Odd Lots - Could Buddhism Save The Global Economy?

Episode Date: February 24, 2017

There's a widespread sense that something remains broken in the global economy. Despite a comeback in official measures of economic performance, like GDP and the unemployment rate, there's a widespread sense of disillusionment and discontentment with the status quo. Clair Brown, an economics professor at UC Berkeley teaches a class on Buddhist Economics and has written a book on the subject. On this week's episode of the Odd Lots podcast, Brown argues that the application of Buddhist principles could help economists and policymakers focus on what will actually satisfy people, as opposed to material measures that leave them feeling cold and empty.See omnystudio.com/listener for privacy information.

Thanks for listening to Odd Lots. Follow the show on Amazon Music for more future episodes or just ask, Alexa, play the Odd Lots podcast on Amazon Music. Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy. Bond markets are massive, murky, and let's be real. Lots of firms throw a couple flashy funds your way and call it a day. But not Vanguard. At Vanguard, institutional quality isn't a tagline. It's a very big. It's a very big. It's a very much. It's a lot of firm. It's a lot of commitment to your clients. We're talking top-grade products across the board of over 80 bond funds, actively managed by a 200-person global squad of sector specialists, analysts, and traders. These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at vanguard.com slash audio.

That's vanguard.com slash audio. All investing is subject to risk vanguard marketing corporation distributor. Hello and welcome to another episode of the Odd Lots podcast. I'm Tracy Allaway. And I'm Joe Weisenthal. Joe, we've said this before, but it feels like we've gotten off to a really dark start for 2017. And doesn't it just feel like everyone is sort of really emotional right now and

unhappy and quite negative? Wait, when you say we've gotten off to a dark start in 2017, do you mean the world or you're referring to our? podcast. Because I guess they're both kind of true, maybe. Yeah, I think you could take your pick. I did mean the podcast specifically. I mean, we've been going through some not sunshine and light topics, right? Right. Kidnapping, the mafia, the French Revolution. Yeah, I'd say we've had several bleak episodes. All right. So do you ever kind of wonder about why everyone is so unhappy and so dissatisfied, particularly at this moment in time. Now I'm not talking about the podcast. Now I'm talking

about the wider world. It certainly does feel like there is some sort of deeper crisis that is not something that just started this year. That's not something particularly related to politics in any given country that may manifest itself as such from time to time. And it could be narcissism. maybe everyone just sort of feels like their ages in crisis. But, you know, I remember the 90s. I think people were pretty happy then, and it feels like things have turned a darker corner in terms of perceptions of the state of the world

and people's material being. Right. So you mentioned material being, but it's weird, right? Because by most measures, people's standards of living have actually increased quite dramatically, right? Everyone has fridges and washing machines. we have Netflix, we can watch whatever we want to watch, lots of entertainment options, and everyone still feels economically deprived in some way, right?

Absolutely. And you see these charts and there are these optimists out there who are saying, look, fewer and fewer people die of ecstasy every year, or we're close to curing this, or everybody has this now, and they didn't have that 10 years ago. But strangely, it doesn't seem to really satisfy many people. Right. And economics hasn't really been able to discuss that issue either. Because again, if you look on a pure economics perspective, like, sure, you can look at sluggish wage growth, you can look at low productivity, but overall things should be reasonably okay. You'd think so. So what's the answer? How about Buddhism? Go on. Okay. So today, we are actually going to talk.

about what we can learn from Buddhism when it comes to economics. And if you think about it, it's a really interesting question because at first glance, you would think Buddhism is almost totally different to economics, right? Economics is all about goods. It's all about increasing wealth and Buddhism is pretty much the polar opposite. Yeah, absolutely. It would not be intuitive that there would be an episode of this podcast where the two were combined. But there's not just an episode. There's actually a class being taught called Buddhist economics. And today we are going to speak with the professor behind that class. She is Claire Brown. She's a professor of economics at UC Berkeley. Claire, thanks so much for joining us.

