Prioritizing People over Product

by Rituparna Sanyal*

The Kancanakkhandha Jataka tells the story of a Bodhisattva, who was a farmer in a village. Once, while ploughing, he chanced upon a huge bar of gold. Unsure about what to do with so much gold, he decided to divide it into four equal parts: One for his own living expenses, one for saving, one for trading and one for charity and good work.

Going beyond capitalism

The economic models and theories that prevailed through the 20th century are rapidly falling apart and economists are scrambling for solutions. But much of what has gone wrong was already anticipated by economist and statistician E. F. Schumacher.

Influenced by Buddhism on a trip to Burma, he wrote an essay on “Buddhist Economics” in 1966 which was later added in his book “Small is Beautiful” (1973). The British economist felt that modern economics was becoming increasingly materialistic. He was upset by the increasing stress on the output of work rather than the workers and the reliance on non-renewable resources. He believed that applying Buddhist principles to the way an economy operates would produce an economy designed primarily to meet the needs of people. In accord with the Buddhist concept of “right livelihood,” Schumacher called for jobs that are valued for their psychological and spiritual values, not just for what they produce. He argued that an economy should exist to serve the needs of the people; people should not exist to serve the economy.

Economics of happiness

Most of us have grown up with our parents telling us that life is not just about money. Mental well-being is more valuable than money and what it can buy. But then, the reality is quite opposite; we see everything revolves around one thing- money. We enter the rat race to get a job- with a better pay- and scoff at the idea of happiness without money to finance our extravagance.

On the other hand, Bhutan seeks a better world with Buddhist economics. Bhutan values the quality of life of its citizens over the quantity of goods it produces. Bhutan is a tiny constitutional monarchy between India and China, deeply rooted in its Buddhist culture. Welfare in this country is measured with the help of the unique Gross National Happiness (GNH) Index which is dependent on the well-being of the people, not just economic growth. It was introduced by their Fourth King, Jigme Singye Wangchuck, in 1972. This displays the monarch’s commitment to building an economy that would serve their culture based on Buddhist spiritual values instead of western development.

The index is a single number based on 9 domains with 33 indicators. It ranges from 0 to 1 and reflects the percentage of Bhutanese who are happy. As with most indices, the higher the better. It rests on four pillars: good governance, sustainable socio-economic development, cultural preservation and environmental conservation.

Cease to do evil, Try to do good

One of the principles of the Buddha’s eight-fold path includes “Right Livelihood”, or making a living without doing any harm to others. It is based on interdependence and compassion. True Buddhist economics recognizes everyone’s interconnectedness.

So what exactly is Buddhist Economics? Not many have written on this subject and I doubt you will find it in your economics textbooks.

Buddhist economics applies spiritual principles and moral purpose to the question of wealth. This spiritual approach to economics does not rely on theories and models, but on the forces of empathy, love and restraint. It is a “Middle Way” between a purely mundane materialist society and an immobile traditionalist society, while striving for minimum consumption and maximum satisfaction.

The Buddhist approach to economics is based on 2 core principles:
1. The ideal is sufficiency, not surplus.
2. A civilization built on renewable resources is superior to one built on non-renewable resources.

The differences between Modern and Buddhist economics are gradually becoming more evident. Some of them include:

Modern Economics Buddhist Economics
Concentrates on self-interest Concentrates on concept of no-self or Anatta. Humans should detach from the feeling of “I” and “Mine”
Aims at maximizing profits and individual gain Aims at minimizing suffering
Encourages material wealth and desire Importance given to simplifying one’s desires
Belief that the bigger, the better Belief that small is beautiful
Labour is a necessary evil for employers and a “cost” that needs to be minimized People should take part in common, collective tasks and produce at an optimal level
Dependent on world-wide system of trade Production using local resources; global trade justifiable only on a small scale


Small is beautiful

 As quoted in Schumacher’s article, “Spiritual health and material well-being are not enemies: they are natural allies” in Burma.

“A modern economist may engage in highly sophisticated calculations on whether full employment ‘pays’ or whether it might be more ‘economic’ to run an economy at less than full employment so as to ensure a greater mobility of labour, a better stability of wages, and so forth. His fundamental criterion of success is simply the total quantity of goods produced during a given period of time … From a Buddhist point of view, this is standing the truth on its head by considering goods as more important than people and consumption as more important than creative activity. It means shifting the emphasis from the worker to the product of work, that is, from the human to the subhuman, a surrender to the forces of evil.”

While the materialist is mainly interested in goods, the Buddhist is mainly interested in liberation. According to Buddhism, it is not wealth that stands in the way of liberation but the attachment to wealth; not the enjoyment of pleasurable things but the craving for them. Buddhist economics is therefore about simplicity and non-violence; about small means leading to extraordinarily satisfactory results. In other words, it is the systematic study of how to attain given ends with minimum means.

As the saying goes, “Don’t eat just because you feel like it; eat when you feel hungry.”

In an inspiring interview of Dr Saamdu Chetri, Director, Gross National Happiness Centre, Thimphu, he says, “We need very few things as human beings. Why are we chasing for more and more?” He strongly feels that, “It is very important to make a human being understand what the basic purpose of life is. That is what the GNH tries to embed.” If a country buys arms and ammunition to fight another, that is added in the gross domestic product (GDP) or gross national product (GNP). However, this will not benefit any citizen and will in fact harm them. While the Western model focuses on limitless growth, Bhutan ensures that their children do not go hungry to bed.


Buddhist Economics – An Oxymoron? 

What if we lived in a society that did not put consumption at the centre? What if we follow the Buddhist mandate to minimize suffering, and are driven by compassion rather than desire? This gives rise to another crucial question. Can nations that are not Buddhist adopt GNH and such a seemingly ideal economic lifestyle?

“Buddhism is not a religion. It is a way of life- Living life is a universal value,” believes Dr Chetri. Indeed, many other countries are showing interest in the GNH economic model. In 2011, the UN General Assembly adopted a resolution to recognize happiness as a basic human goal.

The need of the hour thus, is a middle path based on generosity, faith, wisdom, integrity, conscience and contemplation. It is also about time that we recognize that economics is not all about money, but about happiness too.



  • F.Schumacher, Buddhist Economics
  • Buddhist Economics E.F. Schumacher’s Prophetic Ideas,  by Barbara O’Brien |
  • Bhutan seeks a better world through Buddhist economics,
  • GNH Index,
  • Buddhist Economics by E. F. Schumacher
  • The Jataka, Volume I, tr. by Robert Chalmers, [1895], at
  • Buddhist economics: oxymoron or idea whose time has come? b Kathleen Maclay, Media relations | March 13, 2014 |


*Author is a second year Economics (Hons.) student at Miranda House (Delhi University)

Let us know what you think...

Please log in using one of these methods to post your comment: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s