Take a moment to follow the logic. You are the president of the newly independent Republic of Imaginaria. You’ve got a population that’s not particularly well fed, clothed, and housed, and a fairly high unemployment rate; you’ve got a very modest budget for economic development; you’ve also got raw materials of various kinds, which could be used to feed, clothe, and house the Imaginarian people. Your foreign economic advisers, who not coincidentally come from the industrial nation that used to be your country’s imperial overlord, insist that your best option is to use your budget to build a big modern factory that will turn those raw materials into goods for export to their country by their merchants, giving your country cash income to buy goods from them, and in the process employ a few thousand Imaginarians as factory workers.
Not so fast, says Schumacher. If your goal is to feed, clothe, house, and employ the Imaginarian people, building a factory is a very inefficient way to go about it, because that approach requires a very large investment per worker employed. You can provide many more Imaginarians with productive jobs for the same amount of money, by turning to a technology that’s less expensive to build, maintain, and supply with energy and raw materials – say, by providing them with hand tools and workbenches instead of state-of-the-art fabrication equipment, and setting up supply chains that supply them with local raw materials instead of imports from abroad. The goods those workers produce may not be as valuable in the export market as what might come out of a factory, but that’s not necessarily a problem – remember, your main goal is to feed, clothe, and house Imaginarians, so maximizing production for domestic use is a better idea in the first place, since less of the value produced by those workers will be skimmed off by the middlemen who manage international trade. Furthermore, since you won’t have to to trade with overseas producers for as many of the necessities of life, your need for cash from overseas goes down, and you get an economy less vulnerable to foreign-exchange shocks into the bargain.
This was the basis for what Schumacher called "intermediate technology," and the younger generation of activist-inventors who followed in his footsteps called "appropriate technology." The idea was that relatively simple technologies, powered by locally available energy sources and drawing on locally available raw materials, could provide paying jobs and an improved standard of living for working people throughout the Third World. A lot of very productive thinking went into these projects, and there were some impressive success stories before the counterrevolution of the 1980s cut what little funding the movement had been able to find. Mind you, Schumacher’s thinking was never popular among economists or the business world, and it happened more than once that countries that tried to adopt such economic policies were treated to the sort of attitude adjustments mentioned above. Still, pay attention to those Third World nations that have succeeded in becoming relatively prosperous, and you’ll find that some version of Schumacher’s scheme played a significant role in helping them do that.
It’s when the same logic is applied to the industrial world, though, that Schumacher’s ideas become relevant to the project of this blog. If, as I’ve suggested, the United States (and, in due time, the rest of the world’s industrial nations) have begun a descent to Third World status, thinking designed for the Third World may be a good deal more applicable here and now than the conventional wisdom might suggest. It seems utterly improbable to me that the governments of today’s industrial powers will have the foresight, or for that matter the common sense, to realize that economic policies that deliberately increase the number of people earning a living might be a very good idea in an age of pervasive structural unemployment – or, for that matter, to glimpse the unraveling of the industrial age, and realize that within a finite amount of time, the choice will no longer be between high-tech and low-tech ways of manufacturing goods, but between low-tech ways and no way at all. Still, national governments are not the only players in the game.
http://www.energybulletin.net/51603
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