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Fri

26

Mar

2010

Christopher Ketcham: The Curse of Bigness Or business as usual in America the vulnerable
Friday, 26 March 2010 17:03
by Christopher Ketcham
Originally published in Orion Magazine
THE NEXT TIME I HEAR a politico or banker or Detroit executive talk about institutions “too big to fail,” i’ll direct them to the 34 percent of Americans who are obese. Last I heard, these big Americans, themselves a kind of cultural institution, were failing en masse, racked by diabetes, asthma, heart trouble, and bound for early death. The human form can only grow so big. Or I could point them to Pig #6707. Conceived in the laboratories of the U.S. Department of Agriculture during the 1990s, Pig #6707’s embryo was genetically altered with a human growth gene to develop a super-pig, bigger and faster-growing and more productive of meat. But the genetic alterations produced a monster, impotent and nearly blind, its legs arthritic, its body crippled, the creature able to stand up and be photographed only with the support of a plywood board. When asked by a reporter why he created the sick pig, the lead researcher said his intent was to make livestock more efficient.

There is, of course, a caution for our species in Pig #6707. When an organism grows beyond its design, nature will determine it to fail—a fact of life, in the strictest sense. Nowhere in evolutionary theory is hypertrophic growth posited as the key to success. What is key is optimum size, what we’d more accurately call right size. All living things have a right size, and historically evolved to that size because it was optimal for survival. So, for example, elephants and giraffes and rhinoceroses, though comparatively huge, are in fact just the right size—their bigness operating as a defense against predators, allowing for greater reach in forage, and much else. The same goes for polar bears and walruses and whales, which require extra tissue volume to retain heat against cold water and long winters. Dinosaurs, as we all know, were likely the biggest creatures to walk the Earth, but bigness didn’t help them meet the challenge of changing conditions. The largest of the dinosaurs disappeared altogether, the smaller ones got even smaller and eventually evolved into birds, while the animals of more moderate size, the marsupials and primitive mammals, found that being small in the first place was a blessing.

On the cellular level, biologists have long understood that large cells, the kind found in cancer, are always unstable and heading for collapse. In physics, too, the principle of right size holds fast. “Atoms of middle weight are stable and inert,” writes Sir George Thomson, the nuclear physicist and Nobel laureate, “but the light as well as the heavy atoms have stores of energy. If one thinks of the heaviest atoms as overgrown empires which are ripe for dissolution and only held together by special efforts . . . One may think, on the other hand, of the lightest of the atoms as individuals which run together naturally for mutual help and readily coalesce to form stable tribes and communities.” As with atoms and empires, so also the stars, which when grown too big will collapse under their own weight in the spectacle of the supernova. So also for animal communities, which rarely aim for bigness. Birds fledge their nests; they don’t keep crowding in. Bees and ants split their colonies when they grow too large, decentralization as instinct. Trees self-prune when laden with too much ice or snow or assailed by wind, dropping limbs to sustain the trunk. Naturalized goldfish in the carp family, kept in an outdoor garden, will only grow to a size proportionate to their pond—unless they are fed (and if fed too much, they grow terribly obese and soon lose the knack for swimming, procreating, and everything else that makes a fish a fish).


Nothing in nature just keeps growing, except where the usual evolutionary constraints are removed from the picture. Isolation from predators, in the example of island gigantism, allowed a host of species to grow to outsize proportions. The elephant bird of Madagascar, the giant gecko of New Zealand, the giant ducks of Hawaii, the giant rabbits of Mediterranean islands, the famed dodo—all were extinguished at astonishing speed after meeting the wily Homo sapiens and his diminutive camp followers (dogs, cats, rats). Without effective competition to keep them fit, the island gigantics were in fact terribly vulnerable when conditions changed.

The United States, it would seem, is suffering its own kind of island gigantism. Bigness is the prejudice of American life, our cultural albatross, the axiom being that when something is big it is automatically better. Why we’ve been saddled with love of bigness as a people perhaps comes down to the matter of geography, the vastness and richness that the landscape offered for the taking from the moment of European settlement. Size was our birthright, our conditioning, the justification for our exceptionalism, bigness our manifest destiny, and for a long time, whole centuries, it worked. The free land and timber and animals to be hunted down and coal and oil and ore to be dug out of the ground made us very wealthy very fast, taught us that growthmania was the norm, the shape of progress, the American way.

