Brexit Outcome: Schumacher’s Lessons for Nations


New York

June 28, 2016

Brexit Outcome: Schumacher’s Lessons for Nations

by Dr. Lim Teck Ghee

Over 40 years ago, a British economist, E.F. Schumacher, published a collection of essays on the theme of “small is beautiful” which argued that the modern growth-obsessed economy is unsustainable.

Anticipating the present global warming and environmental crisis in our land and oceans, he noted that natural resources should be treated as capital, since they are not renewable and subject to depletion. He further argued that nature’s ability to fight and resist pollution is limited as well – a warning which has still not sunk deeply enough into the corridors of power all over the world.

Besides his somber – and now proven to be correct – message on environmentalism, he made the case for sustainable development and against inappropriate technology transfer to developing countries which, in his view, would not resolve the underlying problems of unsustainable economies.

Schumacher was also amongst the earliest economists to question the appropriateness of using gross national product and other pure economic indicators to measure human well-being.

What has been referred to as “his dense mixture of philosophy, economics and politics” struck an immediate chord with Western readers, especially during the era of the 70s and the advent of the first global energy crisis. In 1995, the Times Literary Supplement ranked the slim volume of his work as among the 100 most influential books published since World War II.

Since then his influence appears to have waned. New critiques of conventional economic thinking have emerged; and Schumacher’s concern for the “philosophy of materialism” to be replaced or subsumed to ideals such as justice and harmony, and his counter-cultural ideas on the organic, the gentle, the non-violent, the elegant and beautiful as laid out in his Buddhist economics, have been taken up by less credible “gurus” with new vocabulary omitting his ideas and name.

Today, however, some of the concerns which “small is beautiful” raised in 1973 just before the push for European Union began to take place, are echoing in the popular sentiments and issues raised by the “Leave” voters in the Brexit referendum.

Why Britain is Leaving EU

The historic upset defeat of the “Remain” camp and successful revolt against the EU has been explained and interpreted in many ways.

In a lead article, the day after the referendum result, the BBC listed 8 reasons why Leave won the UK referendum on the EU. These reasons included the backfiring of Brexit economic warnings; bungled leadership of the Prime Minster, David Cameron; Labour’s disconnect with voters; the inter-generational divide with older voters preferring to leave; the ascendency of immigration and national and cultural identity issues in the minds of lower income voters; perceived economic benefits; and finally, the influence of Euroskeptic leaders and critics such as Nigel Farage and Boris Johnson during the referendum campaign.

While all the reasons advanced played a role in the final voting count to tilt the balance towards those opting for an uncharted and potentially precarious future, in one sense it represented a rejection of what local Britishers see as a much too big, too powerful and out-of-touch technocratic Frankenstein’s monster – as described in a United Kingdom Independence Party’s internet newsletter on the eve of the referendum – which has made life not only difficult but has also profoundly alienated the common citizen (http://www.ukipdaily.com/eu-is-a-frankenstein/)

In the immigration issue especially which assumed center stage in the Brexit debate, many Britons resent the EU migrants who legally move to jobs in Britain, are seen as taking jobs away from locals and are alleged to abuse the country’s benefits and welfare system.

And this is by no means just a view found in Britain. Other nations in the EU face similarly disenchanted citizens fed up with the “big is good; bigger is better” philosophy in economic and political systems that Schumacher warned against, and which the enlarged grouping of European nations seemed to signify.

Ordinary people and communities seem to be looking for solutions which call for more local autonomy and for moves away from centralized control towards greater decentralization and a return to local and national economies in which they have greater influence, however naive or impractical it may appear to the political and business elites that run our world today.

The same soul searching in the rest of Europe has already produced populist politicians and a growing number of Euroskeptics. They will seek their own referendums on EU membership and if successful will produce a breakup of the present union; and the need as French Prime Minister  Manuel Valls puts it “to invent another Europe.”

Can Malaysia Learn

In Malaysia the Brexit referendum result has produced the predictable dollars and cents focused analysis of what it means to the nation’s trade and investment flows as well as to the property, education and other sectors whose links with the UK are based on its inclusion in the EU. This is a limiting and inadequate focus which misses the larger lessons to be learned.

In our part of the world, especially in Sabah and Sarawak which opted to join Malaya and Singapore in the formation of Malaysia in 1963, a sense of alienation towards the federalized centralized political entity, run from Kuala Lumpur and beholden to UMNO’s agenda, has been brewing for some time.

In August 2014, a coalition of NGOs, politicians and activists from Sarawak and Sabah drew up a petition addressed to the United Nations (UN) secretary-general to re-open the issue of self-determination for the two East Malaysian states. The petition believed to be signed by some 100 representatives was also copied to the UN Special Committee of 24 (C-24) and the UN Human Rights Committee (http://www.theborneopost.com/2014/08/13/group-draws-up-self-determination-petition-for-sarawak-and-sabah/#ixzz4Ccnmmakv).

