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“Sariputra, if there are people who have already made the vow, who now make the vow, or who are about to make the vow, ‘I desire to be born in Amitabha’s country,’ these people, whether born in the past, now being born, or to be born in the future, all will irreversibly attain to anuttarasamyaksambodhi. Therefore, Sariputra, all good men and good women, if they are among those who have faith, should make the vow, ‘I will be born in that country.’”

~ Amitabha Sutra

When I obtain the Buddhahood, any being of the boundless and inconceivable Buddha-worlds of the ten quarters whose body if be touched by the rays of my splendour should not make his body and mind gentle and peaceful, in such a state that he is far more sublime than the gods and men, then may I not attain the enlightenment.

~ Amitabha Buddha's Thirty-Third Vow

Thursday, October 22, 2009

Buddhist Economics by E. F. Schumacher

"Right Livelihood" is one of the requirements of the Buddha’s Noble Eightfold Path. It is clear, therefore, that there must be such a thing as Buddhist economics.

Buddhist countries have often stated that they wish to remain faithful to their heritage. So Burma: “The New Burma sees no conflict between religious values and economic progress. Spiritual health and material well-being are not enemies: they are natural allies.” 1 Or: “We can blend successfully the religious and spiritual values of our heritage with the benefits of modern technology.” 2 Or: “We Burmans have a sacred duty to conform both our dreams and our acts to our faith. This we shall ever do.” 3

All the same, such countries invariably assume that they can model their economic development plans in accordance with modern economics, and they call upon modern economists from so-called advanced countries to advise them, to formulate the policies to be pursued, and to construct the grand design for development, the Five-Year Plan or whatever it may be called. No one seems to think that a Buddhist way of life would call for Buddhist economics, just as the modern materialist way of life has brought forth modern economics.

Economists themselves, like most specialists, normally suffer from a kind of metaphysical blindness, assuming that theirs is a science of absolute and invariable truths, without any presuppositions. Some go as far as to claim that economic laws are as free from "metaphysics" or "values" as the law of gravitation. We need not, however, get involved in arguments of methodology. Instead, let us take some fundamentals and see what they look like when viewed by a modern economist and a Buddhist economist.

There is universal agreement that a fundamental source of wealth is human labour. Now, the modern economist has been brought up to consider "labour" or work as little more than a necessary evil. From the point of view of the employer, it is in any case simply an item of cost, to be reduced to a minimum if it can not be eliminated altogether, say, by automation. From the point of view of the workman, it is a "disutility"; to work is to make a sacrifice of one’s leisure and comfort, and wages are a kind of compensation for the sacrifice. Hence the ideal from the point of view of the employer is to have output without employees, and the ideal from the point of view of the employee is to have income without employment.

The consequences of these attitudes both in theory and in practice are, of course, extremely far-reaching. If the ideal with regard to work is to get rid of it, every method that "reduces the work load" is a good thing. The most potent method, short of automation, is the so-called "division of labour" and the classical example is the pin factory eulogised in Adam Smith’s Wealth of Nations. 4 Here it is not a matter of ordinary specialisation, which mankind has practiced from time immemorial, but of dividing up every complete process of production into minute parts, so that the final product can be produced at great speed without anyone having had to contribute more than a totally insignificant and, in most cases, unskilled movement of his limbs.

The Buddhist point of view takes the function of work to be at least threefold: to give man a chance to utilise and develop his faculties; to enable him to overcome his ego-centredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence. Again, the consequences that flow from this view are endless. To organise work in such a manner that it becomes meaningless, boring, stultifying, or nerve-racking for the worker would be little short of criminal; it would indicate a greater concern with goods than with people, an evil lack of compassion and a soul-destroying degree of attachment to the most primitive side of this worldly existence. Equally, to strive for leisure as an alternative to work would be considered a complete misunderstanding of one of the basic truths of human existence, namely that work and leisure are complementary parts of the same living process and cannot be separated without destroying the joy of work and the bliss of leisure.

From the Buddhist point of view, there are therefore two types of mechanisation which must be clearly distinguished: one that enhances a man’s skill and power and one that turns the work of man over to a mechanical slave, leaving man in a position of having to serve the slave. How to tell the one from the other? “The craftsman himself,” says Ananda Coomaraswamy, a man equally competent to talk about the modern West as the ancient East, “can always, if allowed to, draw the delicate distinction between the machine and the tool. The carpet loom is a tool, a contrivance for holding warp threads at a stretch for the pile to be woven round them by the craftsmen’s fingers; but the power loom is a machine, and its significance as a destroyer of culture lies in the fact that it does the essentially human part of the work.” 5 It is clear, therefore, that Buddhist economics must be very different from the economics of modern materialism, since the Buddhist sees the essence of civilisation not in a multiplication of wants but in the purification of human character. Character, at the same time, is formed primarily by a man’s work. And work, properly conducted in conditions of human dignity and freedom, blesses those who do it and equally their products. The Indian philosopher and economist J. C. Kumarappa sums the matter up as follows:

If the nature of the work is properly appreciated and applied, it will stand in the same relation to the higher faculties as food is to the physical body. It nourishes and enlivens the higher man and urges him to produce the best he is capable of. It directs his free will along the proper course and disciplines the animal in him into progressive channels. It furnishes an excellent background for man to display his scale of values and develop his personality. 6

If a man has no chance of obtaining work he is in a desperate position, not simply because he lacks an income but because he lacks this nourishing and enlivening factor of disciplined work which nothing can replace. A modern economist may engage in highly sophisticated calculations on whether full employment "pays" or whether it might be more "economic" to run an economy at less than full employment so as to insure a greater mobility of labour, a better stability of wages, and so forth. His fundamental criterion of success is simply the total quantity of goods produced during a given period of time. “If the marginal urgency of goods is low,” says Professor Galbraith in The Affluent Society, “then so is the urgency of employing the last man or the last million men in the labour force.” 7And again: “If . . . we can afford some unemployment in the interest of stability—a proposition, incidentally, of impeccably conservative antecedents—then we can afford to give those who are unemployed the goods that enable them to sustain their accustomed standard of living.”