I'm delighted to join you on Unlots to talk about Buddhist economics. Well, what's Buddhist I'm just going to start with the obvious question. What is Buddhist economics? Buddhist economics rests upon a lot of economics that's already been done about inequality, how it occurs, what we can do about it, about sustainability and how to create an economy that can move us to clean energy and low carbon emissions, and about how to reduce suffering and increase happiness. So Buddhist economics basically brings together a lot of economic. it's already out there. But it's done in a very fragmented way. So what I wanted to do was to bring together a lot of the economics that we already know

into a system where we have equity, we have sustainability, and we simultaneously are reducing suffering and increasing happiness. And it's in the last part that Buddhism plays a big role. Because in Buddhism, we're all interconnected. with each other and with nature. And we are supposed to reduce suffering. And so there's a way to integrate all of these ideas into an economic structure that can make some sense. So, Claire, how do you square Buddhism with classical economics? Because economics is essentially, we said it in the intro, right? It's all about goods. But even its view of labor is very, very specific,

because in classical economics, employers are always working towards increasing output while minimizing employees, right? So how would they ever account for things like well-being? Let's step back one minute and say, what are our two biggest economic problems? They're inequality and sustainability. And we do care about labor and jobs and technological change. But right now, we're dealing with enormous inequality. that's been growing for the last 40 years, and we're dealing with the problem of global warming where we need to move to a clean energy economy.

So the way we put together Buddhist economics is we say, you know, we know a lot about inequality. Society picks their level of inequality, and then they can set up their institutions, their rules and regulations to decrease inequality. We know that we can do that. But, in fact, we haven't in the United States. We also know that we have the technology, we have the science about how to move from a fossil fuel economy to a clean economy. We know we can do that. So why are people feeling unhappy?

Well, from a Buddhist economics viewpoint, people are feeling unhappy because when you have increased inequality, people compare how well they're doing to the people above them. And all of a sudden, the economic growth is going to the top 1 percent. and families across the board are feeling less well off. It's like we don't need to have that level of unhappiness, but we are having it because our society and our economy are not willing to undertake the policies to actually redistribute income and to help the bottom 95%. Now, one of the things that strikes me about economics

is and a sort of truism that I think extends beyond all, beyond just economics is you can get what you measure. So it's easy to measure the number of people who are unemployed and it's easy to create a policy in theory that reduces the number of unemployed. Or if you want to lower people's taxes, you can, there's a number there. How do you measure happiness? I mean, it's a subjective thing. People might say, oh, we, everyone feels so unhappy these days, but it's not like there's some obvious statistic out there that judges the mood of the nation. So how do you feel confident saying what we sort of all intuitively feel, which is that people are unhappy and unsatisfied? You're right. It's very hard to make a good measurement of happiness and even a well-being.

But economists have lots of ways we do it. We have many metrics. One of them, for example, for happiness is the Cantrell ladder. We're we ask people, I'll have asked people around the world, how are you feeling about your life on a ladder? If 10 is the highest rank and one is the lowest, right now, what's the best you could, given what's the best you could do in your life? Where are you on the ladder? What's so interesting is that most people just give a perfunctory, oh, I'm a five or a six. And it's really hard to tell from that, I think, how people are truly feeling because their response on the Cantrell ladder doesn't very agree. great deal across society or even within society. But we can go one step further. In the UK, they've

put together a quality of life index of well-being that's much more objective, not just asking how do you feel, but sort of how well are you doing? And it has to do with your help, with how well you're functioning in society and other measures that really look at people's well-being. and they pull 10 measures into an index. And what they find is that when inequality goes up, the social well-being index goes down. People are actually not doing as well in a very objective manner. And so we can see that, in fact, social well-being and inequality go together, unfortunately, inversely. Is that dissatisfaction?

Is that all because of income inequality? or are people also unhappy about the nature of their work? Because the other thing that's been going on for the past few years is this idea that we've lost a lot of traditional jobs, manufacturing jobs specifically. Is there a sense that some people just aren't happy because they aren't doing the work that they would prefer to be doing? I think one of the biggest problems with work around the country, especially in the Rust Belt, is that as we've gone, especially into automation and technological change, that a lot of jobs have disappeared, but they've disappeared in towns where there are no alternatives. And of course, one of the things in Buddhist economics is very important is that, first of all, everybody has a comfortable life with food, clothing, shelter. they can buy the things they need for their families to survive well, be comfortable, but that also in Buddhist economics, as Schumacher told us,

