It is 30 years since the publication of a slim volume of articles and essays titled Small is Beautiful - a key text of the nascent environmental movement. The year 1973 was a timely one for radical environmental thinking. The first UN conference on sustainable development had been held the previous year, and soon after, within months of each other, Greenpeace, Friends of the Earth and the UK Green party were founded.

Small is Beautiful rapidly became a bestseller, and its author, EF Schumacher, was feted by international leaders and counterculture activists alike. Today, Schumacher is less well known, but the ideas he popularised helped shape modern environmentalism, development theory and the global justice movement.

Equal parts economic analysis, spiritual tract and radical manifesto, the book reflected the contradictory nature of its author - a patrician academic who was also passionately interested in Eastern philosophy. What bound his work was a central belief that modern society had lost touch with basic human needs and values - and in doing so had failed both the planet and its people.

In the name of profit and technological progress, Schumacher argued, modern economic policies had created rampant inefficiency, environmental degradation and dehumanising labour conditions. "Ever bigger machines, entailing ever bigger concentrations of economic power and exerting ever greater violence against the environment, do not represent progress: they are a denial of wisdom. Wisdom demands a new orientation of science and technology towards the organic, the gentle, the non-violent, the elegant and beautiful," he wrote.

The remedy he proposed - a holistic approach to human society, which stressed small scale, localised solutions - flew in the face of economic orthodoxies of the time: "I have no doubt that it is possible to give a new direction to technological development, a direction that shall lead it back to the real needs of man, and that also means: to the actual size of man. Man is small, and, therefore, small is beautiful."

Western campaigners and governments in the developing world took up his arguments. But today, amid the wholesale imposition of globalisation and free trade, Schumacher's vision of self-sufficient local economies seems quaint and anachronistic. So is small still beautiful?

Born in Bonn in 1911, Schumacher emigrated to England in 1936. He became a British citizen in 1946 and in 1950 became economic adviser to the National Coal Board. For the next 20 years he worked at the heart of the British economic establishment, but visits to India and Burma led him to doubt technocratic certainties. He concluded that the imposition of a Western model of development had bypassed the rural poor. Industrialisation and megaprojects created vast wealth for a few, but left the masses trapped in spiritual and material poverty.

The antidote he called "Buddhist economics" - "a middle way between materialist heedlessness and traditionalist immobility".

Instead of mass production and mechanisation, industry in the developing world should be on a "human scale". Cheap, locally developed solutions would be more effective than imported technologies and have less environmental impact.

In 1966, Schumacher founded the Intermediate Technology Development Group (ITDG), and his work inspired non-government organisations around the world. Today the group supports hundreds of projects, from donkey plough workshops in Sudan to micro-hydroelectric schemes in Nepal, Sri Lanka and Peru.

But Small is Beautiful was never accepted by mainstream economists, who see it as an impractical model for development. The Oxford economist Wilfred Beckerman published a riposte to Schumacher titled Small is Stupid.

Local management of resources has become commonplace in mainstream economics, but localisation and self-sufficiency are not always efficient or even practical, says Julian Morris, director of free-market think-tank the International Policy Network. "Most of the people in the world who currently don't have electricity would benefit from having it. The important thing is to get them electricity in the most efficient and costeffective matter, and avoid pollution. For that, we're not talking about local solutions, but solutions that come from the economies of scale," he says.

"It comes down to whether or not you believe in technological progress and growth," says Philip Stott, professor emeritus in bio-geography at the University of London. "I believe that technology and growth can fundamentally be equated with good."

According to Stott, Schumacher's followers idealise a primitive past while ignoring the benefits of scientific progress. They risk condescension in their attitudes towards the developing world. "There is an element of neo-colonialism - they are trying to regress parts of the world that should be progressing," he says.

But science and technology have not improved basic living conditions for much of humanity, argues Cowan Coventry, chief executive of the ITDG. "Given the dramatic [scientific] advances of the past 40 years, why is it that the number of people living in poverty continues to increase? Why do we find that 2 billion still don't have access to electricity?"

Schumacher's followers may have failed to take up the wider implications of Small is Beautiful, says Coventry. Despite the tight focus implied in the title, Schumacher proposed an overhaul of the way the global economy is run. "People saw the beauty of local endeavour, but they never really grappled with the bigger issues of how to change macro policies."

Meanwhile, the march of trade liberalisation threatens small-scale manufacture in developing countries, while small-scale agriculture is swamped by subsidised imports.

"We're seeing the same economic model. It's business as usual," says Spencer Fitzgibbon, a member of the Green party national executive. Governments still place their faith in technological advances instead of considering economic re-organisation, he says.

Schumacher's view of mechanisation finds its parallel in today's debates over GM crops and nanotechnology. Once again, hi-tech solutions are being boosted when their benefits are still unclear, argues Coventry. "Extravagant claims are often made about new technologies and their benefits for developing countries. We're sceptical about those claims, especially when they're made by corporate interests. The big question is, can new technology bridge the divide between the haves and the have nots?" It is the same question that Schumacher put 30 years ago.

"Small is Beautiful is a book of many good ideas, and they are more and more relevant today," says Satish Kumar, editor of Resurgence, where many of Schumacher's essays first appeared.

"Schumacher was called a crank, and he quite happily agreed. But what is a crank? It's a small element in a machine that makes revolutions."