The document discusses Buddhist economics and how it differs from Western economics. Some key points: - Buddhist economics focuses on minimizing suffering for all beings and the environment, while Western economics focuses on maximizing profits and individual gains. - Buddhist economics believes in simplifying desires and minimizing consumption and waste, while Western economics encourages accumulating wealth and material desires. - Small, local, community-based economic activities that foster sustainability and non-violence are preferred in Buddhist economics over large markets and profit maximization in Western economics. - Buddhist economics measures well-being by gross national happiness rather than just consumption-based gross national product used in Western economics. Happiness comes from having basic needs met, not endless desires

1. THE ECONOMICS OF HAPPINESS
Research paper
By Aparajita Misra
Abstract
What If , Economics was not all about More trade, more production for export and more foreign investment, used
as a formula for prosperity. Which is the current model used by the global economics, this outdated model has led
global economy to be responsible for poverty and the increasing cultural gaps between the rich and poor. You can
today notice in every part of the world , the frustration in the minds of every individual against their government
due to the emerging worldwide trend, which is creating a split between the government and the interests of the
people.
The current need is that of the fundamental change in the global economy. The change we need to make is more
than globalizing, localizing the economy ie, shifting away from Globalizing to localizing our economies.
Localization is a multiplier that offers a far reaching alternative to corporate capitalism as well as communism. It’s
a way to reducing Co2 emission, energy consumption of all kinds and waste and at the same time as adapting
economic activity, localizing activity can restore biodiversity as well as cultural diversity. It’s a way of creating
meaningful & secure jobs for the entire global population. It’s about rebuilding the fabric of connection,
communication and community between the people and between people and their local environment it is the
Economics of Happiness.
The Current Economic model – More trade, more production for export and more foreign investment, used as a
formula for prosperity. This model is outdated and is not contributing towards the prosperity of the world in its
true sense. It is fundamentally about the distancing the globalizing of economic activity. And now it should be all
about shortening distances. The left and right is no more the issue. The issue is global and local.
The research paper is going to talking about adopting the spiritual way of economics by following the path
of Buddhist teachings and examining the word , Buddhist Economics coined by E. F. Schumacher , in 1995.

2. Tibetan Plateau – Laddakh. | 35 years ago
Suddenly, globalization changed everything in Laddakh. This place was suddenly open to the world economy, there
was subsidized food was coming in on subsidized roads, running on subsidized fuel, the import of this food and
other goods, destroyed the local market. Overnight, this led to mass unemployment, this intern led friction in
between people who lived peacefully side by side for generations. After a decade, Buddhists who resided there
were literally killing each other.
An exactly same incident occurred in Bhutan, where the same pattern was noticed; just that here the Buddhist and
Hindu were killing each other.
The story of every culture is very similar to that of Laddakh. There is a trend worldwide, which is creating a split
between the government and the interests of the people.
The Impact of Globalization in Tibet
Globalization is often seen as a helpful tool in international trade, which has been simplified considerably by the
reduction of trade barriers, improvement in financial systems and the expansion of markets. Tim Riley, the Director
of the Economic Literacy Centre, defines this so-called economic globalization as “the process of increasing
economic integration between two countries, leading to the emergence of a global marketplace or a single
world market.”
One such tool to disentangle international trade is the free trade regime, implemented by the World Trade
Organization, which allows for the unhindered trade of goods and services within or between countries,
unconstrained by government-enforced restrictions. While a good implementation in theory, in the case of Tibet it
is often argued that as a result, small Tibetan businesses are forced to compete with powerful Chinese and
Western corporations in the so-called ‘free market’ environment.
A more recent concern voiced by the Tibetan government is the Chinese government’s exploitation of Tibet’s
natural resources, such as oil, as well as mineral and natural gas reserves. Perhaps Tibet’s history of submission to
the Chinese government has influenced the country’s view of globalization. It stands to reason that, “to the
Tibetans, globalization represents another framework for exploitation, imposed upon by China, without their
approval or knowledge”.
Culture
Beyond the effects of free trade on the Tibetan economy, many Tibetans think of globalization as a palpable threat
to their culture and way of life. For example, the Tibetan notion of reality and their feelings towards nature
contradicts the industrious mentality driving globalization. According to Tenzin P. Atisha, Australia’s Dalai Lama
representative. Tibetans have a great respect for all forms of life. Traditionally Tibetans have always lived in
harmony with nature. They obey the environmental decrees issued by the government. Through their religion
Tibetans strive to improve the vitality of the earth and protect life on earth.
