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Barbara O'Brien

Buddhist Economics

By February 6, 2009

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Thanong Khanthong writes in The Nation of Thailand about Buddhist economics and the global financial crisis. In particular he cites the work of Thai monk Phra Payutto, whose book Buddhist Economics: A Middle Way for the Market Place can be read online in English translation.

I don't know enough about the economy of Thailand to discuss how "Buddhist" or how successful it is in practice, as opposed to theory. And I haven't read Phra Payutto's book, although it's now on my to-do list. However, Thanong Khanthog's article raises the question, what can Buddhism teach us about 21st century economies?

In recent decades, the economic climate in the U.S. has been dominated by people who believe American business is inherently sustainable. According to this theory, an economy is something like an ecosystem that will sustain itself by natural law as long as government doesn't interfere with it. The theory assumes that most business leaders will make rational decisions based on the long-term interests of their companies. It also assumes that "supply and demand" will ensure most needs of a population will be met by the private sector without intervention of government.

The biggest flaw in this pretty picture is that it leaves out the corrupting influence of greed. As Buddhism teaches us, the passions of greed will short-circuit reason as surely as fish swim and birds fly.

Today Americans are looking at the wreckage of a once-thriving economy and asking, how could this have happened? We're learning now that the heads of big corporations and financial institutions have not been making rational decisions at all. The hyper-competitive Asuras who rise to the top of the business world have been running their corporations in such a bone-headed manner one wonders if they need text messages on their PDAs to tell them to come in out of the rain.

Further, basic needs are not being met. The U.S. economy is very good at turning out shiny new products that people lived happily without before the ad campaign, but our roads and bridges are falling apart and the aging electrical grid grows more fragile by the day. We produce a dizzying variety of teeth-whitening products, yet millions of Americans can't afford basic dental care. We create cutting-edge medical technology, but hospital emergency rooms are decaying for lack of funds.

Remarkably, even when the real world is screaming at us that our current economic mode is not sustainable, too many of our business and political leaders still deny there's a problem that a few tax cuts won't fix. I'm not hopeful that the nation will make the kinds of corrections it needs to make.

Thanong Khanthong writes,

In conventional economics, the value of goods and services is determined by the consumers' perception as to whether it serves the satisfaction or the desire. In Buddhist economics, there are two kinds of desires or two kinds of value: true value and artificial value. "True value is created by chanda (good desire). In other words, a commodity's true value is determined by its ability to meet the need for well-being. Conversely, artificial value is created by tanha (bad desire) -- it is a commodity's capacity to satisfy the desire for pleasure," Payutto says.

Tanha is the "thirst" described in the Second Noble Truth. The glossary of one of my books defines chanda as "will" or "volition." It's not a word I've seen much in use. If anyone can shed more light on the meaning of chanda, please speak up.

The larger point Thanong Khanthong makes, however, is that we have created an economy fueled by tanha. But the teaching of the Four Noble Truths is that tanha is a thirst that can never be satisfied. As soon as we acquire the thing we desired, we fixate on something else we think we must have, and the formerly desired thing eventually is cast aside.

So we have landfills of discarded toys, tape players and toaster ovens, but we can't find the resources to repair bridges or maintain emergency rooms.

The challenge, it seems to me, is to devise a sensible middle way between unfettered greed-driven capitalism and a centrally controlled, Communist-style economy, which the real world has shown to be unworkable also. The problem for Americans is that we seem unable to have rational discussions about the economy, mostly because so many people are unable to let go of their pet unworkable theories. As I said, I'm not hopeful that we won't put ourselves through a lot more suffering in the next few years.

Discuss this topic in the Buddhism Forum!

February 6, 2009 at 12:07 pm
(1) Kendall says:

I’m no economist, but I do find our economy an odd ball at times. It seems so dependent on us spending all our money on things we generally don’t need. As a Buddhist, I really don’t like buying things just for the sake of it. I often will use things until they fall apart, or resell if possible.

I can’t say I’m surprised we are having these issues, and I hope people start realizing things can be done differently and successfully. Many people are refusing to change their own ways as the world is changing around them. This will be true for a very long time though and goes well beyond the economy.

Obama has some opportunities to help get things in the right direction, but it will take individual people making changes in their own like that will also need to happen for things to truly become better. Just going back to how things were isn’t good enough.

November 14, 2011 at 2:56 am
(2) Mysectional Sofasx says:

Too true. But wheather a Democrat or Republican is in office doesn’t seem to matter much. Both parties do the same thing.

February 6, 2009 at 12:38 pm
(3) Greg Stone says:

Excellent topic.

I believe the difference between tanha and chanda can be described as the difference between desire driven by our cumulative karmic imprints, or monkey mind, and actions we take as a result of our awakened mind through our will or volition.

In other words, is desire driving us or are we driving desire? Asleep or awake?

The only adjustment I might make to the analysis concerns the idea that government gets a pass on the current debacle. The idea that the markets were operating without government influence and that the greed had not also infected D.C. is a dangerous myth.

One can undertake a fairly quick analysis to determine whether we have a government driven by monkey mind or awakened mind.

Perhaps, at the end of the day, the only fix for the economy is the practice.

February 6, 2009 at 9:17 pm
(4) toriecooper says:

I really appreciate your article Barbara. Its impossible to have a fully functioning economy unless it is based upon higher reasoning and purpose. Thank you for introducing Thanong Khanthog to me.

February 7, 2009 at 1:59 pm
(5) jeffwong says:

Thanks for your perspectives. You’ve articulated very well some ideas I’ve been having economics. I have been asking the question of “What is the purpose of our economy?” It’s a complicated issue to discuss especially since it involves the topic of freedom and people have varying ideas of freedom.

February 9, 2009 at 1:45 pm
(6) Adam M says:

Thank you for the link to Phra Payutto’s book. E.F.Schumacher also wrote about a “middle way for the marketplace” back in 1973 in his book “Small Is Beautiful: Economics As If People Mattered”. Unlike Payutto, Schumacher was neither monastic or Eastern in background/origin… he was a top economist for Britain after the second world war.

After decades of observing & working with a globalizing economy, he was convinced that economies purely founded on growth in a finite material world, where people are treated as capital, was inherently unstable, unsustainable and socially unjust. Though he only touches on Buddhism in his book, readers here may find his understanding of qualitative vs. quantitative inquiry very insightful.

October 1, 2009 at 7:08 am
(7) Patriya says:

I truly appreciate Barbara’s article and all the insightful comments on the current classical economic model adopted by many governments. Despite rounds of economic crises, officials are still pouring much money into stimulating their economy to grow rapidly again, rather than moderation and sustainability. I read that the King of Thailand has tried in the past three decades to promote “sufficiency economy” based on the Buddhist principle outlined by Barbara. But as anywhere in the world, greed seems to win while more Thai people are beginning to be slowly awakened to a sustainble lifestyle. Bhutan is a better example in successfully following Buddhist economic principles, with the gross national happiness (GNH) that is higher than most develooped countries.

October 7, 2009 at 1:32 pm
(8) samadanie says:

i invite you all to think about the co-operative model as an alternative to capitalism and communism. In my opinion co-opartive enterprises where a community pool their resources for common purpose, voluntarily and work within basic cooprative principles provide us a middle path.

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