- Buddhist Economics
- Limitations of Economic Theory in the Industrial Age
- (1) Specialization
- (2) Not free of ethics, but inattentive to them
- (3) Unable to be a science, but wanting to be one
- (4) Lack of clarity in its understanding of human nature
- — (a) Want
- — (b) Consumption
- — (c) Work and working
- — (d) Competition & Cooperation
- — (e) Contentment and Consumerism
- The Major Characteristics of Buddhist Economics
- (1) Middle-way economics: realization of true well-being
- (2) Not harming oneself or others
- Appendix: General Principles of Buddhist Economics (Middle-way Economics)
- 1. Wise Consumption
- 2. Freedom from Self-harm and from Oppression of Others
- 3. Economy as a Support
- 4. Harmony with Human Nature
- 5. Integration with the Unity of Nature
- Origin of this Book
- Translator’s Foreword
(2) Not free of ethics, but inattentive to them
A solution to the problems facing humanity requires the presence of many contributing factors, one of which is ethics, a subject of particular relevance to myself as a Buddhist monk. I would like to discuss ethics here in light of its relationship to economics, so that it may serve to illuminate the connection between the different components of a right way of life. We have already seen the great importance of this relationship on a general level, so let us now take a look at some particular cases that illustrate the nature of this relationship and its significance.
Ethics (or the lack of them) affect economics both directly and indirectly. If, for example, a particular area is unsafe, if there are robbers, and a lot of violence, and if lines of communication are unsafe—then it is obvious that businesses will not invest there, tourists will not want to go there, and so on. The economy of the area is thus adversely affected. This is a phenomenon that is easily observed.
In a public transport system, if the staff, the ticket-collectors and the passengers are all honest then not only will the government receive its full revenue, but it may also be able to save on inspections. If the passengers’ honesty can be relied upon, then it may be possible to substitute ticket machines for collectors. When people are self-disciplined and help to keep their surroundings clean and litter-free the municipal authorities may not have to waste so much of their funds on trash-collection and other cleaning operations.
Conversely, if businesses are overly greedy and attempt to fatten their profits by using sub-standard ingredients in foodstuffs, e.g. putting cloth-dye as a coloring in children’s sweets, substituting chemicals for orange juice, or putting boric acid in meatballs (all of which have occurred in Thailand in recent years), consumers’ health is endangered. The people made ill by these practices have to pay medical costs. The government has to spend money on police investigations and the prosecution of the offenders. Furthermore, people whose health has suffered work less efficiently, causing a decline in productivity. In international trade, those who pass off shoddy goods as quality merchandise risk losing the trust of their customers and foreign markets—as well as the foreign currency obtained through those markets.
The freedom of the free market system may be lost through businesses using unscrupulous means of competition; the creation of a monopoly through influence is one common example, the use of thugs to assassinate a competitor a more unorthodox one. The violent elimination of rivals heralds the end of the free market system, although it is a method scarcely mentioned in the economics textbooks.
Western companies send medicines to third-world countries that they are forbidden from selling in their own countries. Those so-called ‘medicines’ endanger the health and lives of any who consume them. In economic terms, it causes a decline in the quality and efficiency of labour while also necessitating increased expenditure on health care, which is a drain on the nation.
Businesses use advertising to stimulate desire for their product. Advertising costs are included in capital outlay and so are added to the price of the product itself. Thus people tend to buy unnecessary things at prices that are unnecessarily expensive. There is much waste and extravagance. Things are used for a short while and then replaced, although still in good condition. This is a waste of economic resources and its existence is related to the common penchant for flaunting possessions and social status. Businessmen are able to exploit such desires to make more money out of their customers because people who like to show off their possessions and status tend to buy unnecessarily expensive products without considering their quality. They take snob-appeal as their criteria, considering expense no object. Worse than that there are people in Thailand today who, unable to wait until they have saved enough to afford some new product, rush off and borrow the money, plunging themselves into debt. Spending in excess of earnings has serious ill-effects. Eventually the person’s status that the object is meant to exalt, declines, along with the country’s economy as its balance of trade with other countries goes into the red.
A person in the business world once said to me that in Thailand if one saw a Sikh riding on a motorbike one could safely assume that he was a wealthy man. If he was driving a car one could take it for granted that he was a millionaire. But if one was to go into the provinces one would find that 50% of the Thais who ride motorbikes have bought them on credit. This economic phenomena is also a matter of social values. It is the same with the purchase of cars. Quite poor people buy cars on borrowed money or pay for them in installments. So there are cars everywhere, which gives rise to the problem of traffic congestion with all its attendant ill effects on the economy until eventually there is turmoil. Economics cannot be divorced from social matters. The love of flaunting and ostentation is prominent in Thailand. Some people, although reasonably well-off, will refuse to pay a few dollars for a ticket to a show. In order to show off their connections they will find a way to get a complimentary ticket. Then they will swagger into the show flashing their free ticket. On such occasions they are not willing to part with even a dollar or two. But the same people, in order to show off their prestige or social standing, may arrange a lavish party for a huge number of people and spend thousands of dollars. This character trait, or this sort of value system, has a great effect on the economy. Sometimes when Western economists come to Thailand and encounter this phenomena they say that it just knocks them flat. They can’t see how to solve the country’s economic problems. When they meet these strange new mental sets and ways of behavior they are baffled as to how to find a solution.
In economic matters we must consider the various factors that have come to be involved with them, an important one of which is confidence or belief. We need to have confidence in the banks, confidence in the stock market. At any time when there is a loss of confidence then the stock market may crash and banks go into liquidation. Even confidence in the sense of belief in the claims of advertisors has effects on the economy. But confidence is also conditioned by other factors. Its presence or absence is often the result of deliberate manipulation by business interests.
In the workplace, if the boss is responsible, capable and kind, and commands the confidence and affection of his or her employees, and the employees are harmonious, diligent, and committed to their work, then production will be high. There have been cases where the employer has been such a good person that when their business failed and came close to bankruptcy, the employees sympathetically made sacrifices and worked as hard as possible to make the company profitable again. In such cases, employees have sometimes been willing to take a cut in wages, rather than just making demands for compensation.
So abstract human values become economic variables. We can clearly see that industriousness, honesty, devotion to work and punctuality have great effects on both productivity and efficiency. Conversely, boredom, cheating, dishonesty, discrimination, discouragement, conflicts, even private depressions and anxieties have adverse effects on productivity, and this point is important.
On a broader level, nationalism is significant. If a sense of patriotism can be instilled into the people, they may be led to refuse to buy foreign goods, even if those goods are of high quality and there are inducements to buy them. People are able to put aside personal desires out of regard for the greatness of their nation and only use things made within their country. They wish to help production so that their country can prosper and become a major force in the world. It may reach the point, as in Japan, where the government has to try to persuade people to buy products from abroad. Nationalism is thus another value system that affects economics.