Thus, we prefer our Big Macs and our Whoppers, our food portions supersized, our big cars and sprawling cities, our enormous football players (growing bigger every year, the average offensive lineman now topping three hundred pounds), our big breasts and big penises and big houses (up from an average of 1,200 square feet in 1950 to 2,216 square feet today), our big armies with big reach, and, though we complain about it incessantly, big government that spends big money running up big debt (more now than at any other period in our history). That we allow corporations to grow to outrageous size is just another symptom of the disease. Bigness worship permeates every layer of the culture; it is racked into our brains with every turn of the advertising screw; it is a totalizing force.

WHEN LOUIS BRANDEIS WROTE The Curse of Bigness in 1934, he had been a lawyer for many years and, famously, a Supreme Court justice, and much of his work in the courts was busting up bigness. He was particularly concerned about the corporate monopolies that afflicted American life at the turn of the twentieth century. The Curse of Bigness was not a big book, because the arguments were pretty obvious. The great robber baron trusts—in oil, rubber, steel, tobacco, sugar, and railroads (and let’s not forget the Writing Paper Trust, the Woolen Trust, the Upper Leather Trust, the Paper Bag Trust)—had rigged bids, defrauded patentees, crushed labor movements, and could sway prices in any direction regardless of supply or demand. The ur-trust that by 1904 controlled 91 percent of U.S. oil production, Standard Oil Company of New Jersey, was found by the Justice Department to have secured its position via “discriminatory practices in favor of the combination by railroad companies; restraint and monopolization by control of pipe lines . . . ; contracts with competitors in restraint of trade; . . . Espionage of the business of competitors, the operation of bogus independent companies”—the stratagems as expectable as they were ugly.

The threat that behemoths like Standard Oil posed to the republic, wrote Brandeis, was their concentration of economic power and decision making to the extent that they were effectively a state within the state, operating under their own laws. Many of the trusts were shattered, in a long struggle that Brandeis pioneered. It was his advocacy that helped push into effective action the antitrust mechanisms in government (the Sherman Antitrust Act of 1890, the Clayton Antitrust Act of 1914, the Federal Trade Commission), which led to the breakup of Standard Oil and many of its sister monopolies by 1911. “American development can come on the lines on which we seek it, and the ideals which we have can be attained, only if side by side with political democracy comes industrial democracy,” Brandeis wrote. “It is the relatively small man who pre-eminently needs the aid and solicitous care of industry and government. We have, gentlemen, to bear all the time that democratic view in mind.”

But we have not. Today we find ourselves in an unprecedented age of corporate gigantism. This situation is characterized not by the outright monopolies that worried Brandeis, but by the rise of oligopolies, a few very obese firms, the Big Three or Big Six, dominating their sectors while being insulated from failure by the hand of government. Republican and Democratic administrations alike for the last thirty years, spellbound by so-called laissez-faire ideology, abandoned their antitrust duties and watched as the total value of mergers and acquisitions rose to an unprecedented $20 trillion—abetting, in other words, the growth of stupendous privileges in the corporatocracy. At the same time, federal and state governments have done most everything they can to ignore, discourage, and imperil the small man in the world of business.

It’s an old story, and it bears repeating: Government subsidies favor large-scale standardized activity (in farming, manufacturing, retail—the list is long) at the expense of the local, the small, the diverse, the upstart. By 2005, four firms controlled 60 percent of the nation’s grain business. The four largest meatpackers controlled 70 percent of beef supply. In some states, the four largest grocery chains controlled as much as 88 percent of all retail sales. Today, a handful of merged energy companies, the Big Five, dominate the petroleum business, with exxonmobil, Chevron-Texaco, Conoco-Phillips, BP, and Royal Dutch / Shell proving, in the words of Lord Browne, former chief executive of British Petroleum, that “many of the components of the old Standard Oil [trust have] been brought together.” The pattern of oligopoly holds in banking (Citigroup, Chase, and Bank of America now issuing one out of every two mortgages, two out of every three credit cards), accounting, tobacco, automobiles (the triopoly of GM, Ford, and Chrysler), defense, steel, telecommunications (Verizon, AT&T, and Sprint-Nextel), pharmaceuticals, airlines (Delta, American, United), in every major stage of the food business (even including grain elevator storage), and in the generation, transmission, and local distribution of electricity.

