BUDDHIST ECONOMICS
by E. F. Schumacher
"Right Livelihood" is one of the requirements
of the Buddhas Noble Eightfold Path. It is clear,
therefore, that there must be such a thing as Buddhist
economics.
Buddhist countries have often stated that they wish
to remain faithful to their heritage. So Burma: The
New Burma sees no conflict between religious values and
economic progress. Spiritual health and material well-being
are not enemies: they are natural allies. 1
Or: We can blend successfully the religious and
spiritual values of our heritage with the benefits of
modern technology. 2 Or: We
Burmans have a sacred duty to conform both our dreams
and our acts to our faith. This we shall ever do.
3
All the same, such countries invariably assume that
they can model their economic development plans in accordance
with modern economics, and they call upon modern economists
from so-called advanced countries to advise them, to formulate
the policies to be pursued, and to construct the grand
design for development, the Five-Year Plan or whatever
it may be called. No one seems to think that a Buddhist
way of life would call for Buddhist economics, just as
the modern materialist way of life has brought forth modern
economics.
Economists themselves, like most specialists, normally
suffer from a kind of metaphysical blindness, assuming
that theirs is a science of absolute and invariable truths,
without any presuppositions. Some go as far as to claim
that economic laws are as free from "metaphysics"
or "values" as the law of gravitation. We need
not, however, get involved in arguments of methodology.
Instead, let us take some fundamentals and see what they
look like when viewed by a modern economist and a Buddhist
economist.
There is universal agreement that a fundamental source
of wealth is human labour. Now, the modern economist has
been brought up to consider "labour" or work as
little more than a necessary evil. From the point of view
of the employer, it is in any case simply an item of cost,
to be reduced to a minimum if it can not be eliminated
altogether, say, by automation. From the point of view
of the workman, it is a "disutility"; to work
is to make a sacrifice of ones leisure and comfort,
and wages are a kind of compensation for the sacrifice.
Hence the ideal from the point of view of the employer
is to have output without employees, and the ideal from
the point of view of the employee is to have income without
employment.
The consequences of these attitudes both in theory and
in practice are, of course, extremely far-reaching. If
the ideal with regard to work is to get rid of it, every
method that "reduces the work load" is a good
thing. The most potent method, short of automation, is
the so-called "division of labour" and the classical
example is the pin factory eulogised in Adam Smiths
Wealth of Nations. 4 Here it is
not a matter of ordinary specialisation, which mankind
has practiced from time immemorial, but of dividing up
every complete process of production into minute parts,
so that the final product can be produced at great speed
without anyone having had to contribute more than a totally
insignificant and, in most cases, unskilled movement of
his limbs.
The Buddhist point of view takes the function of work
to be at least threefold: to give man a chance to utilise
and develop his faculties; to enable him to overcome his
ego-centredness by joining with other people in a common
task; and to bring forth the goods and services needed
for a becoming existence. Again, the consequences that
flow from this view are endless. To organise work in such
a manner that it becomes meaningless, boring, stultifying,
or nerve-racking for the worker would be little short
of criminal; it would indicate a greater concern with
goods than with people, an evil lack of compassion and
a soul-destroying degree of attachment to the most primitive
side of this worldly existence. Equally, to strive for
leisure as an alternative to work would be considered
a complete misunderstanding of one of the basic truths
of human existence, namely that work and leisure are complementary
parts of the same living process and cannot be separated
without destroying the joy of work and the bliss of leisure.
From the Buddhist point of view, there are therefore
two types of mechanisation which must be clearly distinguished:
one that enhances a mans skill and power and one
that turns the work of man over to a mechanical slave,
leaving man in a position of having to serve the slave.
How to tell the one from the other? The craftsman
himself, says Ananda Coomaraswamy, a man equally
competent to talk about the modern West as the ancient
East, can always, if allowed to, draw the delicate
distinction between the machine and the tool. The carpet
loom is a tool, a contrivance for holding warp threads
at a stretch for the pile to be woven round them by the
craftsmens fingers; but the power loom is a machine,
and its significance as a destroyer of culture lies in
the fact that it does the essentially human part of the
work. 5 It is clear, therefore,
that Buddhist economics must be very different from the
economics of modern materialism, since the Buddhist sees
the essence of civilisation not in a multiplication of
wants but in the purification of human character. Character,
at the same time, is formed primarily by a mans
work. And work, properly conducted in conditions of human
dignity and freedom, blesses those who do it and equally
their products. The Indian philosopher and economist J.
C. Kumarappa sums the matter up as follows:
If the nature of the work is properly appreciated and
applied, it will stand in the same relation to the higher
faculties as food is to the physical body. It nourishes
and enlivens the higher man and urges him to produce
the best he is capable of. It directs his free will
along the proper course and disciplines the animal in
him into progressive channels. It furnishes an excellent
background for man to display his scale of values and
develop his personality. 6
If a man has no chance of obtaining work he is in a
desperate position, not simply because he lacks an income
but because he lacks this nourishing and enlivening factor
of disciplined work which nothing can replace. A modern
economist may engage in highly sophisticated calculations
on whether full employment "pays" or whether it
might be more "economic" to run an economy at
less than full employment so as to insure a greater mobility
of labour, a better stability of wages, and so forth.