5
Opponents of globalization often describe the phenomenon of globalization as a tool for unlimited production and
consumption, ultimately conquering and exploiting nature. This ideology fundamentally clashes with the Buddhist
way of thinking, which sees humans as a deep-seated part of nature. In the words of His Holiness, the 14th Dalai
Lama,
If in our generation we exploit every available thing: trees, water, mineral resources or anything, without
bothering about the next generation, about the future, that’s our guilt, isn’t it? So if we have a genuine sense of
universal responsibility, as the central motivation and principle, then from that direction our relations with the

3. environment will be well balanced. Similarly with every aspect of relationships, our relations with our neighbors,
our family neighbors, or country neighbors, will be balanced from that direction.
To some extent, these values, rooted deeply in the Tibetan culture, are perceived as endangered by the ongoing
process of globalization.
A spiritual approach to economics is required. That which examines the psychology of the human mind and the
anxiety, aspirations, and emotions that direct economic activity. An understanding of economics aiming to clear
the confusion about what is harmful and beneficial in the range of human activities involving production and
consumption, and ultimately trying to make human beings ethically mature. That which tries to find a middle way
between a purely mundane society and an immobile conventional society. This approach towards the Global
Economy is called the Buddhist Economy.
It says that truly rational decisions can only be made when we understand what creates irrationality. When people
understand what constitutes desire, they realize that all the wealth in the world cannot satisfy it. When people
understand the universality of fear, they become more compassionate to all beings. Thus, this spiritual approach to
Economics doesn't rely on theories and models but on the essential forces of acumen, empathy, and restraint.
From the perspective of a Buddhist, Economics and other streams of knowledge cannot be separated. Economics is
a single component of a combined effort to fix the problems of humanity and Buddhist Economics works with it to
reach a common goal of societal, individual, and environmental sufficiency.
Buddhist Businessman’s Perspective
Suppose we consider the demand for a commodity, say cigarettes and consider that it has been showing an
increasing trend. This trend will be supported by an increase in production of cigarettes. These cigarettes are then
put into the market and purchased and consumed by people. When it is consumed, the demand is satisfied and
normally, nobody bothers about the stage after consumption. But Buddhist Economists go beyond that and
investigate how these trends affect the three intertwined aspects of human existence: The individual, society and
the environment. Specific to an increase in the consumption of cigarettes, Buddhist Economists try to decipher
how this increase affects the pollution levels in the environment, its impact on passive smokers and active smokers
and the various health hazards that come along with smoking, thus taking into consideration the ethical side of
economics. The ethical aspect of it is partly judged by the outcomes it brings and partly by the qualities which lead
to it.
How is the western Economics different from the Buddhist Economy?
While Western Economics concentrates on self-interest, the Buddhist view challenges it by changing the concept
of self to Anatta or no-self. It posits that all things perceived by one's senses are not actually "I" or "mine" and
therefore, humans must detach themselves from this feeling. They believe that the self-interest based,
opportunistic approach to ethics will always fail. According to them, generosity will work because human beings
are Homo reciprocans who tend to reciprocate to feelings (either positively or negatively) by giving back more than
what is given to them.
The second significant difference is that Western Economists give importance to maximizing profits and individual
gains while the underlying principle of Buddhist Economists is to minimize suffering (losses) for all living or non
living things. Studies conducted by them have shown that human beings show greater sensitivity to loss than to
gains and therefore people should concentrate more on reducing the former.
The third difference is with respect to the concept of desire. Western Economics encourages material wealth
and desire because of which people try and accumulate more and more wealth- sometimes at the cost of others-
to satisfy those cravings. In contrast, in Buddhist Economics, importance is given to simplify one's desires.
According to them, apart from the basic necessities like food, shelter, clothing and medicines, other materialistic
needs should be minimized. They say that overall well-being decreases if people pursue meaningless desires.
Wanting less will benefit the person, the community they live in and nature.

4. The fourth point of difference is related to their views on the market. While Western Economists advocate
maximizing markets to a point of saturation, Buddhist Economists aim at minimizing violence. According to them,
Western Economists do not take into consideration primordial stakeholders like the future generations and the
natural world because their vote is not considered important in terms of purchasing power. They feel that other
stakeholders such as poor and marginalized people are under-represented because of their inadequate purchasing
power and preference is given to the strongest stakeholder. Therefore, they believe that the market is not an
unbiased place, truly representative of the economy. Thus, Buddhist Economists advocate ahimsa or non-
violence. According to them,ahimsa prevents doing anything that directly causes suffering to oneself or others and
urges to find solutions in a participatory way. Community supported agriculture is one such example of community
based economic activities. They believe that it fosters trust, helps build value based communities and brings
people closer to the land and the farm. Achieving this sustainability and non-violence requires restructuring of
dominating configurations of modern business, which they advocate. This leads to deemphasizing profit
maximization as the ultimate motive and renewed emphasis on introducing small-scale, locally adaptable,
substantive economic activities.
