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Buddhist foundation of economics

Tue Sy

(see also: Vietnamese translation, "Nền tảng Phật giáo của kinh tế học")


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Never does man come to the end of his search into the nature expecting to gain more things to fill his ever-wanting storehouse. From the outset, he is doomed to face a world that tends to reduce his ability as he recognizes his hands are too short and his feet are too slow to catch up the swift flow of existence. Nature endows him with a body as an effective instrument to enjoy the taste of life, but at the same time it burdens him with a heavy load. To enjoy life he has to feed the body. Hunger and thirst ceaselessly urge him to move. However, never satisfactorily is hunger relieved and thirst quenched down. Now he finds himself facing a reality that drives him to make prompt decision. Drink up your fill before the rivulet runs dry. He had to choose this one and forgo the others, either engaged in work or taking leisure. Working or leisure, the world appears before him with its limitation in space and time. Somehow, it draws a curve the two ends of which would set the fragment of existence, the very instant of life. Every instant is marked with the rising and falling of things, their appearance and disappearance. The continuity of instant after instant constitutes the duration of life. That where on the curve man should pin down his decision to optimize his gain over loss depends on his store of knowledge about the world around him. Nature appears to offer him, to the point of his observation, infinite resources that would ever satisfy his wants. Nevertheless, being sandwiched between time and space, he could not move at will to get what he wanted at anytime. Resources appear to be infinite to his vision but scarce within his reach. What he should do is to learn how to reasonably allocate the resources.

Before learning how to do this, he is suggested to learn what to know. He is convinced to know by whom this world was created, and how it was created. Otherwise, human existence is supposedly meaningless; life and death are by incident, irrationally and aimlessly. If the Bible did not contain the book of Genesis, people would not know what the face of the world might have been as they think of today, better or rather worse. Nevertheless, such a question has been set aside by Buddhists.

Once upon a time, a young monk named Māluṅkya[1] thought he should challenged the Blessed-One to see if He knew or knew not whether the world is or is not eternal; it is or is not infinite; whether soul and body are identical; and so on. Let the Blessed-One declare He knows if in fact He knows. And let the Blessed-One declare He knows not if in fact He knows not. Otherwise, the young monk would deny the Buddha and return to his worldly life. It is better to conduct a worldly life enjoying sensual pleasures like every other ordinary person than to observe ascetic disciplines without having answer to the questions concerning the origin and nature of the world.

Much against his expectation was the Buddha’s negative answer. On this very account, some might have accused Buddha of trying to unsophisticatedly evade the problem; many others attributed to Him a detestable agnosticism.

Instead of explaining how the world was created and what it is for, the Buddha admonished the young ascetic not to waste his time about the questions beyond the reach of human knowledge but rather to concentrate his effort to know his actual conditions. He gave a smile. A man was hit with a poisonous arrow. Time was not generous to him with asking about where the arrow came from, what kind of wood it was made of, and who had shot it. The most pressing importance for him to do first of all was to plug out the poisonous arrow, treat the wound. Survival first, the rest would be accomplished later.

As your eyes have yet to be amplified with a sophisticated tool such as a telescope, don’t be anxious to locate the orbit of Pluto’s satellite. In addition, a telescope cannot be fabricated with mere human labor, ignoring other materials, which require some amount of capital to produce.

Although there is a saying that people do not live merely with bread, there is a truth that on the edge of starvation he might have died before he could learn to know how a bicycle was made. Think of the majority of people in the poorest country of the world. Trying to teach them how the universe has expanded, from the Big Bang or anything else, rather than trying to teach them how to get food successfully, not only makes fun of the problem but also exposes the outrageous aspect of human life.

In a Sutta,[2] while explaining to a brahmanic priest the true meaning of, and how to celebrate, a great sacrifice, an important ceremony of the Brahmanic religion then, the Buddha relates in disguise a story of the past. Once, a king intended to hold a great sacrifice for the benefit of his kingdom. He consulted the highest priest. The latter gave him a homily on what to do first. The kingdom was then suffering poverty and unrest, rife with robbers and rebels. If His Majesty was thinking about raising tax and crushing those robbers and rebels by force and death punishment, a number of them would be still at large and go on devastating the kingdom. Yet there was an effective measure to improve the situation. To those engaged in agriculture and husbandry, supply them with seed. To those apt to do commerce, supply them with capital to invest. To those tending to public servants, supply them with wages. Should people be employed, robbery and rebellion would be reduced. As long as the national treasure is abundant, people live in prosperity, and a great sacrifice can be expected.

As we have seen, economic growth is the basis for social order and peace, hence its development including the expansion of religious practice. This aspect in the Buddha’s teaching was very often neglected, and the emphasis, if not excluded, was laid upon the ethical behavior. Ethical perfection is, of course, the lofty goal of Buddhist practice, but meditation can never be practiced by those who are starved out.[3] This is implied in a Buddha’s saying: “All sentient beings are subsisting on food.”[4] In modern view, this can be considered as an economic background of Buddhism.


Thus, there must be a Buddhist economics.[5] It is not only of the kind that teaches how man should dhammically, that is, legally and honestly, earn his living, but it also teaches how he could make use of his gains for the benefit of his own and others. Accordingly, it does not neglect the problem of production and consumption.

It is commonplace to say the modern economics is trying to tackle the problems of what, how and for whom to produce. Much is focused on the production of goods, or to name it distinctively, goods and services. These are but a general denomination of a variety of articles produced for sale or for use.