From a Buddhist point of view, this is standing the truth on its head by considering goods as more important than people and consumption as more important than creative activity. It means shifting the emphasis from the worker to the product of work, that is, from the human to the subhuman, a surrender to the forces of evil. The very start of Buddhist economic planning would be a planning for full employment, and the primary purpose of this would in fact be employment for everyone who needs an "outside" job: it would not be the maximisation of employment nor the maximisation of production. Women, on the whole, do not need an "outside" job, and the large-scale employment of women in offices or factories would be considered a sign of serious economic failure. In particular, to let mothers of young children work in factories while the children run wild would be as uneconomic in the eyes of a Buddhist economist as the employment of a skilled worker as a soldier in the eyes of a modern economist.

While the materialist is mainly interested in goods, the Buddhist is mainly interested in liberation. But Buddhism is "The Middle Way" and therefore in no way antagonistic to physical well-being. 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. The keynote of Buddhist economics, therefore, is simplicity and non-violence. From an economist’s point of view, the marvel of the Buddhist way of life is the utter rationality of its pattern—amazingly small means leading to extraordinarily satisfactory results.

For the modern economist this is very difficult to understand. He is used to measuring the "standard of living" by the amount of annual consumption, assuming all the time that a man who consumes more is "better off" than a man who consumes less. A Buddhist economist would consider this approach excessively irrational: since consumption is merely a means to human well-being, the aim should be to obtain the maximum of well-being with the minimum of consumption. Thus, if the purpose of clothing is a certain amount of temperature comfort and an attractive appearance, the task is to attain this purpose with the smallest possible effort, that is, with the smallest annual destruction of cloth and with the help of designs that involve the smallest possible input of toil. The less toil there is, the more time and strength is left for artistic creativity. It would be highly uneconomic, for instance, to go in for complicated tailoring, like the modern West, when a much more beautiful effect can be achieved by the skillful draping of uncut material. It would be the height of folly to make material so that it should wear out quickly and the height of barbarity to make anything ugly, shabby, or mean. What has just been said about clothing applies equally to all other human requirements. The ownership and the consumption of goods is a means to an end, and Buddhist economics is the systematic study of how to attain given ends with the minimum means.

Modern economics, on the other hand, considers consumption to be the sole end and purpose of all economic activity, taking the factors of production—and, labour, and capital—as the means. The former, in short, tries to maximise human satisfactions by the optimal pattern of consumption, while the latter tries to maximise consumption by the optimal pattern of productive effort. It is easy to see that the effort needed to sustain a way of life which seeks to attain the optimal pattern of consumption is likely to be much smaller than the effort needed to sustain a drive for maximum consumption. We need not be surprised, therefore, that the pressure and strain of living is very much less in say, Burma, than it is in the United States, in spite of the fact that the amount of labour-saving machinery used in the former country is only a minute fraction of the amount used in the latter.

Simplicity and non-violence are obviously closely related. The optimal pattern of consumption, producing a high degree of human satisfaction by means of a relatively low rate of consumption, allows people to live without great pressure and strain and to fulfill the primary injunction of Buddhist teaching: “Cease to do evil; try to do good.” As physical resources are everywhere limited, people satisfying their needs by means of a modest use of resources are obviously less likely to be at each other’s throats than people depending upon a high rate of use. Equally, people who live in highly self-sufficient local communities are less likely to get involved in large-scale violence than people whose existence depends on world-wide systems of trade.

From the point of view of Buddhist economics, therefore, production from local resources for local needs is the most rational way of economic life, while dependence on imports from afar and the consequent need to produce for export to unknown and distant peoples is highly uneconomic and justifiable only in exceptional cases and on a small scale. Just as the modern economist would admit that a high rate of consumption of transport services between a man’s home and his place of work signifies a misfortune and not a high standard of life, so the Buddhist would hold that to satisfy human wants from faraway sources rather than from sources nearby signifies failure rather than success. The former tends to take statistics showing an increase in the number of ton/miles per head of the population carried by a country’s transport system as proof of economic progress, while to the latter—the Buddhist economist—the same statistics would indicate a highly undesirable deterioration in the pattern of consumption.

