Monday 18 July 2011

Buddhist Economics: Then and Today

Picture of Schumacher from the 1973 edition of Small is Beautiful.
Economist E. F. “Fritz” Schumacher wrote a book that became a sensation in 1973, Small is Beautiful: Economics as if People Mattered, most of which is a compilation of lectures and articles he’d written in the 60s. The book was not only a fresh breeze in its day, its insights about where the world was quickly headed are prophetic, predicting the waste of resources and the drudgery modern society imposes on people with its view of the meaning of labor and the headlong rush to 'bigger, more, mightier.'  Of inspiration to Schumacher was society in the nation of Burma in the 1950s.

The book is also important as insight into what has been lost in Burma for the last 45 years. We have learned in the last few years of the Orwellian horror that is the life imposed on average Burmese citizens, but, truly a harsh existence has been endured there by average citizens for four-and-a-half decades, since a military junta took control. Soon the dimming light on Burma may move elsewhere and the Burmese will, again, be forgotten, to languish in misery for further decades under the thumb of a cruel regime. [See Bertil Lintner's "The Burmese Way to Fascism," an essay from 2007 on how things have been and pretty much now are in Burma.]

George McRobie, who worked with Schumacher for twenty years, and with him founded Intermediate Technology Group and in the 80s taught Appropriate Technology at the University of Pennsylvania, writes this of Schumacher’s experience in Burma:
Fritz spent all his free time in Burma studying Buddhism. He spent his weekends in a monastery and studied under Buddhist scholars. “I then began to ask myself,” he said, “What would a Buddhist economics look like? And I concluded that it would be the exact opposite of our Western economics.”

First, he argued, a Buddhist approach to economics would distinguish between misery, sufficiency and surfeit. Economic growth would be good only to the point of sufficiency. Limitless growth and consumption would be disastrous. Secondly, a Buddhist economics would be based squarely on renewable resources: an economics of permanence In contrast, Western economics is based on the ruthless exploitation of nonrenewable resources, and recognizes no limits to production and consumption -- a nonsustainable system.
Schumacher had been enchanted by Burma and the happy society he’d witnessed there on visits in the 50s. In 1955, he wrote about how its society functioned in a paper, published in Rangoon, Burma, “The Economics of Buddhists.” In 1966, four years after the military took control of the country, he wrote a paper called “Buddhist Economics” that was published as part of Schumacher’s first book, A Handbook of Asia. It also appears as the fourth chapter in Small is Beautiful and can now be found many places online, including here [at the E.F. Schumacher Society].

It’s only about six pages long. Go read it!

Truly, the whole of Schumacher’s work as an economist, from the mid-50s until his death at age 66 in 1977 is his “Buddhist Economics,” a sustainable system to support happy lives. It is sad that Schumacher’s enduring message made it to the world stage when he was already 62 and so shortly before his death. But his message ― so clarion now with climate change and economic retreat in the offing ― is still disregarded by our gutless leaders who pander to corporations that survive wholly on ‘growth, more, bigger.’

While it is true that Schumacher did not anticipate the rush of technologies that have promised to make work increasingly interesting and challenging and life less wasteful ["might have promise," I should say. Who knows where technological advancement might take us?], he did recognize the rat race that modern life has become. Instead of making life less stressful, it has become more competative with the price of messing up more severe. Instead of bringing more economic balance to societies, it has ushered in a new Gilded Age of wide disparities.

This from Manas Journal [which is associated with the EF Schumacher Society] in a piece titled "Limitation is Liberation" [Nov 1985]:
What, Schumacher asked, is wrong with Western economics? Thinking about how to make a living cannot be a mistake, but Western economics, he held, is founded on a mistake—the failure to establish limits. As he said:
Because Economics, up to a point, can rightly claim universal validity, it has been accepted as possessing universal validity throughout. What do I mean by up to a point? The essence of materialism is not its concern with material wants, but the total absence of any idea of Limit or Measure. The materialist's idea of progress is an idea of progress without limit. . . .

Is this compatible with Buddhism or Christianity or with anything the Great Teachers of mankind have proclaimed? Of course not. It is compatible only with the most naked form of Materialism.
As I write this the Democrats [with Obama being the leading voice] and the Republicans [with the Tea Party holding sway] are locking horns. But, truly, both sides want the same thing to 'cure' America's economic woes: A surge of consumerism! A pox on both their houses, I say. It is exactly what Schumacher inveighed against: Materialism run amok. The cure to all our ills becomes more work, more stuff, bigger houses to hold it all. Our judgments become one of how much stuff we have in comparison to how much stuff the neighbors -- the Joneses -- have. More, more, more, unsustainably till everything bursts.

I don't know that Schumacher would approve, but we need to do something other than what both the Democrats and Republicans are contemplating as fixes for our economy.

My suggestions:  Let us remove ALL payroll taxes, and tax in other ways to cover workers' benefits.  Why?  To make things such that having an employee is as cheap as possible in the US.  That way, workers here can compete against labor elsewhere in the world and against technologies that replace humans as workers.

Let us shorten the workweek from 40 hours to 30 hours before overtime kicks in.  Thus, businesses will be encouraged to enlarge their workforce.

Let us forestall foreclosures on homeowners by allowing homeowners to keep their house if they make mortgage payments that are 40% or more of their income.  That way, we might be able to stabilize the housing market more quickly.  And, we take the intense stress that has descended on as many as 30% of the people in the US.

We need a more compassionate economics in the West.  And, most importantly, one that is sustainable and allows us to escape the pointless, life-robbing circumstance where we all become chasing-our-own-tail Consumerists.

Fantastic blogposts that, from their content, relate to this one:  "Buddhist Economics." from The Buddhist Blog. James Ure bemoans the lost interconnectivity in society in light of the worldwide economic plunge. And, from Integral Options Cafe, there's "Adbusters - E.F. Schumacher (Thought Control in Economics)" wherein PB's William Harryman writes about a more-compassionate economics, based on Schumacher's insights, and then presents a piece from Adbusters that gives some background to Schumacher's life and thoughts.


  1. Excellent timing. Thank you, Tom.
    - judih (off to read Schumacher)

  2. Wow. Thanks, Great and Wonderful judih. I remember fondly our days in 'Kicks.

  3. Interesting. I read everything I can about Burma, it fascinates me. I got the impression that the military junta might be easing up a bit for the sake of economic development, with the release of Aung Sang Su Ki (sp?) and allowing some development projects into the country - read about a pristine shorline that will likely be developed/exploited.

  4. Jill, Yes, it would be wonderful if the junta would ease up. Likely, they would only do that if they view it to their advantage to maintain their grip on power.