Whether it is essential of economic studies or not, it is out of controversy that what man in the first place and ultimately tends to produce is the need for life, and what gives him satisfaction. Economics may study how to optimally allocate scare resources and how markets work for the allocation, and whatever definitions there may be, if and only if human living exists.

Man, this complicated and sophisticated composition of matter and spirit as commonly assumed, is the first motive and final cause of every human activity. Practically, man needs material food for the sustenance of his physical body and spiritual food, so to say, for his spiritual development. Generally speaking, the modern economics has as its object the contemporary man, the living organism that has reached its relatively high, but, of course, not final evolution as it is at the present day. However advanced may be his level throughout his history of evolution, man likely started his life in embryo, which at the very first moment of conception is but a lump of matter. The question if human life begins with embryo is the controversial issue among religions and ethics, economics unconcerned. Normally economists include this first stage of human life in the first period in the two period model of economy. For our particular purpose, we will deal with embryo and foetus as independent consumer.

Basically man needs material food for his material life. This begins at the first moment of conception until ending up in death. Food needed in this condition of nutrition is of matter, which is composed of primary elements universally found in all other varieties of matter. Because at the first period of his life man was not capable of production, so he lived on endowment economy. Economically he was then borrower. What he had borrowed yesterday he had to pay today and what is done to day will be retributed tomorrow: that is the law of action and its retribution based upon the doctrine of karma. Man is a debtor of his own and of others in the past and present. What should be taken in consideration in this rergard is not merely quantitative but qualitative as well.

We suppose the doctrine of karma is well known to those who have acquired a basic knowledge of Buddhism, so it is not necessary to be dealt with in details here. Anyhow, it suggests that the problem of consumption and savings can be treated on the foundation of  the doctrine of karma.


Now, the question is set up: what does human being need for its subsistence and development? In the first place, as a sentient being it merely needs physical food. In its evolution, as an animal it needs one more kind of food: contact food. To the higher level of existence, as a human being it needs all four kinds of food: physical food, contact food, mental food and consciousness food. It is said in Sutta: “There are these four kinds of food for the subsistence of beings who have taken birth or for the support of those in search of a place to be born.  Which four? Physical food, gross or refined; contact as the second, mind and will the third, and consciousness the fourth.”[6]

If we examine the life of a sentient being from its first moment of conception to the last point as death, its development can be traced back from the time immemorial when the first living being came about to the world until now. Within a limited span of life, a living being is marked with its first existence as a mere germ of physical material. It is differentiated from the other class of nonliving being by the kind of material of which it is composed. Ultimately primary elements are intangible, invisible. The differentiation of matter is due to the way in which elements are distributed, arranged in the construction of organism.

In the first stage, supplied with physical nutriment, the germ of physical material expands in proportion to the amount of food consumed at a rate of growth. This process goes on while sensory organs gradually develop. Up to a definite stage mind appears and engages in actions like a speculator.[7] It accumulates data with the cooperation of sensory organs, processes them, and converts them into information. Based on this information, perception is brought to operation. The latter gathers all information thus given to construct a world that is conceived as reflecting the true reality. Nevertheless, the image of the world is not taken once forever as a photograph. It ever changes in quantity as well as in quality as sensory organs develop in stable condition and operate more effectively in response to the demand of mind and will. The image of the world is stored up as a positive ground on which mind ascertains its existence and deploys its activities.

In every stage of development, consciousness is given rise immediately as soon as there is the interaction of external object and internal sensory organ. But on the lower level, the appearance of consciousness is too dim to collect a knowledge of the world. On this level, consciousness is merely a blind will of subsistence.

As sensory organs reach their maturity, the image of the world is reflected clearer and more disctinctively, and the knowledge about it is more rational, more synthetic. On the higher degree of this progression, consciousness develops to self-consciousness, recognizing the existence of the outer world as well as the existence of its self. Consciousness as the fourth kind of food is needed for this stage of evolution.

Thus, the evolution of beings depends on what kind of food they consume. On the lowest level of existence, a living being is hardly different from the vegetative state of life, and only the physical food is needed. On a much higher level, in which a living being is endowed in addition with the least sensory organs sufficient to detect the danger from the external world, contact food is added. This evolution can be tracked in the development of an animal, including a human being, from the very first moment of conception to the instant when it is brought to daylight. From then onward, for some species of animal the process of evolution comes to a stop. Even to certain human beings whose sensory organs are fully endowed, but for some unknown reason their mind cannot reach beyond the sphere of animal.

Mental development depends on the accumulation of experiences. If the processing of accumulation fails, the functioning of sensory organs yields no good effect on mind. This means that facts as mental food have not been supplied sufficiently, or the structure has refused this kind of food. The third kind of food could be called food for thought. It is converted into kind of energy which makes the mental organization work, and consequently the social structure is motivated and the civilization of makind is engendered. Food for civilization to be kept going and developing is consciousness.

 What to produce is the first concern of economics. Goods and services are produced to satisfy human wants. Among other things having been created by God, the “dominion over the fish of the sea, and over the fowl of the air, and over every living thing that moveth upon the earth” was given to the first man. This means since the time of Genesis, the material production, that is, to produce physical food including clothing, and shelter, and the like, was marked as the main occupation of human livelihood.

