An Introduction to the Economics of Compassion

This essay serves as an introduction to the notion of an economics of compassion, and also to the more extensive discussion of this topic which has been accumulating in my blog for the last nine months or so. At the end of this post I outline the main topics of this body of thought, and the various posts that discuss each topic.

For any theory or body of knowledge to be valid, it needs to be concordant with the way things truly are. In effect, this means that such a theory must be concordant with wisdom, if we take wisdom to mean most generally “a correct knowledge or awareness of how things are.” It would perhaps be unnecessary to make such a statement, if it were not a direct way into our topic, which the economics of compassion. The connection is simply this: according to Buddhist philosophy, compassion and wisdom are inseparable. They are two sides of the same coin, as it were. This point needs to be made, at least in passing, because it would be very easy -- and not only for the more cynical among us -- to have the immediate reaction that an economics of compassion is merely a “feel good” concept, or one based on hopelessly idealistic musings.

On the other hand, if you did agree -- or come to agree through reasoning or personal experience -- that compassion and wisdom are inseparable, it would make a great deal of sense to take the idea of an economics of compassion seriously. I am not going to make a lengthy argument here as to how and why wisdom and compassion are inseparable. The reason for that is that perhaps you already agree with me! Or if you have reservations, it may be that the point will be clarified for you as we work through the reasoning involved. One thing that is obvious even with a little reflection is that if you want to actually practice compassion, you have to have wisdom. You have to know how to help someone. Conversely, compassion can be said to arise from the wisdom that we all possess inherently.

If we were to contemplate an economics of compassion, where would it begin? Compassion is understood, both in general usage and in Buddhist thought, to be the wish for someone to be free from suffering. This is the starting point, because economic suffering is, needless to say, a known quantity. Poverty, starvation, and disease are the most obvious forms of economic suffering. And looking a little deeper, we see that people at all levels of wealth suffer. The very rich suffer from the craving and stress coming from the feeling that what they have is never enough. Those of us in the middle suffer from anxiety about our economic security, our ability to realize our dreams or just to have a reasonably comfortable old age. All the economic rungs of society suffer from the stress of endless work and uncertainty about the conditions of our human realm. Wars, disease, and environmental disasters affect us all, rich and poor. Add to this the instability of our economic system as it currently exists, an instability that threatens absolutely everyone with uncertainty and potential ruin. Finally there is the incalculable potential suffering of the future, of a planet devastated by climate change, wracked by wars and social disruption. How does that make us feel in the present? How will our descendants – if there even are any – feel about us looking back from the future?

If we wish to head off or at least reduce economic suffering, we are actually giving rise to compassion, because that is what compassion means. But compassion for whom? Intelligent people are coming to see that the system needs some sort of fixing, that it's not enough to simply plod along and take care of oneself and one's family. It is interesting that there is general agreement these days that the economy is deeply interdependent and that for prosperity to return, things have to happen at the system level. Of course, opinions differ as to the details of what should be done, but this recognition of interdependence is a glimmer of wisdom. And it ties in directly with how the Buddhists see compassion, which is the notion that if you don't have compassion in an unbiased and universal way, it is really not a complete compassion. Wanting to fix our economic system as a whole is actually an orientation towards some degree of compassion for everyone in that system. By the way, this is emphatically not contradictory to the notion of individual responsibility. It is true that we each experience the world individually and differently, and that our individual well-being is deeply dependent on our own actions. But it is equally true that no one individual has the power to address the systemic issues that face humanity today. We need to work together, because we are together, and unavoidably so.

Despite our individual responsibility at all levels (and generating compassion is a prime example of that), there persists a notion in society and economic thought that is extremely toxic and pernicious to any sort of economics of wisdom or compassion. I'm referring to the idea, based on distorted interpretations of Adam Smith's Wealth of Nations, that by behaving selfishly we automatically, through some magic or “invisible hand” are doing the best we can for others. This is such sheer nonsense that it deserves a rigorous refutation, and has in fact been refuted by many great economic thinkers. Nevertheless, it is such a seductive idea, one that relieves us both of moral responsibility for our actions and even the burden of thinking clearly, that it continues to hold sway, particularly among those who are indoctrinated with conservative economic theory. And just to be “fair and balanced,” we also need to sweep out the rubbish of the main notions of Marxist thought, particularly the idea that the only route to justice is for the government to administer the economy under a centralized command system.

If we sweep away the garbage -- and garbage it is -- of the extreme economic views of left and right, we may end up feeling a bit groundless. What reference point can we cling to? What truisms will lead us home? According to Buddhism, this groundlessness is not a problem at all. It is actually a symptom, not of intellectual poverty, but of seeing things directly, of openness, freshness, and new possibilities. So let's stay with the groundlessness, just for a moment.

As we rest in that groundlessness, the reference point that emerges that is truly compatible with seeing things directly is compassion itself. That is the starting point, because it is without limitations. It applies to all members of society, and actually to all living things. And it addresses what is really important, namely the relief of suffering, and by implication, providing universal access to our highest human potential. Therefore compassion is the ground of how to be successful in the world, successful in the truest sense. Many people, of course, will tell you how to be successful, and perhaps their advice is helpful. But I repeat: the foundation of authentic success is unbiased and universal compassion. In technical economic terms, you could say it is an aspiration for the health of the whole system. Think about it. If you want “the economy” to be better, what does that mean? It means wellbeing for all the people in that system. If you think about it more deeply, it means the health of our natural world too, without which we would all soon die off. Therefore, if you want the economy to get better, you have compassion. Congratulations!

Now, how do we practice that? Mahayana Buddhism presents an incredibly rich pallet of time-tested methods for practicing compassion. In particular, there are what are known as the Six Perfections: generosity, ethics, patience, diligence, meditation, and wisdom. I have adapted these six principles of practice to the sphere of economics in my essay The Six-Fold Economics of Compassion. The last of these, wisdom, is divided into two main categories: Post-Materialism, and Co-Centricity. These two principles are each discussed in a separate blog entry. Finally, wisdom could also be broadly divided into “theory,” which is the more general discussion, and “pragmatics,” meaning the practical steps we could institute at a systemic level to put economic compassion into action. The main pragmatic recommendations arising out of my years of contemplating economics issues are put forth in the essay, Civil Endowment Theory. For a shorter discussion of civil endowment, see the post entitled The Special Proposal. (You can see the titles of the various posts by clicking on the little triangles next to the dates in the column on the right side of the page.)