His fundamental criterion of success is simply the total
quantity of goods produced during a given period of time.
If the marginal urgency of goods is low, says
Professor Galbraith in The Affluent Society, then
so is the urgency of employing the last man or the last
million men in the labour force. 7And
again: If . . . we can afford some unemployment
in the interest of stabilitya proposition, incidentally,
of impeccably conservative antecedentsthen we can
afford to give those who are unemployed the goods that
enable them to sustain their accustomed standard of living.
From a Buddhist point of view, this is standing the
truth on its head by considering goods as more important
than people and consumption as more important than creative
activity. It means shifting the emphasis from the worker
to the product of work, that is, from the human to the
subhuman, a surrender to the forces of evil. The very
start of Buddhist economic planning would be a planning
for full employment, and the primary purpose of this would
in fact be employment for everyone who needs an "outside"
job: it would not be the maximisation of employment nor
the maximisation of production. Women, on the whole, do
not need an "outside" job, and the large-scale
employment of women in offices or factories would be considered
a sign of serious economic failure. In particular, to
let mothers of young children work in factories while
the children run wild would be as uneconomic in the eyes
of a Buddhist economist as the employment of a skilled
worker as a soldier in the eyes of a modern economist.
While the materialist is mainly interested in goods,
the Buddhist is mainly interested in liberation. But Buddhism
is "The Middle Way" and therefore in no way antagonistic
to physical well-being. It is not wealth that stands in
the way of liberation but the attachment to wealth; not
the enjoyment of pleasurable things but the craving for
them. The keynote of Buddhist economics, therefore, is
simplicity and non-violence. From an economists
point of view, the marvel of the Buddhist way of life
is the utter rationality of its patternamazingly
small means leading to extraordinarily satisfactory results.
For the modern economist this is very difficult to understand.
He is used to measuring the "standard of living"
by the amount of annual consumption, assuming all the
time that a man who consumes more is "better off"
than a man who consumes less. A Buddhist economist would
consider this approach excessively irrational: since consumption
is merely a means to human well-being, the aim should
be to obtain the maximum of well-being with the minimum
of consumption. Thus, if the purpose of clothing is a
certain amount of temperature comfort and an attractive
appearance, the task is to attain this purpose with the
smallest possible effort, that is, with the smallest annual
destruction of cloth and with the help of designs that
involve the smallest possible input of toil. The less
toil there is, the more time and strength is left for
artistic creativity. It would be highly uneconomic, for
instance, to go in for complicated tailoring, like the
modern West, when a much more beautiful effect can be
achieved by the skillful draping of uncut material. It
would be the height of folly to make material so that
it should wear out quickly and the height of barbarity
to make anything ugly, shabby, or mean. What has just
been said about clothing applies equally to all other
human requirements. The ownership and the consumption
of goods is a means to an end, and Buddhist economics
is the systematic study of how to attain given ends with
the minimum means.
Modern economics, on the other hand, considers consumption
to be the sole end and purpose of all economic activity,
taking the factors of productionand, labour, and
capitalas the means. The former, in short, tries
to maximise human satisfactions by the optimal pattern
of consumption, while the latter tries to maximise consumption
by the optimal pattern of productive effort. It is easy
to see that the effort needed to sustain a way of life
which seeks to attain the optimal pattern of consumption
is likely to be much smaller than the effort needed to
sustain a drive for maximum consumption. We need not be
surprised, therefore, that the pressure and strain of
living is very much less in say, Burma, than it is in
the United States, in spite of the fact that the amount
of labour-saving machinery used in the former country
is only a minute fraction of the amount used in the latter.
Simplicity and non-violence are obviously closely related.
The optimal pattern of consumption, producing a high degree
of human satisfaction by means of a relatively low rate
of consumption, allows people to live without great pressure
and strain and to fulfill the primary injunction of Buddhist
teaching: Cease to do evil; try to do good.
As physical resources are everywhere limited, people satisfying
their needs by means of a modest use of resources are
obviously less likely to be at each others throats
than people depending upon a high rate of use. Equally,
people who live in highly self-sufficient local communities
are less likely to get involved in large-scale violence
than people whose existence depends on world-wide systems
of trade.
From the point of view of Buddhist economics, therefore,
production from local resources for local needs is the
most rational way of economic life, while dependence on
imports from afar and the consequent need to produce for
export to unknown and distant peoples is highly uneconomic
and justifiable only in exceptional cases and on a small
scale. Just as the modern economist would admit that a
high rate of consumption of transport services between
a mans home and his place of work signifies a misfortune
and not a high standard of life, so the Buddhist would
hold that to satisfy human wants from faraway sources
rather than from sources nearby signifies failure rather
than success. The former tends to take statistics showing
an increase in the number of ton/miles per head of
the population carried by a countrys transport system
as proof of economic progress, while to the latterthe
Buddhist economistthe same statistics would indicate
a highly undesirable deterioration in the pattern of consumption.
