Challenge

ISSN: 0577-5132 (Print) 1558-1489 (Online) Journal homepage: http://www.tandfonline.com/loi/mcha20

Buddhist Economics: An Enlightened Approach to

the Dismal Science

Clair Brown

To cite this article: Clair Brown (2015) Buddhist Economics: An Enlightened Approach to the
Dismal Science, Challenge, 58:1, 23-28, DOI: 10.1080/01603477.2015.990826

To link to this article: http://dx.doi.org/10.1080/01603477.2015.990826

Published online: 11 Mar 2015.

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Download by: [Indian Institute of Technology - Kharagpur] Date: 02 July 2017, At: 23:44
Challenge, 58(1):23–28, 2015
Copyright © Taylor & Francis Group, LLC
ISSN: 0577-5132 print/1558-1489 online
DOI: 10.1080/01603477.2015.990826

Buddhist Economics: An Enlightened

Approach to the Dismal Science

CLAIR BROWN

There are many critiques of neoclassical economics, and some

proposals for an alternative way of looking at economics. Here is
a brief summary by a well-trained conventional economist and
Berkeley professor of her path toward Buddhist economics.

I’ve been an economist at the University of California, Berkeley, for a lifetime

and a Buddhist for seven years.
For some time, as an economist, and a student of Buddhism, I have been
grappling with the troubling disconnect between classical economics and the
issues of the real world. In an era marked by vast economic disparities and
the threat of environmental collapse, with opulent living for a few, comfort-
able living for many, and deprivation with suffering for most, classical
economics assumes that markets produce optimal outcomes and people have
the resources to create satisfied lives. Rather than grapple with reality,
economics persists in focusing on income and consumption and to exclude
so many of the pressing issues that define our modern life. As my students
heatedly pointed out, the mainstream economics I taught in Econ 1 addressed
questions of inequality or environmental deterioration outside the mainstream
model, instead of making them an important part of the system.
The Buddhist and the economist in me had to ask if there could be an
alternative to a classical economic world that is ruled by desire and ill-
equipped to address the challenges of achieving happiness, sustainability,
and economic justice. What would a Buddhist approach to economics, in
which people are more important than output and a meaningful life is prized
above a lavish lifestyle, look like? Buddhist economics holds the promise of an
economic system that applies a holistic approach to the challenge of using
and distributing resources in a way that provides a comfortable, happy life
to the world’s population, while ensuring our environment survives.

Clair Brown is a professor of economics at University of California, Berkeley, and director

of its Center for Work, Technology, and Society. Her new book, Buddhist Economics: An
Enlightened Approach to the Dismal Science, will be published by Bloomsbury USA in Fall
2016.

23
24 Brown

IS MORE BETTER?

We feel driven by our culture and our families to make more, buy more, be
more. Yet even when we get a raise, we still want more and feel like we are
missing out. Meeting a goal brings short-lived happiness, and the meaning
of life eludes us. Why do we end up with a life that makes us anxious
rather than happy?
Can we be happy with enough, instead of always needing more?
Conventional economic theory would have us believe that it makes sense to
shop when we’re feeling blue because buying things gives us satisfaction while
also adding to national output. No matter that the rush we get when we buy
a new pair of shoes will not last much past when we pop them into the closet.
Yet we are so convinced that more stuff is desirable that we will do the same
thing the next time that office politics gets to us or we have a family fight.
Are there better ways to feel better? We are happy hanging out with
friends, seeing our kid’s eyes light up when we go bike riding, watching a
glorious sunset. Laughing, enjoying the moment, feeling peaceful all make
us feel better, for longer, than buying one more gadget can do. Yet there
are no economic indicators reported monthly to show that there are ways,
besides consumption, for an economy to grow so we prosper.

WHAT IS WRONG WITH HOW WE MEASURE ECONOMIC

PERFORMANCE?

