The Promise of Buddhist Economics

Update: 29/11/2018
UC Berkeley economist Clair Brown argues for an economic system based on altruism, sustainability, and a meaningful life. Because even economics is about more than money.

The Promise of Buddhist Economics


The starting point of your new book, Buddhist Economics, is that the goal of any economic system is to create human happiness. How does the free market system define happiness and how is the definition in Buddhist economics different?

Professor Clair Brown: Free market economics says that everyone can increase their happiness and life satisfaction by buying and consuming more. That’s how humans become more content, happier, and satisfied—by consuming more.

In Buddhist economics, happiness is defined by the concept of interconnectedness. All people, all beings, are interdependent with each other and with nature. Happiness comes from making sure people lead comfortable, dignified lives and interact with each other and nature in a meaningful, caring way.

So one system defines happiness from a material point of view and the other is an economic system that cultivates non-material happiness.

That’s right. In the free market system, you chase goods to become happy. As Buddhists, we know that happiness doesn’t come from filling up your closet. So we move from a closet-full economics to a mind-full economics.

This is an interesting place where free market economics and Buddhism agree—that our desires can never be fulfilled. But one looks at this as a source of profit, the other as a source of suffering.

People never get to satiation; they always want more. That’s an important assumption of the free market model. But as Buddhists, we know that not only does chasing after goods not make us happy, it actually causes us sorrow. It causes us all that pain and suffering.

I think if we went back to a system with more child care, health care, and education, it would encourage us to become more centered on what creates a meaningful life.

Ultimately, this must come down to different views of human nature.

The question of human nature is key to the difference between free market and Buddhist economics. As the Dalai Lama says, the Buddhist view is that human nature is good and that humans want to be altruistic. They are altruistic—that’s their basic goodness. Free market economics starts from the opposite assumption: that humans are not altruistic, caring only about themselves.

There’s a chicken-and-egg question here. We assume that if people become more altruistic and recognize their interdependence, then the economic system will evolve accordingly. But might it also work the other way—can a different economic system actually encourage change on a personal and even spiritual level? Can we use the economic system to help bring out the best in ourselves?

If we put people in the right social framework, their altruism and compassion will come out. But when we place people in this market economy, where everybody’s grabbing and grasping and comparing incomes, it’s much harder to think about anything other than yourself.

In the 1950s and 1960s, we moved toward a more inclusive economic system, one with lots of public services. Then, boom, in the 1980s Ronald Reagan lowered taxes and cut back government services. Even here at Berkeley, I noticed that all of a sudden students were much more selfish and competitive and judgmental. But I think if we went back to a system with more child care, health care, and education, it would encourage us to become more centered on what creates a meaningful life.

Does this start at the bottom with people’s own values and practice, or at the top with a different economic system?

I think you need both. We need the people who are spiritual leaders in our communities to help people be more mindful. But the government also needs to restructure how the economy works, to provide the services and incentives that will help people be more compassionate and live more capable and meaningful lives. I think climate change and global warming might help push us in that direction, because we can’t keep consuming. The U.S. is already consuming way more than our planet can withstand.

In your book, you describe three principles of Buddhist economics. They are quality of life, sustainability, and shared prosperity. Let’s look at these one at a time.

You define the first goal as “enhanced quality of life for both self and others,” and say, “The economic system should encourage us or help us to lead a meaningful life.” How would an economic system do that?

Everyone needs to have a certain amount of consumption to have a comfortable life. They need food, water, shelter, health care, education. But once you’ve reached this basic standard, then you can think about creating a meaningful life through your interconnections—through helping others and enjoying and protecting nature.

The minute you recognize your interdependence with nature, and commit to heal and protecting it, your economic system completely changes.

So first the system provides basic consumption for everyone to have a comfortable life, as they already do in Northern Europe. Once that is achieved, you can begin to address the things that create a meaningful life: What do we need to provide so that communities and families function well? So people don’t have to overwork and can balance their work and family and community lives? So they can start doing the things that allow them to appreciate the moment? So they can help others and bring everybody along?