These local autonomy and even separatist tendencies and forces are not going to go away. At some point – unless real reforms are put in place to provide for greater autonomy and to protect the freedoms and sense of local identity that the local communities from the two states feel they have lost – we will have our own version of Brexit demanded more forcefully.

 

26 thoughts on “Brexit Outcome: Schumacher’s Lessons for Nations

  1. There is now a strong worldwide anti-globalisation and anti-corporatism movement. Size has become a problem because it alienates people and dictates the conduct of human affairs. Can anyone tell me what is the answer or the alternative for sustainable development or the way to break the nexus between big business and powerful politicians. Any ideas, guys?–Din Merican

  2. Yeah!
    All this time i thought i was the only doggie in this whole frigging nation to have understood E.F. Schumacher and take him seriously. And now i find a (possibly) kindred soul in Dr Lim.., not that i agree with him overmuch in many things.

    I think the works of Ernst Fritz ought to reintroduced into all postmodern economic and philosophical theory – after all even the great J.M. Keynes borrowed his text verbatim (unkind to say ‘plagiarized’ by such an Illuminati) in ‘Multilateral Clearing’, when he presented a White Paper to the British Government.

    Like: “You don’t merely think Ideas, You think Through Ideas. The purpose of Education is to help us clarify these ideas we think with – to make us conscious of our convictions and assumptions, so that our experiences become less muddy.”

    E.F. is one of the great polymath of the 20th century – a Distributist one. It’s probably a waste of time promoting this, as Din says. So i shall desist. Divergent thinking is too difficult.

    Cause-Effect, Karmic and Monodic-Dyadic thinking is much more ‘Newtonian’ and ‘Solid’. That’s why we’ve got enuff nuclear explosive devices to kill mankind a thousand times over.. Just in case. Big is Beautiful.

    Btw, i’m starting a new agri-horticultural cooperative for weekend farming warriors. Anyone got about thousand acres of idle agri land to donate? No? Shame on you!

  3. One answer… there can be NO sustainable anything as long as there are 7 billion of us on the planet… no way…cut it down to two or, at the most, three… and then we can start a debate. A few have already worked this out… but they are not saying anything…yet…

    Small will be beautiful…

  4. Perhaps,
    by making the size and the kind of shoes that fit and match the feet, not ignoring the inevitable evolution of socia-economic and political environment, from every stage of development of an economy , beginning from its infancy till maturity, which by then , with the açcumulated national wealth and resources, sustainability can be achieved and maintained for a long period of time until old age.

  5. I regard Dr Lim as one of the foremost Malaysian thinkers on economic and political issues, but his thesis falls somewhat short for me. If the UK has voted to remain in the EU, I wonder if Friedman’s foresight would have been celebrated by Dr. Lim instead of Schumacher’s prescience.
    And Dr. Lim missed the point that the British people mostly voted to leave the EU on the false construct of sovereignty and the outright deception of the Brexit campaigners on immigration issues.
    The four main motivators for the Brits to break from Brussels were:
    – the collective desire to stick it up to Cameron.
    – the UK can somehow retain access to the single market while being able to curb migration to their shores.
    – the UK was sending 350 million pounds weekly to Brussels, which Brexiters promised will be used to fund the national healthcare system.
    – Turkey’s accession into the EU was imminent and would unleash millions of Muslims flooding into the UK.
    The last three have been proven to be outright lies or conjecture at best.

    I accept that globalization is not without its shortcomings and has disenfranchised large swaths of population especially the unskilled and less educated as well as the spawning of the uber-class in addition to the rapid depletion of natural resources. But we should also acknowledge that globalization has lifted entire nations out of poverty and gifted countless millions of individuals across the globe with empowerment and the freedom to pursue whatever they passionately care for.

    The solutions to the excesses of globalization – and there are many – is not the rollback or curtailment of its advance, but in my view – lie in upgrade and enhancement of skills, learning of new skills, greater use of renewable and low-carbon energy, fiscal responsibility and greater infrastructure investment/development.

    Dr. Lim posits that those in the UK railing against globalization and corporatism fret about immigrants COMING to their country for jobs, and NOT jobs GOING offshore. So, perhaps the advantages of EU membership for the EU is under-appreciated?

    On the other side of the Atlantic, those happily taking selfies of themselves protesting against globalization will probably find something else better to do if they walked into their neighborhood Walmart and found that their made-in-America I-Phones now cost $3,500 instead of $699.

  6. in my humble opinion, the lessons of Brexit to us Malaysians are (1) money, so much so that the government of the day must ensure that the rakyat must have fair access to make a living, and that money should not be concentrated in the hands of a few. Therefore, there must exist a continuous class of people, ie lower class, middle class, upper middle class and upper class, rather than upper class (say 1%) and lower class, say 99% and (2) TPPA is bad news for us. Looked at what happened to Britain…..the paperwork involved to be legally separated takes 2 years maybe more and I recalled the government team that negotiated TPPA mentioned that there is a get out clause should Malaysia wants to pull out from TPPA. In principle, my opinion is that TPPA are meant for corporation to fluourish rather than the people. There is no guarantee that when corporate fluourish, people will fluourish as Malaysian corporations have not shown attitudes of social responsibility to the rakyat. Which means, after the consequences of TPPA is known to the rakyat, the damage has been done. Perhaps not irreversible, but very painful

  7. Quote:- “..as long as there are 7 billion of us on the planet… no way…cut it down to two or, at the most, three…”

    Yes, a Soylent Green / Lemmings Combo?

