On August 16, we celebrated the 115th birthday of E.F. Schumacher, whose visionary yet grounded approach to economics continues to guide the work of the Schumacher Center.
Schumacher had a unique ability to bring economics back to its most fundamental questions. What is work for? What makes a society prosperous? And how might economic life serve people and the living world, rather than the other way around?
These are some of the questions he explores in his pioneering 1966 essay, “Buddhist Economics.”
Beginning with the Buddhist principle of “Right Livelihood,” Schumacher asks us to imagine an economics guided not by the endless expansion of production and consumption, but by human well-being, meaningful work, nonviolence, and care for the natural world.
This new vision for economics starts with the meaning of work itself. While conventional economics tends to regard labor primarily as a cost to be minimized, Schumacher argues that work has an essential human purpose:
“The Buddhist point of view takes the function of work to be at least threefold: to give man a chance to utilise and develop his faculties; to enable him to overcome his ego-centredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence.”
This clarifying of basic priorities extends to consumption as well. Modern economics generally equates a higher standard of living with greater consumption. Schumacher asks why, if consumption is merely a means to human well-being, consuming more should itself be considered an achievement.
“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.”
And later:
“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.”
For Schumacher, an economy built around sufficiency would have consequences far beyond individual lifestyles. Lower material demands reduce pressure on people and resources alike and make more self-reliant communities a reality.
“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.”
His critique also extends to the treatment of the natural world. An economic system that recognizes only monetary price, Schumacher argues, cannot adequately distinguish between resources that can be replenished and those that are irreversibly depleted:
“Non-renewable goods must be used only if they are indispensable, and then only with the greatest care and the most meticulous concern for conservation. To use them heedlessly or extravagantly is an act of violence.”
Sixty years after “Buddhist Economics” was first published, Schumacher’s concerns are now even more urgent. Yet there is also hope in his insistence that another economic logic is possible. He was not asking us to choose between modernity and the past—rather, the task is one of “finding the right path of development, the Middle Way between materialist heedlessness and traditionalist immobility, in short, of finding ‘Right Livelihood.’”
On the occasion of Fritz Schumacher’s birthday, we are grateful for the questions he left us with, and for his vision of an economics that places people, place, and the living world at its heart.
We invite you to revisit “Buddhist Economics” in full.
Warm Wishes,
Staff of the Schumacher Center