Schumacher for Dec 12 to 13 2006[1]

7/29/2019 Schumacher for Dec 12 to 13 2006[1]

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Buddhist Economics that isBeyond that of Schumachers

and Sufficiency Economy

By

Professor Apichai PuntasenDean

Faculty of Management Science,Ubon Rajathanee University, Thailand

December 12 13, 2006


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Main Issues to be Presented.

1. Buddhism as a Mind Based Science

2. Definition of Buddhist Economics and Itscomparison with Mainstream Economics

3. Production in Buddhist Economics4. Consumption in Buddhist Economics

5. Distribution in Buddhist Economics

6. Definition Sufficiency Economy

7. Sufficiency Economy and BuddhistEconomics

8. Epilogue


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Buddhist as a Mind Based Science

The teaching of Buddha known as BuddhaDhamma is neither a religion nor a philosophy inwestern context. It does not subscribe to anyspecific faith or belies. In fact, it explains why aperson should not believe because of the

following reasons; from what have been taught,have been practiced, have been told, because it isin the text book, because it is logical, because itcan be hypothesized and proven throughinduction, 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 aphilosophy because its actual status is a testedtheory.


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Differently from Newtonian Physics thatimplies the study of matter and energy.Buddha Dhamma is mind based science

that goes beyond western physics.

The mind based science explains that thetruth can vary according to different

levels of mind development.



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The concept of mind cannot be understood

unless the concept of emergence into a

completely new thing from existing things isclearly understood. Most forms of training related

to animals and a human beings are part of thetraining of mind. However, the best form of thetraining of the mind is the training to purify themind. This fact implies that things are different

according to the degree of mind purification. Forexample, happiness can vary according to eachperception or the level of purification of the mindof each person.



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It remains to be scientific becausepersons with the same level of mindpurification can have common agreement

on the truth that they have perceived.Also, each one has unlimited potential tobe developed, and there is an explicit wayto do so for almost everyone.



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Definition of Buddhist Economics

The words was first introduced in Chapter4 of E.F. Schumachers book Small isBeautiful in 1973. After then the concept

has been elaborated by many well knownscholars all over the world.


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The most noted one in Thailand was by Venerable P.A.Payutto first edition in 1982 and the more completedversion came out in 1984. His book called BuddhistEconomics: A Middle Way for Market Place.This bookactually reinterpreted most economics terms the way itshould 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 asmoderation, non-consumption, over-consumption,cooperation etc. are also discussed.



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The authors book on Buddhist

Economics: Evolution, Theories, and TheirApplication to Various Economic

Subjects, first published in 2001 hasfurther enlarged the concept explained bythe two prominent pioneers, Schumacherand Venerable P.A. Payutto. The third

edition was published in 2004. The forthedition is forth coming.



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Buddhist Economics is the infusion of twowords, Buddhist and economics.Economics is a subject developed in theWest. It is generally defined as the subjectexplaining economics activities(production, distribution, and consumption)with the aim for individuals to achievemaximum utility under the condition of

resource constraint and for the society toreach maximum welfare under the samecondition.



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Following the similar line of thought,Buddhist economics is the subject

explaining economic activities with the

aim for both individuals and society toachieve peace and tranquility underresource constraint.



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The difference between Buddhist economicsand mainstream economics is due to differentparadigms on human nature. Under the

scientific materialism paradigm, mainstreameconomics observes that each human beingnormally follow his/her self-interest. Therefore,following self-interest of any individual is a

rational behavior. Also, according to ThomasHobbes, an ultra materialist philosopher of the17th century, the ultimate goal of human life is

to avoid pain and to seek maximum pleasure.



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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 morepleasure or utility is to have more

materials.



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The economic subject also adopts DarwinianTheory of the survival of the fittest to imply

that competition will lead to progress. Hence,

the core value of the mainstream economicsor more popularly known as capitalism

consists of the core value of self-interestand competition.



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This core value fits very well with the concept ofcapitalism that explains capital as the mode ofproduction. The only way to increase production inorder to increase utility and welfare is to

accumulate more capital. Capital can be accumulatedmore from profit through more production given thenecessary and sufficient conditions that all productsare 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 aresold for profit, consumption must be stimulatedthrough consumerism.



