-
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- Buddhist
Economics
- A
Middle Way for the Market Place
- ...Ven.
P. A. Payutto...
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Chapter
One
In
a discussion of Buddhist economics, the first question that
arises is whether such a thing actually exists, or whether it
is even possible. The image of a Buddhist monk quietly walking
on alms round does not readily come to mind as an economic activity
for most people. Skyscrapers, shopping centers and the stock
market would more accurately fit the bill. At present the economics
that we are acquainted with is a Western one. When talking of
economics or matters pertaining to it, we use a Western vocabulary
and we think within the conceptual framework of Western economic
theory. It is difficult to avoid these constraints when talking
about a Buddhist economics. We might find ourselves in fact
discussing Buddhism with the language and concepts of Western
economics. Even so, in the course of this book, I hope to at
least provide some Buddhist perspectives on things that can
be usefully employed in economics.
While economic thinking has been in existence since the time
of Plato and Aristotle, the study of economics has only really
crystallized into a science in the industrial era. Like other
sciences in this age of specialization, economics has become
a narrow and rarefied discipline; an isolated, almost stunted,
body of knowledge, having little to do with other disciplines
or human activities.
Ideally, the sciences should provide solutions to the complex,
interrelated problems that face humanity, but cut off as it
is from other disciplines and the larger sphere of human activity,
economics can do little to ease the ethical, social and environmental
problems that face us today. And given the tremendous influence
it exerts on our market-driven societies, narrow economic thinking
may, in fact, be the primary cause of some of our most pressing
social and environmental troubles.
Like other sciences, economics strives for objectivity. In the
process, however, subjective values, such as ethics, are excluded.
With no consideration of subjective, moral values, an economist
may say, for instance, that a bottle of whiskey and a Chinese
dinner have the same economic value, or that drinking in a night
club contributes more to the economy than listening to a religious
talk or volunteering for humanitarian work. These are truths
according to economics.
But the objectivity of economics is shortsighted. Economists
look at just one short phase of the natural causal process and
single out the part that interests them, ignoring the wider
ramifications. Thus, modern economists take no account of the
ethical consequences of economic activity. Neither the vices
associated with the frequenting of night clubs, nor the wisdom
arising from listening to a religious teaching, are its concern.
But is it in fact desirable to look on economics as a science?
Although many believe that science can save us from the perils
of life, it has many limitations. Science shows only one side
of the truth, that which concerns the material world. By only
considering the material side of things, the science of economics
is out of step with the overall truth of the way things are.
Given that all things in this world are naturally interrelated
and interconnected, it follows that human problems must also
be interrelated and interconnected. One-sided scientific solutions
are bound to fail, and the problems bound to spread.
Environmental degradation is the most obvious and dangerous
consequence to our industrialized, specialized approach to solving
problems. Environmental problems have become so pressing that
people are now beginning to see how foolish it is to place their
faith in individual, isolated disciplines that ignore the larger
perspective. They are starting to look at human activities on
a broader scale, to see the repercussions their actions have
on personal lives, society, and the environment.
From a Buddhist perspective, economics cannot be separated from
other branches of knowledge. Economics is rather one component
of a concerted effort to remedy the problems of humanity; and
an economics based on Buddhism, a "Buddhist economics,"
is therefore not so much a self-contained science, but one of
a number of interdependent disciplines working in concert toward
the common goal of social, individual and environmental well-being.
One of the first to integrate the Buddha's
teachings with economics (and indeed to coin the phrase "Buddhist
economics") was E. F. Schumacher in his book Small
is Beautiful.[*] In his essay on
Buddhist economics, Mr. Schumacher looks to the Buddhist teaching
of the Noble Eightfold Path to make his case. He affirms that
the inclusion of the factor of Right Livelihood in the Eightfold
Path, in other words the Buddhist way of life, indicates the
necessity of a Buddhist economics. This is Mr. Schumacher's
starting point.
Looking back, we can see that both the writing of Small
is Beautiful, and the subsequent interest in Buddhist economics
shown by some Western academics, took place in response to a
crisis. Western academic disciplines and conceptual structures
have reached a point which many feel to be a dead end, or if
not, at least a turning point demanding new paradigms of thought
and methodology. This has led many economists to rethink their
isolated, specialized approach. The serious environmental repercussions
of rampant consumerism have compelled economists to develop
more ecological awareness. Some even propose that all new students
of economics incorporate basic ecology into their curriculum.
