February 28, 2023 Reading Time: 5 minutes

There is a growing interest in the West with the idea of a “Buddhist economics.” The German E.F. Schumacher’s Small is Beautiful: Economics as If People Mattered (1973) was the first professional Western economist to address the subject. A number of volumes over the last decade continue to explore the idea. Vaddhaka Linn’s The Buddha on Wall Street: What is Wrong with Capitalism and What We Can Do About It (2015) and Clair Brown’s Buddhist Economics: An Enlightened Approach to the Dismal Science (2017) are two of the most notable.  

In the existing literature on Buddhist economics, Buddhist ideas of selflessness, interdependence, and reverence for nature are primarily seen as a counterpoise or antidote to a capitalist society that fosters greed, environmental depletion, poverty and inequality, and a materialist mindset that leads to meaningless and unhappiness. A Buddhist economic outlook, it is maintained, can show us the way out of these degradations. 

Yet originally, many Westerners during the nineteenth century saw the religion as inherently pessimistic. Its doctrine that life is nothing but suffering, and that enlightenment entails the annihilation of one’s karmic existence, were seen as morbid and nihilistic. On the other hand, others at the time, such as Henry Steel Olcott and Paul Carus, enthusiastically promoted Buddhism as a rational religion consistent with modern science. This characterization of Buddhism as a spiritual tradition relevant to the modern scientific world remains prevalent today, and informs much of its excitement and applicability to economic issues.  

Interestingly, if modern economics is a Western science-based invention, then a “Buddhist” economics seems to be an oxymoron. Self-interest is at the center of modern economics. It presupposes the primacy of an individual self or soul, whose interests benefit from life’s actions and choices. This conception of the individual reigns supreme in the Western world. Conversely, the concept of “no-self” (anatta) is at the heart of Buddhist belief. Buddhism holds that a permanent soul or self is a delusion; that the desires that stem from attachment to the self are the cause of suffering (unhappiness; dissatisfaction). A Buddhist economics would therefore have to deny the self-interest that derives from an individuated self, since in a Buddhist worldview it does not truly exist. In other words, it would have to deny the whole basis of modern Western economics. 

Presently, I think it does. 

Indeed, I believe that the current Buddhist economic point of view starts from a flawed premise that is unduly negative towards free markets and its precepts. Clair Brown states that “Free market economics holds that human nature is self-centered and that people only care about themselves as they push ahead to maximize their incomes and fancy lifestyles.” On the contrary, economic self-interest does not mean self-centeredness or greed. It does not even lead to it. Greed is an individual character flaw, not an economic or political one. At its root, economic self-interest means taking responsibility for one’s own survival and material well-being; it means taking care of oneself so as not to burden society, which lays the foundation for a happiness based on achievement and self-worth. 

This is completely in keeping with Buddhism as promulgated by its founder, Siddhartha Gautama. In What the Buddha Taught, Walpola Rahula — a Buddhist monk and scholar of impeccable reputation — clearly outlines the basic ideas of the religion from its oldest known writings. Rahula quotes the Buddha as saying “One is one’s own refuge, who else could be the refuge?” He tells his followers “never to seek refuge in or help from anybody else,” to be “a refuge to themselves.” Buddhism is about coming to grips with the Truth or Reality of things. It is a way or “path” that promotes questioning what is given and assuaging doubt. As Rahula writes, “[The Buddha] taught, encouraged, and stimulated each person to develop himself and to work out his own emancipation, for man has the power to liberate himself from all bondage through his own personal effort and intelligence.” 

Such independence of thinking and purpose is clearly in keeping with the individual freedom of modern Western political thought and its associated tenet of personal responsibility. And it is utterly consistent with a free-market economic system that values the ability of individuals to manage their own affairs through self-interest for the betterment of all. Buddhism says as much, according to what the Buddha taught. As Rahula states, to eradicate poverty “The Buddha suggests that…economic conditions should be improved for farmers and cultivators; capital should be provided for traders and those engaged in business; adequate wages should be paid to those who are employed. When people are thus provided with opportunities for earning a sufficient income, they will…have no fear or anxiety, and consequently the country will be peaceful and free of crime.”

Current Buddhist economic thinking seeks to assuage what it sees as the predominant issues facing a global society. Yet the major problems of the world, such as poverty and war, do not stem from economic self-interest, but from a lack of proper economic and political policies. According to Arthur Brooks, free markets have led to the greatest prosperity and alleviation of poverty the world has ever seen. The statistics are clear and overwhelming. Billions of people, a great majority of whom live in Asia, have been lifted out of filth and destitution during the modern era because of markets. If we want to solve the problems of poverty or income inequality then more free-market, self-interest-oriented economics are needed, not less. 

Buddhism accepts the notion of an individual self or soul on a provisional basis. The problem comes when a person starts believing that his identity is a permanent function of the universe, and that the more of the universe one possesses (material stuff) the more permanent and lasting that self will be. Again, this is a personal or spiritual flaw, not an economic one. But it is a flaw that the Buddha believed could be overcome with a proper understanding of the universe, of reality. This reality or universe is transient and impermanent, according to Buddhism. The universe and everything in it — including ourselves — is ever-changing and in constant relative motion, a truth of nature that modern science has conclusively demonstrated. 

Since its beginnings, Buddhism has been a utilitarian faith. It seeks to help individuals in the here and now of life, through right thought and action. To do so for oneself is a noble, self-sacrificing undertaking (hence its doctrines are called the Four Noble Truths and the Noble Eightfold Path). These doctrines are meant to be implemented pragmatically, like a surgeon who is removing a poison arrow, as the famous Buddhist parable goes. As the Buddha stated to a wayward follower of his teachings, “Why, Mālankyaputta, have I explained them? Because it is useful, is fundamentally connected to the spiritual holy life, is conducive to aversion, detachment, cessation, tranquility, deep penetration, full realization, Nirvāna.” 

Buddhist economics must take this historical basis as its starting point. It should respect the individual who seeks to better his or her material way of life towards a spiritual understanding rooted in how nature actually works. Free-market capitalism does generate ups and downs, more and less. That happens in a transient, impermanent universe. Yet it has been so successful for human flourishing because it is based on the nature of reality and what humans have always strived for: liberty and an economic self-interest that leads to well-being. A Buddhist economics should understand that the way forward for humanity is commercial prosperity and freedom, for that is what the Buddha taught. 

Robert Edward Gordon

Robert Edward Gordon

Robert Edward Gordon is an Assistant Research Professor in the Center for the Philosophy of Freedom at the University of Arizona, where he brings his expertise on matters of culture to a broad range of research interests: Asian art and philosophy, art and economics, freedom and aesthetics, art and poverty, and humanistic geography.

He is a Fellow at UArizona’s Center for Buddhist Studies and is Adjunct Faculty in the Fred Fox School of Music. His writings can be found in The Wall Street Journal, the Athenaeum Review, the Japanese American National Museum Traveling Exhibit, the peer-review journals Philosophies, Space and Culture, and Social Philosophy & Policy, and elsewhere.

Get notified of new articles from Robert Edward Gordon and AIER.