What we’re told is that all this consolidation, this predilection for bigness, always and every time—per the usual knee-jerk size-valuation—brings “synergies,” “economies of scale,” efficiency, innovation. But the opposite is too often the case. To take perhaps the obvious example: The Big Three automakers, which for the last half-century have trumpeted “efficiency” and “innovation” as the bywords to justify their great size, in fact failed over the years to produce automobiles at prices and quality comparable to smaller Japanese automakers like Honda and Nissan, the U.S. oligopoly by the 1980s requiring nearly twice as many engineering hours per new car project, and today taking up to two weeks to change plants for new model assembly while little Honda does it in one night. And all this for products that are more expensive and less advanced than those of the competitors. GM, among all automakers, was routinely the least efficient, the least visionary, its mastodonic bureaucracy trained to crush new ideas in the cradle. “At GM, if you see a snake, the first thing you do is to hire a consultant on snakes,” said Ross Perot during his tenure on GM’s board of directors. “Then you get a committee on snakes, and then you can discuss it for a couple of years. The most likely course of action is—nothing.” One might go so far as to charge that the neglect and recalcitrance of the Big Three in the field of invention, their strangling of innovation, has been a danger to the public and disastrous for the environment. They ignored and sometimes actively suppressed safety innovations (seatbelts, padded dashboards, shatterproof glass), a decision that arguably cost the lives of hundreds of thousands of motorists who otherwise might have survived crashes. They have consistently resisted fuel economy and emissions technologies. They colluded to destroy public transit in cities throughout the nation, with the planned effect of getting more people into cars (which rendered cities, by default, more destructively auto-dependent). They killed the electric car—invented out of their own labs, years before anyone had heard of a Prius (and now, as it happens, they are seeking tax dollars to reinvent it). If the nation is to be efficient in its use of fast-dwindling fossil fuels, innovative in curbing pollution and greenhouse gases—effective at imagining even the possibility of a sustainable future—the Big Three are, and will continue to be, a monstrous hindrance.

But why confine ourselves to automakers? Look at U.S. Steel, the “big sprawling inert giant,” in the words of the company’s own assessment, which survives only by government subsidy and protectionist measures from friends in Congress. The smaller steel companies, the so-called mini-mills operating throughout the U.S., produce at lower cost and with fewer man-hours and better pay for workers. Or look at IBM, where a senior vice-president once described the managerial hierarchy as “a giant pool of peanut butter we have to swim through.” The company was out-invented at every turn of the 1980s, in the dawn of personal computing, by upstart Microsoft, which preyed on the inventions of Apple. (Microsoft today is an oligopolist like no other, with the Windows operating system installed on 95 percent of personal computers worldwide.)


Or consider how giant pharmaceutical firms license scores of products from tiny innovative biotech labs every year, perfect and mass-market the inventions of the little companies, but invent few, if any, new drugs inside their own labs. It has always been thus: the big private research laboratories of the modern age are marked by their creative barrenness, a pattern identified by no less a luminary than the former vice-president of the General Electric Company back in 1953: “Not a single distinctively new electric home appliance has ever been created by one of the giant concerns—not the first washing machine, electric range, dryer . . . Razor, lawn mower, freezer, air conditioner, vacuum cleaner, dishwasher, or grill. The record of the giants is one of moving in, buying out, and absorbing after the fact.”

Kodachrome film? Not invented by Eastman Kodak, but by two musicians in a bathroom. The earliest turbojet engines? Blew in from none of the major aircraft firms. The Google search platform now fast becoming—in one of those tasteless ironies we have learned to expect—an internet monopoly? Conceived by two geeks in a dorm room. You don’t paint the Sistine ceiling by committee, though perhaps one day a corporation will try. Creativity, in any case—the radical’s creativity, which is the only kind—is not what the corporation looks for. Rather, it pursues what William Whyte called “the fight against genius.” It looks for Whyte’s “Organization Man,” who seeks protection, safety, succor in bigness, who can be relied on to conform and submit. What it lacks in creativity, of course, the big corporation makes up for in coercion.

