Managers of all sorts of social enterprise (nonprofit, public, commercial, coop, whatever) often find themselves stuck between the laws of economics and the goals of social good. Economic theory explores the mechanics of value creation and value transfer among individuals and throughout social systems. As such, it certainly should inform our strategies and tactics in advancing our organization’s work. But economics often sets aside the ”values” that bring us to our jobs each day — truth, beauty, fulfillment of personal potential, social justice, human expression, and human dignity.
As a result, managing a social venture can feel like swimming in a riptide, because we’re trying to advance a non-commercial cause in a highly commercial world.
Enter Buddhist Economics, an effort to combine the ”physics” of economic theory with the larger ”meta-physics” that shape human existence. The combination is not intended as an academic party game, or an amusing oxymoron (like ”military intelligence,” or ”jumbo shrimp”), but rather as a more holistic response to the needs of social systems:
If economists were to stop evading the issue of moral values, they would be in a better position to influence the world in a fundamental way and to provide solutions to the problems of humanity and the world at large. Ideally, economics should play a part in providing mankind with opportunities for real individual and social growth rather than simply being a tool for catering to selfish needs and feeding contention in society, and, on a broader scale, creating imbalance and insecurity within the whole global structure with its innumerable ecosystems.
The idea of merging economic theory and Buddhist principals traces back to a series of essays by E. F. Schumacher in 1973 entitled Small is Beautiful, an early effort by a serious economist to inject ”sustainability” goals into an otherwise value-neutral social science. It seeks to suggest that moral behavior, ethics, and consideration of the larger good, should not be tacked on or sidelined in economic analysis, but integrated.
I’m not a Buddhist, nor have I studied Buddhism extensively, so others will have to tell me if these documents are fair and true to the larger belief system. And I’m as wary as anyone when I hear the phrase “moral values” — a phrase co-opted by many these days.
But as the director of an MBA program that straddles the worlds of economics and social benefit, I definitely appreciate the effort to align the two. Says Ven. P. A. Payutto:
…in the end, a truly beneficial life is only possible when the individual, society and the environment serve each other. If there is conflict between any of these spheres, the result will be problems for all.
Thanks, Colin, for uttering the phrase that led me here.
YF Juan says
As a person trained in economics, a lapsed buddhist, and active in the non-profit world, I would like to take issue with your proposition.
1. The amoral tone of economic analysis is precisely where it derives its perceived power in the realm of social science. Political correctness and agenda, of whichever leaning, would fundamentally undercut the kind of credibility that economic analysis has achieved in the 20th century.
2. To assume that Buddhism/Buddhist have some kind of moral authority on compassion and other benevolent qualities is provincial. Like all major religions around the world, there are/were plenty of examples of how Buddhism is used for good and evil, whatever the definitions of good and evil are/were.
3. The power of quantitative analysis that is employed in economics is to provide an objective and reproducible method to answer hard questions as imposed by reality.
Take for example, there is a budget of X for music/art enrichment classes for elementary schools (in California, where I live, the music/art education is pathetic). There are two options on how to spend X, one is to provide instruction for all the students in both 2nd and 3rd grades, the other is to provide instruction for all student in only 2nd grade but provide specialized classes for students who are motivated/identified for additional training.
Economic (quantitative) analysis can give answers on the impact on the two options. But, it could not and should be be used to assess which one is the “better” option.
Frankly, that decision should not be left to economists nor Buddhists.
Warm regards, YFJ
Andrew Taylor says
Great points. Thanks for the comment.
However, I wasn’t really suggesting we abandon dispassionate economic analysis. It is profoundly valuable and important for understanding the nature of choices, and aligning those choices with your stated goals.
However, those choices must ALSO be informed by some moral or human perspective. Perhaps that’s where economics leaves off and personal convictions kick in. I just found it interesting to find an effort that sought to integrate the two.
Lauren Muney says
Thanks for this post. Very interesting…. I have bookmarked the original Buudhist Economics page to read soon – looks good.