Another striking difference between modern economics and Buddhist economics arises over the use of natural resources. Bertrand de Jouvenel, the eminent French political philosopher, has characterised "Western man" in words which may be taken as a fair description of the modern economist:

He tends to count nothing as an expenditure, other than human effort; he does not seem to mind how much mineral matter he wastes and, far worse, how much living matter he destroys. He does not seem to realize at all that human life is a dependent part of an ecosystem of many different forms of life. As the world is ruled from towns where men are cut off from any form of life other than human, the feeling of belonging to an ecosystem is not revived. This results in a harsh and improvident treatment of things upon which we ultimately depend, such as water and trees. 8

The teaching of the Buddha, on the other hand, enjoins a reverent and non-violent attitude not only to all sentient beings but also, with great emphasis, to trees. Every follower of the Buddha ought to plant a tree every few years and look after it until it is safely established, and the Buddhist economist can demonstrate without difficulty that the universal observation of this rule would result in a high rate of genuine economic development independent of any foreign aid. Much of the economic decay of southeast Asia (as of many other parts of the world) is undoubtedly due to a heedless and shameful neglect of trees.

Modern economics does not distinguish between renewable and non-renewable materials, as its very method is to equalise and quantify everything by means of a money price. Thus, taking various alternative fuels, like coal, oil, wood, or water-power: the only difference between them recognised by modern economics is relative cost per equivalent unit. The cheapest is automatically the one to be preferred, as to do otherwise would be irrational and "uneconomic." From a Buddhist point of view, of course, this will not do; the essential difference between non-renewable fuels like coal and oil on the one hand and renewable fuels like wood and water-power on the other cannot be simply overlooked. Non-renewable goods must be used only if they are indispensable, and then only with the greatest care and the most meticulous concern for conservation. To use them heedlessly or extravagantly is an act of violence, and while complete non-violence may not be attainable on this earth, there is nonetheless an ineluctable duty on man to aim at the ideal of non-violence in all he does.

Just as a modern European economist would not consider it a great achievement if all European art treasures were sold to America at attractive prices, so the Buddhist economist would insist that a population basing its economic life on non-renewable fuels is living parasitically, on capital instead of income. Such a way of life could have no permanence and could therefore be justified only as a purely temporary expedient. As the world’s resources of non-renewable fuels—coal, oil, and natural gas—are exceedingly unevenly distributed over the globe and undoubtedly limited in quantity, it is clear that their exploitation at an ever-increasing rate is an act of violence against nature which must almost inevitably lead to violence between men.

This fact alone might give food for thought even to those people in Buddhist countries who care nothing for the religious and spiritual values of their heritage and ardently desire to embrace the materialism of modern economics at the fastest possible speed. Before they dismiss Buddhist economics as nothing better than a nostalgic dream, they might wish to consider whether the path of economic development outlined by modern economics is likely to lead them to places where they really want to be. Towards the end of his courageous book The Challenge of Man’s Future, Professor Harrison Brown of the California Institute of Technology gives the following appraisal:

Thus we see that, just as industrial society is fundamentally unstable and subject to reversion to agrarian existence, so within it the conditions which offer individual freedom are unstable in their ability to avoid the conditions which impose rigid organisation and totalitarian control. Indeed, when we examine all the foreseeable difficulties which threaten the survival of industrial civilisation, it is difficult to see how the achievement of stability and the maintenance of individual liberty can be made compatible. 9

Even if this were dismissed as a long-term view there is the immediate question of whether "modernisation," as currently practised without regard to religious and spiritual values, is actually producing agreeable results. As far as the masses are concerned, the results appear to be disastrous—a collapse of the rural economy, a rising tide of unemployment in town and country, and the growth of a city proletariat without nourishment for either body or soul.

It is in the light of both immediate experience and long term prospects that the study of Buddhist economics could be recommended even to those who believe that economic growth is more important than any spiritual or religious values. For it is not a question of choosing between "modern growth" and "traditional stagnation." It is a question of finding the right path of development, the Middle Way between materialist heedlessness and traditionalist immobility, in short, of finding "Right Livelihood."


The essay "Buddhist Economics" was first published in Asia: A Handbook, edited by Guy Wint, published by Anthony Blond Ltd., London, 1966. In 1973 it was collected with other essays by Ernest Friedrich Schumacher in Small Is Beautiful: Economics as if People Mattered. The book has been translated into 27 different languages and in 1995 was named by the London Times Literary Supplement as one of the hundred most influential books written after World War II.

In December of 2001, Mrs. Vreni Schumacher and Hartley and Marks Publishers kindly extended permission to include "Buddhist Economics" in the pamphlet, An Economics of Peace, available from the E. F. Schumacher Society, 140 Jug End Road, Great Barrington, MA 01230 USA, (413) 528-1737, www.smallisbeautiful.org.

Source of article: Schumacher Society


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Buddhist Economics by Phrabhavanaviriyakhun (Phadet Dattajeevo)


Buddhists often tend to disregard economics completely, because the monastic way of life idealized by Buddhism is economically very minimalist. Such neglect of comment concerning economic values is not warranted, however, because the Buddhist scriptures are in fact rich with advice from the Buddha regarding sound economic values -- and they are applicable to monastic and lay lifestyles alike.

The availability of teachings, is not, however, the only reason Buddhists should take an interest in economics. Of all the reasons for compiling a treatise in Buddhist economics, the most pressing reason Buddhists have to sit up and take notice of economic issues is because if we don't, abuse of economic principles will continue to escalate conflict in the world. The whole history of our planet from ancient times until now has been punctuated by wars -- whether they be world wars or more localized ones -- and as Buddhists see it, the outbreak of war can usually be traced back to financial strife, or else problems of the abuse of economic knowledge. However, once war breaks out, the nature of the problem is often distorted to make it look as if it is a problem of religious or ethnic conflict.

