Buddhist Economics Part 1: Reshaping How We Think About the Economy

Buddhist Economics Part 1: Reshaping How We Think About the Economy

September 28, 2018 0 By TheHumanRevolution

Sustainable systems require technological innovations, just and fair distributions of wealth, and effective policy that encourages innovation, equality, and a smart use of resources. But to succeed in making these real components of out societies, we must first learn to think a bit differently about the world.

Why Buddhism?

Mixing religion with the economy (or anything, really) tends to make people uncomfortable. But don’t think of Buddhism as a religion, but rather as a framework, or guidebook, for a good life.

It’s based on careful observation of the world and the cosmos in which its located. And it has as its central focus the elimination of suffering in all its forms. Furthermore, Buddhism uses the concept of Awareness, or mindfulness, to help people better understand life in all its complexity.

Buddhists think that learning about the Self and the many influences acting upon us offers insight into the true nature of things, allowing us to make wiser decisions that will lead to the end of suffering and Nirvana, or liberation.

Why Economics?

The economy is central to our lives. The systems and institutions we set up for the production, exchange, and consumption of goods and services motivate many of the things we do.

Buddhism asks us to understand, to listen to both ourselves and others so that we can see things from new perspectives, to feel compassion towards others, and to use our understanding to make wise decisions in not only our best interest but also that of others.

As a result, it makes sense to apply Buddhist thinking to economics. Thinking deeply to understand the different forces and influences acting on the economy gets us thinking about things in a new way. It forces us to ask some tough questions, such as:

  • What is the core function of the economy?

  • What purpose does the economy serve?

  • How can we change it to make it better equipped to satisfy human needs?

About this Series

To demonstrate how Buddhist economics can help us, and to also see how some aspects of how we perceive the economy could be improved, over the course of the next few weeks, we’re going to look at the different aspects of Buddhist Economics. These include:

  • Unlimited Growth and The Source of All Human Suffering

  • Full Employment and Right Livelihood

  • Egocentrism and Compassion

  • External Costs and Respect for Nature

Hopefully these four articles will help us gain a better understanding of the issues we face in building an economy that supports environmentally and socially just societies.

Unlimited Growth and The Source of All Human Suffering

Buddhism posits that suffering is the natural state of existence. As a result, the central focuses of Buddhist thought and philosophy is understanding the different sources of suffering. It’s believed we can do a better job at alleviating our suffering if we first understand it.

What is the source of suffering?

First, the word suffering itself is not particularly accurate. It’s a translation of the word duhkha, which is used to describe a state of conflict between the physical and metaphysical world. So, think of Buddhist suffering as stunted dreams, which are the result of our inability to exert influence on the physical world.

But why do we want to influence the physical world? In short, because doing so gives us the illusion of immortality. Making a “mark” on the world allows us to pretend we might live forever. But immortality of the Self as it relates to they physical world is not possible. This body will die, and although something may carry on, it will never look like “Me” again.

This idea causes us to tend to think of death as a dismal thing, and in comparison to the wonder of life, it often is. But death cannot exist without life, just as life cannot exist without death.

Understanding Impermanence

Accepting the relationship between creation and destruction gets us to the idea of impermanence. Because everything is constantly being shaped and reshaped into something new, the things we think of as permanent really aren’t.

They are merely temporary formations of matter that will someday dissolve and reform into something else. So while matter is neither created nor destroyed, hinting at the universality of life and existence, the things we perceive as being permanent or fixed in time and space have been created, and they someday will also be destroyed. Placing too much importance in impermanent things puts us in a position where our expectations are misaligned with the limitations of reality, dooming us to suffering.

So to alleviate suffering, we must learn detach from these physical things. But this does not mean stripping them of their meaning. Instead, we must work to reduce the role physical things have in helping us understand this meaning.

Today’s Economic Thinking

Our economies today are set up according to a philosophy in almost direct contrast to the ideas laid out above. This is because today’s economy is primarily concerned with the production and consumption of things.