The fifth point of difference is that Western Economists try to maximize instrumental use where the value of any
entity is determined by its marginal contribution to the production output. Therefore, Buddhist Economists feel
that the real value of an entity is neither realized nor given importance to. They try to reduce instrumental use
and form caring organizations which will be rewarded in terms of trust among the management, co-workers and
employees.
The sixth point of difference lies in the fact that Western Economists believe that bigger is better and more is
more whereas Buddhist Economists believe that small is beautiful and less is more.
The seventh point of difference is that Western economics gives importance to gross national product whereas
Buddhist economics gives importance to gross national happiness.
Buddhist Economists believe that as long as work is considered a disutility for labourers and labourers a necessary
evil for employers, true potential of the labourers and employers cannot be achieved. In such a situation,
employees will always prefer income without employment and employers will always prefer output without
employees. They feel that if the nature of work is truly appreciated and applied, it will be as important to the brain
as food is to the body. It will nourish man and motivate him to do his best. According to them, goods should not be
considered more important than people and consumption more important than creative activity. They feel that as
a result of this, the focus shifts from the worker to the product of the work, the human to the subhuman, which is
wrong.
According to them, people are unable to feel liberated not because of wealth but because of their attachment to
wealth. In the same way, they say that it is the craving for pleasurable baubles and not the enjoyment from them
that holds humans back.
Buddhist Economists do not believe in measuring the standard of living by the amount of consumption because
according to them, obtaining maximum well being as a result of minimum consumption is more important than
obtaining maximum well being from maximum consumption. Thus, they feel that the concept of being 'better off'
because of greater levels of consumption is not a true measure of happiness.
From the point of view of a Buddhist economist, the most rational way of economic life is being self-sufficient and
producing local resources for local needs and depending on imports and exports is uneconomic and justifiable only
in a few cases and on a small scale. Thus, they believe in economic development, independent of foreign aid.
Buddhist Economics also gives importance to natural, renewable and non-renewable resources. They feel that
non renewable resources should only be used when most needed and then also with utmost care, meticulously
planning out its use. They believe that using them extravagantly is violent and not in keeping with the Buddhist
belief of non violence. According to them, if the entire population relies on non renewable resources for their
existence, they are behaving parasitically, preying on capital goods instead of income. Adding to this, they feel that
this uneven distribution and ever increasing exploitation of natural resources will lead to violence between man.

5. They also believe that satisfaction need not necessarily be felt only when something tangible is got back in return
for giving something or something material is gained, as stated in modern economics. They say that the feeling of
satisfaction can be achieved even when we part with something without getting anything tangible in return. An
example is when we give presents to our loved one's just because we want them to be happy.
Buddhist Economists believe that production is a very misleading term. According to them, to produce something
new, the old form has to be destroyed. Therefore, production and consumption become complimentary to each
other. Taking this into consideration, they advocate non-production in certain cases because when you produce
lesser of materialistic things, you reduce exploitation of the world's resources and lead the life of a responsible and
aware citizen.
The middle way of living
The concept of the "Middle Way" says that time should be divided between working towards consumption and
meditation and the optimal allocation between these two activities will be when some meditation is utilized to
lower the desire for consumption and to be satisfied with lesser consumption and the work that it involves.
In economic terms this means “the marginal productivity of labour utilized in producing consumption goods is
equal to the marginal effectiveness of the meditation involved in economizing on consumption without bringing
about any change in satisfaction”.
Right Livelihood" is one of the requirements of the Buddha’s Noble Eightfold Path. It is clear, therefore, that there
must be such a thing as Buddhist economics.
While the materialist is mainly interested in goods, the Buddhist is mainly interested in liberation. But Buddhism is
"The Middle Way" and therefore in no way antagonistic to physical well-being. 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.
The keynote of Buddhist economics, therefore, is simplicity and non-violence. From an economist’s point of view,
the marvel of the Buddhist way of life is the utter rationality of its pattern—amazingly small means leading to
extraordinarily satisfactory results.