In the West we are accustomed to feeling a sense of relief when we hear that the economy is booming -- however, we sometimes fail to realize what those economic figures actually reflect in terms of quality of life. Ironically, all it takes for a country to be considered economically strong is for its economic figures to look good. If every household in a certain country or society were wealthy, of course that country or society would have good economic figures to show for itself. In Thailand, however, the majority of the population are economically poor. It is only a small minority of population who are wealthy -- thus, how can Thailand possibly be considered economically strong? If you want to have an accurate picture of the economy of any country, you have to take a long hard look at the wealth of the majority -- not just at the collective figures. It is the economic status of the majority which most accurately reflects the true economic state of that country or society.

Economic values in Buddhism are concerned with quality of life. But in Buddhism we define quality of life not only in terms of material comfort, but also in terms of mental wellbeing and ultimately liberation of the mind from negative latent tendencies. Thus, value is put on sometimes quite abstract qualities. As in the words of the Buddhist nun, Kuhn Yay Ratana Upasika Chandra Khonnokyoong who founded Wat Phra Dhammakaya in Thailand:

"with a well-trained group of people in front of me ready to work for good in society, I fell that I am already a multimillionnaire -- because even if I were to have ten million, I could still not guarantee being able to train up such a group."

Contrary to popular opinion, the Buddha never prohibited wealth -- but he did prohibit poverty. Happiness appropriate to a householder (A.ii.69) includes ownership [atthisukha], enjoyment [bhogasukha], freedom from debt [ananasukha] and blamelessness [anavajjasukha]. Buddhism praises contentment [santu.t.thi] and limited desires [appicchata] but not poverty. What is important as a Buddhist, however, in the economic process, whether one is earning, saving or using money, is that one should never compromise one's principles. Once wealthy, as a Buddhist one should use one's wealth in a way that supports a wholesome aim in life -- not to fritter away money away aimlessly or in a way that leads to further proliferation of defilements of greed, hatred or delusion in the mind. It is not to say that riches cannot buy happiness -- but riches used aimlessly may create more damage than good. Riches, if they are to bring happiness, must be applied to support the emergence of higher spiritual values -- especially virtues and virtuous people -- which according Buddhist economics have more value than anyone can put a price on.

Originally this book was intended to deal solely with Buddhist Economics, however after the warlike events of 11 September 2001, the present author would like to extend the scope of this book to show how the build-up of economic tensions can be blamed for these sort of incidents.


The Economic Hidden Agenda behind every war

"When one nation's army turns its guns on another, far from starting a war, they are the products of a war started long ago through economic exploitation."

The abuse of economic knowledge has beset our interactions with the economy all the way from earning, to saving and expenditure -- every step of the economic process being vulnerable to those who respect no ethical guidelines. In spite of this, western economics seems to turn a blind eye to ethical issues surrounding the economic process. Ethical issues are often intentionally overlooked under the pretext of being 'objective' -- but alas, this leaves the door open to all sorts of economic exploitation -- and even though opponants might never be threatened with knives or guns, the positioning that goes on behind the scenes of the world economy is no less cruel than out-and-out aggression. Economic exploitation in the present day has proliferated to the point that entire populations of countries are forced into compromises that leaves them strait-jacketed with regard to the appropriation of their own finances. This is the reality of economic 'colonization' in many countries of the world even at this very moment -- and Thailand is just one of many countries that seems to have become an economic plaything to more dominant superpowers.

In response to obvious injustice, it is hard to deny that understanding of economics attuned to ethical values must start by addressing two issues:

* the scrupulousness of how wealth is accrued
* the scrupulousness of those who accrue it

The seriousness of economic exploitation, of course depends on how far people are prepared to go to achieve their economic ends. Are they to kill each other or does their conscience cause them to stop short of this merely at indirect (political or diplomatic) pressure? In brief, it can be said that when resources are acquired, hoarded or used unscrupulously, it soon leads to conflict and chaos throughout the world. Insignificant incidences of exploitation gradually exacerbate the burden of bitterness which eventually stops short at nothing less than armed conflict.

The Economics of Exploitation

Having recognized the implications of economic exploitation (even without knowing who is taking advantage of whom) we can start to appreciate that the web of economic exploitation has become so complex that it is difficult to know a beginning or an end of it. When one nation's army turns its guns on another, far from starting a war, they are the products of a war started long ago through economic exploitation. In the absence of any ethical guidelines, when any means seems justified by economic ends, it is no surprise that the conflicts continue to escalate -- violence has indeed proliferated to a point where it is difficult to see how we personally can do anything to ameliorate the situation, without remedies of a similarly large scale.

Condoning unethical economic practices is to kindle the flames of war on our planet. Wars like the Crusades, lasted for longer than a century -- and upon first sight they might seem to have been nothing more than a religious war between Christians and Moslems, however, if examined in more depth, they turn out to have been the result of badly organized economic policy admixed with incompatability of beliefs. If you look beneath the surface of any other religious war which has broken out in history, you will always find a hidden agenda of economic advantage behind the conflict. It is only with the admixture of other elements that turns the conflict into a war. If it wasn't for economic difficulties, in spite of differences of belief, why should different groups want to interrupt 'business as usual'? However, any day economic progress becomes obstructed and a political tinder box doesn't emerge spontaneously, it is not usually long before ethnic and religious differences will provide the necessary spark. To the uninitiated, of course it looks like a war motivated by ethnic or religious conflict . . .