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As a result, capitalism, industrialism, andconsumerism come into one package. Themain purpose is for capital to be generated

more through increased production andconsumption. This way, individuals willachieve maximum utility under budgetconstraint and the society will achieve

maximum welfare.



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The question to be raised is whether the above claimis always true without any adverse consequences. Itshould be noted that according to the Second Law ofThermodynamics, production is similar to

destruction. Production process actually transformsresources and energy from low order entropy into ahigher one. Given such stimulating process ofproduction under capitalism, resources, environment

as well as ecological system conducive to lives, willbe turned into products and waste in relatively shortperiod time. It is the process of self-destruction forhumankind. As a result, capitalism is not a viableoption for long term sustainability.



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Under such depressing scenario ofhumankind under capitalism, BuddhistEconomics can offer a much more promising

alternative. The concept of production,consumption, and distribution in Buddhisteconomics should be explained in order toshow clearly why the concept of

sustainability with peace and tranquility ispossible under such scenario.



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Production in Buddhist Economics

Before discussing production, the mode ofproduction in Buddhist economics will be defined as

paa-ism instead of capitalism in mainstreameconomics. Paa is one supreme quality of the

mind. It means the ability to understand everythingat its own nature. Most of the time people do nothave paa because of the persons own ignoranceor the person distorts fact for his/her own liking or

not liking. Such special quality of mind known aspaamust be continuously trained to achieve itsstatus of neutrality so that it can learn andunderstand everything at the objects own nature.


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Paa cannot be trained alone, it is conditioning tothe training of silashortly known as goodconduct and samadhior concentration. The trainingof the three known as sikkhattayasimultaneously is

the sufficient condition. It begins with some basicfaith that always having a good conduct (clean mind)will result in a calm mind or the mind withconcentration or samadhi. Samadhiwill support theneutrality of the mind (clear mind) that will be able to

learn and understand everything at its own nature.This latter quality of mind is similar to that of rightintention and right views, two of the Noble EightfoldPath known aspaa.



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Given the above quality, there will beincreasing understanding why good conductis necessary for better life. The three

components of good conduct or silaare rightaction, right speech, right livelihood. Theyare the three additional components of theEightfold Path. Given the right conduct, the

mind can be more concentrated, because itwill not be disturbed by bad thinking and badconduct.



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This quality of mind is known as samadhi. Itconsists of the remaining three of theEightfold Path or magga. They are right effort,

right mindfullness, right concentration. Thesikkhattayais the training of the threefunction of mind sila, samadhi, andpaa.They form into maggaor the way to be

relieved from dukkha, or conflict, alienation,pain, misery, or suffering that all humanbeings try to avoid.



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According to Buddha Dhamma, a human being whohaspaa will not seek to maximize pleasure orutility but will seek to be relieved from pain as muchas possible. With less pain, there will be more peace

or happiness. Pain is Buddha Dhamma is like atemperature. It contains both heat and cool at thesame time with more heat their will be less cool andvice versa. Similarly, with less pain there will be

more peace or happiness in the sense of BuddhaDhamma. Happiness in this case can be equated topeace rather than joy or glad.



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With the full understanding of the above concept,production in Buddhist economics can be clearlyexplained.

Sincepaa is the mode of production in Buddhisteconomics,paa should be used to control allfactor inputs, such as technology, capital andnatural resources. The production process shouldbe done in such a way to enhance good quality of

human inputs. The process should generatehuman skills and creativity as well as to have asense of fulfillment from the product of their work.



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A worker should not feel that a person isbeing exploited but given opportunity to dosomething worthwhile for him/her self as well

as the others. Non-renewable resourcesshould be used in any production process attheir minimum amount, while renewableresources should be encouraged to replace

the use of non-renewable ones as much aspossible.



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Waste from production process should bekept at its minimum. There should beutmost attempt to improve nature and

environment at the same time. The reasonfor production to be increased rapidly tomeet more demand for consumption willnot be needed in Buddhist economy, since

consumption will be also at moderation.