Enhanced quality of life means allowing us to live holistically once our basic needs are met. It’s not based upon personal consumption. It’s based on creating a system that works for everybody. That takes a lot of public services, and it is expensive. It means making sure that everyone is well-educated, has the help they need, and that the infrastructure works with a renewable energy.

This is a definition of quality of life that goes far beyond the standard economic measures.

The standard definition for economic performance is average income per capita. It doesn’t include any of the things that really matter to people once their basic needs are met. These are all excluded from the usual measures of standard of living. I spend a whole chapter in the book on economic performance. How should we measure it? Because it’s not easy, even for an economist.

The second principle of Buddhist economics you list is sustainability. How does Buddhist philosophy specifically help us address this?

Through the truth of interdependence. Buddhism teaches that all beings are interconnected with each other and with nature. That’s part of who we are. So the minute you recognize your interdependence with nature, and commit to heal and protecting it, your economic system completely changes.

Free market economics assumes that nature is there to be dominated. It is a commodity we use to increase our standard of living and consumption. That’s the role of nature—it’s a raw material. We can pollute the air, we can do anything we want as long as the benefit is greater than the cost. In free market economics, that’s the only rule. The benefit is individual income and consumption. But until recently, we didn’t very often calculate the cost to the earth and to humanity. Finally, we are becoming more aware of the cost of treating nature as mere resources.

In Buddhism, we honor and protect nature and recognize that we’re interdependent with it. To a Buddhist, the idea that we would go beyond earth’s capability to nurture all beings—not just humans, but all beings—is unthinkable. We care enormously about the health of nature and its ability to last for future generations, and also for all species. The difference from the free market view is like night and day.

How do we change this view of nature from a resource that exists for our consumption to the environment that we inhabit and are part of? Is it simply fear of impending disaster or does it require the kind of deeper understanding of interdependence that Buddhism offers?

I’m not sure how we’re going to decide that consumption isn’t the way. I was recently dealing with some technologists who honestly believe that some technology is going to come—bam!—and save us. They’re overly optimistic about how soon that could happen and what it would be. They’re not worried because somehow technology will ride in and save us so that we can continue to dominate the earth.

I think the Paris climate change agreement was an enormous step forward in changing how we think about what’s possible in our lifetime and what would allow a high standard of living in a sustainable world. In the year leading up to the Paris talks, it became clear that the lifestyle in the advanced countries was not sustainable. Yet the first thing people said was, “Okay, let’s have more renewable energy.” But the climate scientists keep telling us, “Just a second, we need to do a whole lot more.” We have water problems; we have problems with food production. We really are going to have to think globally about what’s happening to the world’s resources. I think it’s an educational process. It’s going to move us along a little too slowly, probably, but as the consequences of global warming become clearer to us, I think people will start—hopefully—changing.

The third principle is shared prosperity, which means less income inequality. You could say that this points to the difference between the narrow self-interest of free market economics and what the Dalai Lama describes as the enlightened self-interest of caring for others.

When I suffer, you suffer, because we’re interdependent. But let’s go one step further. In the free market model, you can’t justify redistributing money from Bill Gates to a starving child, because Bill Gates still gets benefit and satisfaction from his last dollar. How can you judge his satisfaction against the child’s? The model doesn’t allow these kinds of comparisons.

People don’t actually suffer from getting rid of status goods. In fact, it makes them happier.

In the Buddhist model, you would never allow any children to starve. There’s actually a long history in economics of what’s called the relative income hypothesis. This is the idea that people at the top are spending money on positional or status goods that don’t help society at all. So it’s fine to take the money they’re spending on status goods and give it to the people who need it to buy the basics of life. You increase social welfare by taking money from the rich and giving it to people who are not well-off.

You mean social welfare as in social services, or as the welfare of society as a whole? It’s interesting that you could define it in those two different ways, because they’re both served by less inequality.