Accoding to Buddhist tradition, as related in the Aggañña-sutta,[8] in the beginning human beings collected natural resources for his food and clothing, “lived on a kind of naturally ripened uncooked rice.” We can imagine that natural resources mentioned here collected by the primitive men was nonstorable,[9] “What they collect in the evening for evening meal will  growth again and ripen in the morning; what they collect in the morning for morning meal will growth again and ripen in the evening.”[10] This was due partly to his lack of technology and most essentially due to his lack of the idea of accumulation. It is only up to a later definite stage of evolution that human being began to engender in his mind this idea: “Why should I collect rice in the evening for evening meal and in the morning for morning meal? I would rather collect it once for two days.” And he did it. Soon this goaded others into outdoing him. Thus the idea of accumulation entailed speculation.[11] Eventually struggle among rivals within community was aroused and the primitive society of mankind started a new turn engaged into social conflict.

It is easy to recognize the primitive man mentioned in the above quotation from Sutta is far from the real one. But in terms of economical treaty it might serve as a simple economic agent with which a number of models, agent-based models for example, can be built for the convenience of economic analysis.

It is a matter of common sense to take the primitive accumulation as being activated by human laziness. According to the Buddhist theory of nutriment it was due to the growth of the demand for food compatible with the development of human organs. In the first stage of human living, fragmentedly physical food was needed, collaboratively consumed by organs of olfaction, gustation and tactition. In grown-ups, sight and hearing need enhancing for their abiltity to perceive the external world, so more kinds of food must be supplied in addition. As mind developed sufficiently to make decisions of what and how resources should be collected for its agent’s benefit, man now was faced with the limitation of time. He had to allocate his time optimally between labor and leisure. He had to learn how to make choices.[12] In this regard we involve both consumption and idleness in the leisure time. Consumption is meant to signify enjoyment of goods and services produced by man’s labor to satisfy his wants, while idleness implies enjoyment of those given by nature. To higher levels of evolution, leisure time is thoroughly dedicated to enjoyment of four kinds of food. Bread, and anything of the kind, is consumed for sustaining biological body and the stable state of inner organism. Seeing and hearing, sightseeing and listening to music for instance, serve as contact food for the accumulation of experiences hence enhancing the ability of judgment and making choices between the better and the worse. The thinking and willing are fed with mental food, the third kind, by virtue of which human action is taken off aiming at the ultimate end of his destination. Moreover, his future depends on what he is doing in the present. Economically speaking he must learn how to allocate resources across time: how much time for work and consumption he should optimally decide on today so that he would live a life of contentment tomorrow. This lifetime budget constraint is drawn on the substratum of life, that is, the continuum of consciousness, without which no future time is conceived. The latter is irrigated with food termed as consciousness which is marked with the notion of self.

When the sensory organs reach their maturity for sensation and perception, the balance of  food consumption, so far having been tilted to the physical one, now begins to lean toward the others, the first being contact. The enjoyment of seeing and hearing in leisure time passively impressed by nature is no longer sufficient to satisfy the wants of accumulation of experiences as energy resources for motivating mental structure to work. Materials serving as contact food must be produced as items of goods. All the same, physical food needed for sustaining biological body cannot be reduced. He has, therefore, either to double working time or improve his skill in production. The primitive man mentioned in the above-cited Sutta doubled his product, but there is no hint of how he had managed to do so. It makes sense to suppose that along with the full-fledged development of sensory organs he had made a considerable progress in acquiring technological knowledge which enabled him to increase the quantity of his product.


Though mystified with the form of legend related in sort of vernacular by the Sutta, some economic models can in fact be constructed based on the primitive agent. He had as his counterpart in another system of economy Robinson Crusoe[13] who started his living on a deserted island where in his early days of making a living he was endowed merely with his own labor using his hands and what given by nature circumscribed by his environment. Goods produced by the mix of labor and nature-given elements are naturally nonstorable. Without having aid of any other tools than his own hands, he had to spend most of his time for productivity. At the same  time, he also needed a shelter to protect him from danger and damage likely engendered by environment. Within limited total hours of day, even if rationally and proportionally divided between working and leisure – of course he needed a rest or recreation after having toiled –, he was forced to reduce the hours spent on food collection as to spend on building a hut. Unconsciously he constructed in mind the production possibilities frontier which allocates his scarce resourses optimally.

The metaphor of Robinson Crusoe enables us to reason out the increase in productivity by the primitive man – doubling the quantity of rice collected sufficient for two days consumption instead of just one day. Given the production function, other things are held constant – land, and labor in the present context remains unchanged–, a change in technology will alter the output.

In this connection, based on Buddhist theory of four kinds of food, the demand for consumption goods as physical food – supposed in the long-run economy –  when reaching the last unit of its marginal utility will be held constant over a period of time and then fall down along with the decay of human life which is subject to the law of the material world. The other three, in the first place fundamentally considered as mere complements to physical food, will be diminished as the body, which they have as support, decays. But in the ultimate sense, contact is meant to signify the threefold combination of consciousness as subject, its corresponding object and sensory organs as its support. Accordingly, whenever consciousness exists contact is currently working. In the material world, sensory organs are full-fledged only at a definite stage after sentient being was given birth. On account of this, their development is subject to the physical law, and their activity will fade as their support is falling into decay. If the support is unsteady, the structure of mind will be unstable and the activity of consciousness is weakening. Nevertheless, the state of sense contact could be sublimated by the appropriate practice of which meditation is the most effective. Just as sanitary food is beneficial for the health of body, aesthetic works as contact food – food for sight such as paintings and food for hearing such as music and the like –  are helpful to the soundness of mind. Relying on the soundness of mind, mental structure operates in an equilibrium state to absorb more sublimate food supplied through sensory organs and converts it into information. Greed, hatred, delusion are noxious food for mind and information converted from data detained with these defilements will form false judgments and give a distorted image of the world.

