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Buddhist Economics that is Beyond that of Schumachers and Sufficiency EconomyBy

Professor Apichai Puntasen Dean Faculty of Management Science, Ubon Rajathanee University, Thailand December 12 13, 20061

Main Issues to be Presented.1. Buddhism as a Mind Based Science 2. Definition of Buddhist Economics and Its 3. 4. 5. 6. 7. 8.

comparison with Mainstream Economics Production in Buddhist Economics Consumption in Buddhist Economics Distribution in Buddhist Economics Definition Sufficiency Economy Sufficiency Economy and Buddhist Economics Epilogue


Buddhist as a Mind Based Science The teaching of Buddha known as Buddha

Dhamma is neither a religion nor a philosophy in western context. It does not subscribe to any specific faith or believe from what have been taught, have been practiced, have been told, because it is in the text book, because it is logical, because it can be hypothesized, because it is rational, because it fit to ones own theory, because it looks convincing, and because the person is our teacher. It is not a philosophy because its actual status is a tested theory.3

Buddhist as a Mind Based Science Differently from Newtonian Physics that

implies the study of matter and energy. Buddha Dhamma is mind based science that goes beyond western physics. The mind based science explains that the

truth can vary according to different levels of mind development.


Buddhist as a Mind Based Science The concept of mind cannot be clearly

understood unless the concept of emergence into a completely new thing from existing things is clearly understood. Most forms of training related to animals and a human beings are part of the training of mind. However, the best form of the training of the mind is the training to purify the mind. This fact implies that things are different according to the degree of mind purification. For example, happiness can vary according to each perception or the level of purification of the mind of each person.5

Buddhist as a Mind Based Science It remains to be scientific because

persons with the same level of mind purification can have common agreement on the truth that they have perceived. Also, each one has unlimited potential to be developed, and there is an explicit way to do so for almost everyone.


Definition of Buddhist Economics The words was first introduced in Chapter

4 of E.F. Schumachers book Small is Beautiful in 1973. After then the concept has been elaborated by many well known scholars all over the world.


Definition of Buddhist Economics The most noted one in Thailand was by Venerable P.A.

Payutto first edition in 1982 and the more completed version came out in 1984. His book called Buddhist Economics: A Middle Way for Market Place. This book actually reinterpreted most economics terms the way it should be interpreted in Buddhist economics. Examples of those terms are value, consumption, production, work, competition, and choice. After then, the technical terms in Buddhist economics such as moderation, non-consumption, over-consumption, cooperation etc. are also discussed.8

Definition of Buddhist Economics The authors book on Buddhist

Economics: Evolution, Theories, and Their Application to Various Economic Subjects, first published in 2001 has further enlarged the concept explained by the two prominent pioneers, Schumacher and Venerable P.A. Payutto. The third edition was published in 2004. The forth edition is forth coming.9

Definition of Buddhist Economics Buddhist Economics is the infusion of two

words, Buddhist and economics. Economics is a subject developed in the West. It is generally defined as the subject explaining economics activities (production, distribution, and consumption) with the aim for individuals to achieve maximum utility under the condition of resource constraint and for the society to reach maximum welfare under the same condition.10

Definition of Buddhist Economics Following the similar line of thought,

Buddhist economics is the subject explaining economic activities with the aim for both individuals and society to achieve peace and tranquility under resource constraint.


Definition of Buddhist Economics The difference between Buddhist economics

and mainstream economics is due to different paradigms on human nature. Under the scientific materialism paradigm, mainstream economics observes that each human being normally follow his/her self-interest. Therefore, following self-interest of any individual is a rational behavior. Also, according to Thomas Hobbes, an ultra materialist philosopher of the 17th century, the ultimate goal of human life is to avoid pain and to seek maximum pleasure.12

Definition of Buddhist Economics Pleasure in this case has been translated

into economics as utility. Under this scientific materialism paradigm, the typical way for a human being to gain more pleasure or utility is to have more materials.


Definition of Buddhist Economics The economic subject also adopts Darwinian

Theory of the survival of the fittest to imply that competition will lead to progress. Hence, the core value of the mainstream economics or more popularly known as capitalism consists of the core value of self-interest and competition.


Definition of Buddhist Economics This core value fits very well with the concept of

capitalism that explains capital as the mode of production. The only way to increase production in order to increase utility and welfare is to accumulate more capital. Capital can be accumulated more from profit through more production given the necessary and sufficient conditions that all products are sold out for profit. Such process of production under control by human beings is industrialization. At the same time, to make sure that all products are sold for profit, consumption must be stimulated through consumerism.15

Definition of Buddhist Economics As a result, capitalism, industrialism, and

consumerism come into one package. The main purpose is for capital to be generated more through increased production and consumption. This way, individuals will achieve maximum utility under budget constraint and the society will achieve maximum welfare.


Definition of Buddhist Economics The question to be raised is whether the above claim

is always true without any adverse consequences. It should be noted that according to the Second Law of Thermodynamics, production is similar to destruction. Production process actually transforms resources and energy from low order entropy into a higher one. Under such stimulating process of production under capitalism, resources, environment as well as ecological system conducive to lives, will be turned into products and waste in relatively short period time. It is the process of self-destruction for humankind. As a result, capitalism is not a viable option for long term sustainability. 17

Definition of Buddhist Economics Under such depressing scenario of

humankind under capitalism, Buddhist Economics can offer a much more promising alternative. The concept of production, consumption, and distribution in Buddhist economics should be explained in order to show clearly why the concept of sustainability with peace and tranquility is possible under such scenario.18

Production in Buddhist Economics Before discussing production, the mode of

production in Buddhist economics will be defined as paa-ism instead of capitalism in mainstream economics. Paa is one supreme quality of the mind. It means the ability to understand everything at its own nature. Most of the time people do not have paa because of the persons own ignorance or the person distorts fact for his/her own liking or not liking. Such special quality of mind known as paa must be continuously trained to achieve its status of neutrality so that it can learn and understand everything at the objects own nature.19

Production in Buddhist Economics Paa cannot be trained alone, it is conditioning to

the training of sila shortly known as good conduct and samadhi or concentration. The training of the three known as sikkhattaya simultaneously is the sufficient condition. It begins with some basic faith that always having a good conduct (clean mind) will result in a calm mind or the mind with concentration or samadhi. Samadhi will support the neutrality of the mind (clear mind) that will be able to learn and understand everything at its own nature. This latter of mind is similar to the quality of right intention and right views, two of the Noble Eightfold Path known as paa.20

Production in Buddhist Economics Given the above quality, there will be

increasing understanding why good conduct is necessary for better life. The three components of good conduct or sila are right action, right speech, right livelihood. They are the three additional components of the Eightfold Path. Given the right conduct the mind can be more concentrated because it will not be disturbed by bad thinking and bad conduct.21

Production in Buddhist Economics This quality of mind is known as samadhi. It

consists of the remaining three of the Eightfold Path or magga. They are right effort, right mindfullness, right concentration. The sikkhattaya is the training of the three function of mind sila, samadhi, and paa. They form into magga or the way to be relieved from dukkha, or conflict, alienation, pain, misery, or suffering that all human beings try to avoid.22

Production in Buddhist Economics According to Buddha Dhamma, a human being who

has paa will not seek to maximize pleasure or utility but will seek to be relieved from pain as much as possible. With less