As an ‘interested party’ in Buddhism, I understand the nature of what Buddhism offers and also in the larger view of what Buddhism is. Buddhism (actually, “awakening”) was meant as a guideline, not a hardline: understand ‘waking up’, and move towards it. That being said, “awakening” is about CONTEXT: you in the world, you WITH the world, the world WITH itself.
That being said, “moral values” come into the context if we actually do consider context at all. Buddhism puts forth the idea that life includes suffering on many levels: could be small (I lost my keys) or large (I am dying). The idea is to reduce undue suffering, or be able to deal with suffering we don’t have control over.
An example of immoral business: when manufacturers and marketers knowing promote a ‘food product’ which is harmful, such as white bread stripped of nutrients but with added high fructose corn syrup. This product has no value ‘in context’ (ie: does not help the person eating it) but only benefits the manufacturer and shareholders. It is simply a revenue-gaining commodity, one that can actually harm the user – he/she is being pushed faster towards diabetes or other metabolic issues from the vast sugars. This then is a non-sustainable business, and therefore does not fall under any of the quality-context that your article discusses.
Your previous commentor said “there are/were plenty of examples of how Buddhism is used for good and evil, whatever the definitions of good and evil are/were.”. This comment, however well-meaning, removes the fact that ‘humans’ made the decisions about good and evil actions. There are Buddhists killing people in Indonesia: that does go against the Buddhist concept of not taking life. However, there is no law that kicks someone from being a Buddhist, and since Buddhism is simply a philosophy/psychology, there are really not enforceable ‘rules’. If someone is killing ‘as a Buddhist’, it’s his own choice, but it’s not part of the concept of Buddhism.
The true value of “Right Livelihood” (which is what the Buddhist Econonics discusses) is simply about creating sustainable contextual businesses which are compassionate to the planet and society — in context. Right Livelihood says that it’s impromper to engage in businesses which kills, promotes lying, promote hurtful behaviors (like running a service which allows someone to cheat on his wife), or promotes intoxicated behaviors which can further hurt someone else (ie: drug dealer).
Buddhism is not really that different in “morality” than other spiritual traditions — it simply does not have a rewarding-or-punishing deity attached. Buddhism just asks the people to consider context and compassion –not “The Deity will send you to hell for doing that”. (So many religions use this type of reward and punishment for their activities).
It’s easy to understand… as the Buddha said, “Sit down, shut up, and be aware”.
🙂
Martha Mountain says
I fear that this line of inquiry is going to cloud the issue. Economics’ value is its impirical base. The problem is that it has not been asked to include the costs of or to items that traditionally have been “free” – air, water, and so on. This skews the analysis towards results that have deletorious effects on the health of the planet because the costs haven’t been included in the calculation. I think YFJuan is correct that economics AMORALITY is its strength. I think that its assumption that any item that didn’t have a market value could be left out is its gravest flaw. Arrogance? Who knows. The results have been lethal.
YF Juan says
Very interesting discussion. Thanks to everyone.
Would like to address two separate issues here.
1. On Buddhism: I think my fundamental “concern” is that the use of “Buddhist” can be interpreted conventionally as denoting an exotic perfection that is a state of mind as is often attributed in the American/western interpretation. This, for the great masses in Asia that grow up in a historic Buddhist context is mind boggling.
To give it a western/American counter-example, this is like hearing somebody in China, for example, advocating “Christian” economics. At a minimum, Christian economics would not sound as exciting/exotic to an American ear. Moreover, depending on your religious stance, all sorts of emotions would be stirred up by the mere use of word “Christian”.
Compassion, love thy neighbor, be mindful, whatever is fine. Just don’t drag Buddha into this.
2. Economics as a tool “for good”. At the risk of repeating, the power of economic analysis is its ability to present and derive empirical insight. Introducing value judgement and personal agenda into the analysis is simply a bad idea.
To cite a highly “controversial” example, Dr Robert Fogel of the University of Chicago, who is also a Nobel Economics Prize winner, spent a long time analyzing the economic impact of slavery in American south. While he made it very clear that the practice of slavery is hateful to him as a person, he also presented convincing analysis that the practice of slavery is most likely a more economically efficient production method than its contemporary counterparts in the American north.
