Adam Smith and the Buddha

Economics is a powerful way of thinking. While there may occasionally be major errors in its application, at its core the principles of economics remain the strongest paradigm in the social sciences. Buddhism is also a powerful way of thinking. The central question in Buddhist philosophy is the same as that in economics: what is the key to human happiness? How can human suffering be reduced? But the answer to this question in the Buddhist way of thinking is exactly the opposite of that given by economics. Can Adam Smith learn from the Buddha? Can Buddhism learn from economics? This essay explores these topics. I first present an interpretation of what I take to be the core of Buddhist thinking in economic terms, and then show how that could be incorporated into economic thinking, and how economics would change as a result. I then try to do the reverse, and show how the economic way of thinking can clarify Buddhist thinking. I apply simple economic theory to develop a model of rational Zen Buddhism.