Even the battle for Ayutthaya had economic roots

Even the most famous invasion of Thailand in 1564 when the (then) capital of Ayutthaya was sacked by the Burmese is popularly believed to have been a fight over 'royal white elephants'. The first invasion took place in the reign of King Maha Chakrap'at. At that time the region of Ayutthaya, extended as far south as Rangsit and the present site of Wat Phra Dhammakaya. The populace were renowned for elephant husbandry -- especially elephants for use in royal service -- and several of these included the legendary 'white elephants'. According to eye-witness accounts, even as recently as fifty years ago, there was still a large shallow pond in front of Wat Phra Dhammakaya, which previously was used as a watering hole for the elephants of the vicinity. At that time, although the whole area was densely forested, the presence of herds of elephants made the area of strategic importance, because as well as being the royal 'chargers', trained elephants were the most indefatiguable 'machines of war' (equivalent to the modern-day tanks).

The news of the abundance of elephants reached the ears of King Bayinnaung of Burma, who sent an emissary to ask for a pair of 'white elephants' for himself in 1563.


In Southeast Asia, white elephants are held in very high regard because they are believed to be the bodhisatva (a future Buddha in the making) --however, because of residual bad karma from previous lives, instead of taking human birth, the bodhisatva takes birth in one of the most elevated forms of animal life, indicated by the rare 'whiteness' of an elephant. The people of old had the belief that any country possessing such an elephant would prosper, as the charm of the the beast would call the rain to fall according to season.

Of course Thailand would never agree to part with any white elephants -- and that was known full well in advance by King Bayinnaung. He knew that when the refusal came, he would have an excuse to go to war with Thailand. When a battle ensued in 1564, it turned out that it was the Thais who lost on their home ground as a result of their lack of strategy and unity. That is the popular history of the outbreak of war. However, in reality it would be crazy for any king to risk the life and limb of large numbers of his subjects just out of the whim of acquiring an elephant. There ought to be more substantial reasons for the war breaking out in those times.

Much later the present author came across the description of a historical document found in about 1987 by Professors Prasert na Nakorn and Sukit Nimmanmain. It was a letter describing how the Lanna Kingdom had used to trade with Burma in silver, gold, herbs (especially alloe, cinnamon and spices), lac and honey. According to the document Lanna changed its policy on trade and started trading with Ayutthaya instead of Burma. Originally Burma had no interest in the spice trade, but when Europe started trading in spices through India, it saw its chance to dominate the market. Burma had become a wealthy middle man for spices traded between Lanna and the Europeans in India.

Ayutthaya, however, was also a spice trading centre -- but its prices were lower than those of Burma. It was no real difficulty for the trading ships from Europe to round the peninsular at Singapore to trade with Thailand instead of Burma. Within a relatively short period of time, all the Lanna traders decided to supply Ayutthaya instead of Burma. In addition, to take their merchandise to Ayutthaya was easier than taking it to Burma because it was all downstream. Thus Ayutthaya could be a cheaper middleman than Burma and this was the real reason for the conflict that grew up between Burma and Thailand. This is why King Bayinnaung (and King Tabinshwehti before him) wanted to sack Ayutthaya -- and the white elephant was only an excuse -- but he got lucky in the ensuing war and conquered Siam. Thus the reason for the first invasion of Ayutthaya was for economic reasons.

The second fall of Ayutthaya in 1569 was partly revenge for the rebel Sett'at'irat's subsequent counterattack against Burma in 1566 but analysed more deeply, Burma could only sack Ayutthaya a second time because the Thais were competing amongst themselves for economic power and at that time, towards the end of the Ayutthaya dynasty, vice had become very widespread in the old capital. Even the king was up to his neck in 'roads to ruin'. Wherever there is economic prosperity to excess, as we shall discover later in this book, there will be an upsurge various sorts of vice and addiction.

In conclusion, we can say that Buddhist economics and western economics diverge whenever economic advantage is used as a reason to justify conflict. In Buddhism economics, economic advantage is not seen as adequate means to justify ignoble ends.

Having identified the real roots of world conflict, it is no longer useful to look for who to blame. To look for scapegoats is really only an admission of our own inadequecies or laziness to recognize our own part in the problem. It would be more appropriate that we start to study the ethical issues surrounding economics as outlined in the remainder of this book while doing our personal best to be most scrupulous in all respects.

Scrupulous macroeconomics on the level of national policy has to be built on the foundation of scrupulous on the individual (microeconomic) level. Economics on both levels are dealt with in the remainder of this book.


The Distinguishing features of Buddhist Economics

"Don't eat just because you feel like it
-- eat when you feel hungry . . ."

There are many points of similarity and difference between Western Economics and Buddhist Economics. What the two have in common is in their recognition of three stages in the economic process. However, in the detail of each of the three stages, we find significant divergence:

* acquisition of wealth: While Western Economics recognizes acquisition as important, it gives virtually no guidelines for the ethical limits of scrupulous acquisition -- especially concerning livelihood. Anything that doesn't break the Law is seen as fair play. Unfortunately, the Law is a very rough and ready indicator of ethical behaviour. In the olden days where morality was a part of common sense, the Law might have been seen to offer sufficient guidelines, however, in the present day, that can no longer be said to be true. When the way people acquire their wealth is no more ethical than the way animals hunt their prey, that is the point where humans become prepared to kill each other for their wealth -- even if people still have sufficient conscience not to kill each other overtly for wealth, it doesn't mean they won't attempt to do so covertly by economic exploitation -- where direct killing means setting about each other with weapons and indirect killing means pressurizing, cheating and exploiting others by various means.

