Buddhist Economics by EF Schumacher

Buddhist Economics vs Modern Economics

Buddhist economics is very different from the economics of modern materialism. This is because the Buddhist sees the essence of civilisation not in a multiplication of wants but in the purification of human character.

• This character is formed primarily by a man’s work.
• Work then produces goods and services as blessings.

In contrast, a modern economist’s criterion of success is simply the total quantity of goods produced during a given period of time.

• From a Buddhist point of view, this opposite of the truth because it considers:
  • goods as more important than people
  • consumption as more important than creative activity
• This means shifting the emphasis from the worker to the product of work, that is, from the human to the subhuman.
  • It is a surrender to the forces of evil.

The very start of Buddhist economic planning would be a planning for full employment.

• Its primary purpose is to provide employment for everyone who needs an “outside” job.
• This is not to maximize production, but to give worth to everyone.
  • It does not mean letting mothers of young children work in factories while the children run wild

While the materialist is mainly interested in goods, the Buddhist is mainly interested in liberation.

But Buddhism is “The Middle Way”. Therefore, it is not antagonistic to physical well-being.

The attachment to wealth stands in the way of liberation, not the wealth itself.

• The problem is not the enjoyment of pleasurable things, but the craving for them.
• The keynote of Buddhist economics, therefore, is simplicity and non-violence.*

The modern economist will marvel at the Buddhist way of life – the 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.
• He assumes all the time that a man who consumes more is “better off” than a man who consumes less.

A Buddhist economist would consider the approach of the modern economist as 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 to achieve a temperature comfort and an attractive appearance, then it should be attained with the smallest possible effort.
  • It should destroy the least cloth annually, with the help of designs that involve the smallest input of toil.
  • The less toil there is, the more time and strength is left for artistic creativity.

For example, it would be highly uneconomic 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 foolish to make material that would wear out quickly.
• It would be barbaric to make anything ugly, shabby, or mean.

This applies equally to all other human requirements.

• The ownership and the consumption of goods is a means to an end.
• 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.

• It takes the factors of production, labour, and capital as the means.

Buddhist Economics focuses on optimal consumption, Economics focuses on optimal production

Buddhist economics tries to maximise human satisfactions by the optimal pattern of consumption.

Modern economics tries to maximise consumption through the optimal pattern of production.

A life which aims for the optimal consumption will need less effort than a life which aims for maximum consumption. *

• Therefore, it is not surprising that the pressure and strain of living is very much less in Burma than in the US, despite the US having so much more labour-saving machinery.

Simplicity and non-violence are obviously closely related.

• Optimal consumption produces a lot of human satisfaction by lessening consumption.

It allows people to:

• live without great pressure and strain, and
• fulfill the primary injunction of Buddhist teaching: “Cease to do evil; try to do good.”

Physical resources are everywhere limited.

• People satisfying their needs through the modest use of resources are less likely to be at each other’s throats.
• Likewise, 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 worldwide systems of trade.

From the point of view of Buddhist economics:

• The most rational economy is the one that produces from local resources the goods to address local needs
• The most irrational economy is the one that depends on imports from afar and exports to unknown and distant peoples*
  • This is justifiable only in exceptional cases and on a small scale.

The modern economist would view the increase in the number of ton/miles per head of the population carried by a country’s transport system as proof of economic progress.

• But the Buddhist economist would view it as a highly undesirable deterioration of consumption.
  • This is because he would see it as a failure to satisfy human wants from faraway sources rather than from nearby.

Buddhist Economics Can Stop Runaway Global Warming

Another striking difference between modern economics and Buddhist economics arises over the use of natural resources.

Bertrand de Jouvenel was an eminent French political philosopher. He characterised “Western man” as someone who:

• gives importance only to human effort
• does not care about how much mineral matter he wastes and how much living matter he destroys
• does not realize that human life is a dependent part of an ecosystem of many different forms of life.

This is the same description of the modern economist.

The world is ruled from towns where men are cut off from Nature.

• This causes a decline in the feeling of belonging to an ecosystem.
• This results in a harsh and improvident treatment of things upon which we ultimately depend, such as water and trees.

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 should plant a tree every few years and look after it until it is safely established.

• The Buddhist economist can easily show that the universal implementation 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 because its very method is to equalise and quantify everything through a money price. *

• Modern Economics sees fossil fuels and renewables both in their cost per unit.
• It prefers the cheapest cost.
  • Getting an expensive, but renewable material would be irrational and “uneconomic” to it.

From a Buddhist point of view, this will not do.

• The essential difference between fossil fuels and renewables 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

The Buddhist economist would insist that an economy based on fossil fuels is living parasitically on capital [of Mother Nature] instead of income.

• Such a way of life could never be permanent or sustainable.
• The current economic system should therefore be a means to transition into a more sustainable Buddhist system

The world’s fossil fuel resources are:

• exceedingly unevenly distributed, and
• limited in quantity.

Their exploitation at an ever-increasing rate is an act of violence against Nature. This will inevitably lead to violence between men.

Buddhist Economics Should be Implemented Instead of Modern Economics

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
• ardently desire to embrace the materialism of modern economics most quickly

Before they dismiss Buddhist economics as a nostalgic dream, they should think whether the path of economic development outlined by modern economics will lead them to reality 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 concludes that Industrial society is:

• fundamentally unstable
• subject to reversion to agrarian existence

The individual freedoms in Industrial society necessarily lead to conditions which impose:

• rigid organization and
• totalitarian control.

When we examine all the threats to the survival of industrial civilization, it is difficult to see how its stability can be made compatible with individual liberty.

• “Modernization”, as currently practiced without regard to religious and spiritual values, does not produce agreeable results.

As far as the masses are concerned, modernization is disastrous. It would lead to:

• a collapse of the rural economy,
• rising unemployment in town and countryside, and
• the growth of a city proletariat without nourishment for body or soul.

Both immediate experience and long term prospects show that the study of Buddhist economics is recommended even to those who believe that economic growth is more important than any spiritual or religious values.

It is not a question of choosing between “modern growth” and “traditional stagnation”.

• It is a question of finding the “Right Livelihood”, or right path of development, for a society treated as a single entity.
• This “Right Livelihood” is the Middle Way between:
  • materialist heedlessness, and
  • traditionalist immobility