, has a fascinating story about the development of the Ford Works. When Henry Ford started building motor cars, his starting capital was of the order of $30,000.

[42:07]

Now, to change the model costs $300 million, which is not the amount of money that any of us normally carry around with them. But think of it. These three principles, for things to become so enormously large, so enormously complex, and so enormously capital expensive, they act as principles of exclusion. More and more people are excluded. Only the people already rich and powerful can do their own thing. And this, of course, you notice, particularly when you work with poor communities, with the third world, that the barrier for people to become productive is higher than it's ever been before. And the fourth criterion of the development, I would suggest, is a technology that becomes

[43:14]

more and more violent. I don't mean violence simply in the sense of people hitting each other over the head. I mean an attitude of violence. And that is an attitude that, give me the problem, I will solve it. But only that particular problem. And no holds barred. I'm going to smash this problem out of existence. Normally, the breakage that remains means he's created 12 new problems. But then we'll smash those problems. Think of the present established thinking about how to smash the problem of a possible energy shortage. Of course we'll do that. We'll do it with nuclear energy. What is nuclear energy?

[44:14]

Nuclear energy is the greatest violence of an industrial process that can be possibly imagined. It involves the production of substances like plutonium, not only so toxic that the Lord never made it. We make it. One handful of plutonium, if dispersed, is enough to poison the whole of creation. But also radioactive with a half-life of 24,400 years. And mind you, this is not football. There are more than two halves to the half-life. It takes 24,400 years to go down to one half its radioactivity. Another such period to go down to one quarter, etc. But what matters? 24,000 years is no longer a historical period.

[45:19]

It's a geological period. It's, from our point of view, forever. Irreversible changes in the environment, in the health of the planet. But the ingrained attitude of violence is, never mind, we need electricity to operate our television, and so on and so on. Irreversible changes, literally poisoning the planet. Ah, we are such brilliant engineers. We have so many safety devices that nothing could possibly happen except a million to one chance. If they're so brilliant, I wonder why any accidents happen. If they're so brilliant, I wonder why a propane gas plant suddenly goes up in flames. But give them all the credit in the world, it's got nothing to do with it, unless they

[46:23]

can guarantee that from now on there will never be any communal or international strife. That there will no longer be any hijackers, or mad scientists, or schizophrenic so-and-sos, or suicidal maniacs. Unless they can guarantee that, they are not allowed to go ahead. Anyway, this is just a symptom of this attitude to violence. Let's return to more homely subjects. A very clever chap once said, if an ancestor of long ago would visit us today, what would he be more astonished at? The skill of our dentists, or the rottenness of our teeth? We need and allow and permit the violence of these dentists.

[47:25]

Thank God they exist, our teeth being so rotten, because this violence doesn't strike us as absurd. We do not insist that all efforts should be concentrated on keeping teeth healthy. What I mean to say is, if you follow the whole thinking about violence and non-violence into these subjects, you find that prevention is non-violent and cure is violent. Or you find that mechanical and chemical processes are relatively speaking violent, whereas biological processes are relatively non-violent. And all I'm saying is that the tendency of the last at least a hundred years of modern technology has been in the direction of ever increasing violence. Now if we follow this kind of reasoning, we have some sort of a guideline, or guidelines

[48:26]

for work. We can say, well, now couldn't we use that splendid modern intelligence, and it has many splendors, at least a part of it, let's say five percent of it, in the opposite direction, and study whether it's not possible to make things small again, back to the human scale. Of course, when you first suggest this, you cause a crank. You mustn't mind that. A crank, after all, is a very non-violent instrument, and a very simple technology. It doesn't require much capital investment, but it causes revolutions. Can't things now, with all that knowledge, be made small again?

[49:28]

Well, there's no theoretical answer. Let's try it. And I can tell you, and I'm not making big claims, but where the group to which your chairman has referred, the Intermediate Technology Development Group, where they have actually tried, every time it turned out that small is beautiful and viable, that it is simply a 19th century prejudice in most ranges of basic human need, production, that things have to be big to be efficient. That prejudice cannot be shut down by words, it can, however, be shut down by action, and since people are now increasingly open to persuasion, to make at least design studies, you're producing on such a horrendous scale, can't we have a small production unit? I will only give one example.

[50:29]

This desk here looks like wood. It probably is wood, but it's not solid wood, it's chipboard. Chipboard. Instead of just sawing up the trunk, and 45% of the wood is awful, you first turn it into fibers and recompound it, and you can use 100% of the wood. So, chipboard is a good ecological idea, you only need half the number of trees. And so the chipboard industry has been one of the tremendous success stories of the last 30 or 40 years throughout the world. The standard unit for chipboard plant now is a thousand tons a day. Just visualize this, a thousand tons every day must be dragged, of timber must be dragged into this plant, and a thousand tons of produce must be dispersed from that one point.