It is time to recognize that classical economics has led us to focus on the

wrong values and measurements. Now we base economic performance on
consuming and investing and ignore other aspects of life—both the good
and the bad. The calculation of gross domestic product (GDP) only includes
what we spend money on and does not attribute a value to time spent with
friends, except for the money we spend with them. Hey, we may be spend-
ing a lot of money and having a lousy time. GDP also does not pay any
attention to pollution or climate change. Rebuilding after a natural disaster
adds to GDP, without taking into account whether we get back to where
we were before the hurricane or the wildfire. GDP gives us a snapshot of
the total output for the nation, with no concern for how it is distributed or
used, or where it may take us in the future.
Although an economic system based on desire would seem to be in
sync with our materialistic culture, it falls short when it comes to shaping a
meaningful life or addressing the reality that inequality is increasing and
the environment is threatened. Do we believe that an economic system
driven by desire is the one we want to use as our guide when we make
decisions about important things—both the decisions we make as individuals
and the ones we participate in as a society?
 Buddhist Economics 25

Overall, classical economics has not served us well in using our global
resources to create a high quality of life for all people and to avert the
environmental crisis that threatens the planet’s sustainability.

BUDDHIST ECONOMICS

What if we looked for a different model, one that did not put consumption at
its center, one that did not assume that growth of average personal income
was all that mattered? What would Buddhist economics look like?
The term “Buddhist economics” was first coined by E. F. Schumacher
in his 1973 book, Small Is Beautiful: Economics As If People Mattered.
Schumacher foresaw the problems associated with excessive reliance on
the growth of income, especially overwork and dwindling resources. He
argued for a system that valued individual character development and human
liberation instead of an attachment to material goods and ever-expanding
desires. In Schumacher’s view, the goal of Buddhist economics is “the
maximum of well-being with the minimum of consumption.” Materialism
and environmental degradation have worsened since 1973. We can no longer
ignore climate change and continue a lifestyle based on carbon fuels.
A Buddhist approach to organizing the economy would embrace, rather
than skirt, questions of values, sustainability, and inequality. Compassion
replaces desire in Buddhist economics. Interconnectedness replaces putting
oneself first. How we treat others and the environment become central to
how happy we feel about ourselves and our lives.
In Buddhist economics, income is only one element in measuring a
person’s quality of life. More important is how people are able to use their
resources to create meaningful lives. Using the approach developed by
Amartya Sen, we focus on people’s capabilities, which determine how they
function in their daily lives. Capabilities of a family include its health,
education, consumption of basics (such as food, shelter, transportation)
and other goods and services that make life interesting and comfortable, as
well as the ability to participate freely in community and national life. Overall
our capabilities support development of relationships and our full potential.
Our functioning in daily life depends on the social institutions and services
that protect human rights, provide a safety net and security, provide access
to information, protect the environment, and create public infrastructure
and open spaces.
Taking care of our human spirit becomes integrated into our lifestyle.
Buddha taught us that an important aspect of experiencing joy and happiness
comes with being in touch with the beauty of the moment. We pause to sit
quietly and let our image of our self and our illusions about life dissolve.
Happiness does not come from earning more money or from displaying
our knowledge or from buying luxury cars, houses, and clothes. Happiness
comes from being in touch with our own true self, from helping others, and
26 Brown

from living in harmony with nature, as we mindfully enjoy each precious

moment of our lives. We are here to enjoy and appreciate life in its many
aspects. No longer do we have to rely upon buying things to be happy.
Consumption becomes only one aspect of our multi-faceted lives.

