Western economics can be criticized as being based on the rationalization of competitive behavior and maximizing profit for the benefit of a limited few, dependent upon the depletion of natural resources and the long-term degradation of our shared environment. 

Buddhist economics, meanwhile, is founded upon the interdependence of mankind and the environment, thereby providing well-being based on compassion for all sentient beings. Its goal is to maintain a sustainable environment, while affirming shared prosperity and a minimum of suffering for workers, customers, shareholders, and society.

Buddhist economics, treated as an academic topic, began with E. F. Schumacher’s essay Buddhist Economics, first published in 1966, and later in Small Is Beautiful (Schumacher 1973), in which the author offers forewarnings concerning problems associated with “excessive reliance on the growth of income, especially overwork and dwindling resources.” (Brown and Zsolnai, 497)

Schumacher says the Buddhist requirement of Right Livelihood provides the basis for Buddhist economics, with the goal being the development of moral purity, freedom from want, subsisting on little, and doing no harm. The optimal pattern of consumption would be maximum well-being with a minimal dependence on resources. Schumacher concludes that the Buddhist approach to economics represents a Middle Way between ever-growing and slowly stagnating economic systems.

Schumacher’s observations gained notice in Buddhist lands and also in Western countries, where they could be helpful in solving such problems as insatiable greed, over-consumption, the neglect of social welfare, and the devastation of nature. 

In Asia, a significant contribution to Buddhist economics was made by the Thai monk-scholar Venerable P.  A. Payutto in A Middle Way for the Market Place (1994), in which he described guidelines that the Buddha delineated for monks, householders, and business people about earning and accumulating wealth. (Brown and Zsolnai, 498)

For example, regarding acquisition, wealth should not be acquired through exploitation or victimization, but rather though virtuous effort and morally pure action.

Some textual Tipitaka references help illustrate:*

And what is right livelihood? There is the case where a disciple of the noble ones, having abandoned dishonest livelihood, earns his living following virtuous livelihood: This is called right livelihood. (SN 45.8)

In relation to the other factors of the path:

And how is right view the forerunner? One discerns wrong livelihood as wrong livelihood, and right livelihood as right livelihood. And what is wrong livelihood? 

Scheming, persuading, hinting, belittling, and pursuing gain with gain. This is wrong livelihood . . .

One tries to abandon wrong livelihood and to enter into right livelihood: This is one’s right effort. One is mindful to abandon wrong livelihood and to enter and remain in right livelihood: This is one’s right mindfulness. Thus these three qualities—right view, right effort, and right mindfulness—run and circle around right livelihood. (MN 117)

Regarding wrong livelihood for lay followers:

A lay follower should not engage in five types of business. Which five? Business in weapons, business in human beings, business in meat, business in intoxicants, and business in poison. (AN 5.177)

Regarding wrong livelihood for monks:

. . . reading marks on the limbs [e.g., palmistry]; reading omens and signs; interpreting celestial events [falling stars, comets]; interpreting dreams; reading marks on the body [phrenology]; reading marks on cloth gnawed by mice; offering fire oblations, oblations from a ladle, oblations of husks, rice powder, rice grains, ghee, and oil; offering oblations from the mouth; offering blood-sacrifices; making predictions based on the fingertips; soothsaying; laying demons in a cemetery; placing spells on spirits; reciting house-protection charms; snake charming, poison-lore, scorpion-lore, rat-lore, bird-lore, crow-lore; fortune-telling based on visions; giving protective charms; interpreting the calls of birds and animals . . . [The list goes on and on] (DN 2)

Regarding safekeeping, wealth should be saved and protected as an investment for further livelihood and as insurance against future need. Regarding a balanced livelihood:

. . . a householder, knowing his income and expenses, leads a balanced life, neither excessively extravagant nor miserly, knowing that thus his income will stand in excess of his expenses, but not his expenses in excess of his income.

Just as the goldsmith, or an apprentice of his, knows, on holding up a balance, that by so much it has dipped down, by so much it has tilted up; even so a householder, knowing his income and expenses leads a balanced life, neither extravagant nor miserly, knowing that thus his income will stand in excess of his expenses, but not his expenses in excess of his income. (AN 8.54)

When accumulated wealth exceeds the above two needs, it may be used to support oneself, one’s family and fellowship, and social harmony, such as in receiving guests, the activities of friends and relatives, or for supporting good causes such as community welfare.

Regarding mental attitude, wealth should not become a cause for restlessness and anxiety, leading to obsessive greed. Both benefits and limitations should be comprehended, and wealth should be handled in a way that cultivates mental development. (Brown and Zsolnai, 499)

Payutto distinguishes between two different kinds of wanting: tanha, the desire for pleasurable mind-objects; and chanda, the desire for well-being. Tanha is based on ignorance, while chanda is based on wisdom. Those who are driven by tanha, for example, will seek to satisfy blind cravings for sensual pleasures, but for those who are guided by chanda, desires will be directed to the realization of well-being. 

Payutto stresses that production, consumption, and other economic activities should become a means of achieving well-being for the individual, for society, and for the environment. Right consumption should thus be understood as the use of goods and services to achieve balanced well-being for all. 

Wrong consumption should be understood as using goods and services to satisfy desires for pleasing sensations and self-satisfaction, based on the accumulation of wealth. Production will almost invariably be accompanied by degradation of natural resources and harmfulness to the planet. In some cases, such as burning wood for heat-energy on a limited local scale, this will not upset the balance of the environment, but in others, such as burning coal in factories manufacturing steel for global markets, this will upset the natural balance and damage the environment. 

Production can only be justified when the benefits of the commodities produced outweigh the benefits of whatever is destroyed. In industries where production entails the destruction of natural resources and environmental degradation, non-production is sometimes the better choice. In some cases, for example oil production, it is better to refrain from production and leave the oil in the ground. In this light, non-productivity may be seen as a wholesome and useful activity. 

One who produces fewer goods will consume fewer resources and leave a smaller carbon footprint, thereby leading a more beneficial existence by doing little or no harm to sentient life and the environment. Such a person is of more value than a magnate who greedily consumes great quantities of resources through manufacturing goods that are harmful to society and destructive to the environment. 

There is much more to be said on this subject, but the foregoing at least provides a stepping stone on the path to doing what would be economically best for sentient beings and for the planet.

* Translations from Thanissaro Bhikkhu, accesstoinsight.org

References

Schumacher, E. F. 1966. Buddhist Economics. Asia: A Handbook, edited by Guy Wint. London: Anthony Blond.

———. 1973. Small Is Beautiful: A Study of Economics As If People Mattered. London: Blond & Briggs.

Brown, Claire, and Laszlo Zsolnai. 2018. “Buddhist Economics: An Overview.” Journal of the Corvinus University of Budapest, vol. 40, issue 4. https://www.academia.edu/37975833/BUDDHIST_ECONOMICS_AN_OVERVIEW

Payutto, P.  A. 1994. A Middle Way for the Market Place. Bangkok: Buddhadhamma Foundation.

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