Buddhism and economic transformation

Economies have no essential nature. Once this is recognized, many more opportunities for change present themselves.

golden buddha eric pouhler

Many of us, informed about world events and motivated by love and compassion, feel the need for profound economic transformation. We started long ago to question injustice, consumerism, and military-industrial ties. The growing specter of climate-change related disruptions has convinced even more people that ‘business as usual’ is not a viable option.

But what form should this transformation take, and how can we make it happen? I believe that insights from the careful study of both economics and Zen Buddhism can help us along this path—no matter what faith tradition we come from (if any).

I began studying social science, and eventually earned a PhD in Economics, because I thought these studies might help me to contribute to solving the problems of global poverty and hunger. I began studying Zen because—as is a common story—my life was a mess and I needed to find a better way to be in the world.  But what drew me further into both endeavors was the way in which Zen and social science (though not, unfortunately, the discipline of economics) encouraged me to entertain doubt, and try to look afresh at the world with a ‘don’t know mind.’

My economics classes taught me that self-interest and competition rule economic life; that the purpose of firms is to serve their shareholders; and that capitalist economies must grow without limits. These are treated as fundamental principles or even ‘laws.’ I have found these tenets reiterated by many progressive activists, Buddhist scholars among them. David Loy, for example, repeats these beliefs on Transformation in writing about the Three Poisons of greed, anger and ignorance as being institutionalized in our economic system.

In thinking about economies and well-being from this perspective, the route to transformation looks obvious: if the present system institutionalizes the wrong values, then clearly we need to dismantle it and create a replacement economy. This new economy should be founded on the diametrically opposite values of compassion, cooperation, community, and sufficiency. Many activists seem to feel very certain about this conclusion.

But, using my ‘don’t know’ mind, I became curious about how economists discovered these principles and ‘laws,’ and I found that they weren’t discovered through research at all. Instead, economists made them upWanting to emulate the ‘hard’ sciences, they took the complex, emergent, social interaction we call the ‘economy’ and stripped off all its human dimensions. Then they analyzed this desiccated, distorted model using physics-like concepts of ‘laws’ and ‘forces.’ So the image of the market economy as a machine that functions according to universal laws was created by economists who were seeking professional prestige.

I also compared these beliefs about fundamental principles to basic Buddhist tenets, and found that they came up very short. People have now become so used to thinking of the current economy as essentially characterized by profit-making, self-interest, and competition that they no longer notice that this is a manufactured image. Yet one of the central teachings of Buddhist philosophy is anatta, or ‘no-self,’ which means that all phenomena lack any essential nature. Another is anicca, or the impermanence of all things.

In Zen meditation practice, one learns to question the idea that there is a personal, on-going, separate-from-others ‘me’ that has unchanging characteristics. But if all things lack an essential nature and are constantly changing, this must also be true of economies. Like everything else, economies arise from a flux of contingent, historical, and interdependent phenomena.

So both the study of the history of economics and the study of Buddhism leads us to be skeptical about the supposed laws and principles that underlie the current economic system. Taking a fresh look at real world evidence should further weaken their hold on our imaginations.

Consider, for example, the common belief that the essence of a corporation is to make money for its shareholders. This idea is not based in law (despite a widespread belief that this is so), nor was it derived from the observation of actual businesses. Business leaders actually have quite a lot of leeway in what they do—for good or ill.

In any business journal you can read about corporations that are more oriented towards innovation (like Google), or expansion like (Amazon), or maximizing CEO compensation than they are towards shareholder value. Others actively try to contribute to a sustainable world or make their business a force for good.  Most have several goals, among which profit is only one. Still others are a mess and don’t seem to pursue any goal effectively at all.

Relentless profit maximization wasn’t the only myth invented by economists. The ‘free market,’ ‘imperatives to grow,’ ‘perfect competition,’ and the idea that economies can function without widespread norms of cooperation and trust were also invented. Authors such as Yves Smith and Lynn Stout show clearly how selfish opportunism—far from being necessary for economic functioning—actually destroys economic systems and corporations. My own work on Economics for Humans delves deeper into the actual necessity of joining economics with care.