right livelihood or the way you make a living matters to all of us, so that we care about how we spend our time, how we spend our energy, both at work, but also at home and in the community. So in Buddhist economics, well-being encompasses not just your consumption, because everyone needs a certain amount of consumption, but also encompasses how well you feel about your work and your productivity at work and what you're giving to the community. And then also how well you feel about your relationships

and what you're doing outside of work at home with family, with friends. So it all comes together in asking, how well is our economy producing well-being for everyone, Not just how right now the way we measure economic performance is we say, oh, what's the GDP? What's the output on average per person? Which really doesn't tell us very much about well-being. So if I sort of, if I'm trying to get the big picture of what you teach and what Buddhist economics is, is it essentially a search for other values that economists typically ignore that if they paid more,

attention to them, they might see crises coming. So thinking about happiness as a measure, thinking about right livelihood and the importance of what one does with their day and how they value that is the idea essentially that if more people were aware of all of the importance of all these things, then we could have built an economic system or pursued an economic system that would lead to greater satisfaction. I think that's well put, Joe. Yes, I think Here's the whole point. Economists know a lot about how to improve equality within a society. We also know how to make a more sustainable world built upon clean energy. It's just in the United States, for some reason, the Republicans are really against this. They say, no, no, no, that's not the structure we want. And to be honest, now we're even moving into a situation where economists aren't even allowed to show their studies, where we can, we have some. We have some. We have. many studies that we know about how to move us from an economy that's just based upon more goods and services, which are not exactly what people necessarily want to be happier

or to feel better, to an economy where we can create meaningful jobs, we can create meaningful experiences for people within a social and economic structure that cares about everyone, not just average income per person. So if you were applying Buddhist economics to the real world, can you give us an example of what one like real Buddhist economic policy would be? Okay, that's great because actually we have eight steps to get to a Buddhist economy. And the most important role, once again, is by the government, where we would have more progressive taxes. We would build jobs within the Rust Belt that allow people to basically

develop their full potential. And we would also make sure that all consumers are able to move to clean energy, which is basically electricity based upon renewable resources. So we would have the government setting up. And most of these policies are already. in effect in many countries around the world. It's just we're a little slow in the U.S. to getting on board. Then we would have companies take one step further and say, okay, we actually do need to create jobs that allow people enough time to have family and community life. So we want to have companies create jobs that aren't just based upon the number of hours, but jobs that pay a living wage and also provide time for people to care for their families.

So when I listen to this, it all makes a lot of sense, but it sounds to me like fairly straightforward leftist or progressive economic policies, or at least it doesn't sound that much different. Is there something distinct about, you know, as a playing devil's advocate here, is there something distinct about sort of, as you see at Buddhist economics, that isn't sort of what you hear? progressives typically talk about? Yes, in some ways. Because progressives have especially focused on inequality. And Buddhist economics says, no, that's not enough. Inequality we want to reduce. But what we

really need to care about is our interconnection with nature and sustainability. So many economists have actually seen and talked and think about nature is just something out there that we use to increase consumption. And that's not the way we can actually move forward into a sustainable world as we rebuild the infrastructure for clean energy. And then the third part is economists think of, oh, we just need economic growth. That's all we need to get going again. But in fact, in Buddhist economics, and some economists, of course, agree with this more generally, what you have to understand is that economic growth right now just means more GDP on average, and it's been going to the rich. It hasn't been going to everyone. So we used to say in economics, well, if we have

economic growth, the rising tide brings up all ships, but that's not the case now. So in Buddhist economics, we were very specifically saying we don't want economic growth that focuses on raising income and consumption for basically the rich. But economic growth, but economic growth, we're very specifically is something we care about that increases well-being, and we want to measure it that way. We no longer want to measure economic performance is output per person, but we want to measure it in a holistic way. And economists have lots of matrix we can use. We have the genuine progress indicator or the Better Life Index, or we have many that we can use, but we need to start using them. So that economic growth is, when we help the environment, economic growth goes up.

When we reduce inequality, economic growth goes up. When we give people more time to spend with their families and communities, economic growth goes up. So when we look at it that way, happiness goes with economic growth as people feel like the things that they care about and are meaningful to them are now important and are delivered through the economy. What if you get inequality and happiness levels? Like, is that an issue if some people are happier than others? Oh, like a second derivative. Yeah, I'm just curious. Could it be a problem?