Another striking difference between modern economics
and Buddhist economics arises over the use of natural
resources. Bertrand de Jouvenel, the eminent French political
philosopher, has characterised "Western man" in
words which may be taken as a fair description of the
modern economist:
He tends to count nothing as an expenditure, other
than human effort; he does not seem to mind how much
mineral matter he wastes and, far worse, how much living
matter he destroys. He does not seem to realize at all
that human life is a dependent part of an ecosystem
of many different forms of life. As the world is ruled
from towns where men are cut off from any form of life
other than human, the feeling of belonging to an ecosystem
is not revived. This results in a harsh and improvident
treatment of things upon which we ultimately depend,
such as water and trees. 8
The teaching of the Buddha, on the other hand, enjoins
a reverent and non-violent attitude not only to all sentient
beings but also, with great emphasis, to trees. Every
follower of the Buddha ought to plant a tree every few
years and look after it until it is safely established,
and the Buddhist economist can demonstrate without difficulty
that the universal observation of this rule would result
in a high rate of genuine economic development independent
of any foreign aid. Much of the economic decay of southeast
Asia (as of many other parts of the world) is
undoubtedly due to a heedless and shameful neglect of
trees.
Modern economics does not distinguish between renewable
and non-renewable materials, as its very method is to
equalise and quantify everything by means of a money price.
Thus, taking various alternative fuels, like coal, oil,
wood, or water-power: the only difference between them
recognised by modern economics is relative cost per equivalent
unit. The cheapest is automatically the one to be preferred,
as to do otherwise would be irrational and "uneconomic."
From a Buddhist point of view, of course, this will not
do; the essential difference between non-renewable fuels
like coal and oil on the one hand and renewable fuels
like wood and water-power on the other cannot be simply
overlooked. Non-renewable goods must be used only if they
are indispensable, and then only with the greatest care
and the most meticulous concern for conservation. To use
them heedlessly or extravagantly is an act of violence,
and while complete non-violence may not be attainable
on this earth, there is nonetheless an ineluctable duty
on man to aim at the ideal of non-violence in all he does.
Just as a modern European economist would not consider
it a great achievement if all European art treasures were
sold to America at attractive prices, so the Buddhist
economist would insist that a population basing its economic
life on non-renewable fuels is living parasitically, on
capital instead of income. Such a way of life could have
no permanence and could therefore be justified only as
a purely temporary expedient. As the worlds resources
of non-renewable fuelscoal, oil, and natural gasare
exceedingly unevenly distributed over the globe and undoubtedly
limited in quantity, it is clear that their exploitation
at an ever-increasing rate is an act of violence against
nature which must almost inevitably lead to violence between
men.
This fact alone might give food for thought even to
those people in Buddhist countries who care nothing for
the religious and spiritual values of their heritage and
ardently desire to embrace the materialism of modern economics
at the fastest possible speed. Before they dismiss Buddhist
economics as nothing better than a nostalgic dream, they
might wish to consider whether the path of economic development
outlined by modern economics is likely to lead them to
places where they really want to be. Towards the end of
his courageous book The Challenge of Mans Future,
Professor Harrison Brown of the California Institute of
Technology gives the following appraisal:
Thus we see that, just as industrial society is fundamentally
unstable and subject to reversion to agrarian existence,
so within it the conditions which offer individual freedom
are unstable in their ability to avoid the conditions
which impose rigid organisation and totalitarian control.
Indeed, when we examine all the foreseeable difficulties
which threaten the survival of industrial civilisation,
it is difficult to see how the achievement of stability
and the maintenance of individual liberty can be made
compatible. 9
Even if this were dismissed as a long-term view there
is the immediate question of whether "modernisation,"
as currently practised without regard to religious and
spiritual values, is actually producing agreeable results.
As far as the masses are concerned, the results appear
to be disastrousa collapse of the rural economy,
a rising tide of unemployment in town and country, and
the growth of a city proletariat without nourishment for
either body or soul.
It is in the light of both immediate experience and
long term prospects that the study of Buddhist economics
could be recommended even to those who believe that economic
growth is more important than any spiritual or religious
values. For it is not a question of choosing between "modern
growth" and "traditional stagnation." It is
a question of finding the right path of development, the
Middle Way between materialist heedlessness and traditionalist
immobility, in short, of finding "Right Livelihood."
Endnotes
The essay "Buddhist Economics" was first published
in Asia: A Handbook, edited by Guy Wint,
published by Anthony Blond Ltd., London, 1966. In 1973
it was collected with other essays by Ernest Friedrich
Schumacher in Small Is Beautiful: Economics as
if People Mattered. The book has been translated into
27 different languages and in 1995 was named by the London
Times Literary Supplement as one of the hundred most
influential books written after World War II.
In December of 2001, Mrs. Vreni Schumacher and Hartley
and Marks Publishers kindly extended permission to include
"Buddhist Economics" in the pamphlet, An
Economics of Peace, available from the E. F. Schumacher
Society, 140 Jug End Road, Great Barrington, MA 01230
USA, (413) 528-1737, www.smallisbeautiful.org.