THE STANDARD OIL PLAYBOOK, it turns out, is very much alive, because with corporate obesity always comes the institutionalization of unfairness. Economists Walter Adams and James Brock have done more than any contemporary scholars to chronicle the effects on the ground. They find, for example, that the oligopolists in the grain and meat industries drive down prices for family farmers and ranchers, starving the small men out of business. The defense industry, they report, consolidates in the 1990s, and what follows is an explosion in contract fixing and price fraud, with procurement costs skyrocketing at the Pentagon. The oil oligopoly intentionally withholds gasoline supplies from the market in 2001—a “profit-maximizing strategy,” in the words of the Federal Trade Commission—costing Americans billions of dollars in overcharges. The giant airlines tacitly collude to fix prices, always higher and higher, and so do the automakers, while service and quality continue to decline. In the ninety-seven top radio markets, where two broadcasters now control some 80 percent of the spectrum, we hear allegations of censorship, and we stop hearing the music and opinions considered unpalatable by corporate ownership. The power of bigness everywhere corrodes the regulatory instruments of government through the usual means (lobbyists, campaign money, revolving doors, conflicts of interest). And all this is tolerated, which is to say it is not questioned (so much for regulating with a “democratic view in mind”). It can’t be otherwise, when money and influence grows with every aggrandizement of industry, and corruption of the state is only a matter of the size of the checks one can write, the stature of the executives one can place to gorge in the henhouse. American government, write Adams and Brock, “is in constant danger of being transformed into a welfare state for powerful private interests.” The danger has swallowed us whole; we are now living inside its belly.

I think particularly of Goldman Sachs, one of the most powerful players in the banking oligopoly, which for two decades has been a berserker in the marketplace, sowing discord, leading people into shoddy investments and out of their homes, making huge money in the process, all while dictating terms to government and looting the public treasury. Matt Taibbi, in an article in Rolling Stone, recently deconstructed how effective Goldman has been in exploiting its bigness. The achievements in regulatory capture alone are momentous: Bush’s treasury secretary, Henry Paulson, architect of the 2008 bailouts, was a former CEO of Goldman; Robert Rubin, the treasury secretary under Clinton, spent twenty-six years at Goldman; former Goldman director Ed Liddy was placed in charge of the bailout of crumbling insurance goliath AIG (which owed Goldman billions of dollars); the last two heads of the Federal Reserve Bank of New York were Goldmanites; and on and on.

Taibbi reports that Goldman was among the chief promoters of the tech stock bubble of the 1990s (and profited from the collapse), the real estate bubble of the 2000s (and profited from the collapse), and throughout these debacles it was variously accused of securities fraud, tacit bribery, insider trading. Goldman’s commodities bubble predations in 2008 are perhaps most illustrative of how a bigness complex with tentacular reach touches all Americans. With friends placed on the Commodities Futures Trade Commission, Goldman quietly secured an exemption from a Depression-era federal law, specifically the Commodity Exchange Act of 1936, which limits the number of speculators in the commodities market, stating that if speculation gets too big in those basics of existence—corn, wheat, coal, oil—it’s a risk to society as a whole. Armed with the exemption, Goldman was free to set its traders loose in the commodities markets to balloon oil prices even though oil production was up and consumption was down. Due in part to Goldman’s manipulations, Taibbi writes, the average barrel of oil in the summer of 2008 was traded twenty-seven times before it reached the consumer, and with the parasitic middleman taking his cut through aggressive—often lawless—interference in the laws of the marketplace, we had four-dollar-a-gallon prices that crimped the livelihoods of tens of millions of drivers.

For this good work, the company demanded a bailout, stretching its many arms to twist the necks of these same taxpayers. Goldman executives were brought in to help plan the bailout arrangements, for themselves and other banks, and the $700 billion was dispersed mostly in secret, with little or no oversight. They helped to oversee the AIG bailout, because Goldman’s investments were bound up in AIG, and, as anticipated, when AIG received $85 billion at the direction of ex-Goldmanite Paulson at the Treasury, $13 billion was promptly routed from AIG to Goldman. Goldman then machinated for its own bailout, while Paulson opted to let Goldman’s chief competitor, Lehman Brothers, collapse for the pickings. This had the benefit of allowing Goldman to sop up Lehman’s share of the market, so that Goldman, among the prime perpetrators of excess that led to the crash, now grows even bigger, presumably to go on to further excesses.

What must be understood is that this bailing out of bigness is nothing new. It happened, for example, with Chrysler in 1979—$4 billion was allocated by Congress so the company could continue making stupid decisions and crappy cars—and with Long Term Capital Management in 1998, after the hedge fund invested too much money in too much risk, which is just the model of profligacy required for a company to achieve the coveted status of “too big to fail.” The difference in the recent bailout is only its size, stretching into the hundreds of billions of dollars, saddling generations of Americans with government debt larger than any single generation past had to contend with.