Modern economics by definition yet controversial is dealing with the production of goods and services to satisfy human wants in terms of material resources. Human wants, however, are unlimited, and natural rescources are exhaustible; he is, therefore, permanently facing the problems of scarcity.[14]

According to Buddhist psychological view, living being is a substrum (upādāna) on which mind and body are supported, with which and by means of which fuel for life and action is supplied. Terminologically, this fuel is named as taṇhā – craving or thirst or hunger for existence. Directed by the conception of a self and subject to a world that is perpetually inclined to decay, a living being is depressed by the thirst for fuel to light up its existence and the expectation of the moment of life to come.[15] Being conscious of living is having a mind in becoming, expecting to get a more satisfactory state of affairs against the current situation which is ever marked with uneasiness.[16] Nevertheless, under the spell of the law of impermanence, spurred by the thirst for life, man incessantly runs like a thirty horse in moor after a mirage he thinks a stream of water. The more it is seen just a distance, the farther it appears to move away. Never would the thirst be satisfied. This urges man to act more, to move forward to look for further satisfaction. But limited by environment and the biological nature of his body in addition to the scarcity of resources, man never reaches the end of his satisfaction.

In the story of the primitive man as mentioned above, it is said that as people vied with each other for gathering rice to store up for the future consumption, the so-called naturally ripened uncooked rice disappeared and a new kind of rice that required man’s labor to produce replaced it. In the present context, it is understandable that his double collection of rice was not simply due to his want of having more time for tomorrow’s leisure, rather in fact it is meant to signify a primitive act of saving  against an uncertain future, for nobody knew for sure what would happen to him or to his environment. Because he could not reduce the quantity of goods currently consumed such as food and housing and the like, he had to increase product. In comparison with the situation of Robinson Crusoe as much preferred by economists, in which all that he could get in hands were elements given by nature, but no tools were available other than his own labor to produce things he needed to satistfy his even few wants, he was forced to make a choice of either consuming to his fill all he had gotten today or reducing a portion as saving for tomorrow; in the case of the primitive man, saving was not made by reducing today consumption for tomorrow use, but increasing the quantity of output by improving his productivity. In the present context, it is acceptable that in Buddhist view as stated in the above-cited Sutta that originally, before any model of economy could be imagined, when facing the limitation of environment, and the scarcity of external means to satisfy his wants, man saw the increase in product as his best choice. The creation of mankind is not once forever; but is an evolution instead, ranging from microbiology to as human being.

Another detail in the Sutta is worth notice. The concurrence of speculation caused the disappearance of the primordial food, originating the scarcity which required men much more labor to tackle.  This is the crucial point which is easily overlooked in the Buddhist view on the approach to the problem of scarcity. As we have seen, although there is no explicit explanation on the part of the Sutta as cited above, its implication is clear enough for us to recognize the fact that as mankind has made progress to a higher level in his evolution here possibly embodied in a lifetime wants have increased while material resources have remained as they have been, and man has had to develop his technological knowledge to increase production to meet quantity demanded.

The corollary proposition that follows is that material consumption has its marginal utility, but human wants compatible with far higher evolution have no limit, therefore human must manage to reduce working time for increasing material goods so that more time for feeding mental structure and consciousness stratum may be spared. As a logical consequence, it is not the mere richness of material quantity which may be valued to some extent as economic growth, but the quality of spiritual consumption supplied with food for mental structure and consciousness stratum that demonstrates the social progress and the rise in standard of living. This does not mean, however, material production should be neglected; in contrast, it must give support to spiritual consumption. Accordingly, material growth must be in proportion with spiritual development.

As a matter of fact, in dealing with the problem of scarcity, it is not correct to state as some economists do that Buddhist approach is “to alter the nature and level of wants… St. Francis of Assisi and Buddhist monks shared a desire for a more meaningful life by reducing wants or desires for material possessions. In the secular, industrialized world, this approach is not often mentioned.”[17]

Nevertheless, the criticism is not ungrounded. Eveidence for its justification can be found in the historical fact that for many centuries most of countries in Asia under influence of Buddhism failed to eradicate poverty and fell behind in comparision with the West. Buddhism, judged on the background of its assumedly pessimistic view of life, was likely to blame for the Asian backwardness.[18] That “they can model their economic development plans in accordance with modern economics”[19] is not apt to justify their failure, rather than to emphasize that “the destiny of modern civilization as developed by the white peoples in the last two hundred years is inseparably linked with the fate of economic science.”[20] Needless to say, that “economic science” is modelled on the frame of western mentality.

Notwithstanding the material achievement as currently seen in the West since the time of colonialism up to today antiterrorist war, the western civilization somehow proved its superiority over the eastern economic behavior. Its technological progress has improved the standard of living. However, this does not mean people are happier. Instead, the amazing achievement of science and technology is pushing human kind to the brink of mass destruction.[21]


To live means exist and become. Existence, firstly biological one on which mental structure operates, is sustained with external materials given by nature. It is due to the will for existence that urges living beings to act as to make a living. It is a chain of ever changing events, prone to change and become something other than its current state, for better or for worse. Being perpetually threatened by the danger inherent in surroundings, conscious of its power to act circumscribed by its own body, facing a scarcity of external factors on which its satisfaction depends, a living organism evolves into a structure suitable for accumulation of past events as food for will and thought to form the expectation of a better future, and to judge and make choice of what is good and helpful.

Dealing with an unknown and uncertain future, man proceeds to speculation, accumulating as much as possible whatsoever within his reach. Things to be stored for future use require a minimum quantity and preferable quality. Man is not content merely with gifts gratuitously dispensed by nature; he is apt to re-make them so that they could be suitable for his today consumption and accumulation for tomorrow. Thus, to live, in a sense, is to act. Action implies production.