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Consumption in Buddhist Economics

The main objective of consumption inBuddhist economics is not to maximizepleasure or utility but to maintain good

physical and mental health, the strongfoundation for the generation andaccumulation ofpaa, the fundamental toolto be relieved from dukkha. Maximizing

pleasure or utility will not always lead to lesspain. Most of the time it will lead to morepain.


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Consumption being controlled bypaa willonly lead to moderate consumption, becauseit is the optimal consumption needed. Forexample, in case of food consumption toomuch food intake can result in health problemboth in short and long run. Too littleconsumption will lead to nutrient deficiencythat can be harmful to physical health as well

as mental health. Similarly, too muchaccumulation of material wealth will bringmore pain as a result of cravings.



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As only moderate consumption in everything isneeded, the rest can be given or donated to theother who are still in need. On the other hand,peace and tranquility can be obtained from the

ability to understand everything at its own natureor havingpaa. Such knowledge will result inmore understanding of the world, as well as theunderstanding of nothingness or void or no

self to cling on to, the main cause for pain. Thisway excessive production is not needed.



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Distribution in Buddhist Economics

The main purpose of Buddhist economicsis to reduce pain or suffering for all livingthings as much as possible. The reason

behind this goal is once any living thing isborn or existed, it will never be free frompain. Therefore, it does not make muchsense to inflict more pain or to cause

more burden to each other. Contrarily,helping each other or loving and kindnessshould be more of a standard practice.


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Instead of insisting on just distribution, namely, toeach according to a persons ability or technically

known as each factor should be paid at its marginalproductivity, Buddhist economics insists that all

living things who are still in pain because ofinadequate materials received to support their livesshould have the priority. Those who have more

paa should produce more than what they need to

maintain their own living and give the rest to themore needy ones.



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The interaction among production,consumption, and distribution in Buddhisteconomics for sustainability can be

summarized in the diagram below.


Consumption and Production Theories of Buddhist Economics.


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Consumption and Production Theories of Buddhist Economics.

The system of production and consumption under the condition of sustainable development and the promotion of peaceful life.

Consumption process

Waste

Goods and servicesfor net consumption

1. Unsustainable

development

2. Sustainable

development

3. Sustainable

development

and the

reduction of

conflict or

contraction for

more peaceful

body and mind

paaintelligence

renewable

none-renewable

renewable

brain

muscle

capital

technology

energy

other natural

resources.

human

resources

man-made

resources

natural

resources

process

of the

three

trainings

resourcesproduction

process

product (+)

waste (-)

net

production

Net product after the deduction of waste

from consumption

1. Unsustainable development is the condition when net goods and services produced are not sufficient for the maintenance of the

production process to continue at the same rate.

2. Sustainable development is the condition when net goods and services produced are just sufficient for the maintenance of the

production process to continue at the same rate.

3. Sustainable development and the reduction of conflict or contradiction for more peaceful body and mind is the condition when net

goods and services produced are more than enough to maintain the existing system of production. The rest can be used to reduce

pain and suffering of those who are needed. With the help of technology production efficiency can be improved.

peaceful life nirvana


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In conclusion while the core value ofcapitalism is self-interest and competition,the core value ofpaa-ism is no-self and

compassion leading to cooperation. Whichone will result in a better world? Given thetwo difference ways of thinking discussedabove, it is up to each of us to choose one

among the two Capitalism or Paa-ism.



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Official Meaning of Sufficiency Economy

Sufficiency Economy is a philosophy thatstresses themiddle pathas an overriding principlefor appropriate conduct by the populace at alllevels. This applies to conduct starting from the

level of the families, communities, as well as thelevel of national development and administration soas to accommodate change in line withglobalization.


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Sufficiency means moderation, reasonableness,and the need ofself-immunityfor sufficientprotection from impact arising from internal andexternal shocks. To achieve this, an application ofknowledgewithdue considerationandprudenceisessential. In particular, great careis needed in theutilization of theories and methodologies forplanning and implementation in every step.


