The Reality and Diversity of Buddhist Economics

• Author: Wolfgang Drechsler
• Date: 01 March 2019
• Published date: 01 March 2019
• DOI: http://doi.org/10.1111/ajes.12271

The Reality and Diversity of

Buddhist Economics

By Wolfgang Drechsler*

abstract. This essay develops three central points:

1. Buddhist economics (BE), like most religion-based economics, is

not only an extrapolation from the basic texts but is also how BE

has recently been practiced. Examples of that practice include

the application of the concept of “Gross National Happiness” in

Bhutan, the implementation of a “sufficiency economy” in

Thailand, and action based on the principle of the Unification of

King and People in Yogyakarta, Indonesia.

2. BE as a concept comes originally from an outside understanding

of Buddhism that entails perspectives that text-based BE might

not have.

3. Buddhism, as such, is at odds with standard textbook economics

(STE). BE thus potentially forms its own economic paradigm, but

BE as practiced often coexists with ST E.

Discussing these points will hopefully result in seeing that there is

considerable diversity within BE and that there is such a thing as real,

existing BE that truly does matter.

The Realit y of Buddhist Econom ics

It is by no means unambiguous what Buddhist economics (BE)

actually is, including among those dealing with it on a professional

basis. The Dalai Lama has even called the term confusing (in Dunne

2015). However, we can say that BE today is usually constructed

from Buddhism, rather than something that emerges directly from the

authoritative texts.

American Jour nal of Economics and Sociology, Vol. 78, No. 2 (March , 2019).

DOI: 10 .1111/ajes.122 71

© 2019 American Journa l of Economics and Sociology, Inc.

*Professor of Governance, Ragnar Nurkse Department, TalTech,Estonia. Associate,

Davis Center,Harvard University. Formerly served as Advisor to the President of Estonia,

Executive Secretary with the German Wissenschaftsrat, and, as APSA Congressional

Fellow, Senior Legislative Analyst in the U.S. Congress. Email: wdrechsler@fas.harvard.

edu

524 The American Journal of Economics and Sociology

This construction has two starting points coming from different

directions: some start with what can be extrapolated from the teach-

ings of the Buddha regarding economic policy (Payutto 1994: 42,

47–48; Puntasen 2008: 2), others the other way around, by taking

economic positions already held, and then legitimizing them back-

wards by relating them to Buddhism. An example of this may be Clair

Brown’s recent Buddhist Economics (2017), which has had quite a

high profile; another is Tomer (2017). However, Manandar (i2017)

has emphasized that, in many of these cases, ideas that appear to be

based on positions held by authors already can actually be linked

back to what the Buddha taught.

However, defining BE entirely in terms of how individual authors

have constructed it risks reducing it to an almost arbitrary potential-

ity.1 To address BE comprehensively, one also needs to look at actual

economic systems that are called or call themselves Buddhist. To

understand BE, we should therefore examine such economies that

really exist or have really existed. As some considerable truth lies

in what actually exists—notwithstanding the ambiguous position of

“reality” in Buddhism—BE can be discerned in patterns that are not

always closely related to what academic treatises on BE or Buddhist

theory say should exist (Pryor 1990, 1991; Zadek 1993; Piboolsravut

1997).

Yet before delving into the historical or contemporary examples of

how BE was and is practiced, we should first take note of the difference

between micro- and macro-level economies. Micro-level practices are

typical for Buddhism (Prayukvong 2005: 1184); as Phuntsho (i2016)

has argued, they are particularly relevant in Mahayana Buddhism, and

they exist even in countries where Buddhism is not the majority re-

ligion, such as Nepal. However, our focus will be on the macrolevel

and so what matters are economic systems that prevail throughout

the country or some of its territorial units. Therefore, we will examine

states or country-like structures that use BE elements (Khamman 2013:

27). The very fact that these practices exist is important because, as

Kant ([1793] 1923) explains, when a theory is applied in practice, no

matter how lightly, the theory will change in and of itself.

525Reality and Diversity of Buddhist Economics

Buddhism is multifaceted; there is not one Buddhism but there

are many variations; contexts of time and space matter (Greschat and

Kraatz 1985: 5–8). Even within denominations, countries, and schools

of Buddhist teaching, the difference in form can be so complex that

putting them under one label can be difficult. Puntarigvivat (2013)

shows how that is the case in Thailand, but all religions inevitably

change over time (Greschat 1988: 19). Due to what Lanczkowski (1980:

30–35) calls “inner-religious pluralism,” they empirically contain many

aspects that may strongly contradict each other. In addition, more

people worship the Buddha who are not “card-carrying” Buddhists

than those who are. Specifically, there are hundreds of millions of fol-

lowers of amalgamated or syncretistic religions such as Chinese Folk

Religion (CFR), most of whom worship the Buddha.

This dynamic is typically found when one juxtaposes “theology”

and “folk religion.” The latter generally contains older beliefs and

practices underneath newer layers (Smith [1962] 1991: 48–50; Vrijhof

1979). In what is known as the conflict between philological and an-

thropo-sociological Buddhology, and for the purposes of this article,

I assume a “Cœdèsian totality” (Cœdès [1935] 1990: *3–4; Rozenberg

2005: 41–46). Within Buddhism, “reality … is one” (Cœdès [1935]

1990: *4). All variants of BE, therefore, deserve legitimately the label

“Buddhist” prima facie—as long as they do not completely pervert the

(original) intention of the faith. We might argue about whether this

should also pertain to the purely “theological” aspects of Buddhism,

but economics is always applied and thus changes with the applica-

tion. In law, for instance, Llewewllyn ([1930] 2008: 4) has explained

the position of the legal realism school, which follows a similar

practice, as follows:

Rules alone, mere forms of words, a re worthless. … [T]he heaping up of

concrete instances … is necessar y to make any general proposition, be it

rule of law or any other, mean anyt hing at a ll.

In this article, we will look at three diverse cases of actual Buddhist

economies: Thailand, Bhutan, and the Special Region of Yogyakarta in

Indonesia. All three are Southeast or South Asian k ingdoms (Kershaw

2001). These three have specific economic development theories