Buddhist Economics and Modern Economics: A Comparative Study

Abstract

Modern economics is predominantly grounded in the principle of maximizing production and consumption, often equating economic success with material growth and efficiency. In contrast, Buddhist economics emphasizes the maximization of human well-being through the minimization of suffering and the cultivation of ethical and mindful consumption. This paper critically examines Buddhist economics as a significant alternative to the dominant Western economic paradigm. Drawing on the contributions of E. F. Schumacher, P. A. Payutto, and other contemporary scholars, the study highlights how Buddhist economic thought challenges core assumptions of modern economics, particularly its emphasis on self-interest, consumerism, and unlimited desire.

The objectives of this study are threefold: (i) to analyze the fundamental differences between modern economics and Buddhist economics; (ii) to reinterpret contemporary global challenges—such as inequality, environmental degradation, and psychological distress—through a Buddhist economic perspective; and (iii) to propose a balanced path of development grounded in the Middle Way (majjhimā paṭipadā), avoiding both excessive materialism and rigid traditionalism.

Buddhist economics advances key principles including the reduction of suffering (dukkha), the moderation of desire (taṇhā), non-violence (ahiṃsā), ethical livelihood (sammā-ājīva), and compassion-based social relations. Rather than functioning as a rigid economic system, it is better understood as a flexible ethical framework applicable across diverse economic contexts. It prioritizes quality of life not merely in terms of material comfort, but also in relation to mental well-being, social harmony, and the ultimate liberation of the mind from unwholesome tendencies.

The study argues that integrating Buddhist economic principles into contemporary discourse can contribute to a more sustainable, equitable, and peaceful model of development, thereby bridging the gap between material progress and inner well-being.