Mr. Schumacher's point that the existence of Right Livelihood
as one of the factors of the Noble Eightfold Path necessitates
a Buddhist economics has a number of implications. Firstly,
it indicates the importance given to Right Livelihood (or economics)
in Buddhism. Secondly, and conversely, it means that economics
is taken to be merely one amongst a number of factors (traditionally
eight) that comprise a right way of life, that is, one capable
of solving the problems of life.
Specialization can be a great benefit as long as we don't lose
sight of our common goal: as a specialized study, economics
allows us to analyze with minute detail the causes and factors
within economic activities. But it is a mistake to believe that
any one discipline or field of learning can in itself solve
all problems. In concert with other disciplines, however, economics
can constitute a complete response to human suffering, and it
is only by fully understanding the contributions and limitations
of each discipline that we will be able to produce such a coordinated
effort.
Unfortunately, as it stands, economics is grossly out of touch
with the whole stream of causes and conditions that constitute
reality. Economics, and indeed all the social sciences, are,
after all, based on man-made or artificial truths. For example,
according to natural laws, the action of digging the earth results
in a hole. This is a fixed cause and effect relationship based
on natural laws. However, the digging which results in a wage
is a conventional truth based on a social agreement. Without
the social agreement, the action of digging does not result
in a wage. While economists scrutinize one isolated segment
of the cause and effect process, the universe manifests itself
in an inconceivably vast array of causes and conditions, actions
and reactions. Focused as they are on the linear progression
of the economic events that concern them, economists forget
that nature unfolds in all directions. In nature, actions and
results are not confined to isolated spheres. One action gives
rise to results, which in turn becomes a cause for further results.
Each result conditions further results. In this way, action
and reaction are intertwined to form the vibrant fabric of causes
and conditions that we perceive as reality. To understand reality,
it is necessary to understand this process.
The
Two Meanings of Dhamma
For
many people, the term "Buddhist economics" may evoke
the image of an ideal society where all economic activity
-- buying and selling, production and consumption -- adheres
to strict ethical standards. But such an idealized image, attractive
as it may sound, does not convey the full depth of the Buddha's
teachings. The Buddha's teachings point to Dhamma,
or truth. In Buddhism the term Dhamma is used to convey different
levels of truth, both relative truths and ultimate truth.
Those truths regarding ethical behavior -- both on a personal
day-to-day basis and in society -- are called cariyadhamma.
These are the truths related to matters of good and evil. Dhamma
in its larger sense is saccadhamma, truth, or sabhavadhamma,
reality: it includes all things as they are and the laws by
which they function. In this sense, Dhamma is used to describe
the entire stream of causes and conditions, the process by which
all things exist and function.
Unlike the narrower scope of cariyadhamma, which refers
to isolated ethical considerations, sabhavadhamma points
to nature or reality itself, which is beyond concerns of good
and evil. In this all-encompassing sense, Dhamma expresses the
totality of natural conditions, that which the various branches
of science seek to describe.
Thus, the Buddha's teachings give us more than just ethical
guidelines for a virtuous life. His teachings offer a grand
insight into the nature of reality. Given the twofold meaning
of the term Dhamma, it follows that an economics inspired by
the Dhamma would be both attuned to the grand sphere of causes
and conditions and, at the same time, guided by the specific
ethical teachings based on natural reality. In other words,
Buddhist economists would not only consider the ethical values
of economic activity, but also strive to understand reality
and direct economic activity to be in harmony with "the
way things are."
Ultimately, economics cannot be separated from Dhamma, because
all the activities we associate with economics emerge from the
Dhamma. Economics is just one part of a vast interconnected
whole, subject to the same natural laws by which all things
function. Dhamma describes the workings of this whole, the basic
truth of all things, including economics. If economics is ignorant
of the Dhamma -- of the complex and dynamic process of causes-and-effects
that constitutes reality -- then it will be hard pressed to
solve problems, much less produce the benefits to which it aims.
Yet this is precisely the trouble with modern economic thinking.
Lacking any holistic, comprehensive insight and limited by the
narrowness of their specialized view, economists single out
one isolated portion of the stream of conditions and fail to
consider results beyond that point. An example: there exists
a demand for a commodity, such as whiskey. The demand is supplied
by production -- growing grain and distilling it into liquor.
