The Wisdom of Leopold Kohr (Annual E. F. Schumacher Lectures Book 14)

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It would be no exaggeration to call him the Keynes of postindustrial society, by which I mean and Schumacher means a society that has left behind its lethal obsession with those very megasystems of production and distribu. The first example of Schumacher's work I came across was an informal talk he gave in the mid-sixties on the practicality of Gandhi's economic program in India. I was at the time editing a small pacifist weekly in London. Peace News and was on the lookout for anything about Gandhi I could find.

But here was a viewpoint I had never lJ. Not so of Schumacher. Step by step, he spelled out the essential good sense of a third world economic policy that rejected imitation of Western models: breakneck urbanization, heavy capital investments, mass production, centralized development planning, and advanced technology. In con trast, Gandhi's scheme was to begin with the villages, to stabilize and enrich their traditional way of life by use of labor-intensive manufacture and handicrafts, and to keep the nation's economic decision making as decentralized as possible, even if this slowed the pace of urban and indus trial growth to a crawl.

From the standpoint of conventional economics, this 5. It is not that at all. Schumacher's point was that Gandhi's economics, for. And even then, it may not be a way to feed the hungry. Gandhi's economics started and finished. As Schumacher points out, "poor countries slip, and are pushed, into the adoption of production methods and con swnption standards which destroy the possibilities of self reliance and self-help. The results are unintentional neocolonialism and hopelessness.

In doing so, as. But then, economists, for all their purported objectivity, are the most narrowly ethnocentric of people. Since they are univer sally urban intellectuals who understand little of rural ways, they easily come to regard the land, and all that lives and grows upon it, as nothing more than another factor of production.

Integral Reflections:

Hence, it seems to them no loss, but. Since they inherit their conception of work from the darkest days of early industrialization, they find it impossi ble to believe that labor might ever be a freely-chosen, nonexploitive, and creative value in its own right. Hence, it seems to them self-evident that work must be eliminated. Worst of all, since their world view is a cultural by-product of industri alism, they automatically endorse the ecological stupidity of industrial man and his love affair with the terrible sim plicities of quantification.

They thus overlook or distort the incommensurable qualities of life, especially Schumacher's holy trinity of "health, beauty, and permanence. Today in poor nations everywhere we find far too many Western and Soviet financed projects like the African textile factory Schumacher describes: industries demanding such advanced expertise and such refined materials to finish their luxurious products that they cannot employ local labor or use local resources, but must import skills and goods from Europe and America.

In Ghana the vast Volta River power project, built with American money at high interest, provides Kaiser Alumi num with stupendously cheap electricity contracted at a long-term low price. But no Ghanaian bauxite has been used by Kaiser, and no aluminum plants have been built in the country. Instead, Kaiser imports its aluminum for processing and sends it to Germany for finishing. Else where we fi nd prestigious megaprojects like Egypt's Aswan high dam, built by Russian money and brains to produce a level of power far beyond the needs of the nation's. Or consider the poor countries that sell them selves to the international tourist industry in pursuit of those symbols of wealth and progress the West has taught them to covet: luxurious airports, high-rise hotels, six-lane motor ways.

Their people wind up as bellhops and souve nir sellers, desk clerks and entertainers, and their proudest traditions soon degenerate into crude caricatures. But the balance sheet may show a marvelous increase in foreign-. As for the developed countries from which this corrupting ethos of progress goes out: more and more their "growthmania" distorts their environments and robs the world of its nonrenewable resources for no better end than to increase the output of ballistic missiles, electric hairdryers, and eight-track stereophonic tape recorders.

But in the statistics of the economic index such mad waste measures out as "productivity," and all looks rosy. What kind of economics can treat all this as anything more than childish nonsense or criminal prodigality? The answer is: an economics that has no higher idea of what people are here on earth to be and to do than was bequeathed to it by Andrew Ure and Samuel Smiles and that has long since translated that debased conception of humanity into the objective quantities of its science, as if to quantify benightedness were to dignify it.