MEASURING WHAT MATTERS

Economists rightly think that what we measure reflects, and then reinforces,
our values. Defining and measuring GDP as the output of goods and services
leads the country to focus on national income growth and leads individuals
to focus on consumption. Each month the government announces the
amount that GDP increased (or took an unfortunate downturn) with great
fanfare, and the stock market responds. The Federal Reserve and Congress
concentrate on how economic policies affect GDP, and how to keep GDP
growing. This means that incomes and consumption must grow relentlessly,
without regard for how well we are living or what impact we are having on
the environment. Our health, our children’s education, our safety are mea-
sured by how much we spend on health care, education, and police and mili-
tary, and actual outcomes are ignored. All that matters is that total income
continues to grow.
Economists can measure other things that matter, like inequality,
pollution, happiness, and well-being—all things that affect our quality of life.
Quite a few measures already exist, including Bhutan’s Gross National
Happiness, the UN’s Human Development Index, the OECD’s Better Life
Index, the Genuine Progress Indicator, and the Happy Planet Index. You
get the idea. We already have holistic measures of economic performance,
yet we do not use them to judge how well our economy is doing, not to
mention how we are doing, ourselves.
Here is a cheat sheet on how the Buddhist measures of economic perfor-
mance could be calculated. Increasing the consumption of basic goods adds
to economic performance, but increased consumption of luxuries does not.
Degrading the environment subtracts from economic performance. Declines
in health have a negative effect, while improvements in education have a
positive one. Improving the opportunities available to each person adds to
the economy; crime and natural disasters subtract from the economy. Growth
is measured in terms of mindful usage of food, water, and other goods and
resources, usage that includes restoring and nurturing the sources of those
goods, while harmful and wasteful consumption decreases growth. These
are commonsense ways to evaluate the economy and how well we live—
they should be the monthly measures that guide the Fed and Congress in
their policies.
If you have taken Econ 1, you might ask, “Is Buddhist economics a
microeconomic approach (focused on the individual and the firm) or a
 Buddhist Economics 27

macroeconomics approach (focused on the national economy)?” As you

might expect, micro and macro are interconnected, and they come together
in Buddhist economics in creating a high quality of life. Individuals pursue
happiness for both themselves and for all, and this leads to national well-
being in a sustainable world.
Buddhist economics does not mean taking a vow of poverty, or giving up
creature comforts. We can make a living, even prosper, but not at the expense
of others or the planet. Because it measures, and thereby values, quality of
life much more broadly, it offers a sustainable pathway to prosperity that is
available to all.

HOW I DISCOVERED BUDDHIST ECONOMICS

My thinking about how to reframe basic economics from a Buddhist perspec-

tive was inspired by happenstance seven years ago, when a Tibetan Buddhist
meditation hall opened not far from our house. My husband and I stopped by
and heard Anam Thubten Rinpoche, a Tibetan Buddhist lama. Our world view
changed. I embraced the core concepts of interconnectedness, compassion,
and right livelihood, and I wondered, “How would Buddha teach Econ 1?”
Two years ago, I began teaching a sophomore seminar on Buddhist
economics in order to push my own thinking. The students energetically
engaged in addressing questions about inequality, happiness, and sustain-
ability. They did not have to be economics majors or practice Buddhism to
join in the conversation about how Buddhism can connect the human spirit
and the economy to create well-being and happiness globally.

THREE ELEMENTS OF A BUDDHIST APPROACH TO ECONOMICS

My approach to Buddhist economics is based on the idea of interconnected-

ness: we are all one, and our interdependence extends to nature and all
beings. Economic interconnectedness happens simultaneously in three ways.
First, being interconnected to each other makes it essential that we are
kind and compassionate. We no longer see ourselves as separate individuals
and no longer strive to maximize our own well-being, as mandated by the
mainstream model. Instead, individual and community goals merge into
one goal of promoting the well-being of all. In our daily life, we are mindful
of those we know and meet, and care about them.
Second, being interconnected to our environment makes it essential that
we inflict no harm on it. Our interconnectedness with nature leads us to
measure the value of all the resources we use as well as any damage done
to the environment, both right now and in the future.
Third, being interconnected means that suffering of one is suffering for
everyone. This includes people we never meet, even though we consume
28 Brown

the clothes and gadgets and food they produce for us. We care especially
about the suffering of families who lack the basics required to be healthy
and live comfortable lives, no matter where they live.
Buddhist economics leads us to think holistically and mindfully as we go
about our daily activities and offers a way to appreciate how our actions
affect the welfare of everyone. Buddha noted that people suffer needlessly
because they are disconnected from their true nature, and people can end
their suffering by giving up their sense of separateness and their delusions.
Being in touch with our true nature, we can be happy and enjoy material
things and activities without becoming attached to them.
Because everything is impermanent, giving up attachments should not be
difficult. Yet we find it overwhelmingly difficult to let go of our egos and our
attachments, because they provide a feeling of security and our place in
the world. The mainstream model of consumerism ends up trumping the
Buddhist model. Then we focus on what our income buys, and forget what
brings happiness—experiencing joy and love, being compassionate, and
being mindful of the wonders of the world around us.