The whiskey is then put on the market and then purchased and
consumed. When it is consumed, demand is satisfied. Modern economic
thinking stops here, at the satisfaction of the demand. There
is no investigation of what happens after the demand is satisfied.
By contrast, an economics inspired by Dhamma would be concerned
with how economic activities influence the entire process of
causes and conditions. While modern economics confines its regard
to events within its specialized sphere, Buddhist economics
would investigate how a given economic activity affects the
three interconnected spheres of human existence: the individual,
society, and nature or the environment. In the case of the demand
for a commodity such as whiskey, we would have to ask ourselves
how liquor production affects the ecology and how its consumption
affects the individual and society.
These are largely ethical considerations and this brings us
back to the more specialized meaning of Dhamma, that relating
to matters of good and evil. It is said in the Buddhist scriptures
that good actions lead to good results and bad actions lead
to bad results. All of the Buddha's teachings on ethical behavior
are based on this principle. It is important to note here that,
unlike the theistic religions, Buddhism does not propose an
agent or arbitrating force that rewards or punishes good and
evil actions. Rather, good and evil actions are seen as causes
and conditions that unfold according to the natural flow of
events. In this regard, Dhamma (in the sense of ethical teachings)
and Dhamma (in the sense of natural reality) are connected in
that the Buddhist ethical teachings are based on natural reality.
Ethical laws follow the natural law of cause and effect: virtuous
actions naturally lead to benefit and evil actions naturally
lead to harm, because all of these are factors in the stream
of causes and conditions.
Given its dynamic view of the world, Buddhism does not put forth
absolute rules for ethical behavior. The ethical value of behavior
is judged partly by the results it brings and partly by the
qualities which lead to it. Virtuous actions are good because
they lead to benefit; evil actions are evil because they lead
to harm. There is a belief that any method used to attain a
worthy end is justified by the worthiness of that end. This
idea is summed up in the expression "the end justifies
the means." Communist revolutionaries, for instance, believed
that since the objective is to create an ideal society in which
all people are treated fairly, then destroying anybody and anything
which stands in the way of that ideal society is justified.
The end (the ideal society) justifies the means (hatred and
bloodshed).
The idea that "the end justifies the means" is a good
example of a human belief which simply does not accord with
natural truth. This concept is a human invention, an expedient
rationalization which contradicts natural law and "the
way things are." Beliefs are not evil in themselves, but
when they are in contradiction with reality, they are bound
to cause problems. Throughout the ages, people with extreme
political and religious ideologies have committed the most brutal
acts under the slogan "the end justifies the means."
No matter how noble their cause, they ended up destroying that
which they were trying to create, which is some kind of happiness
or social order.
To learn from history, we must analyze all the causes and conditions
that contributed to the unfolding of past events. This includes
the qualities of mind of the participants. A thorough analysis
of the history of a violent revolution, for example, must consider
not only the economic and social climate of the society, but
also the emotional and intellectual makeup of the revolutionaries
themselves and question the rational validity of the intellectual
ideals and methods used, because all of these factors have a
bearing on the outcome.
With this kind of analysis, it becomes obvious that, by the
natural laws of cause and effect, it is impossible to create
an ideal society out of anything less than ideal means -- and
certainly not bloodshed and hatred. Buddhism would say that
it is not the end which justifies the means, but rather the
means which condition the end. Thus, the result of
slaughter and hatred is further violence and instability. This
can be witnessed in police states and governments produced by
violent revolution -- there is always an aftermath of tension,
the results of kamma, which often proves to be intolerable
and social collapse soon follows. Thus the means (bloodshed
and aggression) condition the end (tension and instability).
Yet while ethics are subject to these natural laws, when we
have to make personal ethical choices right and wrong are not
always so obvious. Indeed, the question of ethics is always
a highly subjective matter. Throughout our lives, we continually
face -- and must answer for ourselves -- questions of right
and wrong. Our every choice, our every intention, holds some
ethical judgment.
The Buddhist teachings on matters relating to good and evil
serve as guides to help us with these subjective moral choices.
But while they are subjective, we should not forget that our
ethical choices inevitably play themselves out in the world
according to the objective principle of causes and conditions.