But at the bottom of its statistics, sunk well out of sight, are so many sweeping assumptions about people like you and me-about our needs and motivations and the purpose we have given our lives. Again and again Schumacher insists that economics as it is practiced today -whether it is socialist or capitalist economics-is regarding man a. What, then, if those preconceptions are obsolete? What a humanistic social wisdom that trusts to experienced intuition, plays by ear,.

What if there stir, in all those expertly quantified millions of living souls statistical surface, aspirations for creativity, beneath the generosity,. If that is so and there is no doubt in my mind that it is , then it is no wonder the policies which stem from that economics must so often be.

And what sort of science is it that must, for the sake of its predictive success, hope and pray that people will never be their better selVes, but always be greedy social idiots with nothing finer to do than getting and spending, getting and spending? It is as Schumacher tells us: "when the available 'spiritual space' is lower-by not filled by some higher attitude to life motivations, then it will necessarily be filled by something the small, mean, calculating which is rationalized in the economic calculus.

Here it is. Not only is this belief firmly held by people remote from production and therefore professionally unacquainted with the facts -it is held by virtually all the experts, the captains of industry, the economic managers in the governments of the world, the academic and not-so-academic economists, not to mention the economic journalists. They may dis agree on many things but they all agree that the problem of production has been solved; that mankind has at last come of age.

For the rich countries, they say, the most important task now is "education for leisure" and, for the poor countries, the "transfer of technology. We must there fore construct a political system so perfect that human wickedness disappears and everybody behaves well, no matter how much wickedness there may be in him or her. In fact, it is widely held that everybody is born good; if one turns into a criminal or an exploiter, this is the fault of "the system. One of the main reasons why it is bad and why it can still survive in spite of its badness, is this erroneous view that the "problem of production" has been solved.

As this error pervades all present-day. The arising of this error, so egregious and so firmly rooted, is closely connected with the philosophical, not to say religious, changes during the last three or four cen turies in man's attitude to nature. I should perhaps say:.

Western man's attitude to nature, but since the whole world is now in a process of westernisation, the more generalised statement appears to be justified. Modern man does not experience himself as a part of nature but as an outside force destined to dominate and conquer it.

He even talks of a battle with nature, forgetting that, if he won the battle, he would find himself on the losing side. Until quite recently, the battle seemed to go well enough to give him the illusion of unlimited powers, but not so well as to bring the possibility of total victory into view.

This has now come into view, and many people, albeit only a minority, are beginning to realise what tbis means for the continued existence of humanity. The illusion of unlimited powers, nourished by astonish ing scientific and technological achievements, has pro duced the concurrent illusion of having solved the problem of production. The latter illusion is based on the failure to distinguish between income and capital where this distinction matters most. Every economist and busi nessman is familiar with the distinction, and applies it conscientiously and with considerable subtlety to all eco nomic affairs-except where it really matters: namely, the irreplaceable capital which man has not made, but simply found, and without wbich he can do nothing.

A businessman would not consider a firm to have solved its problems of production and to have acbieved viability if he saw that it capital. How, then, was rapidly conswning its this vital fact could we overlook. One reason for overlooking this vital fact is that we are great Dr. Marx fell into this devastating error when he formulated the so-called "labour theory of value.

Even the we have indeed laboured to make some of the capital which today helps us to produce-a large fund of scien tific, technological, physical and other knowledge; an elaborate innumerable types of sophisti infrastructure;. Far larger is the capital provided by nature and not by man-and we do not even recognise it as such. This larger part is now being used up at an alarming rate, and that is why it is an absurd and suicidal error to believe, and act on the belief, that the problem of production has been solved.

Let us take a closer look at this "natural capital. No one, I am sure, will deny that we are treating them as income items although they are undeniably capital items. If we treated them as capital items, we should be concerned with conservation; we should do everything in our power to try and minimise their current rate of use; we might be from saying, the for instance, of that the money obtained realisation these assets-these.

