Why Buddhist Economics Is Needed: Overcoming Large Scale Biophysical and Socio-Economic Dysfunctions

Buddhist economics embodies a world view that is very different from the world views of Western economies. The world views of the latter are largely based on the tenets of mainstream economics. The world view of every society reflects its citizens’ values, especially their values concerning how their economies should function. The functioning of all economies needs to be built on an explicit set of values related to the society’s economic goals. The world views associated with Western or modern capitalist economies are typically narrowly oriented and emphasize growth of output. The world view of Buddhist economics, on the other hand, emphasizes a very broad view of what contributes to well-being. The latter world view emphasizes the ideal relationships that humans can develop with each other and with nature. This paper analyzes and outlines why a society adopting Buddhist economics can be expected to experience much less socio-economic and biophysical dysfunction than can be expected for conventionally oriented capitalist societies. Human activities are increasingly having massive negative consequences for both the biosphere and socio-economic relationships. Climate change is a prominent example of biophysical dysfunction, and obesity is an important example of socio-economic dysfunction. The world view and orientation of mainstream economics does little to help us understand the causes of these large dysfunctions, nor to understand what is necessary to resolve them. Mainstream economics does not provide the key insights into the socio-economic causes of the market failures involved. For example, it provides little appreciation of the tendency of businesses to be excessively self-interested, opportunistic, and exploitive in its relationships with consumers and others. The idea that businesses might embrace social responsibility and attempt to serve people’s true preferences rather their actual preferences is foreign to mainstream economics. Mainstream economics also does not help us understand the excessive growth of the Earth’s economic activity and the excessive use of fossil fuel energy. Further, it does not help us understand that consumers’ ignorance and inability to find satisfaction with their consumption are principal factors in contemporary biophysical dysfunction. Because important, large scale dysfunctions such as climate change and obesity have been largely outside the scope of mainstream economics, the types of analysis most suitable for understanding them have not been developed. It follows that mainstream economists are unlikely to propose viable solutions for these dysfunctions. Interestingly, it turns out that many of the answers can be found by turning to the wisdom embodied in Buddhism. As Thich Nhat Hanh has stated, what is needed is a collective enlightenment. We need to draw on Buddhist teachings such as the Four Noble Truths and the Noble Eightfold Path. These teachings can help us understand why dishonest businesses that are not concerned with the true well-being of their customers are part of the problem. It will also help us understand that ignorant, compulsive consumer behavior is an integral part of the dysfunctions. Ideally, people ought to consume mindfully and moderately, using intelligent reflection on their choices in order for their consumption to contribute to their true well-being. If a society were to adopt Buddhist economics, and if people and businesses were to behave in accord with the ideals articulated in Buddhist teachings, there is good reason to believe that the result would be sustainable use of the Earth’s resources and that both biophysical and socio-economic dysfunctions would be avoided or resolved. Clearly, we need Buddhist economics.