Our ethics -- and the behavior that naturally flows from our
ethics -- contribute to the causes and conditions that determine
who we are, the kind of society we live in and the condition
of our environment.
One of the most profound lessons of the Buddha's teachings is
the truth that internal, subjective values are directly linked
to the dynamic of external objective reality. This subtle realization
is at the heart of all ethical questions. Unfortunately, most
people are only vaguely aware of how their internal values condition
external reality. It is easy to observe the laws of cause and
effect in the physical world: ripe apples fall from trees and
water runs down hill. But because people tend to think of themselves
as individuals separate from the universe, they fail to see
how the same laws apply to internal subjective values, such
as thoughts and moral attitudes. Since ethics are "subjective,"
people think they are somehow unconnected to "objective"
reality.
According to the Buddhist view, however, ethics forms a bridge
between internal and external realities. In accordance with
the law of causes and conditions, ethics act as "subjective"
causes for "objective" conditions. This should be
obvious when we consider that, in essence, ethical questions
always ask, "Do my thoughts, words and deeds help or harm
myself and those around me?" In practice, we rely on ethics
to regulate the unwholesome desires of our subjective reality:
anger, greed, hatred. The quality of our thoughts, though internal,
constantly conditions the way we speak and act. Though subjective,
our ethics determine the kind of impact our life makes on the
external, objective world.
To
be sure, the distinction between economics and ethics is easily
discernible. We can look at any economic situation either from
an entirely economic perspective, or from an entirely ethical
one. For example, you are reading this book. From an ethical
perspective, your reading is a good action, you are motivated
by a desire for knowledge. This is an ethical judgment. From
the economic perspective, on the other hand, this book may seem
to be a waste of resources with no clear benefit. The same situation
can be seen in different ways.
However, the two perspectives are interconnected and do influence
each other. While modern economic thinking rejects any subjective
values like ethics, the influence of ethics in economic matters
is all too obvious. If a community is unsafe -- if there are
thieves, the threat of violence, and the roads are unsafe to
travel -- then it is obvious that businesses will not invest
there, tourists will not want to go there, and the economy will
suffer. On the other hand, if the citizens are law-abiding,
well-disciplined and conscientiously help to keep their community
safe and clean, businesses will have a much better chance of
success and the municipal authorities will not have to spend
so much on civic maintenance and security.
Unethical business practices have direct economic consequences.
If businesses attempt to fatten their profits by using substandard
ingredients in foodstuffs, such as by using cloth-dye as a coloring
in children's sweets, substituting chemicals for orange juice,
or putting boric acid in meatballs (all of which have occurred
in Thailand in recent years), consumers' health is endangered.
The people made ill by these practices have to pay medical costs
and the government has to spend money on police investigations
and prosecution of the offenders. Furthermore, the people whose
health has suffered work less efficiently, causing a decline
in productivity. In international trade, those who pass off
shoddy goods as quality merchandise risk losing the trust of
their customers and foreign markets -- as well as the foreign
currency obtained through those markets.
Ethical qualities also influence industrial output. If workers
enjoy their work and are industrious, productivity will be high.
On the other hand, if they are dishonest, disgruntled or lazy,
this will have a negative effect on the quality of production
and the amount of productivity.
When it comes to consumption, consumers in a society with vain
and fickle values will prefer flashy and ostentatious products
to high quality products which are not so flashy. In a more
practically-minded society, where the social values do not tend
toward showiness and extravagance, consumers will choose goods
on the basis of their reliability. Obviously, the goods consumed
in these two different societies will lead to different social
and economic results.
Advertising stimulates economic activity, but often at an ethically
unacceptable price. Advertising is bound up with popular values:
advertisers must draw on common aspirations, prejudices and
desires in order to produce advertisements that are appealing.
Employing social psychology, advertising manipulates popular
values for economic ends, and because of its repercussions on
the popular mind, it has considerable ethical significance.
The volume of advertising may cause an increase in materialism,
and unskillful images or messages may harm public morality.
The vast majority of ads imbue the public with a predilection
for selfish indulgence; they condition us into being perfect
consumers who have no higher purpose in life than to consume
the products of modern industry. In the process, we are transformed
into 'hungry ghosts,' striving to feed an everlasting craving,
and society becomes a seething mass of conflicting interests.