    I wonder why no one or government has thought about implementing such a simple but effective final solution?

  8. The way we (everyone of us) are polluting the planet, nature will solve our over population issue for us…

  9. All I can say is that if anyone really thinks that the Brexit represents anything remotely resembling what EFS pondered than the world is really going to hell in a hand basket.

  10. Globalization? Haha.. good one.

    Perhaps it’s time to enlighten oneself to Fundamental Human Needs. Ontology? See here:
    http://www.theatlantic.com/health/archive/2011/08/maslow-20-a-new-and-improved-recipe-for-happiness/243486/#.TkvKIRv8USE.facebook

    or for eggheads:
    http://www.apa.org/pubs/journals/releases/psp-101-2-354.pdf

    Time to rethink Mundane Newtonian Mechanics applied to Subjective Human Proclivities. So much for Justice, Freedom, Pursuit of Happiness and all that Jazz. I really think we should stop listening to what so called Economists, Financiers and other Materialistic Nerds are selling, and go back to what makes us Human in the first place.

    It’s also a wonder we have all these Humanities Gurus who can’t see beyond their self-interests or Ivory Tower Tenure.

  11. sui generis, well said. This whole BREXIT fiasco started with a power struggle within the Tory party. The scam was perpetrated by charlatans and right wing demagogues on a gullible population succumbing to their baser instincts which usually happens during tumultuous times.

    Now these charlatans are playing it cool, smugly backing away from a rushed exit and relying on legalese. This was never a call to greener pastures. This was never about a paradigm shift in thinking.

    This was just politics as usual.

  12. The whole issue is that the EU is undemocratic… run by a toothless Parliament and controlled by a tiny non-elected group answerable to no one…nobody in any of the countries of EU gave their assent to this mechanism…when two countries (France and Holland, I believe) were asked, both gave a firm NO…and what happened? a redrafted “treaty” was hurriedly presented that conveniently by-passed both the referendums.

    Europe slaughtered tens of millions of their own people in order that the will of citizens would prevail over dictatorship. Now, without a shot being fired, that has been overturned as millions on the continent find themselves sidelined.

    If this means nothing to anyone then debate is of no use… as I said earlier, politics, the economy, jobs are secondary and are being used as a blatant scare tactic.

    A political union is not a pre-requisite of conducting successful trade… the whole world works on this principle… the UK was a top-notch trading country in the mid.70s and there is not the slightest reason why it cannot regain that position, massive currency fixing, stock market manipulations etc. that will almost certainly follow, notwithstanding.

    And those of us outside the EU better beware…such totalitarian scams will eventually hit our shores…

  13. katasayang,

    One key element to make Japan Communists to have positive image is to keep their members a tiny percentage of the total population. With 320,000 members out of 127,000,000 Japanese, Japanese communists is 0.25% of the population. Japanese culture has the confidence that will always ensure foreign sweeping ideas such as socialism has only small number of followers.

    Communism causes mayhem only to those cultures that are already weakened, just like cold germs kill only persons with compromised immune system. Just like cold germs, communists and socialists survive under healthy system supported by non-socialist features; but once communists and socialists overwhelm the entire system, both communists/socialists and the host die.

  14. Not for the first time, Communists and Socialists are put in the same category…

  15. “The whole issue is that the EU is undemocratic… run by a toothless Parliament and controlled by a tiny non-elected group answerable to no one…”

    This is how most governments work in substance .

  16. Yes, Mr Isa Manteqi 8:43 am

    Just like classifying the tens of thousands of Daesh extremists (at most) with the other mainstream 1.6 billion Muslims.

    Mr/Ms Shiou spends too much time in the right-wing echo chambers of
    Fox News and the “magic of the free market” camp 🙂

  17. It is always easy for a political party on the margins of power to look pure. It’s not so much that power corrupts, but that holding the reins of power and administering a city/state/country requires compromises and deals. Politics is indeed commonly said to be the art of the compromise.

    Not everyone will agree with every policy pursued by a political party in power. To get things done require negotiations and compromise with often comflicting stakeholders, and even then some people (often even most people) will hate the compromises that have been made. The only types of political parties in power that never compromise are the totalitarian ones after they have crushed dissent.

    I make this point not in support of the Chinese or Soviet communist parties. Personally I much prefer liberal democracy. But I think there is nothing wrong with being pragmatic in politics. It is easy for those not in power to be ideologically pure and talk about an ideal society. For a cautionary tale, look what happened to the Lib Dems in the UK.

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