Mainly what you want to think of it this way, Tracy. Think of it is we want to reduce suffering. So we want everybody to be happy in some way, but we aren't trying to compare their happiness level. But we are trying to help the people at the very bottom who are suffering for various reasons. Often it's because they don't have enough food or clean water or what have you. But what we do care about is that if your happiness goes up, but just for a few people, but it goes down for most people, then the economy is not producing well-being. That actually would be seen as a decline in well-being. So what we want to do is increase the well-being of everyone and not just a few.

And when I say well-being, well-being happiness, we're somewhat interchangeable. What is the best thing to read for people who are more interested in this if they wanted to read a book that sort of explained Buddhist values that could potentially be applied to economic thinking? Where would you recommend they start? Well, I'd recommend, of course, they start with my book, Buddhist economics, because I do go over basic Buddhism and how it applies to economics. And then I explain the free market economy and why we really. it's not producing what we want. And then we move to the Buddhist economy, which is based upon a Marty Asin and Joe Stiglitz and many economists, but we integrate it. We bring them together and say, now what happens if we bring together all the things that economists know, but somewhat practice in their

little niches? How would that then structure an economy that provides well-being for everyone? Claire, what's been the reception to the class that you're teaching at Berkeley? Because I think I read somewhere that your students meditate as part of the syllabus, and you also have the involvement of a Tibetan Buddhist priest. It sounds quite unusual. Well, Buddhism is experiential, as you pointed out earlier, and economics is conceptual. So we need to bring them together. And also the mindfulness movement of sitting. Everyone has now knows that, oh, it helps your brain.

It sort of helps you figure out who you are and how you fit into the world. So, yeah, we do some sitting, five to ten minutes. We do field work where the students go and actually go to a practice at a Buddhist temple where they sit and have a lesson. And that's field work. So I want students to understand the experiential part of Buddhist economics as well as the conceptual part. Because the conceptual part is much easier to teach them. You know, they all know how to do economics, or they're learning at least.

And so the students, actually, when you ask them at the end of class, what was most important? He said, oh, we love the experiential part. That was great. But we also love thinking outside the box. And many of them have come back and said, you know it has helped me so much to learn to quiet my mind and open my heart when we're sitting. And so we – the students love the class, basically. And so we have to ration it. But then they say go out and help each other, you know, teach your friends, which they then do.

You know, thinking about this sort of current malaise and, you know, if we accept that there is this deep unhappiness out there around the world, something that I've thought about is how our culture and our society really values. You know, if there's one thing that our society really values, it's making money. And as long as people are generally getting rich and you certainly had felt like everyone was getting rich in the 90s during the dot-com bubble and a lot of people felt like they were getting rich in the 2000s, then it feels like the individual getting rich in that society feels like they're achieving the goals and the values that society has set out before them. And now in the wake of the financial crisis, I wonder, you know, people are maybe. they've returned to jobs, but it doesn't really feel like people don't feel like they're thriving. And I wonder like if the issue is like we don't have a thing that society is for besides being rich. And that, you know, besides just anticipating what aspects of an economy are going to make people unhappy, that it really comes down to sort of these deep values that we don't, you know, there's not something

bigger that people can pursue other than sort of individualism and their own material well-being. and that the sort of more spiritual approach and understanding non-material things is sort of the essence of why people are unhappy. Maybe I'm just restating it. But I think this sort of really, what you're talking about really does, I think, speak to why we see this rise in unhappiness after the economy really stalled out. Yes, I think that's really true, Joe, that people are looking for a meaningful life and that consumption income are just one aspect of. it and they don't want to have their whole life focused on that because otherwise you say, gee, I'm just working, but I need to live also. And I need relationships are extraordinarily important to people and how happy they are.

