Mixed economy

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Adapted from excerpts from a chapter in The Complete Book of Buddha's Lists -- Explained. David N. Snyder, Ph.D., 2006.

For most of the twentieth century the nations of the world struggled between a very extreme capitalism and a very extreme socialism. Government hands-off capitalism produced sweat shops, poor working conditions, and other problems. The other extreme of socialism produced few incentives, little economic growth, and poor living conditions in general for the masses. The balanced middle way approach proved successful by the end of the twentieth century as the former Soviet Union collapsed and the economic super powers of the world all practiced the middle way, a mixed economy of not pure capitalism and not pure socialism (Japan, the U.S., and Germany).

The views of Buddhists around the world in regard to politics and economic vary from the far left spectrum all the way to the far right spectrum, with most probably hovering around the middle or a little left of center. It is understandable that many Buddhists would be left of center or even left wing when we see the numerous teachings of the Buddha praising generosity and compassion and opposing greediness and selfishness.

However, the Buddha, unlike the common perception of other religious leaders, was not anti-rich. He had a very balanced approach. The Buddha said that workers should be given adequate wages, safe working conditions, and other basic benefits. The capitalist was to be free to invest and make an honest living and business. He advised lay people to spend one-fourth of their income on daily expenses, invest half, and keep one-fourth for an emergency. According to the Buddha, one of the greatest happinesses lay persons should strive for is to be free of debts.

The Buddha recognized the undesirability of economic deprivation saying: "Monks, poverty is real suffering for an ordinary worldly person" (A.III,351). He also described the difficulties that often accompanying poverty. "When a man is poor, penniless and in penury he gets into debt and that is suffering. When he is in debt he borrows money and that too is suffering. When he the bills aren’t paid they press him that is suffering also. When he is pressed and cannot pay they harass him and that is even more suffering. When they harass him and he still cannot pay they have him arrested and that is great suffering" (A.III,352).


Main article: Poverty

Poverty can have a variety of causes; individual or social. Some of the causes of individual poverty can be making unwise business decisions, irresponsible spending or failure to husband one’s resources carefully. Other causes such as sickness or disabilities are perhaps beyond the control of the individual. The causes of social poverty include long-term unemployment, downturns in the economy or exploitive social systems and are likewise are not the fault of individuals and beyond their ability to solve. In the Buddha’s time, being crushed taxation (balipilita) by tyrannical kings sometimes drove large numbers of people into penury (Ja.V,98). Such poverty is unconscionable and one of the roles of the government should be to try to alleviate it. Another reason why a government should involve itself in poverty alleviation programs is because there is a link between poverty and crime and a government also has a duty to protect its citizens against crime. The Buddha recognized the link between poverty and crime when he said: "From (the king) not providing sufficient relief to the poor, poverty increased, with the increase of poverty theft grew, from the growth of theft the use of weapons became common and with weapons common there was an increase in killing" (D.III,67).


Main article: Wealth

The Buddha and his Sangha, also benefited from the generosity of wealthy followers. Anathapindika was a wealthy businessman during the time of the Buddha. He wanted to buy a nice piece of land and donate it to the Sangha. The prince would not sell the land. Finally after some persuading, Anathapindika was able to buy it by placing about 1.8 million gold coins all over the land, each coin touching another gold coin. Then Anathapindika had buildings and meditation halls built on the land for the Buddha and the Sangha. (Vinaya, Cullavagga 6.4)

There were several other wealthy merchants and business people who donated land and buildings to the Sangha and the Buddha never condemned their livelihood or their wealth.

"The wise and virtuous shine like a blazing fire. He who acquires his wealth in harmless ways like to a bee that honey gathers, riches mount up for him like ant hill's rapid growth. With wealth acquired this way, a layman fit for household life, in portions four divides his wealth: thus will he friendship win. One portion for his wants he uses, two portions on his business spends, the fourth for times of need he keeps."(Digha Nikaya 31)

Middle Way

The "middle way" does not always necessarily mean a little of this and a little of that, but in terms of politics and the economy it seems to have the best fit. Nations that have a mixed economy between socialism and capitalism do very well, have less poverty and crime compared to more extremist policies that are practiced in other nations. Entrepreneurs are free to engage in business and the incentive of wealth allows them to produce good products in a fair market, whereas in a strictly socialist economy there was no incentive. However, to avoid corruption and greed from taking over among corporations, regulations and other laws need to be placed on the economy to ensure everyone is treated fairly. To varying degrees, this is what has worked in the nations that follow a more balanced, middle way approach.