This recent talk given at the Triratna International Order Convention by Vaddhaka was the cause of a lot of food for thought. Its clear and succinct style, well backed up by research as well as extensive quotation from relevant sources meant that the talk spread rapidly amidst the social media of sites of local centres and order members alike. Vadhaka’s years of thought and research on the issues discussed came through forcibly. His own strength of feeling for the consequences of ignoring what are essential issues in our modern world left a strong impression on both myself and others.


Having recently finished a six week Karuna door knocking appeal to raise money for valuable social projects making a revolutionary difference to the lives of the Dalit community in India, I came face to face with the poverty mentality effecting so many people in the modern West. Time and again I would be told that the prospective donor could not afford to give even a moderate amount towards those living in deep poverty. This despite all the evidence of extreme wealth such as expensive cars and large extravagant homes being evident from the doorway. A trip on the London underground leaves one bombarded by messages encouraging useless consumption. Most anybody can agree that the values of greed often celebrated by conservative economists leave us feeling hollow and cut off from our fellow man. However Vaddhaka’s talk left much unsaid about the benefits of capitalism he touches on early on in his talk, as well as the pitfalls in creating powerful political institutions designed to interfere with free markets for the laudable goal of counteracting many of the negative social issues that plague our society today.


One critical issue with Vadhaka’s talk is to confuse the institution of capitalism or free market with the values associated with some of its proponents. Capitalism has become laden down with negative associations such as greed, war and exploitation. However capitalism in itself is not connotative of any particular values, it is simply a way in which society is organised through which individuals can interact. The Oxford English dictionary defines capitalism as “a way of organising an economy so that the things that are used to make and transport products (such as land, oil, factories, ships, etc.) are owned by individual people and companies rather than by the government”. That is, under capitalism goods are owned by people trading freely with each other and not owned and controlled by the state.


The role of self interest in a modern capitalist economy is through the effective use of pricing and profit as a way of signalling to both labourers, landlords and producers alike what needs producing and where it is required. The development of free exchange through the medium of money has been the biggest single advance for human beings in recorded history. How pricing and profit organises an infinitely complex and interconnected economy through individual self interest, and how this is indispensable to a modern civilised world is essential to understand.


The price of a good reflects two things, the demand for that good by individuals and the price they are willing to pay for it according to how they subjectively value it, as well as the supply of that good. It can be worthwhile to consider the number of independent factors that make up those two above conditioning factors. Needless to say, it is a lot, pushing towards infinite!


The miracle of modern capitalism and free trade is that all of these conditioning factors are weighed, balanced and crystallised by the price for the good which bring about its optimal supply in relation to other scarce goods according to how badly people want it. No government system could ever hope to process the level of information required to organise a complex economy in a way that pricing ascertained through the free trade of individuals does. It is through pricing that labourers, landlords and producers alike know what to produce so as to make a profit. Consumers tell producers (including basic labour) what to produce through their consumption preferences communicated through price. Without this signalling system the spontaneous order of such complex modern economies, based on billions of goods and countless transactions, would be impossible.


In this way it is true to say the pursuit of profit has provided for the welfare of mankind. It has created huge amounts of wealth. But it is welfare as understood subjectively by individuals themselves. Now we know as Buddhists that we dont always make the right choices in regard to what is good for us. Economics is ultimately value free however and economists do not make value judgements on what people choose to consume. The alternative is a society that dictates how we consume and is planned from above, and as already discussed this is not a viable alternative. Neither do I think Vaddhaka is arguing for this. But this does suggest the the solutions to the problems of consumerism and acquisitiveness are spiritual, are cultural and are normative, they are not economic or political. Ultimately the right livelihood businesses and workplaces that we hope will characterise the future can only exist within a free society based on private property and free trade.


Capitalism has found a way that we can use the thanha, or greed, mentioned by the Buddha as inherent to the self in a way that is subjectively useful to others. Self interest cannot be wished away. Capitalism harnesses that self interest we are born with to encourage individuals to provide something of use to others in satisfying their desire for wealth. Sometimes this “something” is mindless consumption goods, however more often it is those things essential for a full and human life such as food, shelter, education, family and children for some, etc. As Buddhists our role is to show ourselves and others that the things we thought gave us pleasure do not and that we need to move beyond self interest.


This finally leads to what the results have been in trying to engineer more ethical and equal societies, both today and in the past. The increased intervention of governments in the West since the New Deal of the 1940’s is directly correlated with the increased monopolisation and concentration of wealth by the ultra rich. The massive regulatory states created by the progressive movements of the post war years have been used not for the benefit of those at the bottom but to solidify the position of the well connected at the top. Large social democratic states have not responded to the needs and wants of their populace but to the highly connected, organised and funded interest and lobby groups financed and controlled by big industry and finance, the recent bank bailouts being a classic example. The examples of the Scandinavian countries (who interestingly often score higher on economic freedom ratings than the United States) are by and large aberrations on the rule that where you have power this will be captured by small, well backed and well financed elites. It is in my opinion, far more likely that markets freed of corporate state interference would become radically more egalitarian and peaceful than anything since achieved by welfare states. All this is to say nothing of the level of destruction caused by big state organisations through war and holocaust in the last 100 years. Would left wing activists view the 262 million killed by governments (many of them democratic socialist) in the 20 century to be “worth it”, and if not, for how long should we continue the social democratic experiment?


To finish on a positive, I really liked the suggestions given by Vaddhaka on how we should proceed to bring about a positive future. Ultimately we need to be be the change we want to see in the world. I’m really glad we have a movement that can support us in becoming so.