Chapter 3

Economic Karma

January 1, 2016 by Dalisay

Economic Karma

Smith was one of the few Western intellectuals to hint at the concept of dharma, or the natural and sustainable activities of humans, and apply it both for moral and economic purporses.

Instead of the word dharma, however, he named his concept the invisible hand. This had economic applications in The Wealth of Nations and moral applications in The Theory of Moral Sentiments.

Weaponizing the Invisible Hand

The main difference between Smith’s invisible hand and Eastern dharma is that the former has moral, spiritual, and practical uses, while the latter emphasizes only its moral and spiritual use.


Eastern philosophers did not dare teach the practical use of dharma because they knew that it would merely lead to corruption and evil.

For example, the Chinese discovered the principles of gunpowder which the Europeans took and weaponized in order to enslave Africa, South America, and Asia and even take Hongkong. Similarly, Western physicists discovered the nuclear fission and weaponized it to drop atom bombs on Japan.

Smith and the Physiocrats discovered the principles of wealth created by knowing one’s own self-interest or purpose in life or svadharma. But this was soon “weaponized” by the merchants to enrich themselves via Mercantilism and trade wars instead of enriching all humans.

Those merchants merely brushed aside the warnings by Smith against the pursuit of utility and avarice that the principles might bring. Later economists such as John Stuart Mill and Jean Baptiste Say even built economic theories around selfishness instead of dharma or morality:

The doctrine that the basis of morals is utility, or the greatest happiness principle, holds that actions are right in proportion as they tend to promote happiness, wrong in proportion as they tend to produce the reverse of happiness. By ‘happiness’ is meant pleasure and the absence of pain; by ‘unhappiness’ is meant pain and the lack of pleasure. Mill, Utilitarianism

Of course, the flaw in Mill’s philosophy is that personal happiness is subjective. If pursued without thinking of others, then it becomes arbitrary.

For example, it might bring happiness to a rich country to invade a poorer country for oil as the former would think that it would bring happiness and progress to both countries. Or conversely, it might bring happiness to terrorists to attack a rich, extravagant country thinking that it would bring it closer to simplicity and austerity which are foundations for religious happiness (For example, Jesus himself said it will be difficult for the rich to enter the Kingdom of God).

Taliban fighters
The Taliban is doing what they feel is moral, just as what the US is doing

Utilitarianism is useful only when one is alone. It, however, creates problems when one comes into society because people have diverse experiences, opinions, and moral standards. It’s the type of thing that works only in thought experiments but fails in the real world.

Smith’s invisible hand, on the contrary, works both personally by tapping into one’s conscience, or “the man within the breast”, and socially by knowing what others are interested in, through selling and market research.

Why did later economists miss out on the invisible hand or dharma?

The first reason is because Say and Mill lived during the start and the height of the Industrial Revolution which lasted from 1760 to 1840. The increase in productivity increased the number and variety of products available for use or utility and for satisfying the senses which were not available before. Thus, utility and all its shallow and short-term benefits came to dominate the field of morality.

Another more important reason is because both dharma and the invisible hand are naturally invisible or not obvious to shallow observation. Both can only be seen by highly-penetrating and highly-evolved minds that can look far beyond the obvious.

In Hinduism, the concept of dharma naturally leads to the concept of karma. Anything that has a self will want to act to express that self. This action is called karma. Other selves will then react to this karma to create a reaction or another karma that boomerangs on the intial actor or self. This is why in English, karma is loosely translated as “What goes around, comes around.”

Smith on Economic Karma

Since karma is universal and timeless, it works the same way regardless of time and location, whether in the distant past, distant future, or in a very distant place. Selfish actions always and everywhere bring about something hurtful, or opposite of what was intended, in the long-run or even short-run:

At first sight, the monopoly of the great commerce of America naturally seems to be an acquisition of the highest value. The dazzling splendour of the object, however, is the very quality which renders the monopoly of it hurtful..
Even the regulations by which each nation endeavours to secure to itself the exclusive trade of its own colonies are frequently more hurtful to the countries in favour of which they are established than to those against which they are established.
The unjust oppression of the industry of other countries falls back, if I may say so, upon the heads of the oppressors, and crushes their industry more than it does that of those other countries. The industry of the country, therefore, is thus turned away from a more to a less advantageous employment [because of the monopoly of the home market]; and the exchangeable value of its annual produce, instead of being increased, according to the intention of the lawgiver, must necessarily be diminished by every such regulation. The Wealth of Nations
Karma boxes falling

History is full of examples of narrow-minded economic policies going back to hurt the intended beneficiaries or producing opposite effects:

  • Tariffs were created in the 1930’s in the US to protect their local industries. Instead, they contributed to the Great Depression that destroyed them

  • Credit derivatives were created in the 90’s to increase the wealth of investment banks. They instead led to bankruptcy and the Great Recession

  • The Greek government borrowed massively for the Athens Olympics to make their country richer. It however led to the Greek debt crisis and plunged the country into austerity

Those policies were created to increase wealth rapidly, but ended up destroying it. The more people study Smith and his ideas, the better will be humanity’s chances in avoiding bad economic karma from selfish motives.

Luck vs Karma

According to Eastern Philosoophy, there is no such thing as good or bad luck. Instead, everything is based on karma or action and reaction.

If you plant good deeds, then you get good rewards and a good feeling from such rewards. If you plant bad or selfish deeds, then you get bad consequences and a bad feeling from such consequences.

The problem is that such reactions do not happen in a fixed nor predictable time period. A good action today might create a reaction that will be experienced 10 days from now, 10 years from now, or 10 lifetimes from now (since Asian philosophy believes in reincarnation).

So if you plant a good action now and experience the good effects 10 lifetimes from now, then your future self will regard it as good luck. This is because your future self will have no memory of the good deed you performed 10 lifetimes ago. Likewise, the ‘bad luck’ that we experience today could come from our bad actions 10 days ago, 10 years ago, or 10 lifetimes ago.

This is why Asian philosophies have certain policy suggestions:

  1. Do good deeds as much as you can and avoid doing bad. According to Hindus and Buddhists, this is to deposit good karma into your existential bank account so you have a lot of good karma to withdraw in the future.

However, according to Superphysics, this is not 100% technically correct. Instead, the act of consistently doing good deeds makes the ‘wave’ of your soul attain a certain shape. This shape then will let it fit in its proper reality, just as a classical violin fits into an orchestra and not in a death-metal band or a gangsta rap group.

  1. Learn the techniques to burn karma faster, whether good or bad. This is akin to making your karmic bank account more liquid. In this way, bad karma doesn’t occur in one go, which might overwhelm your mind. Likewise, good karma doesn’t all fall on you in one package, as this might bloat your ego. Instead, karma is taken in manageable pieces, just like a loan that gets easy payment terms.


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