These and many other things we should be doing. And we do not do any of them, but the exact contrary of every one of them: we are not in the least concerned with conservation; we are maximising, instead of mini mising, the current rates of use; and, far from being interested in studying the possibilities of alternative meth ods of production and patterns of living-so as to get.

The liquidation of these capital assets is proceeding so rapidly that even in the allegedly richest country in the world, the United States of America, there are many worried men, right up to the White House, calling for the massive conversion of coal into oil and gas, demanding ever more gigantic efforts to search for and exploit the remaining treasures of the earth. Look at the figures that are being put forward under the beading "World Fuel Requirements in the Year What are twenty-eight years?

Looking backwards, they take us roughly to the end of World War II, and, of course, since then fuel consumption has trebled; but the trebling involved an increase of less than million tons of coal equivalent. Now we are calmly talking about an increase three times as large. People ask: Can it be done? And the answer comes back: It must be done and therefore it shall be done. One might say with apologies to John Kenneth Galbraith that it is a case of the bland leading the blind. But why cast aspersions? The question itself is wrong-headed, because it carries the implicit assumption that we are dealing with income and not with capital.

What is so special about the year ? What about the year , when little children running about today will be planning for their retirement? Another trebling by then? All these questions and answers are seen to be absurd the moment we realise that we are dealing with capital and not with income: fossil fuels are not made by men; they cannot be recycled.

Once they are gone they are gone for ever. But what-it will be asked-about the income fuels? Yes, indeed, what about them? Currently, they contribute reckoned in calories less than four per cent to the world total.

In the foreseeable future they will have to contrib ute seventy, eighty, ninety per cent. To do something on a small scale is one thing: to do it on a gigantic scale is quite another, and to make an impact on the world fuel problem, contributions have to be truly gigantic. Who will say that the problem of production has been solved when it comes to income fuels required on a truly gigantic scale? Fossil fuels are merely a part of the "natural capital'' which we steadfastly insist on treating as expendable, as.

If we squander our fossil fuels, we threaten civilisa tion; but if we squander the capital represented by living nature around us, we threaten life itself. People are waking up to this threat, and they demand that pollution must stop. They think of pollution as a rather nasty habit indulged in by careless or greedy people who, as it were, throw their rubbish over the fence into the neighbour's garden. A more civilised behaviour, they realise, would incur some extra cost, and therefore we need a faster rate of economic growth to be able to pay for it.

From now on, they say, we should use at least some of the fruits of our ever-increasing productivity to improve "the quality of life" and not merely to increase the quantity of consumption. All this is fair enough, but it touches only the outer fringe of the problem. To get to the crux of the matter, we do well to ask why it is that all these terms-pollution, environment, ecology, etc.

After all, we have had an industrial system for quite some time, yet only five or ten years ago these words were virtually unknown. Is this a sudden fad, a silly fashion, or perhaps a sudden failure of nerve? The explanation is not difficult to find. As with fossil It is only since the end of World War II that we have succeeded in increasing this rate to alarming proportions. In comparison with what is going on now and what has been going on, progressively, during the last quarter of a century, all the industrial activities of mankind up to, and including, World War II are as nothing.

The next four or five years are likely to see more industrial production, taking the world as a whole, than all of mankind accom plished up to In other words, quite recently-so recently that most of us have hardly yet become con scious of it-there has been a unique quantitative jump. Partly as a cause and also as an effect, there has also been a unique qualitative jump. Our scientists and tech nologists have learned to compound substances unknown to nature.

Against many of them, nature is virtually defenceless. There are no natural agents to attack and break them down. It is as if aborigines were suddenly attacked with machine-gun fire: their bows and arrows are of no avail. These substances, unknown to nature, owe their almost magical effectiveness precisely to nature's defencelessness-and that accounts also for their dangerous ecological impact. It is only in the last twenty years or so that they have made their appearance in bulk. Because they have accumulate, and no natural enemies, they long-term consequences tend of to this the.