There is no learning curve, only the upward sweep of profits and size and government intervention. Bailing out bigness masterfully incentivizes bigness, because to be big is apparently the ultimate indemnity against the rigors of the marketplace, i.e., against the real world in which you and I are supposed to muck around for a living. And the bigger the losses among the giants, the better—how else can one threaten the “system” and demand a bailout and grow still bigger? The small community and state banks in boring places like North Dakota are holding course just fine in the throes of the “crisis”—they were humble and frugal—as are many smaller banks that operate nationally. But the necessary consequence of bailing out losers like AIG and Goldman Sachs and the other giants is that the small guys, who were modestly surviving, lose business to the subsidized goliaths. The bailouts in their scale have one other big incentivizing consequence: they reframe the mistakes of the private sector as social catastrophes, which makes us all vulnerable by encouraging the socialization of foolishness and greed that would better remain the burden of boardroom executives. The private enterprise economy is revolutionized in the most cynical and ironic fashion, so that unfairness bears down like a jackboot on the small man, while it’s socialism for the rich, the big, the abusive, the powerful, the ones doing the stomping. “Marx, in his innocent, and now obsolete, way thought it would be the workers who would force the pace of socialism,” wrote John Kenneth Galbraith way back in the comparative innocence of 1985. “He must be looking with surprise at the way, in our time, it is the bankers and the big industrialists who lead the march, carry the flag.” And lo, swollen with government money, while the world economy immolated throughout the summer and fall of 2009, Goldman Sachs posted its largest profits ever.

In 1834, Roger B. Taney, who would become chief justice of the Supreme Court, warned about the supersized hostage-taking capacity of big concentrations in business. Listening to the bailout justifications throughout 2009, one could appreciate the fatefulness in Taney’s message. The big interests, he observed, “may now demand the possession of the public money . . . And if these objects are yielded to them from apprehensions of their power, or from the suffering which rapid curtailments on their part are inflicting on the community, what may they next not require? Will submission render such a corporation more forbearing in its course?” Ask Goldman Sachs.

The Founding Fathers were concerned about the problem from day one, though they described the influence and power of bigness in terms of “factions,” those groups of citizens—and now, more problematically, in a way the founders did not foresee, those groups of fake citizens known as corporations—“who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community.” Madison’s solution in the Federalist Papers was to allow a multiplicity of interests that, ideally, would balance each other out, so that no one interest could hold sway. In other words, competition for power among factions—that itself could only function in a decentralized system—was key to keeping all factions free.

The principles of representative democracy and the principles of free-market economics were able to coexist in the small-scale schematic of eighteenth-century America. But the bigness complexes of today require that we sacrifice one or the other. We can refuse to bail out the big companies while letting the economy falter—dragging into penury no small number of Americans—and fail in our oath to caretake the interests of the people. Or we can sacrifice free-market principles and fund the bailouts and let corporate obesity run riot till it crashes power-drunk into another wall—and it will, it always does. “The irony,” says James Brock, “is that we have established a reverse economic Darwinism, where we ensure the survival of the fattest, not the fittest, the biggest, not the best.”

THE 9/11 ATTACKS presented one of those classic moments when bigness failed spectacularly. The $75-billion-and-counting “central intelligence” apparatus, this lumbering giantist peanut-butter bureaucracy, was outsmarted by a dispersed, small-scale, “small-cell” operation of nineteen men armed with box cutters and bad English and funded by a Saudi exile languishing in the mountains of Afghanistan. I got on the phone recently with a sociologist at Yale University named Charles Perrow, who a few years ago wrote a book called The Next Catastrophe, in which he singles out Islamist terrorist networks for their adaptive dexterity, their adroitness in adversity, and for the schooling they offer in the vulnerability of being too big, which is to say too centralized. Terrorist networks “are very reliable,” says Perrow. “They can live largely off the land, can remain dormant for years with no maintenance costs and few costs from unused invested capital, and individual cells are expendable. There are multiple ties between cells, providing redundancy, and taking out any one cell does not endanger the network.”