And helping other people, in fact, makes people much happier. Right. So we know that we need to be able to bring these all together and we can within our economic structure. We can't just any longer say, oh, that's okay. Maybe you'll be rich. I have just one more question, and then we have to let Claire go. But it's that there is a theory out there right now, which is that if we allow the economy

to keep working as efficiently as possible, if we develop as much technology as possible, we'll get everything automated, output will be fantastic, we'll have a bunch of robots doing all the work for us. And we as human beings will be able to sit around and enjoy our. our leisure time. How does that square with economics and with Buddhist economics in particular? Right. Well, I know I read all these are my colleagues that are my here in various places. And I, you know, I think we're a long way from that. But I do think that one of the wonderful things about our increased productivity and technology is we could lower the work week. And we can do

that. But to do that, we need to do it within a structured framework where minimum wages and transfers from capital to workers occurs in a balanced market system. We can do all those things. And in my book, I talk about some of the policies that are suggested and how we might move to there. But it's a wonderful opportunity to think, you know, we won't have to work as hard. We won't have to work as many hours. And we can focus on our well-being within our families, in our communities, and our country. And that would be a wonderful way of seeing the economy delivering well-being to everyone. Okay, Claire Brown, Professor of Economics of UC Berkeley, thank you so much for joining us today. It was my pleasure being on odd lot and talking with you.

Thank you. So, Joe, are you a convert to Buddhist economics? I think there's real value here. I think that there's something, this idea that economics needs to find. new ways of measuring the well-being of society beyond the traditional ones is an important one. And this idea that perhaps there's part of the deep unhappiness that a lot of people feel is as a result of an economy and a society that prioritizes some of the wrong numbers, I think, is also true. So I think there's a lot of merit to this approach.

Yeah, I completely agree. The only thing I'm a little bit frustrated with is the policy recommendations because as you pointed out, a lot of the Buddhist economic policies, so to speak, just sound a lot like the traditional progressive policies that we've heard from economic thinkers for decades now. I think that's probably correct. I mean, I think as Professor Brown noted, or a few different things beyond the focus on output. And especially I thought that was a really powerful point about the fallacy of growing the pie or growing GDP as a solution, Because if the problem stems from inequality and if growing the pie, you know, if the wealthiest get a greater share of that grown pie than the lower classes, then even you could imagine a situation in which an expanded economy leads to less overall happiness by virtue of the fact that's more unequal. So I think, you know, reframing the challenge outside of purely material things is a hugely important.

and I suspect that economics is kind of, you know, just at the beginning of rethinking the economy that way. But as you pointed out in your last question, these issues are coming fast and furious with all the concerns about robots and whether we'll have any work and stuff like that. So it's actually a very timely, it's very timely to rethink these things. Yeah. Did I ever tell you the story about when I met a Russian billionaire and his whole plan was to encourage technological development to the point where humans wouldn't have to work and we could all focus on our spiritual development. That was his plan. Can we get him on a future episode?

Oh, oh, we should. Yes. Okay. All right. Okay. All right. I'm going to go work on that. And people should check out Claire's book, which just came out, Buddhist economics, an enlightened approach to the dismal science. Thank you for tuning in to the latest edition of the Oddlots podcast. I'm Joe Wisenthal. You can follow me on Twitter at The Stallwart. And I'm Tracy Alloway. I'm on Twitter at Tracy Alloway. Thanks for listening.

I'm June Grasso, inviting you to join me for the Bloomberg Law podcast. Every weekday, we help you make sense of the legal stories that shape the nation and the world. Listen for complete analysis of the biggest court cases, the latest actions from Congress and regulators, and the legal moves driving the markets, from corporate law to constitutional law and from state courts to the Supreme Court. At Bloomberg Law, we go beyond the day's headlines. We speak with top attorneys, judges, scholars, and policy experts to break down what the rulings really mean. We do this every weekday, then bring you the best conversations in our daily podcast. Search for Bloomberg Law on YouTube, Apple, Spotify, or anywhere else you listen.

On the East Coast, listen as you start your day. And on the West Coast, catch up in the evening. That's the Bloomberg Law podcast with me, June Grosso. Subscribe today wherever you get your podcast. What separates good leaders from transformational ones? I'm Jessica Chen and in season two of Leading By Example, we'll sit down with executives like Grace Chen of Bertie Gray to find out. It's important to understand where you spike,

but also really acknowledge where you don't and find people who can fill those gaps. Listen to leading by example, executives making an impact on the I-Heart radio app, Apple Podcast, or wherever you get your podcasts.