Among other definitions of economics, I would like to refer to one that would seem fit for contemporary capitalism as it states “economics as a science that studies the production of wealth under a system of division of labor…”[22] In this definition the importance is attached to the production of wealth, for wealth in the present context is the accumulation of all material goods produced by man’s labor capable of satisfying to some extent human needs. Moreover, it is wealth that enhances one’s position and authority in social relations.

In a Sutta, [23] it is stated that in ancient time, or in the era when people reach the legendary highest development, there were only three varieties of need: desire, hunger and old age. As time elapsed, when human society was getting into fierce conflict, more varieties of need appeared. This statement gives a general view on the evolution of mankind, from the simple form of life to the complicated one. The notion of wealth is conceived as human beings are conscious of their existence as a self that acts as a master over its surroundings. According to the Esukārī-sutta,[24] in the time of Buddha there existed a classification of wealth under four categories with which social hierachy was determined. Accordingly, a man’s wealth was all he had in his possession; it is means by which he earned a living. This conception of wealth suggests the notions of production and consumption as are likely understood to some extent by modern economics. Nonetheless, Buddha promoted the supreme Law as the ultimate wealth that human being was recommended to seek. The Supreme Law thus mentioned consists of seven factors or constituents of wealth; they are faith, virtue, shame of sin, fear of sin, learning, generosity and wisdom,[25] of which the sixth, generosity or liberty, attained by generously giving up in practicing charity, implies the possession of material goods, for one would give up to others only what one, a wealthy man or instance, had in possession. Accordingly, these constituents of wealth should be regarded as factors of production of goods of highest quality. Nonetheless, most economic writers would be reluctant to approve such likely idealistic a definition of wealth, for in their assumption by wealth are meant “both real assets (a house, automobiles, television sets, and other durables) and financial assets (cash, savings accounts, stocks, bonds, insurance policies, pensions) that households own.”[26]

In general, things, of which the causal connection with human needs is recognized and which men have power to direct to their satisfaction, are conceived as goods.[27] Goods thus characterized implies the meaning of wealth.

Suffice it to say in this implication of wealth that in the ordinary sense all human action is aimed at satisfying his wants and needs. In hope of reaching this end he has to gather all that are thought beneficial to him. They constitutes his wealth. In other words, men make an effort and do labor to produce a variety of goods for current consumption and in expectation of a better future.

As we have seen, it is commonplace to distinguish between material goods that achieve one’s worldly satisfactions and higher goods that serve as means of attainment of ideal satisfactions. Because economics deals with only things in this world, it follows as a logical consequence that only material consumption is concerned.

Buddha, in fact, never denied the need of material goods consumed as requisites for sustaining human biological existence that serves as a basis for higher development. In the Sutta of Debtlessnes, [28] He recognizes four kinds of well-being: the enjoyment of having, the enjoyment of making use of wealth, the enjoyment of being debtless, and the enjoyment of being blameless. Here a man enjoys having righteous wealth righteously gained through his effort and labor; he enjoys rationally consuming and making merit righteous wealth righteously accumulated; he experiences joy to own no debt; and he experiences joy as thinking of the blamelessness of his actions performed with body, speech and thought.

In this passage, the conditons of well-being are by no means improved and increased merely by gaining and accumulating a quantity of wealth even though “righteously gained through one’s effort and labor.” Wealth is beneficial only if it brings men enjoyment and happiness with both material consumption and spiritual development.

In another Sutta,[29] once a man came to Buddha and asked for the teaching in compliance with which could live happily, in peace and prosperity in the very present life and in the future as well, those who  were “householders, enjoying worldly pleasures, being in bondage to wives and children…” The Blessed One then offered him in the first place four conditions that lead to the present bliss. They were industry, protection, good friends and right livelihood. Industry means he makes a living in pursuing a career, and he is good at his occupation, practicing it assiduously, tirelessly. Wealth gained with such industry should be safely guarded in such way that it would not be taken away by thieves, destroyed by fire, swept away by flood, or going bankrupt with spoiled children. Had these two conditions been fulfilled, wealth would have been accumulated and increased only in a favorable environment, with good social relationship. In addition, at last, the household has to hold a balance between income and expenditure.

Thus, in brief, economical behavior is instructed. In production, industry or assiduity is emphasized. Exertion, energetic, industrious, assiduous (viriya, uṭṭhāna, padhāna, etc.), sometimes can be understood as describing the same state of mind or consciousness, though their psychological activities are of a minor difference. However, in general, they often express the most important element in practice, namely vigilance (appamāda). Buddha said: “Vigilance is the way to Deathless. Indolence is the way to Death.”[30]

Negligence, carelessness, indolence, laziness: these are the inertia of mind or consciousness. It awakens in men a disclination to work. Economists might just as well call it leisure versus labor. As it should be in this context to quote Mises[31]: “Leisure, other things being equal, preferred to travail.” That is, by nature men have an inclination to enjoy more time used for leisure. Working to him is a must only when he chooses to increase material goods to satisfy his wants and needs.

Nonetheless, strictly speaking, leisure is not negligence or laziness as it appears to be. As it is defined by economists, leisure is a category of consumer’s goods that can be measured in terms of units of time.[32] As combined with comsumption goods it forms a bundle for consumers to make choices; for leisure by this definition means any time spent not working in the labor market. Accordingly, as a worker tries to increase his income, in the case that other things are equal, i.e. other variables in the production function are held constant, he has to increase the expenditure of labor, that means he should reduce the time spent on leisure. Thus, labor is the opportunity cost of leisure.

