Buddhist economics

Slogan in Bhutan about Gross National Happiness in Thimphu's School of Traditional Arts.

Buddhist economics is a spiritual approach to economics.[1] It examines the psychology of the human mind and the anxiety, aspirations, and emotions that direct economic activity. A Buddhist understanding of economics aims to clear the confusion about what is harmful and beneficial in the range of human activities involving production and consumption, and ultimately tries to make human beings ethically mature.[2] It tries to find a middle way between a purely mundane society and an immobile conventional society.[3]

Sri Lankan economist, Neville Karunatilake, wrote that ‘A Buddhist economic system has its foundations in the development of a co-operative and harmonious effort in group living. Selfishness and acquisitive pursuits have to be eliminated by developing man himself.’[4] Karunatilake sees the Buddhist economic principles as exemplified in the rule of the Buddhist king Ashoka.

Bhutan's King Jigme Singye Wangchuck and their government have promoted the concept of 'Gross National Happiness' (GNH) since 1972, based on Buddhist spiritual values, as a counter to gauging a nation's development by gross domestic product (GDP).

It represents a commitment to building an economy that would serve Bhutan's culture based on Buddhist spiritual values instead of western material development gauged by gross domestic product (GDP).[5]

Buddhist economics holds that truly rational decisions can only be made when we understand what creates irrationality. When people understand what constitutes desire, they realize that all the wealth in the world cannot satisfy it. When people understand the universality of fear, they become more compassionate to all beings. Thus, this spiritual approach to Economics doesn't rely on theories and models but on the essential forces of acumen, empathy, and restraint.[2] From the perspective of a Buddhist, Economics and other streams of knowledge cannot be separated. Economics is a single component of a combined effort to fix the problems of humanity and Buddhist Economics works with it to reach a common goal of societal, individual, and environmental sufficiency.[2]


Buddhist ethics has been applied to the running of a state's economy since the rule of the Indian Buddhist emperor Ashoka (c. 268 to 232 BCE). Ashoka was famous for his extensive philanthropic and public works program, building hospitals, hostels, parks and nature preserves.

The term 'Buddhist economics' was coined by E. F. Schumacher in 1955, when he traveled to Burma as an economic consultant for Prime Minister U Nu,[6] and is used by followers of Schumacher and by Theravada Buddhist writers such as Prayudh Payutto, Padmasiri De Silva and Phrabhavanaviriyakhun.

Schumacher's essay "Buddhist Economics" was first published in 1966 in Asia: A Handbook, and republished in his influential collection Small Is Beautiful (1973).

The 1st Conference of the Buddhist Economics Research Platform, August 23–24, 2007 was held in Budapest, Hungary [7] and the 2nd in Ubon Ratchathani University, Warin Chamrab, Ubon Ratchathani Thailand from April 9–11, 2009.[8] The third conference was supposed to be held in Brisbane, Australia on January 18–19, 2011 but was postponed until further notice.[9]

A Buddhist economist's perspective

Suppose we consider the demand for a commodity, say cigarettes and consider that it has been showing an increasing trend. This trend will be supported by an increase in production of cigarettes. These cigarettes are then put into the market and purchased and consumed by people. When it is consumed, the demand is satisfied and normally, nobody bothers about the stage after consumption. But Buddhist Economists go beyond that and investigate how these trends affect the three intertwined aspects of human existence: The individual, society and the environment. Specific to an increase in the consumption of cigarettes, Buddhist Economists try to decipher how this increase affects the pollution levels in the environment, its impact on passive smokers and active smokers and the various health hazards that come along with smoking, thus taking into consideration the ethical side of economics. The ethical aspect of it is partly judged by the outcomes it brings and partly by the qualities which lead to it.[2]

The Buddhist point of view ascribes to work three functions: to give man a chance to utilize and develop his aptitude; to enable him to overcome his self-aggrandizement by engaging with other people in common tasks; and to bring forward the goods and services needed for a better existence.[10]

Differences between Western and Buddhist economics

There are a number of differences between Western and Buddhist economics.