In other words, the changes of the last twenty-five years, both in the quantity and in the quality of man's industrial processes, have produced an entirely new situation-a situ ation resulting not from our failures but from what we thought were our greatest successes. And this has come so suddenly that we hardly noticed the fact that we were very rapidly using up a certain kind of irreplaceable capital Now let me return to the question of "income fuels" with which I had previously dealt in a somewhat cavalier manner.

No one is suggesting that the world-wide indus trial system which is being envisaged to operate in the year , a generation ahead, would be sustained primarily by water or wind power. No, we are told that we are moving rapidly into the nuclear age. Of course, this bas been the story for quite some time, for over twenty years, and yet, the contribution of nuclear energy to man's total fuel and energy requirements is still minute. In , it amounted to 2. Perhaps we can assume that nature's tolerance margins will be able to cope with such small impositions, although there are many people even today who are deeply worried, and Dr.

Edward D. David, President Nixon's Science Adviser, talking about the storage of radioactive wastes, says that "one has a queasy feeling about something that has to stay underground and be pretty well sealed off for 25, years before it is harmless. David will not be the only one to have "a queasy feeling. Having said this, I am sure that I shall be confronted with another, even more daring proposition: namely, that future scientists and technologists will be able to devise safety rules and precautions of such perfection that the using, transporting, processing and storing of radioactive Again, it is a proposition to solve one problem simply by shifting it to another sphere, the sphere of everyday human behaviour.

And this takes us to the third category of "natural capital" which we are recklessly squandering because we treat it as if it were income: as if it were something we had made our selves and -could easily replace out of our much-vaunted and rapidly rising productivity.


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Is it not evident that our current methods of production are already eating into the very substance of industrial man? To many people this is not at all evident. Now that we have solved the problem of production, they say, have we ever had it so good? Are we not better fed, better clothed, and better housed than ever before-and better educated? Of course we are: most, but by no means all, of us: in the rich countries. But this is not what I mean by "substance. Perhaps it cannot be measured at all, except for certain symptoms of loss. However, this is not the place to go into the statistics of these symptoms, such as crime, drug addiction, vandalism, mental break down, rebellion, and so forth.

Statistics never prove anything. I started by saying that one of the most fateful errors of our age is the belief that the problem of production has been solved. This illusion, I suggested, is mainly due to our inability to recognise that the modern industrial system, with all its intellectual sophistication, consumes the very basis on which it has been erected. To use the language of the economist, it lives on irreplaceable capital which it cheerfully treats as income.

I specified three categories of such capital: fossil fuels, the tolerance margins of nature, and the human substance. Even if some readers should. And what is my case? Simply that our most important task is to get off our present collision course. And who is there to tackle such a task? I think every one of us, whether old or young, powerful or powerless, rich or poor, influential or uninfiuential. To talk about the future is useful only if it leads to action now. And what can we do. To say the least-which is already very much -we must thoroughly understand the problem and begin to see the possibility of evolving a new life-style, with new methods of production and new patterns o f consumption: a life-style designed for permanence.

To give only three preliminary examples: in agriculture and horticulture, we can interest ourselves in the perfection of production meth ods which are biologically sound, build up soil fertility, and produce health, beauty and permanence. Productivity will then look after itself. In industry, we can interest ourselves in the evolution of small-scale technology, relatively non violent technology, "technology with a human face," so that people have a chance to enjoy themselves while they are working, instead of working solely for their pay packet and hoping, usually forlornly, for enjoyment solely during their leisure time.

In industry, again-and, surely, industry is the pace-setter of modern life-we can interest ourselves.

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We often hear it said that we are entering the era of "the Learning Society. We still have to learn how to live peacefully, not only with our fellow men but also with nature and, above all, with those Higher Powers which have made nature and have made us; for, assuredly, we have not come about by accident and certainly have not made ourselves. The themes which have been merely touched upon in. Few people will be easily convinced that the chal lenge to man's future cannot be met by making marginal adjustments here or there, or, possibly, by changing the political system.

