Is Buddhist Economics an Oxymoron?

As you’re reading the words “Buddhist Economics” you may jump to the conclusion that it seems like an oxymoron. But the field and study of Buddhist economics, which has some overlap with areas of behavioral economics, is one that is starting to develop and even be taught at schools like UC Berkely. I love economics, but after every course I took I felt unsettled with the underlying assumptions the models make about us as humans, and how related fields such as finance and marketing are heavily focused on making money and convincing people to spend it on things they don’t need. As someone who has practiced Buddhism for some time, I saw an opportunity to discuss how its beliefs and ideals can diminish some of the harsh lines that Western economics draws.

E.F. Schumacher coined the term “Buddhist Economics” in 1955, when he traveled to Burma as an economic consultant for the Prime Minister. He claims that it “examines the psychology of the human mind and the anxiety, aspirations, and emotions that direct economic activity”. Its main goal is to clarify and teach beings about what is beneficial and harmful when observing everyday interactions that involve production and consumption. It seeks to find a livable middle ground that lies somewhere in between a mundane society and an immobile conventional society. Most importantly it prioritizes people over products, and creativity over consumption.

But today everywhere we look we see advertisements subliminally telling us to consume, with an average person seeing up to 5,000 ads per day. Buddhist economics contradicts the Western economics figure of a perfectly rational person, homo economicus, whose goal is to maximize utility as a consumer and profit as a producer. It does so by claiming that truly rational decisions can only be made when we understand the cause of irrationality, and when we all finally understand what constitutes desire we will come to realize that all the wealth in the world will not be sufficient enough to satisfy it. Buddhist economics also looks at the Western idea of consuming more to be better off as irrational in itself. It claims that since consumption is the means to well being, the goal should still be to achieve the maximum level of well being, but while consuming the minimum amount to do so. This demonstrates why GDP may not be the best indicator of a countries well being, which is why Buddhist economics uses GNH, gross national happiness, as what it believes to be a more accurate indicator.

An example of an application of Buddhist economics is shown through the market for cigarettes. If the demand for cigarettes is rising, this rise is going to be met with increased production of cigarettes. Then people buy and consume them and that initial demand is met, and the story is over. But Buddhist economists would go one step further and investigate how the consumption affects the individual, the society, and the environment. For example a Buddhist economist would observe pollution levels, second hand smoke, and all of the health hazards that come from first hand smoke.

Some of the cornerstone beliefs of Buddhist Economics:

  1. The opportunistic, solely self-interested approach to ethics will never succeed. Instead the focus should be on generosity, because human beings naturally want to reciprocate.
  1. Instead of focusing on the Western ideals of maximizing individual profits and gains, we need to minimize suffering for all living and non-living things
  1. Overall well-being decreases when we pursue meaningless desires, and instead wanting less will not only benefit the individual but also the community we live in and the surrounding environment.
  1. Work should give a man or woman a chance to utilize and develop their skills, and overcome their ego-centeredness by coming together with others in a common task while producing what is needed for survival.
  1. It is not wealth that stands in the way of liberation but the attachment to wealth; not the enjoyment of pleasurable things but the craving for them.

Now if you are a macro or microeconomics enthusiast and believe in the models and theories, I would encourage you to see the real question, which is not the choice of either modern growth or traditional stagnation. Rather it is the never-ending challenge of developing and implementing the right path to development- a middle ground between materialist carelessness and traditionalist apathy.


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