Buddhist Economics Part 2: Right Livelihood and Universal Basic IncomeOctober 18, 2018
Autumn has set in New England. The air has turned sharp, the ground swishes with fallen leaves, and the Red Sox are keeping everyone up way past their bed times. Evening cocktails on the beach and afternoons by the pool are distant memories. Books, movies, tea, and old records are back.
Our lives are defined by how we spend them. And while we spend the majority of our waking hours working, what we do when we’re not says a lot about who we are and how we see the world.
However, time away from work is a relatively new development in the human story. Before the Industrial Revolution, working from dawn to dusk was not only the norm but also a survival requirement for nearly everyone except the most wealthy and powerful. Nowadays, due to massive expansions in productivity across the globe, regular leisure is an everyday part of life, although this phenomenon is far more concentrated in what we call the “Industrialized West.”
In the not so distant future, as productivity continues to rise, especially throughout Africa and Asia, this will become the norm for people all around the world. Improved technology allows us to do more with less, meaning, in theory, we won’t need to work so hard, or more importantly, so much, to maintain high quality of life.
But as this transition unfolds, we’re going to run into a new problem: what do people do when they don’t need to work? “Idle hands are the devil’s workshop”—a common argument against a reduction in the amount of time we spend working. Yet despite these philosophical objections, this change will happen, and the lens provided by Buddhist economics can guide us to an adaption strategy that will make sustainable societies become more of a reality.
About this Series
Buddhist Economics, a term first coined be E.F. Shcumacher in his book, Small is Beautiful, is a school of thought that combines the teachings of Buddhist philosophy with economic theory. It’s a useful framework for examining the core assumptions guiding our understanding of the economy and how it relates to our lives.
This series aims to inform and educate about key elements of Buddhist economics to demonstrate its usefulness in helping us address the sustainability challenges we face. The topics to be covered are:
Full Employment and Right Livelihood
Egocentrism and Compassion
External Costs and Respect for Nature
The Rising Tide of Automation and the Law of Diminishing Returns
The Industrial Revolution could just as easily be called the Automation Revolution. It began when people started using machines to overcome the law of diminishing returns. This is the economic principle that more and more laborers cannot always produce more stuff.
Example: Say a factory can produce 100 cars per month with 50 workers. With 75 workers, it can produce 125, and with 100 workers it can produce 150. A 100 percent increase in the number of workers (from 50-100) only created at 50 percent boost in productivity. This could happen for a number of reasons: the machines people use can only really be worked by two people, the inspection process has fixed time requirements that hold workers back from speeding up production, there isn’t enough metal and plastic to make more cars in a given month, etc.
The Loophole in the Law
Evidence of this law in action can be seen in the world today. The chart below shows the United States, the world’s largest and most productive economy, has grown at an average rate of 3.2 percent since 1948, with the highest year being 1950, when the economy grew over 13 percent, and the lowest being -3.9 percent in 2009. The high growth in the 1950s and until the 1970s can be attributed to the post World War II boom, as well as the addition of women to the workforce. Since the end of the 1980s, growth has consistently been lower than 5 percent, with the overall trend heading towards smaller growth numbers.
Knowing what we know about the law of diminishing returns, this makes sense. Population has been growing in the U.S. since the 1950s, but both growth is leveling leveling.
To paint a different picture, take a look at the graph below. China, India, Vietnam, Ghana, South Africa and Malaysia have all grown around at least 5 percent since 1980, with China producing astonishing double-digit growth several times during this period, something that helped catapult it from a largely agrarian society and non-player on the international stage to a political and economic giant.
Everyone took a hit in 2008/2009, and most have recovered. However, growth in China is beginning to slow, something that would be expected according to the law of diminishing returns.
The reason economies can grow like this is because technological advancement allows for more efficient production systems that can overcome diminishing returns to scale and instead produce increasing returns.
To return to the factory example, this happens when a new technology comes along that allows technicians to finish an inspection in 30 minutes, thus doubling how many they can do in an hour, allowing the factory to increase its output.