Islamist terrorists operate, to their credit, Perrow says, by virtue of the same “resiliencies” and “decentralizations” that characterize small-firm networks, those systems of disparate though interrelated companies that most economists would associate with low economic development—because of their smallness—but that in fact do very well while spreading the wealth. Looking at small-firm networks, where each firm had twenty or fewer employees, Perrow found “efficiency, resiliency, reliability, innovativeness and positive social outcomes” in Japan, Taiwan, Italy, across Northern Europe, and, not least, in the Silicon Valley of the United States. Dependency, the chief factor in Perrow’s understanding of how catastrophes past and future can envelop whole societies, was what small-firm networks cut out of the equation. “Dependencies are low because there are multiple sources of suppliers, producers, customers, and distributors,” he writes. “Wealth is decentralized, since it is spread over many units, and thus the economic power of individuals or single units is kept in check while the power of the network is enhanced.”

It echoes what the founders were thinking, though presently such thoughts are considered wholly un-American. The American way in business and government and infrastructure is to systematically increase dependencies and call it “efficiency.” Perrow singles out three areas of dangerous concentration: in energy, in populations, and in economic/political power. In energy, there is not simply the fact that U.S. refining capacity agglomerates just where hurricanes like to hit, but that industrial storage and toxic processing facilities sit one atop the other, some of them prone to explosion, such as the ruptured oil storage tanks in the wake of Hurricane Katrina. It’s not just cities too big for the floodplains in which they sprawl, but the fact that they are supplied by electricity grids too centralized and increasingly prone to blackouts like the one that surprised much of the American Northeast in 2003, resultant from a single broken link in the grid. It’s not just that the grids are centralized and so tightly coupled, but that they became this way because energy companies, growing into oligopoloid monoliths, captured and undermined the centralized regulatory agencies of government. In Perrow’s analysis, it all interlinks, cross-pollinates, conduces to perpetuate ever-increasing bigness. The bigger and more complex and more total our systems and institutions become, Perrow is saying, the weaker and more vulnerable they really are.

Anybody who’s been on a camping trip with too many friends can understand Perrow’s thinking. Small groups of people prove to be more cohesive, effective, creative in getting things done. In the 1970s, the English management expert and business scholar Charles Handy put the ideal group size in work environments at “between five and seven” for “best participation, for highest all-round involvement.” Alexander Paul Hare, author of the classic Creativity in Small Groups, showed that groups sized between four and seven were most successful at problem solving, largely because small groups, as Hare observed, are more democratic: egalitarian, mutualist, co-operative, inclusive. Hundreds of studies in factories and workplaces confirm that workers divided into small groups enjoy lower absenteeism, less sickness, higher productivity, greater social interaction, higher morale—most likely because the conditions allow them to engage what is best in being human, to share the meaning and fruits of their labor.

This might have something to do with the evolution of the human brain over the hundred thousand years that man survived by hunting and gathering in small tribes. Cognitive neuroscience suggests that the regions of the brain controlling emotion are hard-wired for a small-group dynamic, that the frontal cortex itself is severely limited in the amount of information it can synthesize on a large scale. Indeed, these same researchers of group dynamics show that a disturbing thing happens as groups expand. Large groups develop quickly into a committee structure, with an executive or leadership that directs and often dominates the decision-making process. Power, in other words, is centralized, hierarchies are built, authority is increasingly top-down, consent is gently coerced or it arrives by default, as members of the group simply stop participating—not speaking, or initiating, or deciding, or acting, their invisibility growing in proportion as the group grows in size. In short, the experience of most members of the big group could accurately be described as one of alienation, powerlessness, meaninglessness.

Needless to say, in our very modern world of enormous institutions, we are daily confronted with this alienating experience, not merely in corporations, banks, automakers—to whom we say, “Yes, too big to fail, and nothing to be done about it!”—but in our most prestigious universities, our proudest labor unions, our staunchest advocates for environmental action and civil rights, our best hospitals, our gigantic corporate organic farms, not to mention the multi-trillion-dollar machine of a welfare government—the social safety nets, the regulatory functions, the housing and healthcare authorities, and all its octopus arms that reach into the lives of citizens. In such environments, people, as Paul Goodman once put it, are reduced to personnel, certainly if they don’t secure a place at the top of the heap or near it, which most do not; they become functionaries, bureaucrats, organizers for the organization, jugglers of abstractions. Goodman, a self-described anarchist, observed in 1963 that “no matter how benevolent the goals, the style of execution is dehumanizing. So long as people are transformed into personnel—management-personnel, labor-personnel, professional-personnel,” and to this Goodman goes on to add sales-personnel, consumer-personnel, client-personnel, voting-personnel, to which we might as well add military-personnel, security-personnel, police-personnel, killing-personnel—“we cannot expect the organization to be internally humanized by their persons, for there are no persons.”