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At the same time, it is essential to strengthen theethical integrityof the nation, so everyone,particularly public officials, academics, businessmenat all levels, adheres first and foremost to the

principles ofhonestyandintegrity. In addition, a wayof life based onpatience, perseverance, diligence,wisdomandprudenceis indispensable to createbalanceand be able to cope appropriately with criticalchallenge arising from extensive and rapid

socioeconomic, environmentalandculturalchangesin the world.


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Way of Thinking

Peaceful Society


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+

MethodSelf

Immunity

Way of thoughtWay of life

Sati paa and ethical integrity

Peaceful Society

ModerationReasonableness

Knowledge and Ethical IntegrityPeaceful Society

Peaceful Society


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+

MethodSelf

Immunity

Way of thought

Moderation

Way of life

Reasonableness


Knowledge and Ethical Integrity

Peaceful Society

Peaceful Society

Peaceful Society


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+

MethodSelf

Immunity

Way of thought

Moderation

Way of life

Reasonableness


Knowledge and Ethical Integrity

Peaceful Society

Peaceful Society

Peaceful Society


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+

MethodSelf

Immunity



Peaceful Society

ModerationReasonableness

Peaceful Society

MethodSelf

Immunity



MethodSelf

Immunity


Reasonableness

Moderation

MethodSelf

Immunity

Way of thought

Moderation

MethodSelf

Immunity

Knowledge and Ethical IntegrityModeration

Reasonableness


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Sufficiency Economy and Buddhist Economics

Not like capitalism, Sufficiency Economy doesnot sanctify greed as economic virtue.

Since it has its origin in Thailand, it draws heavilyfrom many concepts in Buddhism such as

wisdom or more correctly,paa, dueconsideration and great care or sati. In otherword,paa must be controlled by satiin order tomaintain ethical integrity. The concept of middle

path, moderation and self-reliance are the onesavailable in Buddha Dhamma. It can be alsofound in Buddhist economics.


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Like Buddhist economics, Sufficiency Economyalso has a status of a grounded theory. Both havetheir theoretical basis built from actual practices.Such theoretical basis is now known as a

grounded theory. Both stress on human security and not human

wealth, the strong foundation for mental peaceand happiness. Human wealth does not warrant

peace and happiness. Most of the time it leads tomore pain.



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Sufficiency Economy can be validly calledethical economics. It has its root in allmajor religion since it is anti greed.

However, it does not require back up fromany religion.

If Buddha Dhamma is qualified not to be aregion, then both Sufficiency Economy

and Buddhist economics also share thesame feature.



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Both Sufficiency Economy and BuddhistEconomics do not confront or rejectcapitalism and globalization out right but

looking for a device to survive andflourish under the two, and in the processlessening their undesirable influences. Itis a peaceful means of struggle against

the evil giant.



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Although, Sufficiency Economy has ahigher ethical ground than that ofcapitalism, the depth in its theoretical

analysis is less than Buddhist economics.It has the advantage over Buddhisteconomics in that it can be more appeal toa broader base of population who do not

seek in-depth understanding of BuddhaDhamma.



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Epilogue

Because of the said nature of SufficiencyEconomy, it has a better chance especiallyin Thailand where problems created by

capitalism is so severe. The odd to reducethe undesirable influences of capitalism ofSufficiency Economy is better than that ofBuddhist economics especially as King

Bhumibol of Thailand who has advancedthe concept of Sufficiency Economy, hasbeen highly revere by the Thai people.


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On the other hand, because of the seminalwork of Schumacher, Buddhist economicsis better known globally. Because of its

scientific nature based on mind as well asphysics. It has much better chance to beincreasingly understood in the West asBuddha Dhamma also gains better

understanding there even more thanbefore.

Epilogue


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The existing world population have notmuch choice to choose from, if they wantto survive human catastrophe brought

about by capitalism and globalization. Anyreasonable alternatives with strongscientific back up will definitely gain muchstronger ground in the future. Among the

ones existed, Buddhist economics canprovide such an option.

Epilogue


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Thank you for your attention

Schumacher for Dec 12 to 13 2006[1]

Documents

Transcript of Schumacher for Dec 12 to 13 2006[1]