With the aid of technological progress, today worker can rise the productivity of labor that yields higher wage rate without curtailing time for leisure. His standard of living is increased, and his income is maximized; he has both wealth and leisure to enjoy the pleasures of life. This is a feature of the mordern civilization which is dubbed as that of material consumption worked out on the western model of economy.

It is, however, unjustified to blame the West for the unrest of the today world only on account of its material achievements; for the inclination to enjoying sensuous pleasures is inherent in every sentient being. The satisfaction of it should first be sought in the material factors that constitutes physical food as stated in the doctrine of nutriment. Hankering after sensuous pleasures keeps living beings on the track of carnal appeal, incessantly seeking for material objects to gratify the demanding body. In a Sutta,[33] Buddha likened material consumption to the child-eating of a couple. Once a couple bringing with their only son crossed a desert. Halfway through, their travel rations ran out, and they were driven to consent to kill and sparingly eat the only son. As they were eating their only son, they lamented over him. The simile reveals the marginal utility in material consumption. Things, like physical food, here composed of material elements, are supposedly needed for the removal of a human being’s hunger or thirst, his felt uneasiness. In proceeding with consumption of one kind of subjectively homogenous food, as one more unit is added, the marginal utility of good consumed is dininished; up to a point, as for the last unit, the marginal utility is negative and no more good consumed is needed. However, this does not mean the saturation of material enjoyment is reached. Man’s longing for sensuous pleasures is never satiated. As a rule, the total utility of a good consumed is treated with its quantitativeness; but to a consumer its qualitativeness – hence its subjectivity, should not be neglected. Time of consumption is as well a factor that affects the change in the total utility. One more unit of time augmented lessens the favor with enjoyment. A substitution of daily disk is desirable. The fact is that as the supply of one thing is full while desire for enjoying it remains insatiable, another is appealed for substitution.

Economists are normally concerned with the problem of overproduction – whether it is relative and causes depression, but they have paid no attention to the problem of overconsumption. The effect we call over-consumption could be compared to people, albeit being full, continuing to eat excessively to their obesity.

Buddha recognises four requisites: food, clothing, housing, medicine. They are of material elements and classified under physical nutriment. The need for them is not unlimited, but the want or desire for their enjoyment is somewhat unconstrained. Almost all human production is concentrated on the productivity of material goods. Economic growth is exclusively based on the quantity of goods and services that have been produced for the sake of the satisfaction of meterial consumption. Any incentive that encourages consumption, thus makes increase in quantity of demand,

This concentration on material production and consumption, lacking other kinds of nutriment – that we call mental or spiritual ones – needed  for an ultimate evelution of mankind, has caused the disparity between bodily and mental growth. Today with the wonderful progress of science, and somewhat miraculous accomplishment of technology, people know a lot of how matter works, yet their knowledge of how mental structure is composed and which kind of food is to be taken, is lamentably narrow. Dietetics would advise to people as to what to be eaten is beneficial to health and against what is noxious, but for mental health, little is warned against detriment. Adultery, rape, drug traffic, violence, a myriad of social disorders; all these symptoms of social obesity are in fact the outcome of the disparity of economic development.

Economic growth of the world today has risen the standard of living of mankind in general to a considerable level. Nonetheless, the overproduction and overconsumption entail the inevitable inequality in the distribution of wealth on the world scale. The cause and effect of this mal-distribution has been much studied and analysed among economists, and I suppose that I have no special contribution to the estimation. Nonetheless, it is advisable in this concern to makes some references to the Buddha’s instructions on the current issue.

Once,[34] Buddha gave householder Anāthapiṇḍika instruction on five conditions to accumulate wealth:

1. The householder, using the wealth righteously earned through his effort and labor, enyoys himself with pleasure, benefits his parantes and family, living rightly with pleasures.

2. He benefits his friends and associates from wealth that has been righteously accumulated.

3. He keeps safe the wealth that has been honestly gathered, warding off  from fire, flood, thieves, from being dissipated by depraved heirs, and confisticated by the king.

4. Using his righteous wealth, he performs five oblations: oblation to relatives, to guests, to the dead, to the king (taxation), and to gods.

 5. Using his righteous wealth, he accumulates merits for the future life by giving to priests, to charity.

In another Sutta,[35] Buddha instructed a young householder to rationally optimize his income by dividing it into four portions: One portion used for his wants; two portions spent on business,[36] and the fourth kept away for times of need.[37] In more details as stated in the corresponding Sutta translated in Chinese Āgamas,[38] two additional portions are added: one for buiding shrines and the sixth for construction of monasteries.

It is interesting to take notice in the Chinese translation of Āgama in which the role of god worshipping shrines and monasteries in Ancient India is to be matched with today’s economical and social institutions. They do not imply the meaning of religion as we understand nowadays. Monasteries at the time of Buddha were converted almost pleasure-grounds or parks orginally owned by kings or queens, or nobles, or the wealthy; later they were dedicated to religious or sectarian groupes for their preaching and practising. Religious or doctrinal debates sometimes took place among current sects involving Buddhism. At those places, not only were religious dogmas taught but many other branches of knowledges also. Oftentimes, subjects chatted about among defferent communions were denounced in Buddhist canon as futile, useless, or a mere waste of time.[39] Generally speaking, their roles were kind of cutural and educational establishments where new thoughts and even technological knowledge were from there spread and transmitted. The dedication to religious purposes of a portion of the disposal income of a household as instructed by Buddha is to be taken as a contribution to the cultural and educational activities, kind of an investment in human capital.