For the modern economist this is very difficult to understand. He is used to measuring the "standard of living" by
the amount of annual consumption, assuming all the time that a man who consumes more is "better off" than a
man who consumes less. A Buddhist economist would consider this approach excessively irrational: since
consumption is merely a means to human well-being, the aim should be to obtain the maximum of well-being with
the minimum of consumption. Thus, if the purpose of clothing is a certain amount of temperature comfort and an
attractive appearance, the task is to attain this purpose with the smallest possible effort, that is, with the smallest
annual destruction of cloth and with the help of designs that involve the smallest possible input of toil. The less toil
there is, the more time and strength is left for artistic creativity. It would be highly uneconomic, for instance, to go
in for complicated tailoring, like the modern West, when a much more beautiful effect can be achieved by the
skillful draping of uncut material. It would be the height of folly to make material so that it should wear out quickly
and the height of barbarity to make anything ugly, shabby, or mean. What has just been said about clothing applies
equally to all other human requirements. The ownership and the consumption of goods is a means to an end, and
Buddhist economics is the systematic study of how to attain given ends with the minimum means.
Modern economics, on the other hand, considers consumption to be the sole end and purpose of all economic
activity, taking the factors of production—and, labour, and capital—as the means. The former, in short, tries to
maximise human satisfactions by the optimal pattern of consumption, while the latter tries to maximise
consumption by the optimal pattern of productive effort. It is easy to see that the effort needed to sustain a way of
life which seeks to attain the optimal pattern of consumption is likely to be much smaller than the effort needed to
sustain a drive for maximum consumption. We need not be surprised, therefore, that the pressure and strain of
living is very much less in say, Burma, than it is in the United States, in spite of the fact that the amount of labour-
saving machinery used in the former country is only a minute fraction of the amount used in the latter.

6. Simplicity and non-violence are obviously closely related. The optimal pattern of consumption, producing a high
degree of human satisfaction by means of a relatively low rate of consumption, allows people to live without great
pressure and strain and to fulfill the primary injunction of Buddhist teaching: “Cease to do evil; try to do good.” As
physical resources are everywhere limited, people satisfying their needs by means of a modest use of resources
are obviously less likely to be at each other’s throats than people depending upon a high rate of use. Equally,
people who live in highly self-sufficient local communities are less likely to get involved in large-scale violence than
people whose existence depends on world-wide systems of trade.
From the point of view of Buddhist economics, therefore, production from local resources for local needs is the
most rational way of economic life, while dependence on imports from afar and the consequent need to produce
for export to unknown and distant peoples is highly uneconomic and justifiable only in exceptional cases and on a
small scale. Just as the modern economist would admit that a high rate of consumption of transport services
between a man’s home and his place of work signifies a misfortune and not a high standard of life, so the Buddhist
would hold that to satisfy human wants from faraway sources rather than from sources nearby signifies failure
rather than success. The former tends to take statistics showing an increase in the number of ton/miles per head
of the population carried by a country’s transport system as proof of economic progress, while to the latter—the
Buddhist economist—the same statistics would indicate a highly undesirable deterioration in the pattern of
consumption.
Another striking difference between modern economics and Buddhist economics arises over the use of natural
resources. Bertrand de Jouvenel, the eminent French political philosopher, has characterised "Western man" in
words which may be taken as a fair description of the modern economist:
He tends to count nothing as an expenditure, other than human effort; he does not seem to mind how much
mineral matter he wastes and, far worse, how much living matter he destroys. He does not seem to realize at all
that human life is a dependent part of an ecosystem of many different forms of life. As the world is ruled from
towns where men are cut off from any form of life other than human, the feeling of belonging to an ecosystem is
not revived. This results in a harsh and improvident treatment of things upon which we ultimately depend, such as
water and trees.
The teaching of the Buddha, on the other hand, enjoins a reverent and non-violent attitude not only to all sentient
beings but also, with great emphasis, to trees. Every follower of the Buddha ought to plant a tree every few years
and look after it until it is safely established, and the Buddhist economist can demonstrate without difficulty that
the universal observation of this rule would result in a high rate of genuine economic development independent of
any foreign aid. Much of the economic decay of southeast Asia (as of many other parts of the world) is
undoubtedly due to a heedless and shameful neglect of trees.
It is in the light of both immediate experience and long term prospects that the study of Buddhist economics could
be recommended even to those who believe that economic growth is more important than any spiritual or
religious values. For it is not a question of choosing between "modern growth" and "traditional stagnation." It is a
question of finding the right path of development, the Middle Way between materialist heedlessness and
traditionalist immobility, in short, of finding "Right Livelihood”
Bibliography
http://www.globalization101.org
http://www.tibetjustice.org
http://en.wikipedia.org/wiki/Buddhist_economics
Book – Small Is Beautiful by E. F. Schumacher