This is a continuation of our discussion on Buddhist Economics based on E. F. Schumacher’s book, ‘Small is Beautiful’. Part I discussed about Labor, Part II on Mechanization and Part III on Unemployment. In this post, we shall investigate the aims of Traditional Economics and contrast this to Buddhist Economics.
Aims of Orthodox Economics
Under traditional economics, the scope of economics is defined as the study of the allocation of scarce resources. The three main allocation issues that it seeks to solve are:
1. Which goods and services should be produced and in what quantities?
2. How should these goods and services be produced?
3. Who should consume the goods and services that have been produced?
With the fall of socialism, our economies are largely governed by the free market with minimal government intervention. The interaction of demand and supply, driven by individuals acting in their own self interests solves all the allocation questions.
Aims of Buddhist Economics
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 economist’s point of view, the marvel of the Buddhist way of life is the utter rationality of its pattern—amazingly 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.
An Enlightening Example
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 production—and, labor, and capital—as the means.
The former, in short, tries to maximize human satisfactions by the optimal pattern of consumption, while the latter tries to maximize 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.
Are you happy with the current economic system? When consumption is the sole end and all factors of productions are merely costs to be minimized, Corporations are only a step away from abandoning all morals and ethics in the pursuit of profits. The 2008 Baby Milk Scandal are mere symptoms of a systemic disease in our current free market system. Treating the symptoms alone will not cure the disease. Does anybody have any questions or comments?