Moreover, advertising adds to the price of the product itself.
Thus people tend to buy unnecessary things at prices that are
unnecessarily expensive. There is much wastage and extravagance.
Things are used for a short while and then replaced, even though
they are still in good condition. Advertising also caters to
peoples' tendency to flaunt their possessions as a way of gaining
social status. When snob-appeal is the main criterion, people
buy unnecessarily expensive products without considering the
quality. In extreme cases, people are so driven by the need
to appear stylish that they cannot wait to save the money for
the latest gadget or fashion -- they simply use their credit
cards. Spending in excess of earnings can become a vicious cycle.
A newer model or fashion is advertised and people plunge themselves
deeper and deeper into debt trying to keep up. In this way,
unethical advertising can lead people to financial ruin. It
is ironic that, with the vast amount of 'information technology'
available, most of it is used to generate 'misinformation' or
delusion.
On the political plane, decisions have to be made regarding
policy on advertising -- should there be any control, and if
so, of what kind? How is one to achieve the proper balance between
moral and economic concerns? Education is also involved. Ways
may have to be found to teach people to be aware of how advertising
works, to reflect on it, and to consider how much of it is to
be believed. Good education should seek to make people more
intelligent in making decisions about buying goods. The question
of advertising demonstrates how activities prevalent in society
may have to be considered from many perspectives, all of which
are interrelated.
Taking a wider perspective, it can be seen that the free market
system itself is ultimately based on a minimum of ethics. The
freedom of the free market system may be lost through businesses
using unscrupulous means of competition; the creation of a monopoly
through influence is one common example, the use of thugs to
assassinate a competitor a more unorthodox one. The violent
elimination of rivals heralds the end of the free market system,
although it is a method scarcely mentioned in the economics
textbooks.
To be ethically sound, economic activity must take place in
a way that is not harmful to the individual, society or the
natural environment. In other words, economic activity should
not cause problems for oneself, agitation in society or degeneration
of the ecosystem, but rather enhance well-being in these three
spheres. If ethical values were factored into economic analysis,
a cheap but nourishing meal would certainly be accorded more
value than a bottle of whiskey.
Thus, an economics inspired by Buddhism would strive to see
and accept the truth of all things. It would cast a wider, more
comprehensive eye on the question of ethics. Once ethics has
been accepted as a legitimate subject for consideration, ethical
questions then become factors to be studied within the whole
causal process. But if no account is taken of ethical considerations,
economics will be incapable of developing any understanding
of the whole causal process, of which ethics forms an integral
part.
Modern economics has been said to be the most scientific of
all the social sciences. Indeed, priding themselves on their
scientific methodology, economists take only measurable quantities
into consideration. Some even assert that economics is purely
a science of numbers, a matter of mathematical equations. In
its efforts to be scientific, economics ignores all non-quantifiable,
abstract values.
But by considering economic activity in isolation from other
forms of human activity, modern economists have fallen into
the narrow specialization characteristic of the industrial age.
In the manner of specialists, economists try to eliminate all
non-economic factors from their considerations of human activity
and concentrate on a single perspective, that of their own discipline.
In recent years, critics of economics, even a number of economists
themselves, have challenged this "objective" position
and asserted that economics is the most value-dependent of all
the social sciences. It may be asked how it is possible for
economics to be free of values when, in fact, it is rooted in
the human mind. The economic process begins with want, continues
with choice, and ends with satisfaction, all of which are functions
of mind. Abstract values are thus the beginning, the middle
and the end of economics, and so it is impossible for economics
to be value-free. Yet as it stands, many economists avoid any
consideration of values, ethics, or mental qualities, despite
the fact that these will always have a bearing on economic concerns.
Economists' lack of ethical training and their ignorance of
the workings of mental values and human desire is a major shortcoming
which will prevent them from solving the problems it is their
task to solve. If the world is to be saved from the ravages
of overconsumption and overproduction, economists must come
to an understanding of the importance of ethics to their field.
Just as they might study ecology, they should also study ethics
and the nature of human desire, and understand them thoroughly.
Here is one area in which Buddhism can be of great help.
Footnote:
[*]
Small is Beautiful, Economics as if People Mattered,
by E. F. Schumacher, first published by Blond and Briggs Ltd.,
London, 1973. [Back to text]
Chapters
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