IT WAS E. F. SCHUMACHER WHO, in the 1950s, as the chief economist at the British National Coal Board, came to the quite reasonable—at the time unthinkable—conclusion that energy supply, the coal that England so ravenously was burning up, could not satisfy an ideology of unlimited growth. It was, Schumacher concluded, a suicide pact with Planet Earth. What Schumacher offered instead in the book that made him famous, Small Is Beautiful, is the common-sensical idea that man is small, therefore should think small—that is, think along the lines of human scale.

When in 1955 Schumacher was invited by the government of Burma as an advisor on economic development, he understood at once that the rote econometrics of the West had little to offer the Burmese. Schumacher fell in love with the country, the people, the culture, and it was Buddhism that most impressed him, Buddhism in practice in the little villages, the Buddhism of the Middle Path. The experience was transformative, inspiring him to gestate the notion of a “Buddhist economics,” an “economics as if people mattered.” Instead of demanding that his hosts modernize, he urged the Burmese to hold fast to the middle path, employing energy-light, human-scale technology—what he called “democratic or people’s technology”—to develop the economy on the organic scale of the village. Instead of industrial irrigation super-projects, there would be drip-irrigation and foot-operated treadle pumps (which have worked in Burma to this day). Instead of breakneck urbanization and huge capital investments and centralized planning, the Burmese would do better to decentralize as much as possible, he said, to keep decision-making local for the local production of food and handicrafts to be locally consumed.

Mahatma Gandhi’s development plans for India were much along the same lines. “If we feel the need of machines,” said Gandhi, “we certainly will have them. Every machine that helps every individual has a place, but there should be no place for machines [that] turn the masses into mere machine minders.” What in the intervening years has been the alternative? In China, great leaps forward have poisoned the rivers and the lakes and the fields and the coastal beds, displacing huge populations, concentrating them in the filth of cities as machine minders, impoverishing every rank of traditional society while enriching a very few, for whom tradition is nothing more than an attachment to the nonmaterial.

Of course, among the economists for whom growth was the unquestioned ideology—growth for its own sake, the ideology of the cancer cell—Schumacher was considered a crazy old man, a godforsaken crank. And to that he was said to have replied that a crank is small, safe, cheap, comprehensible, nonviolent, and efficient, a perfect tool of intermediate technology.

Let us be cranks then, though the consensus conspires against us—against the very notion that the small-scale and low-tech may hold the means to a workable future. We can start by downsizing the monster corporations. The antitrust law is there, waiting, a fist in our pockets. Let’s have a third party in politics that might dare to confront bigness—hell, let’s have a second party, given that Republicans and Democrats are at odds only in the perfumes they wear. Let’s have ten or twenty parties. Let’s encourage local production with local labor within easy commuting distances; pay a living wage; restructure land-use patterns to provide easy access to work; grow most of our food close to where it will be consumed. Let’s dream small.

Of course, bigness may still be needed to provide certain goods and services, but the most realistic future for humankind lies in a determined return to the human scale. The transformation will no doubt be costly in the short term, that is, less profitable for Big Ag and Big Oil and Big Coal and all the other bigness complexes, but it will produce vast benefits to social health in the long run. And how shall we quantify that kind of quality? Not in the usual gibberish of national product—the original definition of gross meaning “repellently fat”—or exports and imports, or capital-output ratios, or capitalization, not with the metrics of the idiot savants in the finance industry, who produce nothing one can hold in the hand, nothing of real value in a human-scale economy. Instead of depending on slave labor abroad, we can have jobs at home for the things we need, not the things we are told to want. Instead of processed food, we can have fresh food. Instead of faraway hierarchies, we can have local networks. Instead of militarism, cooperation. Instead of repression, innovation. Instead of homogenous, homegrown.

It goes against every urging in our recent history and our covetous training, and therefore it may only happen when some external force comes into play. Most likely that force will be the limits of Planet Earth, and our fitness will be determined, as it was with the dinosaurs, by our ability to adapt to the new conditions. Or not. We might do well to remember that the laws of nature are bigger than Goldman Sachs or the Big Three or the United States of America. Until then, we will continue to think of our systems as too big to fail, during which time we may end up presiding with a blithe mind over their failure—which, ultimately, will mean our failure.

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