The following chapter is an attempt to look at the whole s ituation again, from the angle of peace and permanence. Now that man has acquired the physical means of self obliteration, the question of peace obviously looms larger than ever before in human history. And how could peace be built without some assurance of permanence with regard to our economic life?

One may look in vain for historical evidence that the rich have regularly been more peaceful than the poor, but then it can be argued that they have never felt secure against the poor; that their aggressiveness stemmed from fear; and that the situation would be quite different if everybody were rich. Why should a rich man go to war? He has nothing to gain. Are not the poor, the exploited, the oppressed most likely to do so, as they have nothing to lose but their chains? The road to peace, it is argued, is to follow the road to riches.

This dominant modem belief has an almost irresistible attraction, as it suggests that the faster you get one desira ble thing the more securely do you attain another. It is doubly attractive because it completely by-passes the whole question of ethics: there is no need for renunciation or sacrifice; on the contrary! We have science and technology to help us along the road to peace and plenty, and all that is needed is that we should not behave stupidly, irration ally, cutting into our own flesh.

The message to the poor and discontented is that they must not impatiently upset or kill the goose that will assuredly, in due course, lay golden eggs also for them. And the message to the rich is that they must be intelligent enough from time to time to. Gandhi used to talk disparagingly of "dreaming of sys tems so perfect that no one will need to be good.

Why ask for virtues, which man may never acquire, when scientific rationality and technical competence are all that is needed? Instead of listening to Gandhi, are we not more inclined to listen to one of the most influential economists of our century, the great Lord Keynes?

In 1 , during the world wide economic depression, he felt moved to speculate on the "economic possibilities for our: grandchildren" and con cluded that the day might not be all that far off when everybody would be rich. We shall then, he said, "once more value ends above means and prefer the good to the useful.

For at least another hundre d years we must pretend to ourselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight. Maybe we do not even have to wait for another sixty years until univer sal plenty will be attained. In any case, the Keynesian message is clear enough: Beware! Ethical considerations are not merely irrelevant, they are an actual hindrance, "for foul is useful and fair is not. The road to heaven is paved with bad intentions.

I shall now consider this proposition. It can be divided into three parts:. The question with which to start my investigation is obviously this: Is there enough to go round? Immediately we encounter a serious difficulty: What is "enough"? Who can tell us? Certainly not the economist who pursues "economic growth" as the highest of all values, and there fore has no concept of "enough.

We have enough"? There is none. Perhaps we can forget about "enough" and content ourselves with exploring the growth of demand upon the world's resources which arises when everybody simply we cannot study all strives hard to have "more. More prosperity means a greater use of fuel-there can be no doubt about that. At present, the prosperity gap between the poor of this world and the rich is very wide indeed, and this is clearly show"D.

Let us define as "rich" all populations in countries with an average fuel consumption-in 1 of more than one metric ton of coal equivalent abbrevi ated: c. On these definitions we can draw up the table on the next page using United Nations figures throughout. The average fuel consumption per head of the "poor" is only. If the "poor" suddenly used as much fuel as the "rich," world fuel consumption would treble right away. But this cannot happen, as everything takes time. And in time both the "rich" and the "poor" are growing in desires and in numbers.

So let us make an exploratory calculation. If at the same time the fuel consumption. The total result on world fuel consumption would be a growth from 5. This half-and-half split is interesting enough. But the split between the "rich" and the "poor" is even more inter esting. Of the total increase in world fuel consumption from 5.

Over the whole thirty-four-year period, the world would use milliard tons of coal equivalent, with the "rich" using milliards or seventy-five per cent, and the "poor," 1 04 milliards. Now, does not this put a very interesting light on the total situation? These figures are not, of course, predic tions : they are what might be called "exploratory calcula tions.