So, the question is, what is a “benevolent/Buddhist economist” to do if he/she came to the same conclusion based on sound economic analysis? Suppress the finding because it does not fit the concept of benevolence and forsake the unpleasant “reality”? Or, admit to the facts/analyses and give “foes” the ammunition? You cannot win either way if you practice good economics with that kind of judgement in mind.
==
Finally, just because, the description that economics cannot value/analyze anything that does not have a market clearing price is somewhat misleading.
For example, Steven Levitt analyzed the correlation of legalized abortion and the pattern of crime in about 15-20 years hence using standard economic analysis tools in his book Freakonomics. (In case you are wondering, he claimed to have found correlation on a decrease in crime as a result of the legalization. But, the result is in dispute as other economists at the Fed Reserve of Boston were not able to come to the same conclusion.)
This is an example of how economic analysis can be extend into areas that do not have clear pricing information. And, at the same time, an example that the “final analysis” where judgement involved is outside the realm of economics depending on where your stance is on a particular issue, abortion in this case.
==
As for selling/buying white bread that is no good for me. I can only say: get off it! Vices are what makes life good and if I want a wide choices to indulge the weaker side of self as a consumer, vendors should have the ability to fulfill my demand.
Accurate and readily available information, on the other hand, is of critical importance. Don’t say the white bread stripped of nutrient is good for my health (and, this would have violated legal requirements on truth in advertising, anyway) but say that it tastes like nothing else and makes me “cool” – I’ll buy it!
Amorally, YFJ
JCM says
I would just like to add that most of the problems we face that are rooted in economics are systemic. Problems of resource depletion, social injustice and instability are anchored to our capitalist system that relentlessly strives to maximize profit accumulation for investors. Please take a look at this book:
http://www.mindfuleconomics.com/
JCM
RJP says
Just came across this article and comments.
As a professional economist with a Ph.D. and significant training and practice in Western, mainstream, economics and more particularly, Welfare Theory, it am amazes me the extent to which people operate under the illusion that economic analysis is somehow value neutral. There appears to be a misunderstanding that empiricism somehow confers objectivity on its methods, theories, and recommendations.
Nothing can be further from the truth.
The Western, neo-classical economics framework is argued by its most esteemed practitioners to be value neutral and objective. Even the Nobel Prize winning economist Sen, who won it for his work on Welfare Theory, made this argument in his book On Welfare Theory.
He and most others carry this misguided belief forward. How is this the case?
All economic theory supporting public policy has its foundation in the assumption that we can simply add up the welfare of each individual, where equal importance is assumed for each individual when summing to obtain the community’s total welfare. This assumption of equal weighting is then forgotten and described as being objective and value neutral! That is, a policy that leads to re-distribution to the wealthy would receive the same weighting as a policy leading to re-distribution to he poor in assessing the overall welfare of the community.
Warren Sammuels and Allan Schmid, Institutional Economists at Michigan State University have captured this contradiction in the quip “you can’t get an ought [what policy is justifiable] from an is [belief in objectivism of empiricism] without an intervening normative premise.” Here, the normative premise most often employed is the assumption of equal weighting and characterizing it as objective and positive (in contrast to normative).
Joan Robinson made the same point using different language when she asked “how can we reach conclusions about right and wrong lest we judge the preferences themselves?”
Economists are trained (as I was for the most part) that the discipline of economics provides an objective antidote to all the subjectivity of life in the real world. It provides this antidote since its methods are objective (value free) in contrast to normative (subjective) analysis. And as such, it ought to be followed by those in power if they desire to do what’s best for their communities. In reality though, modern economics and most of its practitioners are blind to the inherent subjectivity of modern economics even when empirical analysis is performed.
Henway says
Based on my understand, right livelihood means earning a living that doesn’t damage or harm other ppl physically, or emotionally, and doesn’t give u inner conflict as well. So jobs that involve killing others obviously get ruled out. Jobs that help others like physical trainers, or police officers are good jobs.