* conservation of wealth: Having acquired wealth surplus to one's needs, the remainder needs to be stored or shared. Animals will tend to hoard as much as they can without any consideration of ethical fairness. If you watch any African wildlife documentary you will see how in the dry season the big cats don't have to go out hunting, but sculk by the watering hole, dominating that scarce resource, so that they can prey on anything that comes to drink there. The big cat will get both water to drink and easy meat just by staying close to the watering hole. This is the way animals hoard their requisites -- without any consideration of ethicality. How do people measure up to these animal ways? As we all know, some acquire wealth scrupulously -- while others disregard ethicality completely or partially. Hoarding wealth in a way that disregards ethicality includes limiting the supply of resources to the point that others risk death because of the lack of these things in the marketplace. In the present day, this often happens -- for example when oil-producing countries limit the supply of their produce to force the prices up -- to the degree that their potential customers must suffer. In such a case Buddhists would no longer agree with Western economics that such hoarding is ethically justified and would favour the sale of such products at a moderate price. It is frightening to consider what would happen if the food producing countries were to start hoarding their products -- there would be dire consequences for the rest of the world.

* employment of weath for benefit or to satisfy desires: When spending, Buddhist economics again diverges from Western Economics, because it advocates spending one's resources:

o in moderation: 'Moderation' is the keyword when it comes to the beneficial deployment of wealth. Moderation in spending depends largely on a person's ability to distinguish between need and want. Necessary wealth can be broken down into the Four Requisites of clothing, food, shelter and medicine. Buddhists define 'need' as clothing enough to protect oneself from heat and cold, food to stave off hunger, shelter to protect us from the elements and medical care to treat us when we are ill (as mentioned in the verses of the Buddhist monk's recollection [M.i.10, Nd.496]). If one is clear in one's mind what constitutes a 'need', one will see consumption for what it really is -- that is, merely a means to an end. If we confuse 'wants' with 'needs', however, as encouraged by modern marketing forces, we will err into regarding consumption as an end in itself. However because people have the tendency never to know enough of a good thing, 'need' has given way to 'want'. When people want anything they can get their hands on, their ethical considerations tend to be forgotten. The Buddha would see moderation as an antidote for consumption to excess and would say that moderation in fact contributes to economic wellbeing. Most people are most interested in how high their income is. However, more important still is how much you are left with at the end of the month. In the olden days, they used to say "Don't just eat because you feel like it -- eat when you are hungry . . ." -- because we can feel like eating twenty-four hours a day! If there was nothing more to moderation than appetite, then we would need to be no more intelligent than a cow which chews cud at one end and drops cowpats from the other. It is not the income which counts but how much is left after the expenses. The secret of having something left is to expend only in case of need (not want). However, because people know no moderation in their consumption, resources become scarce and there is not much remaining difference between how such people make their living and how scavenging birds fight over their carrion. However, moderate consumption is hardly something supported by Western economics.

o only in order to give the greatest possible amount of true happiness for all: Consider how much the world could be improved if all the money squandered worldwide on gambling, drugs and prostitution were redirected into feeding the hungry, giving basic education or instilling virtue in the hearts of our planet's citizens? Even if not all the money were to be redirected -- maybe just 5-10%, our world would be a much more attractive place to live in! Unfortunately, because such a large amount of money has been sunk into businesses involved with vice, our whole world has become inundated with the contingent social problems -- and consequently, the opportunity to encourage virtue in society diminishes with every passing year.

BOX 2: Diighajaa.nu Sutta

Origin of Principles for Buddhist Economic Practice

Principles of Buddhist Economic practice are derived from a scriptural source called the Diighajaanu Sutta (A.iv.281ff.) -- and are repeated in the Ujjaya Sutta (A.iv.285-9). The former Sutta was given in response to the questions of a householder called Diighajaa.nu who was not short on wealth but failed to apply what he had to achieve any satisfaction in his life. Diighajaa.nu was a man who inhabited Kakkarapatta in Ko.liya -- and the people of that town referred to themselves as Byagghapajjans. He asked Buddha two questions:

* How to find happiness in the present lifetime
* How to find happiness in the next lifetime.

His questions are particularly pertinent to the subject of this book because Diighajaa.nu requested principles of practice applicable to economics for the household life (rather than the monastic one). The answers the Buddha gave were formulated as the 'four principles of finding happiness in the present lifetime' [di.t.t.hadhammikattha-sa.mvattanika dhamma] (enlarged upon in Chapter 3) and the 'four principles of finding happiness in the lifetime to come' [samparaayikattha sa.mvattanika dhamma] (enlarged upon in Chapter 4).


Buddhist Micro-economics for the here-and-now

"It's not what you earn that counts -- but how much you have left over at the end of the month . . ."