So far we have dealt with some aspects that can be considered as the Buddhist foundation of economics. There are many left to be discussed. Generally speaking, writings concerning the problem were mostly focused on the moral issues and blamed for the situation of the world today.

Many writers on Buddhist economics criticise Adam Smith for his theorem of the “invisible hand” according to which if individual behaves on the basis his own interest then social benefits will be promoted. To some extent, this is not a normative theory, but a positive one.  

The fact that can not be denied is that this sefl-interest, or more exactly selfishness, has been the motive for the economic growth that has been longed for by almost countries outside Europe and her scions. As Smith may have affirmed, had individual’s self-interest not been motivated, no economic development would be made. It is accepted in the theory of general equilibrium that competitive markets are adjusted among themselves under the effect of the interaction between buyers and sellers, households and firms. The interaction is brought about  as partners in competitve markets are trying to do the best, to gain the most profit they can.

In order to have a closer look at the picture, let’s put the situation into Keynes’s words: “It does not count the cost of the struggle, but looks only to the benefits of the final result which are assumed to be permanent. The object of life being to crop the leaves off the branches up to the greatest possible height, the likeliest way of achieving this end is to leave the giraffes with the longest necks to starve out those whose necks are shorter.”[40] As a logical consequence, it is needless to say about the outcome of this pattern of competitive economy that it on one hand motivates craving for profit as incentive for material achievement by means of which people’s standard of living has been considerably improved – despite the unjust distribution of wealth, and on the other hand it entices humans to manufacture unimaginably lethal weapons and innumerable apparatuses of exploitation and oppression.

Thus, the root causes of economic growth, for better or worse as seen today, are entangled with greed, hate and delusion. The elimination of these three poisions is the ultimate goal of Buddhist life. Nonetheless, selfishness associated with evil root-causes as revealed in the profit maximization, if Buddhist psychological attitude is to be taken, is the driving force of every human action. Based on the doctrine of nutriment, as the biological body keeps subsisting even after the saint has attained the state of destroying the evil root-causes, four kinds of food remain required until the saint enters Nirvana as the body composed of five aggregates comes to a total disintegration. In this perspective, a certain economic system still exists as to supply him the requisites. But Buddha never taught anything that goes far beyond the reach of human capacity. To those who choose to follow the path that leads to the ultimate liberation, to the attainment of Nirvana, He instructs the pratice of the absolute renunciation of worldly pleasures. To those who are bound up with sense pleasures, He gives the teaching of mundane life so that they might live in peace and happiness in the very present life, as well as in the future. The teaching for the latter is simple: generosity and virtue. Generosity here consists of offering to monks and giving to the poor. To be able to practice generosity, he must possess a certain amount of wealth.

Thus, economic behavior of a lay Buddhist is a purposeful action aimed at gathering tangible wealth for material comsumption and accumulating merits for the future life. Merit by canonical definition is profitable deeds that are good for the actor himself and for others in the present as well as in the future. In relation to this purposeful action, the ground for increase in wealth of a lay Buddhit is said to be comprised of ten items: land, capital, children, servants, cattle, faith, virtue, learning, giving and wisdom.[41] Accordingly, conditions for economic growth must be a balance of material consumption and spiritual development.

Nonenetheless, Buddhist economics, if any, is feasable only on the condition that an individual’s goal in this life must be established and his deeds are directed with virtue; no matter if the theory of selfishness or profit motive is in question. In this respect, the Buddha’s teaching related to the right livelihood[42] is expected to contribute a good deal of leading principles for economic studies. 