Other beliefs

Buddhist economists believe that as long as work is considered a disutility for labourers and labourers a necessary evil for employers, the true potential of the labourers and employers cannot be achieved. In such a situation, employees will always prefer income without employment and employers will always prefer output without employees. They feel that if the nature of work is truly appreciated and applied, it will be as important to the brain as food is to the body. It will nourish man and motivate him to do his best. According to them, goods should not be considered more important than people and consumption more important than creative activity. They feel that as a result of this, the focus shifts from the worker to the product of the work, the human to the subhuman, which is wrong.[3]

According to them, people are unable to feel liberated not because of wealth but because of their attachment to wealth. In the same way, they say that it is the craving for pleasurable baubles and not the enjoyment from them that holds humans back.[3]

Buddhist Economists do not believe in measuring the standard of living by the amount of consumption because according to them, obtaining maximum well being as a result of minimum consumption is more important than obtaining maximum well being from maximum consumption. Thus, they feel that the concept of being 'better off' because of greater levels of consumption is not a true measure of happiness.[3]

From the point of view of a Buddhist economist, the most rational way of economic life is being self-sufficient and producing local resources for local needs and depending on imports and exports is uneconomic and justifiable only in a few cases and on a small scale. Thus, they believe in economic development, independent of foreign aid.[3]

Buddhist economics also gives importance to natural, renewable and non-renewable resources. They feel that non renewable resources should only be used when most needed and then also with utmost care, meticulously planning out its use. They believe that using them extravagantly is violent and not in keeping with the Buddhist belief of nonviolence. According to them, if the entire population relies on non renewable resources for their existence, they are behaving parasitically, preying on capital goods instead of income. Adding to this, they feel that this uneven distribution and ever increasing exploitation of natural resources will lead to violence between man.[3]

They also believe that satisfaction need not necessarily be felt only when something tangible is got back in return for giving something or something material is gained, as stated in modern economics. They say that the feeling of satisfaction can be achieved even when one parts with something without getting anything tangible in return. An example is when one gives presents to their loved ones simply because they want them to be happy.[2]

Buddhist economists believe that production is a very misleading term. According to them, to produce something new, the old form has to be destroyed. Therefore, production and consumption become complementary to each other. Taking this into consideration, they advocate non-production in certain cases because when one produces less materialistic things, they reduce exploitation of the world's resources and lead the life of a responsible and aware citizen.[2]

The middle way of living

The concept of the "Middle Way" says that time should be divided between working towards consumption and meditation and the optimal allocation between these two activities will be when some meditation is utilized to lower the desire for consumption and to be satisfied with lesser consumption and the work that it involves.[11]

In economic terms this means “the marginal productivity of labour utilized in producing consumption goods is equal to the marginal effectiveness of the meditation involved in economizing on consumption without bringing about any change in satisfaction”.[11]

In the scriptures

The Kañcanakkhanda-Jātaka tells the tale of a past Bodhisattva who was living as a farmer, and plowing a field one day chanced upon a massive block of gold. Pondering what to do with it, and seeing it was more than he could ever use, he decided to divide it in four equal parts. One for his living expenses, one for saving, one for trading, and one for donating to charity and good works.[13]

See also


  1. Gross National Happiness » Maintenance Mode Archived September 2, 2009, at the Wayback Machine.
  2. 1 2 3 4 5 6 Payutto, Ven. P. A. "Buddhist Economics - A Middle Way for the Market Place" (PDF).
  3. 1 2 3 4 5 6 Schumacher, E. F. "BUDDHIST ECONOMICS". Archived from the original on 13 December 2012. Retrieved 4 December 2012.
  4. Karunatilake, This Confused Society (1976)
  5. "Policy Innovations - Redefining Progress". policyinnovations.org. Retrieved 18 July 2015.
  6. E. F. Schumacher: Life and Work Archived October 12, 2011, at the Wayback Machine.
  7. Buddhist Economics - Conferences
  8. Buddhist Economics Research Platform
  9. Buddhist Economics Research Platform 3 - Home
  10. Buddhist Economics
  11. 1 2 3 4 5 6 7 8 Zsolnai, Laszlo. "Buddhist Economics for Business" (PDF). Retrieved 13 September 2011.
  12. stephensp.net16.net/articles/grossnatl%20happylongbuddhist.doc
  13. English translation of the Kañcanakkhanda-Jātaka

External links

Wikiquote has quotations related to: Buddhist economics
This article is issued from Wikipedia - version of the 11/30/2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.