The Buddha gave a total of four principles of economic practice for finding happiness in the present lifetime [di.t.t.hadhammikattha-sa.mvattanika dhamma] (A.iv.281):

1. Diligent acquisition [u.t.thaanasampadaa]: Diligent acquisition means skilfulness in the acquisition of wealth. Diligent acquisition refers to the habits of a person who works hard for their living -- in contrast to those who are too lazy to make the effort. It also refers to the patience needed for people to work together as a team and the wisdom to recognize the work left undone -- being able to perform, organize and administer the work as required. The most important feature of this first stage of the economic process can be summarized as acquiring wealth in an ethical way. As Buddhists we would say that taking advantage of others economically, in whatever form, is unethical acquisition of wealth. Particular forms of livelihood which the Buddha advised us to avoid in this respect are the five sorts of Unwholesome Livelihood [micchaa va.nijjaa] (A.iii.207) mentioned below:

1. trading in weapons: The weapon trade is a major source of income for every superpower of the world. It is only normal that those who supply weapons will be on the receiving end of hatred from the victims of the destruction caused by the weapons they have sold. Selling weapons is the starting point of a long chain of negative karmic consequences. Weapons have had a part in every violent catastrophe occurring worldwide over the years -- and it is not our place here to say who is right or wrong -- but no-one can deny the magnitude of the death toll coming from armed conflict. Not selling weapons means refraining from any sort of trade in instruments for destroying life, whether it be guns, knives or even hunting equipment like traps or bait. Anything used for killing people or animals are considered weapons for the purposes of Unwholesome Livelihood. Even without physically harming a person, maltreatment can cause resentment which lasts across lifetimes -- thus, it is up to all of us to check our own aggression without waiting for prodding from others . . .

2. trading in people: Trading in people is also making profit out of the suffering of others. It formerly meant trading in slaves, but nowadays has come to include child labour, wage-slaves and prostitution;

3. selling live animals to the slaughterhouse: Selling live animals to the slaughterhouse is taking a profit from the suffering of animals in a way that leads inevitably to their death;

4. trading in alcohol or intoxicants: Trading in alcohol and intoxicants including non-medicinal drugs such as marijuana;

5. trading in poison: Trading in poison means selling poison such as insecticide or rat-poison. The Buddha advised us not to sell such agents because otherwise their retribution will find its way back to us. Even though when we sell the poison it has not yet caused any harm, but as soon as it is used it has the same potency as already mentioned for weapons. If only we were to follow the Buddha's advice more widely we wouldn't have to waste our time in the present day for so much campaigning for biologically grown vegetables.

It is not to say that there are no more than these five ways of unwholesomely earning a living -- but these are the main ones. Thus if you would like to know where to start looking for ways to reduce the amount of conflict in the world, the present author's advice would be to start by minimizing your involvement with Unwholesome Livelihood. The Buddha taught that any person who lapses into Unwholesome Livelihood will eventually attract a heavy burden of negative karma for themselves. Other ways of making money which involve economic exploitation in various ways can also be included as unwholesome livelihood, such as criminal activities, or for example:

* Making one's living out of interest: The present author's still remembers when he was a child, his mother always maintained, "In our household and our family we have never liked living off the interest earned from the money we lend to others." She explained, "It is making a living out of the suffering of people who are incompetent in managing their own finances. If they were really competent in their financial management, they wouldn't have to come borrowing money from the likes of us! Those who are financially careless would rather borrow at a high interest rate than go without -- which would indicate that they don't have much idea about the effective way to earn, save and use their finances. If you get too involved with these sort of people, it will just lead you to unnecessary frustration. If you really want to help such people, then just give the money to them without strings attached. It is not worthwhile to extend the mutual agony of having to be paid back for the interest on a loan."

2. Careful conservation [aarakkhasampadaa]: Careful conservation means skilfulness in the saving of wealth. Having earned wealth by the sweat of one's brow in a scrupulous way, a person should take good care of their wealth, not allowing it to be eroded away by unjust taxation, theft, natural disaster or unintended inheritants. As for unwholesome conservation of wealth -- this refers to excessive hoarding or stockpiling as mentioned above. Furthermore, when saving up one's wealth -- one should not allow doing so to bring us into conflict with those around us. Good reasons to put money on the side, according to Buddhist principles (A.iii.45) are in case of emergency such as repairing the consequences of fire, flood, excess taxation, theft or exhortion by malevolent relatives! You have to consider carefully, however what form you ought to save your money in. Of course the best way to conserve your wealth is as transcendental wealth or merit (see self-sacrifice of Chapter 4) -- because in such a form it is beyond the touch of interest rates and it will appreciate with the passing of the years -- thus saving in the form of transcendental wealth is really the most skilful way of conserving one's wealth.