This increased production creates more wealth, which means an economy can continue to grow even when population and resource discovery stabilize. In other words, technological advancement is the loophole in the law pf diminshing returns. And the Digital Age is upending a prolonged period of technological stagnation that will eventually bring us to never-before-seen productive capacities.
The Growth of Leisure
Most of the research out there on jobs lost to automation suggests the labor market is set to take a hit, although no one can know for sure how hard that hit will be. This threat to employment has people concerned, but most forget that new technology leads to the creation of new jobs. Some areas will see a reduction in the amount of people needed, and others will see growth. This is nothing new when we consider how technology has shaped human existence. Many people thought the invention of the tractor would mean an end to farming, but now most farmers drive tractors instead of tilling their land by hand. They’re still working, but technology has changed how they do their job. And it has changed also how many people are needed to do it
But what is new is that this phenomenon is happening all over the world. For those who have had the chance to travel to Asia, you’ve likely noticed its a continent on the move. Rising productivity has allowed for more leisure time, and the Chinese, Korean, Malaysian, Thai, Vietnamese, and Indian middle classes are using it to travel their corner of the world and get to know one another.
And as global growth continues, we can expect this same thing to happen everywhere else. Combined with free flowing international trade (which the Trump administration risks losing out on as a result of its nationalist agenda), we can expect rising productivity to continue, meaning less people doing more, and, of course, more leisure.
What Comes Next?
For some, this might seem like an exciting prospect. Anyone dissatisfied with their professional situation may see this as an opportunity to more freely pursue something they enjoy. Yet this transition is still many lifetimes away. Some of us living today will experience meaningful change in our lives as a result of this phenomenon, but not everyone.
As a result, in the short-term, a threat to our jobs does not represent a welcome respite from the constant toil of existence. Instead, it shakes the ground upon which we’ve built our lives and our identity. We’re very much defined by the work that we do, for better or worse, and not being able to engage in productive activity would strip the meaning and satisfaction many of us get from our lives. It’s therefore our job to prepare future generations for the coming changes by reshaping the way we understand work.
Understanding Right Livelihood
The concept of Right Livelihood is part of the Buddhist Eightfold Path, which was created as a guide for eliminating suffering and attaining enlightenment or liberation. By including work, the Buddhists are touching on a value we all share: what we do for a living greatly impacts our well-being. As a result, it is not only a requirement for survival, but it’s also something we willfully engage in to better ourselves and our lives.
We are beginning to embrace this concept, albeit slowly. We still overwhelmingly see work as an obligation, and this is because so many people around the world are not given the chance to choose their profession. Instead, they are relegated to what they can find. This has allowed us to meet and even exceed the production needs of society, but it has also created an imbalance between desire and reality, leading to an intensification of suffering. Put more simply, too many of us work jobs we don’t like, and we put up with them because we have no other choice, which prevents us from living as well as we could.
As such, one of the things we need to work on as a society is our perception of work. It’s important to find productive activities that nourish us as individuals. The physical fruits of our labor should be secondary to the metaphysical, but right now we have the opposite. Our productive efforts are prioritized, and the perks and benefits that facilitate well-being are relegated to being earned privileges and precious luxuries.
Reshaping Our Notion of Work
To meet the challenges presented by an economy where people are no longer the primary means of production, we must redefine work to be something that contributes to personal development first and economic development second. The primary function of the economy must cease to be the maximum capitalization of resources. Instead, it needs to be optimized for the maximization of participant well-being.
However, this change will take many generations. Any new system that emerges must incorporate nearly all of the elements of the previous one, otherwise it will fail. So the focus needs to be on gradually reshaping the economy to produce different things.
A good starting point is the next generation. This notion that work is an obligation is ingrained into the very building blocks of our society. We take children, who are most apt to want to play, explore, and follow their curiosity, and put them into rigid educational institutions designed to help them figure out their productive talent and prepare for a life of work. And while it’s good to instill in children the value of hard work, less and less opportunities for people to put their hard work towards something they value and that gives them meaning will create problems. Finding a solution calls for an increased focus on helping our students develop the skills that allow them to do what they like, not what is available or what will produce the best returns.