[51:36]

Water transport required. Because to get a thousand tons of timber every day, you have to drag it in from a very wide circle, and the same for the chipboard that you produce. I managed to talk to one of the original inventors of chipboard many years ago, and I said, look, these plants that you are constructing all over the world, they're going to be white elephants if there's a real bottleneck on oil, and transport becomes expensive, and maybe even in some countries, intermittent. Why don't you make a design study for a mini plant? After all, a few little forests, a few trunks, three trunks, dragged into a small plant, that's not much of a problem. Basically, local production from local materials for local use. He said, my dear chap, this would be totally uneconomic. He did, however, then commission such a study.

[52:42]

The study was quite cheap. Not big money you have to have for this. And the upshot of the study was, yes, here are designs which make the most expert engineers convinced a viable plant of the capacity of six and a half tons a day is quite possible. I'm sorry to say this has not yet been put into actual practice, but the design study is there. I just give it as an example. Instead of having one plant for the same capacity, you can have 150 plants scattered around. Then decentralized production, which does not entail immense transport, suddenly becomes possible. And not only that, such a mini plant doesn't require computer programmers. It doesn't require management that has spent years and years at the Harvard School of Business.

[53:45]

In fact, all these on-cost workers, what we call management, become unnecessary. It manages itself because it is of a scale that the human mind can encompass what it is doing. It is on a scale that the people who work with you, they can all be your friends. You know them by their first name. There are not very many people that you can work with and still all know them. So in all respects, such mini plants may be the wave of the future. And when if only we can persuade our people in business, also in academic research, that they should give if only 5% of their attention to such a development, then I'm quite certain it will turn out to be not at all a very difficult road to travel.

[54:47]

So in industry, the greatest call now is that work should be done in this direction. My own experience is that these people are perfectly approachable, provided one doesn't become a 100%-er and say switch over 100% of your research and development in this other direction. But if one approaches them with the idea or with the example that even the best-designed transatlantic steamer has lifeboats, not in the firm knowledge that it will sink, but it might be so, then I think they are approachable. And that's why I recommend the lifeboat approach to these matters. 5% of current research and development expenditure would be amply enough to do all these studies. Let us now for a moment turn to the third world.

[56:01]

As I said before, the very observation of the rich countries has a daunting effect on the third world, because the rich countries seem to suggest that you must be rich to have a proper life, and it is now known that you can't be rich. That applies to most of mankind. That this is not a pattern that can possibly be established, and therefore the question is, is there another pattern that would make life really worth living? These patterns have existed. They have existed and, as I said before, have produced the greatest works of art and culture that we know of. And this was a culture of poverty, not a culture of affluence. In fact, when all is said and done, the culture of affluence has been living culturally on

[57:06]

the culture of poverty and has been destroying it at a rate that is, to some of us, pretty horrifying. Now, what is the culture of poverty? It seems to me that it is making a very firm distinction between two categories of goods, which I shall call the ephemeral goods, on the one hand, goods produced in order that they should be destroyed, like any foodstuff. That's their purpose. And eternal goods, perhaps eternal is too big a term, goods which are not to be destroyed. They may be destroyed by accident, but that's not their purpose. Now, in all real cultures, the eternal goods were outside the economic calculus, because after all, how can you calculate eternity?

[58:08]

When they built a cathedral, they didn't calculate. They said, only the best is good enough. Only that which can be offered to the glory of God is worthy of the dignity of man. But when they came to ephemeral goods, they lived frugally. They didn't starve, but they lived frugally on the ephemeral side. In Florence, I visited Florence a year ago for the first time, really, opposite this fantastic cathedral, there is the statue of the architect, and on the pedestal is a Latin inscription, which was the greatest difficulty I deciphered. And it says, this is Arnulfo, the architect, who, instructed by the municipality of Florence to build a cathedral of such superlative splendor that no human genius can ever surpass

[59:16]

it, comma, on account of the superlative endowment of his mind proved equal to this gigantic task. Well, instructed. You see, outside the cathedral, there is the baptisterium with the famous bronze doors by Ghiberti, and you learn that it took him 28 years to do it. Now, there was no calculation behind it, I'm quite certain. No economist calculated that if these bronze doors are made in 28 years instead of 20, then the tourist trade would be increased by 3%. The tourist trade has increased by 30,000%, and you can hardly see the doors now, but that is another matter. The moment we allow economic calculus to invade everything, then nothing becomes worthwhile

[60:20]

anymore. I can well imagine, opposite one of the huge office blocks in London, the statue of the architect, and the inscription. Thank you.

[60:41]

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