In economics, social welfare refers to the well-being of society as a whole. You make a nice point that social welfare improves when we decrease inequality by both redistributing income and providing social services.

We all feel so much better when everybody has a comfortable life. And people don’t actually suffer from getting rid of status goods. In fact, it makes them happier. They’re not separated from other people, they’re less judgmental, and they’re no longer comparing themselves with others. It’s okay to consume, but not in a way that’s graspy or greedy. We need to make sure that no one is starving while we’re eating fancy food.

You cite research that there’s a higher level of happiness in societies with less income inequality.

That’s right. In the free market economy, when inequality increases, everybody feels, “Oh my gosh! I’m even further behind now.” But when I’m in the middle in a less unequal society, I feel I have a great life!

I want to add that in the U.S. we’re way too focused on our own country. When we talk about shared prosperity in Buddhist economics, we take the U.N. viewpoint of sustainable development goals for everybody. That takes us from 325 million people to 7.5 billion people, of whom more than five billion can’t even think about leading more meaningful lives because they have to spend so much time just trying to feed themselves.

To go from mainstream to Buddhist economics, we really need to shorten the work week.

Looking around the world, what economies do you think best reflect the values of Buddhist economics?

In the developed world, I think everybody thinks immediately about Northern Europe. Countries like Denmark and Sweden score really high on happiness. They score very high on health and education and very low on inequality. Everyone’s caring for each other and if you ask people if they need more they’ll say, “No, I don’t need more, I have a great life! Actually, if I do want anything else, it’s a little more time with my family and to help my community.”

So even in those countries, they’re feeling the stress of too much to do, because work hours are still too long. I think to go from mainstream to Buddhist economics—and to save the earth—we really need to shorten the work week. But we’re not there yet, even in the best performing social democracies.

If the social democratic model already achieves many of these goals, what does Buddhist philosophy really have to offer, if it’s already happening in places that aren’t informed by Buddhism?

We need to keep coming back to sustainability, because those countries are actually not sustainable yet. A lot of them are producing fossil fuel for export and their lifestyles are still too consumption-oriented. The other thing is that the social democratic countries don’t talk about mindfulness. They don’t talk enough about reducing suffering or appreciating the present moment.

Even in these societies, there is a lot of alienation, which is a sign that although these societies work well, their values are still too material to ultimately be satisfying from a human point of view.

To be honest, I think part of the problem is the United States is the leader in defining how an economy should look. We still put ourselves out as the world’s model. Everybody watches American television, and all of a sudden they feel they need to have a closet full of stuff and big gas-guzzling cars. It’s causing problems worldwide. It would help so much if the U.S. would take the lead in saying, let’s become sustainable and take care of everybody.

In the end, doesn’t this mean that from a conventional point of view, many of us are going to have to be poorer to make this work? And that people are going to have to be convinced to accept that?

We all have to live more naturally, yes, which means consuming less. This is where I think the semantics are important. You’re using “poorer” in the mainstream, free market sense, which defines wealth as purely material. Whereas in a Buddhist model, we say that we live truly rich lives because we enjoy our families and communities and nature.

What you have to argue successfully is that this change in the economic model will not make you poorer, that in a deeper way it will make you richer. Because if you can’t convince people of that, then nothing’s going to change.

That’s why we need to rethink the measures of economic performance. What’s prosperity? What’s our quality of life? It’s not consumption. It’s the Buddhist concept of inner and outer wealth, in which even outer wealth includes so much more than what we buy and consume. And inner wealth is, of course, extraordinarily important for our happiness and wellbeing.

Lion’s Roarz

Related News

COVID-19 a Lesson in “Universal Responsibility,” Dalai Lama Says on Earth Day
Korean Zen Master Pomnyun Sunim Offers Buddhist Guidance for Coping with the Pandemic
A Million Turn Out for Samyak Mahadan Buddhist Festival in Patan, Nepal
Buddhist “Eco-monks” Work to Protect Thailand’s Environment
South Korea Unveils Restored 1,300-year-old Buddhist Pagoda