This by itself is not bad. After all, we need lots of things to live, and there are lots of us on this Earth who need them. But attaching metaphysical value to something physical is a dangerous move. The metaphysical is forever and infinite, whereas the physical is impermanent and finite. And our economic thinking adds a twist: it asks for unlimited growth in a limited system, something that is inherently unsustainable.

The Myth of Unlimited Growth

We’re told economic growth is always a good thing. Presidents and other political leaders run campaigns on strong growth numbers, and people tend to associate the overall health of the economy using macroeconomic figures that have almost no impact on the day-to-day experience that is the economy, such as Gross Domestic Prodcut (GDP) or stock market indexes.

To move away from our fixation with these aspects of the economy, we must begin to understand why it’s not in our best interest to spend so much energy pursuing them.

The Problem:

A system based on ever-increasing productivity and consumption will eventually fail, or least it will cease to serve the core function of an economy, which is to facilitate the satisfaction of people’s needs. This is because one person only needs or wants so many things. Yet for the economy to continue to function, we must keep finding reasons for people to buy more things. In other words, we must create new needs, or new variants on the needs that already define us.

For example, social acceptance is a natural human need; people have been trying to fit into tribes since they first stood up and began using their thumbs. This is because our role in social situations helps us define and broadcast our identity and sense of Self. But since the Self we should be focusing on is the eternal and Universal Self, not the mortal, impermanent Self associated with this body, using things to express our identity causes us to focus, and hold onto, the impermanent aspects of our existence, which is a major source of our suffering.

But this also makes us too dependent on an unsustainable system. We’ve placed tremendous significance in the unlimited production of goods as a means of satisfying our unlimited needs. But resources are finite, meaning this unlimited growth is simply not possible in the long run. And because of the finite nature of resources and the significance we place on their transformation into things, we’ve created a sensation of scarcity, which fosters competition instead of collaboration and gets in our way of a harmonious existence.

The Middle Path

Buddhism talks a lot about the Middle Path. In his search for happiness, the Buddha went from a life of incredible riches to one of poverty. When neither provided him with relief from suffering, he determined the best path forward was in the middle of both extremes. This type of approach is needed to reshape our economy so that it works better at producing just and environmentally safe systems.

An economy based on principles of Buddhism, including the concept of the Middle Path, would turn its attention away from growth, but it wouldn’t completely reject it. Its focus would shift from the mere production and consumption of goods, working instead to provide meaning, peace, and justice for all people. In other words, the “goods and services” we would produce and consume would be the metaphysical needs of society.

Methods of mass production, such as automation, would help provide everyone with the material goods needed for a good life in their corner of the globe. And this would free people to focus more on fulfillment, satisfaction, helping others, and whatever else they need to do to alleviate their own suffering.

Economic activity would continue, and as a result we would continue to grow. After all, growth is a natural part of life. But instead of growing the number of things we produce and consume, we’d be growing the amount of people who have access to a good life.

Moving Forward

Recognizing how the dominant forms of today’s economic thinking contribute directly to human suffering is an important first step in making change. But today’s economy is the only thing we have, meaning change must come from within. As active participants in the economy, we need to do what we can to shift the focus of the economy away from things and towards what’s really important.

This can be done by supporting companies who give equal attention to both social causes and profit. Food is a major part of today’s economy, so working to support alternative food systems can also help reshape the way in which our economy is designed. Lastly, you yourself could start a business that is designed to help meet a social need. There are markets out there not being met, so consider being the one to reach these groups.

We will be unable to switch to these types of businesses for all of our needs. But it’s important to do so where we can. Each dollar we spend is a vote cast for our version of the future’s economy. Everything matters. Everything counts. Let’s all start doing our part today.

Next on Buddhist Economics: Full Employment and Right Livelihood

Further Reading on THR:

For More About Buddhist Economics:

  • Small is Beautiful. E.F. Schumacher. This is the man who originally coined the term Buddhist economics and who introduced the world to different ways of thinking about the economy.
  • Buddhist Economics. Claire Brown. An economist at the top of her field goes into detail about the shortcomings of today’s economic thinking and offers some insight into how we can make things better.