3. Having virtuous friends [kalyaa.namittata]: Having virtuous friends means surrounding yourself with a network of virtuous friends in all areas of your life. The sort of friends one should cultivate are those endowed with faith [saddha], self-discipline [siila], self-sacrifice [caaga] and wisdom [pa~n~naa]. Apart from facilitating our cultivation of wisdom, it will also strengthen the network of good friends of which we are a part. Such networking is particularly relevant to teamwork because when one earns one's living, one does not usually do so alone -- whether it be working in the same office as one's colleagues or cooperating in an international network. The most important attribute of teamwork is that the team members must have a similarly high level of scrupulousness in their work dealings and a similarly high level of faith in spiritual teachings. Furthermore, everyone in the team should have a similarly high level of self-sacrifice, dedicated to the collective good -- thereby avoiding the dangers of networking with those who are overcome by their own selfishness. The Buddha taught that worldly wealth is exhausted in a moment -- but the value of training other people to be virtuous never knows an end. The importance of this virtue is emphasized over and over again by the Buddha -- who especially in the context of economics, taught that simply acquiring, storing and using wealth is not good enough. We have to build up a network of good people to work with too, before we get round to using our wealth -- the way we use our wealth should be in cooperation with such good friends, if we really want happiness and prosperity in life.The Buddha emphasized that when one is earning one's living, one should try to avoid associating with those who break the Precepts -- no matter whether they be young or old. If not only the Precepts, but also their faith in Buddhism is lacking, then that is all the more reason to avoid associating with them. It is as if we are selective about channelling our resources -- devoting our resources to encourage the proliferation of virtuous people in our society. Those who encourage virtue in their co-workers at the same time they earn their living will never have to complain at a later date of being 'stabbed in the back' by their colleagues. You have no-one else but yourself to blame if your employees are left incompetent, unable to work as a team or unable to delegate -- you cannot just expect competent people to rain down on you from the sky! You have to build on your employees competency by training them yourself. At the same time you need to continue to train yourself -- seeing what virtues you can pick up from those more experienced than yourself -- in this way, you will soon produce a network of good co-workers for yourself.

4. Living within your means [samajiivitaa]: Living within your means means skilfulness in spending. Those who realize the ease with which wealth can come and go, should lead their life in a way that is appropriate to their means -- not being extravagent but at the same time, not too spendthrift either! When we talk of generosity [daana] in this context we mean giving those things which are surplus to our needs. Some people might doubt as to how much they really need or might be unable to distinguish between 'need' and 'want' and hence the Buddha gave guidance about how householders should budget their earnings so that their generosity is neither reluctant nor a burden on the family expenditure. The Buddha taught (Aadiya Sutta A.iii.45 [36/93]) that the family budget should be divided into five. He did not say that each part should be 20% of your earnings, but he taught that you should budget for each of these sorts of expenditure. As for the "working capital" which you have built up for yourself, the Buddha taught in the Si"ngalovaada Sutta (D.iii.180ff.) that you should apply one-quarter of your earnings for your immediate needs, one-half should be reinvested in your business and the remaining quarter should be saved in case of emergency. It is up to each individual to decide how much of their income to use as "working capital" and how much to use for generosity. If you budget in this way, you will be able to practise generosity, giving neither too much nor too little. The fivefold division of one's funds mentioned above should be as follows:

1. one part to support the immediate needs of yourself, your parents, your children, spouse, servants

2. one part to extend generosity towards your friends

3. one part to be saved in case of emergency (as already mentioned above)

4. one part which should be used for five sorts of dedication
1. for one's extended family
2. for hospitality
3. for dedicating merit for the departed
4. for taxes
5. for dedicating merit to the things that you believe in according to your local custom (e.g.ascetics, animals, physical forces and elements, lower deities or higher deities depending on your culture)

5. one part to extend support to well-practising monks and ascetics

In the old days they used to compare an extravagent person with a low income to the owner of a fig-tree who shakes the tree so that all the figs fall off, but who picks up only a few of them to eat. At the other extreme, a person with a good income who is not generous with their wealth will die in hardship out of keeping with their social status. Steering the middle way between stinginess and extravagence in a way appropriate to your level of income is said to be living within your means. Aside of the main five forms of Unwholesome Livelihood (mentioned above) which cause deterioration of wealth, there are another four sorts of behaviour, known as the 'Four Roads to Ruin' which if we can avoid them, will also help to protect our hard-earned income:

1. womanizing;
2. drinking alcohol;
3. gambling;
4. associating with bad company

In conclusion, for anyone to remain scrupulous after wholesomely acquiring and saving their wealth, it is necessary to build up a network of good people [kalyaa.namitta] around themselves first, before they come to spending their hard-earned wealth. Habitually associating with good friends will cause one to expend with reflection as to true benefit, and thereby use one's wealth solely for things which help in cultivating faith, keeping one's precepts purely, practising self-sacrifice and cultivating wisdom in keeping with the guidance of the Buddha for happiness in lives to come (see next chapter).

Thus, throughout one's life one should earn one's living carefully according to the four principles of happiness in the present lifetime -- never compromising one's Buddhist scrupulousness -- and the same goes for saving one's wealth. At the same time one needs to develop those around one as a protective fence or network of good friends. Surrounded by virtuous people, the tendency for our mind to be tempted by unethical compromises will be significantly reduced -- and the interactions we have with our fellow workers will be for mutual encouragement of further good deeds.

Metaphor of the reservoir

The four economic principles for happiness in the present lifetime can be compared to four channels of water which supply a pool. The Four Roads to Ruin can be compared to four outlets from the pool. If we close the inlets and open the outlets, in the absence of rain, the pool will soon become completely dry. There will certainly be no increase in the water level. On the contrary, if one opens all four of the inlets by conducting oneself in keeping with the Buddhist economic principles, while closing the outlets by avoiding all four roads to ruin, before long the pool will be full or even overflowing. Thus, whether we are speaking economically on a personal level or on national level, it is vital to seal up the four possible outlets from our economic prosperity -- by not womanizing, drinking alcohol or gambling -- and by associating with good friends. These are the basics of Buddhist microeconomics for the present lifetime -- economics that you won't find described anywhere else in the world. If you heed the Buddha's words on economics and put them in to practice you will have prosperity in your future, never falling upon hard times.

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