[1] CūḷaMāluṇkya-sutta, M. i. 426ff.
[2] Kuṭadanta-sutta, D. i, p. 133.
[3] Loon, Louis van, "Why the Buddha did not Preach to a Hungry Man: Buddhist Reflections on Affluence and Poverty," Bodhi Leaves No. 121, Buddhist Publication Society, Kandy, 1990.
[4] Saṅgīti-sutta, D. iii, p. 211: sabbe sattā āhāraṭṭhitikā.
[5] Cf. E.F. Schumaker: Small is Beautiful, HarperPerennial, 1989, p. 56; and Samuel Cameron: The economics of sin: Rational Choice Or No Choice at All? (Edward Elgar, p. 60): “The first overt attempt by Schumacher, in 1968, to claim that there was such a thing as “Buddhist economics” began with a startling claim: ‘Right Livelihood is one of the requirements of the Buddhist’s Noble Eightfold Path. It is clear therefore, that there must be such a thing as Buddhist Economics’ [Daly (1973, p. 241)]. Indeed there must be if one were to go along with the position of Elster quoted earlier in this chapter. Many would not go that way and might stake the claim that simply stating the propositions of Buddhism as they apply to the economic sphere of life does not a body of economic thought make.”
[6] Sannādiṭṭhi-suttaṃ, M. I, p. 47: Cattārome,  āvuso,  āhārā  bhūtānaṃ  vā sattānaṃ  ṭhitiyā,  sambhavesīnaṃ  vā  anuggahāya.  Katame  cattāro? Kabaḷīkāro āhāro oḷāriko vā sukhumo vā, phasso dutiyo,   manosañcetanā  tatiyā,  viññāṇaṃ  catutthaṃ.
[7] It is inspired by L. von Mises (Human Action, the Scholar’s Editon, p. 58): “action necessarily always aims at future and therefore uncertain conditions and thus is always speculation.” 
[8] D. iii, p. 88.
[9] Cf. David Aldolfatto: Macroeconomic Theory and Policy (Preliminary draft), p. 211
[10] ibid.
[11] Murray N. Rothbart (Man, Economy and State, the Scholar’s edition, p. 7): “All his actions are of necessity speculations based on his judgment of the course of future events.”
[12] To quote L. von Mises (Human Action, the Scholar’s edition, p. 3): “The general theory of choice and preferences goes far beyond the horizon which encompssed  the scope of econimic pronlems as circumscribed  by the econimists from Cantillon, Hume and Adam Smith down to John Stuart Mill.”
[13] Cf. Murray N. Rothbarth: Man, Economy and State, Scholar’s Editon, p. 47 ff.
[14] L.W. Mises (Human Action, 263): “The economists were and are still today confronted with the superstitious belief that the scarcity of factors of production could be brushed away, either entirely or at least to some extent, by increasing the amount of money in circulation and by credit expansion.”
[15] Canonical definition of taṇhā (craving, thirst for existence): “That which is leading to future existence, associated with desire and pleasure, delighted with expectation of becoming so and so, is taṇhā).” (Cf. S. iii. p. 26)
[16] The idea can be traced back to L. W. Mises (Human Action, p. 878): “Within the universe the existence of which our reason cannot explain, analyze, or conceive, there is a narrow field left within which man is capable of removing uneasiness to some extent.” 
[17] For example, R. Larry Reynolds: Alternative Microeconomics, Electronic Text; p. 14. For further quotation, L. W. Mises (Human Action, p. 880): “It is neither more nor less rational to aim at riches like Croesus than to aim at poverty like a Buddhist monk.”
[18] Anyhow, Shinichi Inoue was able to prove the economic success under the reign of Emperor of Ancient India, and Prince Shotoku of Japan. Shinichi Inoue: Putting Buddhism to Work. A Book Review, Buddhanet Magazine Articles. http://www.buddhanet.net/mag_text.htm.
[19] E. F. Schumacher: “Buddhist economics”, Small is Beautiful, HarperPerennial (1989), p.56.
[20] L. W. Mises, ibid. p. 10.
[21] It suffices in this consideration to quote Wickramasanghe: “Although advancement of technology and ensuing so called socio-economic progress has raised the level of material comforts to some, majority of the people, particularly living in the third world, have been overlooked. To some people life has become more difficult. Risk to life is getting more and more increasing day by day. Environment has been destroyed to the extent of making healthy living practically impossible. Wars and civil commotions are increasing than ever before.” http://www. appropriateeconomics.org/ materials/people_friendly_ economic_development.html.
[22] George Reisman: Capitalism (online), p. 16.
[23] Cakkavattī-suttam, D.iii. 75: asītavassasahassāyukesu, bhikkhave,  manussesu tāyo ābādhā bhavissanti, icchā, anasanaṃ, jarā.
[24] M. ii. p. 180.
[25] Saṅkhitadhana-sutta, A.iv. p. 4: saddhādhanaṃ, sīladhanaṃ, hirīdhanaṃ, ottappadhanaṃ, suta-dhanaṃ, cāgadhanaṃ, paññādhanaṃ.
[26] Campbell R. McConnell & Stanley L. Brue: Economics: Principles, Problems, and Policies; 15th edition, p. 164. But George Reisman (Capitalism, p. 39f ) excluded financial asstes and related the meaning of wealth with goods.
[27] Purposefully I adopt Carl Menger’s the general theory of good, in which he states “all four of the following prerequisites must be simultaneously present: 1. A human need. 2. Such properties as render the thing capable of being brought into a causal connection with the satisfaction of this need. 3. Human knowledge of this causal connection. 4. Command of the thing sufficient to direct it to the satisfaction of the need.” (Principles of Economics, p. 51 f).
[28] Ānaṇya-sutta, A. ii. p. 69.
[29] Dīghajāṇusuttaṃ, A. iv. 281-5.
[30] Dhammapada, verse 21.
[31] L. W. Mises (Human Action, Scholar’s edition, p. 131-2).
[32] Cf. Murray N. Rothbard (Man. Economy, and State with Power and Market, the Scholar’s edition, p. 44): “For almost all actors, consumer’s good, to be weighed in the balance against the prospect of acquring other consumer’s goods, including possible satisfaction from the effort itself.”
[33] Puttamaṃsūpama-sutta, S. 12. 63 (ii. p. 98).
[34] Ādiyasutta, A. iii. p. 45.
[35] Sīgalovāda-sutta, D.iii. p. 188.
[36] In Chinses translation of Āgama (Taisho 1, No 1, p. 72b.), these include the investments in agricculture and business.
[37] ibid.: ekena bhoge bhuñjeyya, dvīhi kammaṃ payojaye; catutthañca nidhāpeyya. By commentary: dvīhi  kammaṃ payojayeti: dvīhi koṭṭhāsehi kasivāṇijjādikammaṃ payojeyya. DA. iii. 951.
[38] Taisho 1, No 1, p. 72b.
[39] These were considered as tiracchāna-vijjā, pseudo-science, ususally understood as science of magic. Cf. D. i. p. 9 ff)
[40] John Maynard Keynes: The End of the Laissez-faire, 1926.
[41] Vaḍḍhi-sutta, A. v. p. 137.
[42] E. F. Schumacher (Small is Beautiful,  HarperPerennial, p.): “Right Livelihood id one of the requirment of the Buddha’s Noble Eightfold Path. It is clear, therefore, that there must be such a thing as Buddhist economics.” Statement is much quoted as Buddhist economics is dealt with.


 Source: Phat Viet, http://www.phatviet.com  

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last updated: 20-07-2006