Likewise, Buddhist teachings should help us to relax our tight grip on the image of the ideal ‘replacement economy.’ If we imagine that the new economy will have a good essential nature, we deny anatta. If we envision the replacement economy as an end point or culmination of the search for social justice, we deny anicca—the inescapability of impermanence and change. If we place our hopes in an idealized end to suffering (or dukkha), we deny the teaching that tells us that suffering is a basic feature of existence.

Relaxing our belief in essences also leads to a different interpretation of The Three Poisons: greed, anger, and ignorance. The Sanskrit word for ignorance,moha, is sometimes translated as ‘certainty.’ The more certain we are about something—like the ‘essential’ nature of the current economic system—and the more we resist looking at it with a ‘don’t know’ mind, the more deluded we can become.

Anger is also a clear temptation if we buy into the replacement economy model. It’s very easy to see ExxonMobil, for example, as motivated by greed, and our own anger as righteous. Yet Buddhist teaching reminds us that anger is a poison and that ‘us versus them’ thinking arises from a deep delusion of separation. If we see people ‘inside the system’—especially ‘corporate elites’—as no more than weak, deluded, role-playing robots, we deny them their humanity.

And if we think that we aren’t motivated by greed, we deny our own membership of the human race. Greed for money is only the least subtle variety of this vice. I want climate change to stop along with child abuse, unemployment, sexism, racism, war, the arms trade, and nuclear weapons. Yet with a little introspection, I’ve realized that I don’t just simply aspire to relieve suffering—I have additional desires (demands really) that I pile on top of that aspiration: ‘I want to feel good about myself’ ‘and ‘I want to be free of guilt.’

While feeling myself to be part of a righteous vanguard could feed these ego needs, they are precisely the sort of deluded self-making that Buddhism warns about. Suffering arises when we feel that the world is unsatisfactory and should conform to our wishes. Wanting the world to be this way so that I can always feel righteous and effective is a very subtle form of greed, but it is greed nonetheless.

To address the suffering arising from economic problems we need changes in our hearts, and then we need to take these changes out into the world. Just because we don’t need a wholesale replacement economy doesn’t mean that we don’t need structural and systemic changes. Within any nation, community or organization there are forces that shape the flows of information, values, decisions, and patterns of activity that underpin economic institutions, so that’s where there are huge opportunities for action.

Economies, markets, and corporations, like human individuals or any other institutions, arise contingently, historically, and in deep interdependence with one another. Recognizing this fact opens up many possibilities for wise, compassionate, pragmatic, and deeply engaged action, not in some imagined alternative universe but in this messy and painful world. Letting go of the image of economic transformation as a gigantic battle between two opposing sets of principles frees us to work on cultivating good wherever it can spring up, and disarm evil in whatever forms it emerges in the here-and-now.

This article was orginally published on Transformation: Where Love Meets Social Justice and is based on a talk (video, text) given at the Harvard Divinity School and sponsored by the Religions and the Practice of Peace Initiative on February 18, 2016. 

Photo credit: Credit: Wikimedia/Eric Pouhier, CC BY-SA 2.5.

Author: Julie A. Nelson

Julie A. Nelson is a writer on gender, ethics, economics, ecology, and Zen; a Professor of Economics, Emeritus; a Dharma Holder and Teaching Coordinator at the Greater Boston Zen Center; and mother of two grown children.

3 thoughts on “Buddhism and economic transformation”

  1. I enjoyed this post and your blog Julie. You wrote “if the present system institutionalizes the wrong values, then clearly we need to dismantle it and create a replacement economy”. I feel we just need to recognize and embrace the right values of generosity or service (instead of greed); wisdom and compassion (instead of hate, dogma and delusion). See my blog on Deep Conscious Capitalism.


    1. Thank you for taking the time to comment! However, you seem to have misunderstood my point. I followed the passage that you quote with “Many activists seem to feel very certain about this conclusion. But, using my ‘don’t know’ mind…”


      1. Yes I see now. Yet Buddha did give the Noble Eightfold path to make an end to man-made suffering. We must make effort to develop insight into institutionalized greed, hate and delusion and gradually disentangle us from our collective delusions.


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