Buddhist Economics by Ven. P. A. Payutto

In a previous post I mentioned that I was not impressed with E. F. Schumaker, the guy who originally coined the term "Buddhist Economics." Mr. Schumaker seemed to be trying to use Buddhism as a tool to support his own ideas, rather than necessarily basing his ideas on Buddhism, and his tendency to quote western thinkers while not citing references to actual Buddhist sources was extremely disappointing to me. As it turns out, E. F. Schumaker's ideas probably have more to do with American Transcendentalism (see Professor Mark Blum's talk) than actual Buddhism.

Venerable P. A. Payutto is an actual Thai Buddhist monk though, so not surprisingly his book on Buddhist Economics is much more sound. He actually uses terms like chanda (intention) and tanha (craving) and otherwise seems to know what he's talking about.

He does seem to advocate an approach of integrating economics and ethics:

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.

This probably makes more sense in Thailand where most people are Buddhist, but in the US for example we have people of different religions and it seems like it makes more sense to try to make economics a more neutral study and leave ethical decisions to the political process used to enact various economic policies.

For example, should a society maximize wealth or well-being? An economist might tell you that a policy will retard the economy but he can't be expected to tell you if it will increase people's well being because well being is difficult to measure. He may be able to measure it if observable metrics can be determined. As absurd as it may sound to some people, a monetary value might need to be placed on the well being (perhaps based on survey data of people in society, i.e. how much money are you willing to give up in order to be this much happier?) in order to determine if people will think they're getting they're money's worth for the well being.

Again, this may sound crazy to some people who think that well being is "priceless" but to many people it isn't priceless, and failure to try to estimate some value can cause the value to essentially get treated as zero. Regulators already place a value on human life in certain contexts, such as prevention of a statistical death. Believe it or not, survey data within a society will reveal the amount of money a person is willing to spend to prevent a random unknown person from dying.

So in some of these economic models, I think the place of Dhamma and Buddhist teaching in general is to help set the values on how much happiness and saving peoples' lives is worth.

We can't really force these values on people, especially in a democratic country, because people are going to set their own values regardless. If the politicians spend too much money, in the opinion of the public, to save statistical lives or increase well being in some way they are going to get voted out of office.

So I don't believe the Buddhist way is to try to force people to be happy because that doesn't work. They have to be taught what things are really worth something and which ones aren't. When you try to force stuff on them they just rebel and problems happen.

More from Ven. Payutto's book:

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.

I haven't finished reading this yet but so far it seems like what I would call the only truly Buddhist economic work I've seen so far. Most western stuff I've encountered, claiming to be Buddhist, has essentially been materialistic and based on ideas like "if everyone just has equal amounts of wealth then everyone will be happier" or something. Not only that, but in these peoples' minds "the end justifies the means" in that force is perfectly justified if that's what it takes to bring about these objectives based on material-based theories happiness. This is not Dhamma in the least.

I would highly recommend reading Buddhist Economics by Ven. P. A. Payutto.