We have a lot of problems in the world. It’s difficult to try and solve them when a lot of us have the emotional desire to make the world a better place but lack the tools we need in order to take appropriate action.
A lot of the time, the way we try to address issues like healthcare, poverty, or hunger – through economic models – oversimplifies the issues in order for us to make mathematical sense of an assumed free market. We leave out the things that may be most important to us simply because they cannot be quantified through money—things like family time, sense of fulfillment, or community welfare.
Economics is not so much the study of money or the management of wealth as it is the process by which we can model the decisions we make in order to maximize welfare. The immediate thoughts related to economics most likely reflect the free market model taught in introductory economics courses. But free market economics doesn’t provide the framework that most economic advisors and researchers should use. Though a lot of financial thinking and profiteering supports the idea that we live in a zero-sum world, this is not the case. Instead, creating holistic economic models that are just as rigorous can help us to make intentional decisions about how we make the world better for ourselves and for each other. “Once we move beyond the notion that no matter what we have, we want more, and getting more is always good”[1] we have the ability to develop better economic models that take other things into consideration.
One of the major problems with the free market model that most conservative politicians and policy-makers tend to use is that it doesn’t take into account the externalities associated with economic justice or environmental sustainability.
At a time when all major economies of the world are growing[2], it’s especially important to make sure that they are doing so in a way that is sustainable and that actually helps the citizens in each country. Implicit in managing sustainable development is making sure that you are able to model the growth and take into account all the asymmetric information, relative incomes, and possible market failures that may come with it. Understanding behavioral economics, altruism, and human capabilities are required of the Buddhist economic model, which directly coincides with the return of ethics in economics. A more holistic model would help show that economics can deliver prosperity, justice, and sustainability for all people, and just more income for the rich.
One of my favorite things to apply economic methodology to is the policy used in urban development. Cities are condensed populations and the policies required to manage these kinds of communities are much more intentional. The Buddhist Economic model is typically easier to implement in situations where living is intentional and based on a community that holds to these values on a public scale. However, many cities follow more closely to the free market tendencies by rule of thumb as the city becomes a dog-eat-dog competitive world[3]. The scale economies and agglomeration of individuals – though technically existing in a community, not necessarily participating in it the way that Buddhist Economics hopes people would – results in a lost sense of agency. For example, people commute to the city and then leave at the end of the day; though there is implicit interconnectedness in this kind of a system, it is forgotten by the greater majority of individuals. Few businessmen and women will take the time to stop and care for the people asking them for money on the side of the road and in the rush of commuting not many people will appreciate the talent of the buskers or drop change for them. A more inclusive, holistic model could help to include the missing values of sustainability in policies and reinstate them as factors of urban development and the sprawl associated with it.
The general idea is that, in solving the problems of our society, there are more factors that we need to take into consideration. We have tools; we just need to use them right. A paradigm shift must occur in order for this world to change for the better.
[1] C. Brown “Buddhist Economics” Chapter 1, page 6.
[2] P.S. Goodman “Every One of the World’s Big Economies is Now Growing” https://www.nytimes.com/2018/01/27/business/its-not-a-roar-but-the-global-economy-is-finally-making-noise.html?smid=pl-share
[3] J.K. Bruekner “Lectures on Urban Economics” Chapter 1