Even if the popu lations classified as "poor" grew only at the rate assumed for the "rich," the effect on total world fuel requirements would be hardly significant-a reduction of just over ten per cent. But if the. The most important comment, however, is a question : I s i t plausible t o assume that world fuel consumption could grow to anything like 23 , million tons c. In the light of our present. It is clear that the "rich" are in the process of stripping the world of its once-for-all endowment of relatively cheap and simple fuels.

It is their continuing economic growth which produces ever more exorbitant demands, with the result that the world's cheap and simple fuels could easily become dear and scarce long before the poor countries had acquired the wealth, education, industrial sophistication, and power of capital accumulation needed for the application of alternative fuels on any significant scale. Exploratory calculations, of course, do not prove any thing.

A proof about the future is in any case impossible, and it has been sagely remarked that all predictions are unreliable, particularly those about the future. What is required is judgement, and exploratory calculations can at least help to inform our judgement. In any case, our calculations in a most important respect understate the magnitude of the problem. It is not realistic to treat the world as a unit. Fuel resources are very unevenly dis tributed, and any shortage of supplies, no matter how slight, would immediately divide the world into "haves" and "have-nots" along entirely novel lines.

The specially favoured areas, such as the Middle East and North Africa, would attract envious attention on a scale scarcely imagi nable today, while some high consumption areas, such as Western Europe and Japan, would move into the unenvi able position of residual legatees. Here is a source of conflict if ever there was one. As nothing can be proved about the futur,e-not even about the relatively short-term future of the next thirty years-it is always possible to dismiss even the most threatening problems with the suggestion that something will tum up.

There could be simply enormous and alto gether unheard-of discoveries of new reserves of oil, natu-. And why should nuclear energy b e confined t o supplying one-quarter o r one-third o f total requirements? The problem can thus be shifted to another plane, but it refuses to go away. For the consumption of fuel on the indicated scale--assuming no insurmountable difficulties of fuel supply-would produce environmental hazards of an unprecedented kind.

Take nuclear energy. Some people say that the world's resources of relatively concentrated uranium are insuffi cient to sustain a really large nuclear programme-large enough to have a significant impact on the world fuel situation, where we have to reckon with thousands lent. Enough uranium will! It is hard to imagine a greater biological threat, not to men tion the political danger that someone might use a tiny bit of this terrible substance for purposes not altogether peaceful.

On the other hand, if fantastic new discoveries of fossil fuels should m ake it unnecessary to force the pace of nuclear energy, there would be a problem of thermal pol lution on quite a different scale from anything encountered hitherto. Whatever the fuel, increases in fuel consumption by a factor of four and then five and then six. I have taken fuel merely as an example to illustrate a very simple thesis : that economic growth, which viewed from the point of view of economics, physics, chemistry and technology, has no discernible limit, must necessarily run into decisive bottlenecks when viewed from the point of view of the environmental sciences.

An attitude to life which seeks wealth-in fulfilment short, in the single-minded not fit pursuit of into this materialism--does. Already, the environment is trying to tell us that certain stresses are becoming excessive. As one problem is being "solved," ten new problems arise as a result of the first "solution. Here again, however, many people will insist on discuss ing these matters solely in terms of optimism and pessi mism, taking pride in their own optimism that "science will find a way out.

The developments of science and technology over the last hundred years have been such that the dangers have grown even faster than the oppor tunities.

Austrian economists

About this, I shall have more to say later. Already, there is overwhelming evidence that the great self-balancing system of nature is becoming increasingly unbalanced in particular respects and at specific points. It would take us too far if I attempted to assemble the evi dence here. The condition of Lake Erie, to which Professor Barry Commoner, among others, has drawn attention, should serve as a sufficient warning. Another decade or two, and all the inland water systems of the United States may be in a similar condition.

You know what you have to do then? Redo the Downtown Plan. I agree with Puri. While Washington is feet shorter than the Pyramid, it is feet taller than it should be. Located right at the edge, the Pyramid—completed 13 years before the Downtown Plan—sought to shift the center of gravity of the Financial District north from Market Street, away from transit.