The Long Road Ahead
This type of change would represent a seismic shift in our understanding of the economy and how it is formed. And it will likely be met with some challenges, the most significant being the value we place on things, as this could exacerbate issues of inequality in the short term.
When we envision an economy that employs people to have the best chance for a good life, we invariably think to the arts. If people aren’t going to be working as much in the future, then what are they going to be doing? Pessimists paint a dystopic picture where we sit in front of a TV and eat pill food, turning our brains to mush and handing our autonomy over to technocrats who govern for the “Greater Good.”
Optimists, on the other hand, like you and I, see a world where people take the free time afforded to them by highly-automated modes of production and use it to develop their talents, whatever they may be. These optimists imagine a world full of artist, actors, writers, dancers, and entrepreneurs all using their creativity to produce what’s needed for a good life, not what will generate a profit.
However, in the short-term, this will be difficult to execute. Not everyone is equally talented, and therefore we cannot expect them to be compensated equally for their work. It’s why we scoff at a $10 cover when a local bar has an unknown band playing, but we’ll fork over $250 to see Sir Paul.
As a result, the transition to this type of economy will inevitably be accompanied by some sort of universal income policy. This would allow those who prefer to earn less but do what they love to pursue their own interests without risking survival. Yet those who wish to elevate their material wealth would be free to do so, and those who have the talents to demand a higher price would attract higher payments from those with the money to afford them.
In many ways, this is not all that different than the system we have in place now. People are free to pursue wealth in whichever way they please. Some aspire to luxury, whereas others are okay with a more modest existence. And neither has a right to judge the other’s choices. But in our current structure, we assume everyone wants to pursue extreme wealth. Everyone must engage in productive activities, even if they don’t want to, since doing so is what permits us to survive. As a result, those who decide to pursue wealth effectively set the minimum for how much wealth one must obtain, whereas those who choose a more modest existence are completely powerless in setting a limit as to how much wealth one can have. This is neither freedom nor justice, and it’s something that must change.
Universal income provides a safety net that effectively removes the obligation of work. This creates a scenario where people work by choice, not because they feel obligated to. There was a time in human history when this was acceptable, but technology is quickly making this way of thinking obsolete. Individuals should be free to spend time learning what they’re talents are, and then when they feel ready to offer something at the market, they’ll should be able to do so confident they’ll have a meal and a bed to sleep in at night.
The Challenges of Universal Income
The concept of universal income is not new, but it’s gaining in popularity. Trials have taken place in Finland, and there are discussion of doing the same in Switzerland. And even a city in California is giving it a try. The results are pending, and no conclusions have been drawn. We’re still very much in the initial stages.
Yet universal basic income (UBI) is not without it’s critics. The argument always coming back to “What will people do?” and “How will we pay for this?” But remember that these changes will come slowly, and that we must prepare for them by beginning to adapt now. Immediately handing money over to people would likely cause chaos, and it won’t fix all of our problems overnight. It’s something we must work to, and it’s a transition we must supplement using educational and consumer strategies that support an economy where work is not an obligation and well-being is a right.
The Sustainability Link
To build more socially, economically, and environmentally sustainable societies, we must adopt the Right Livelihood approach to work. Not only would this shift us away from economies reliant on unlimited growth, which strains resources and creates scarcity and excessive competition, but it would allow us to tackle some of the more problematic aspects of human nature, such as our perennial dissatisfaction, frequent boredom, and sometimes unchecked lust for power and money, giving us a chance at peace and equality.
Much of the change needed is systemic, but there are ways in which we can help signal to each other our common pursuit. A good start would be spending more time researching the products we buy and the services we use so that we can learn which type of economy these businesses are helping to shape.
For example, it’s important to support companies with a mission for helping their entire supply chain live a better life. Try to find businesses that emphasize well-being over profits. At times this is impossible, but by giving preference to businesses with a cause, we’re helping demonstrate we want a change. And this new demand will be met by supply, helping the movement for a sustainable economy push forward.
Next on Buddhist Economics: Egocentrism and Compassion