The Downtown Plan rejected this, emphasizing the Market-and-Mission corridor as the core of high-density redevelopment in downtown San Francisco. That emphasis was reiterated more recently by the Transbay Terminal Area Plan, which calls for very tall buildings in the corridor. The opponents of Washington are portrayed as nostalgic, elitist, and out of touch. A question that these arguments raise is whether modern life has left us ill-equipped to consider density in relation to the scale and character of a place.

Kohr would say that bicycling is ideally appropriate for one living in a certain place. In other words, we cannot meaningfully discuss density except in relation to a certain place. In his talk, Illich noted that, with the Enlightenment, we began to lose our grasp of proportionality in this sense. This disappearance has hardly been recognized in cultural history. The correspondence between up and down, right and left, macro and micro, was acknowledged intellectually, sense perception confirming it, until the end of the 17th century.

Space was simply understood as a familiar cosmos. Cosmos meant that order of relationships in which things are originally placed. For this relatedness—this tension or inclination of things, one to another, their tonos —we no longer have a word. Tonos was silenced in the course of Enlightenment progress as a victim of the desire to quantify justice. Therefore we face a delicate task: to retrieve something like a lost ear, an abandoned sensibility. Another word Illich mentions is temperament. An ethics of value—with its misplaced concreteness—allowed one to speak of human problems.

As this manufacturing technique improves its ability to make load bearing products we might expect that more parts of the retail economy will add on a manufacturing component. We could make cups, utensils, and hundreds of other items on-site. Yet information by its nature is global. Thus we can envision a globalized information economy and a localized physical economy. In the future we will import a good idea, a patent, a piece of software, a good design, a good book from anywhere, but we will produce it locally.

Most of our professors and our policymakers assume that this is an inevitable byproduct of progress and development. To them, we have moved from self-sufficient farming communities to trading city-states to nation states to a global economy, and as those of you familiar with science fiction know, we will soon move into the intergalactic economy era. Economicevolution has indeed moved us from small to gargantuan over the past years. But this was not an inevitable process. We made the rules. The rules do not made us. We made the rules that channeled investment capital and scientific genius and entrepreneurial energy in directions that resulted in absentee ownership, long-distance distribution lines, separation, insecurity, and dependence.

What would happen if we were to use our genius to develop rules that encouraged the opposite results, rules that couple responsibility and authority, that favor rootedness over mobility, humanly scaled systems over large scaled systems, continuity over change? Little of that is spent on communicating their positions on policy.

Not one penny will be spent to address the most fundamental issue of our time: how do we preserve community in an age of globalization? Well, without formally tossing my hat into the political ring, let me offer a few rules that could encourage an economy as if community mattered. Backin we passed the Clean Air Act. It was a major piece of legislation, and one section of that law dealt with smokestack pollution. The remedy was to raise the height of the stack.

Raising the height of the smokestack transformed a local particulate problem into a regional and even international acid rain problem. Whatwould have happened if in we had passed a Clean Air Act that instead of raising the stack, lowered it and curved the front of the pipe so that it entered the window of the executive suite?

I guarantee you that we would have heard about zero emission factories 25 years before the phrase was conceived. Consider this. Nevada has no nuclear reactors. Both bills gained wide bipartis an support. Yet even a cursory reading of the two bills reveals their inherent inconsistency.

One couples authority and responsibility; the other separates it. But what would happen if we did accept responsibility for our own wastes? We might see a widespread movement to close down nuclear plants. Which is probably why Congress is unwilling to delegate authority to communities over this issue. All worthwhile strategies and all of which, intriguingly, move us toward a more decentralized economy.

Rightnow a war is going on between banks and credit unions. Two issues are on the table: the tax exemption given to credit unions and the ability of credit unions to have members from many different organizations, thus allowing them to grow very large. The battle is being waged by large credit unions against large banks, although each argues that they are doing this on behalf of small credit unions and community banks. This makes for a very confusing situation. But if we were to use a Schumacherian perspective, we might end up with this position.

We support rules that firmly root banks in the community they serve. That means we support rules that encourage locally owned and operated banks and locally owned and operated credit unions. This means that, in the banking sector, we would revisit rules that allow for interstate banking and mergers.

It means that we support incentives for credit unions because, being owned by their depositors, they are less likely to be purchased by absentee owners. They read the comics, the gossip section, and the sports section. Today sports news has become front page news because more than 50 million Americans are living in and around cities which are being held blackmail by professional sports team owners. Ownersused to insist that their teams provided economic benefit for the town. Money spent at the ballpark is not spent at the local bar or bowling alley or movie theater.

Havingfailed to make the economic case, owners now argue for local subsidies because of the psychological benefit of professional sports. Here they are on stronger ground. Rooting for the local sports teams does help to tie a community together. Following the play of the local sports team is one of the few activities that old and young, black and white, rich and poor share. Communityownership of sports teams has a long and successful pedigree. The Green Bay Packers have been owned by their fans since , and have won several Super Bowls since then.

A dozen minor league baseball teams and several profitable Canadian professional football teams are also owned by their communities. Because it is illegal. All professional sports teams formally or informally prohibit the fans from owning their teams. Welet them adopt that rule; we can demand that they drop it. Indeed, a bill in Congress would require sports team owners to allow their fans to own the teams, or to suffer the loss of their antitrust exemption that allows them to negotiate as one entity with the media. Oncewe use our imagination to design rules that allow our communities to regain a sense of authority and responsibility, dozens of possibilities occur, Consider, the struggle over so-called big box retail.

Those in favor of these stores argue that they carry a wider selection and offer lower prices than smaller local stores. Those against argue that they suck money from the local economy and undermine Main Street. This issue is being debated at the local level because in this sector communities do have the power to say yes or no, through a vote of the Zoning Board or the Planning Commission or the County Council or directly by the voters.

This is democracy at its best. Some communities have established size limits on retail stores. Others have developed a process whereby large developments are reviewed with an eye on how they will affect the fabric of local business. Vermont established a citizens board to review all developments over 10 acres. Recently the Board rejected an application from a Wal Mart. Wal Mart took the state to court, arguing that it had no right to reject a development simply because it harmed local businesses.

The Vermont Supreme Court ruled that states and through them, communities do indeed have that authority. Inthe s and s, states fashioned another type of tool to encourage local ownership. These were called branch store taxes. Thesetaxes increased in proportion to the increase in the number of branches in a business chain. The feeling was that as a corporation opened more and more branches, it increasingly distanced itself from its customers, while at the same time acquiring more and more economic as well as political clout in the state legislatures and the local city councils.

The tax imposed a penalty on concentrated power and the separation of the business owner from the community served. Oncewe think that community is important, we will have to revisit many of our most cherished regulatory notions. For example, consider the way we approach the government exercise of eminent domain, that is, the authority to seize property for public purposes.

Telling Stories Beautifully: Hybrid Legal Forms in the New Economy

When government exercises its right of eminent domain, the owner whose property is seized must be compensated. They are paid the market value. Two identical houses located on the same street will fetch the same compensation. But what if we took into account not only the market value of the house but the social value of the house? What if we took into account the value of rootedness and continuity and community and neighborhood in our calculations? The people who live there know everybody in the neighborhood, know the history of the neighborhood, indeed, represent a vital part of the local civic society.

Reclaiming Community

Thefair market value of both houses is identical. But clearly their real value to the community is quite different. What if we enacted a measure that offered the owner of the second house the fair market value but gave the owner, or occupant, of the first house a premium over and above the market value based on the number of years of occupancy—say an additional 25 percent for every ten years of ownership? Thismeasure would achieve three objectives. First, it would value community and compensate those for whom dislocation would create a special hardship.

Second, by raising the cost of dislocation it might alter the cost-benefit equation against the proposed development.