As an economist and someone who practises spirituality, I haven’t often contemplated this combination of unlikely bedfellows – economics and spirituality

Economics or ‘the dismal science’ is a subject primarily limited to materialism and the wealth of nations; and so is rarely considered from any metaphysical perspective.

Self-interest theory

A compelling idea in economics is that of self-interest theory. Economists assume individuals seek to maximise their utility (happiness). This utility is primarily measured by consumption of goods, services and ‘leisure time’. The argument of classical economics is that by pursuing our self-interest, the invisible hand of the market helps create an efficient allocation of resources.

“It is not from the benevolence (kindness) of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

– Adam Smith,(1776) Wealth of Nations, Chapter II, p. 19.

Adam Smith wasn’t quite the free market evangelist, he was later made out to be. He was a moral philosopher who hoped people would aspire to more than self-interest but gain happiness from altruism and thinking of others. He valued the golden rule of religious teachings.

“As to love our neighbour as we love ourselves is the great law of Christianity, so it is the great precept of nature to love ourselves only as we love our neighbour, or what comes to the same thing, as our neighbour is capable of loving us.”

– Adam Smith, The Theory of Moral Sentiments, Section I, Chap. V. (1759)

However, his observation that self-interest could be mutually beneficial has become a powerful feature of economic theory. It is quite convenient for those who wish to justify their own pursuit of material self-interest.

Limits of self-interest theory

The simplicity of self-interest theory is not shared by all economists.

One issue is that maximising our personal self-interest can cause externalities (side-effects) for other people (and future generations). For example, consumption of fossil fuels leads to pollution which may damage the environment and living standards in a way not measured by market mechanisms. An important aspect of economics is trying to make people understand and pay the full social costs of their actions. ‘No man is an island’ we need to move from purely personal costs/benefits to the whole.

Other economists have also raised concern that the pursuit of self-interest, can subtly influence human behaviour in a negative way. In particular, ‘Means to an end can influence human character.’

In “What money can’t buy: the moral limits of markets,” (2012) Michael Sandel questions the side effects of making markets such a dominant and pervasive influence in society. For example, in the past, the queue was an egalitarian influence on society; ‘We’re all in it together’. But, now, if you have the money, you can pay to jump the queue (or pay to have someone stand inline for you). From an economic perspective, it is efficient, but Sandel asks if society always places the highest value on who can pay, it can subtly undermine social norms and human perspectives. Sanders raises the example of ticket touts offering a ticket to have an audience with the Pope in New York. Can spiritual salvation really be bought by the highest payer? The Bible would suggest otherwise.

“It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God.” Matthew 19:23-26.

On earth, money may buy you best seat in the church, but it can never buy character or spiritual wisdom.

Other economists have been concerned that the study of economics and prevailing ideology of self-interest theory can actually make you more selfish. Research by Robert Frank and his colleagues from Cornell University, in Ithaca, New York State found that in a version of the Prisoner’s Dilemma’ economists were 17% more likely to take the ‘selfish’ path. Others have suggested perhaps it is selfish people are more likely to become economists. (BBC link)

The point is that the values of society are important – if we elevate pursuit of material self-gain and make this a dominant aspect of our world understanding, this can subtly change our character and human behaviour. The way we think about the world informs how we act in the world.

John Maynard Keynes once poked fun at his own subject.

“Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.”

Keynes was making a satirical point about the logic of economics that the end justifies the mean. It matters how you get there.

Heterodox Economists

Marcel Mauss an economic anthropologist is the author of “The Gift economy” (1950) He argues that many human societies are based on the concept of reciprocity and gift giving. It is a recognition that societies intuitively recognise the interdependence of individuals. The problem with elevating market forces and economics is that it can undermine these voluntary agreements and sense of selflessness. Economics and markets have a role but are not necessarily the highest ideal

Ernest Schumacher who published “Small is Beautiful” (1973) challenged many of the essential assumptions of economics. He argued traditional economics places too much emphasise on the ideal of maximising material production and consumption. Schumacher argues this approach ignores wider issues, such as externalities, spiritual well-being and gaining real happiness. Schumacher’s book attempted to re-orientate the goal of economics around Buddhist principles (he called it Buddhist economics). He argues the goal is not to maximise national output per se but to maximise individual, social and environmental well-being and get there through ‘right action’ – the same philosophy as that of the Buddha.

“The substance of man cannot be measured by Gross National Product.”

E. F. Schumacher (1973) Small is Beautiful: Economics as if People Mattered (1973)

Schumacher emphasises

“the foundations of peace cannot be laid by universal prosperity, in the modern sense, because such prosperity, if attainable at all, is attainable only by cultivating such drives of human nature as greed and envy, which destroy intelligence, happiness, serenity, and thereby the peacefulness of man.”

– E. F. Schumacher (1973) Small is Beautiful: Economics as if People Mattered (1973) ch. 2

The limits of economics

Even the great economists John Maynard Keynes cautioned about placing economics on a pedestal; he once expressed hope that economics would settle down to be a more modest subject on a par with dentistry. Despite being an economist, Keynes recognised there could be more important issues than economics.

‘But, chiefly, do not let us overestimate the importance of the economic problem, or sacrifice to its supposed necessities other matters of greater and more permanent significance. It should be a matter for specialists – like dentistry. If economists could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid! ‘

– John Maynard Keynes, Essays in Persuasion, New York: W. W. Norton & Co., 1963

Incidentally, that quote came from an article, ‘Economic Possibilities for our Grandchildren’ (1930) where Keynes hoped by 2028, economic growth would enable individuals to have a fifteen hour work week, leaving more time for cultural and artistic activities. It is ironic that as we get richer, we work harder and lead more stressful lives. It illustrates the fundamental premise that material wealth without wisdom can lead to disharmony and unfulfilled spiritual potential.

A spiritual perspective

Another way of looking at self-interest theory is what do we mean by self? If we mean just our body, our ego, then we can say it is the limited self. If we practise spirituality, our sense of self-grows; if we are truly spiritual, we get as much joy in the well-being of others in society as our own well-being. With a more enlightened perspective, we know there is no joy in a feeling of supremacy.

If society and individuals have a sufficient spiritual outlook, the ‘correct’ economic model becomes secondary. If people have replaced an egoistic self-interest with a genuine concern for the well-being of society, it doesn’t matter so much if we live in free market economy or planned economy.

If people are compassionate and empathetic, you don’t need a whole list of rules to enforce ‘fair’ behaviour, it will happen spontaneously.

At the current stage of evolution, modern economists have to work with the current state of social evolution, where self-interest and selfishness are still powerful motivators. Economics is an attempt to try to manage these conflicting motivations and create a fairer society.

But, the problem with any economic theory, is that whatever you come up with, it will always face the limitation of the human element. If people are deeply selfish, they will always find a way to diminish society. If people are deeply spiritual, they will find a way to make things work. The real progress of humanity depends on much more than finding a better economic theory.

“A deeper brotherhood, a yet unfounded law of love is the only sure foundation possible for a perfect social evolution; no other can replace it”

Sri Aurobindo, The Human Cycle, pp. 206-07.

When Sri Chinmoy was asked the importance of the religious, social, political and economics, he put it in the order of ‘religious, political, social and economic.’

Sri Chinmoy explains:

“…When we feel our oneness with others, economic problems will be solved to a great extent. For then your need I will feel like my need, and vice versa. At that time, I shall be more than ready to help you and you will be more than happy to help me. So first religion, then politics, then social problems and then economics!”

– Sri Chinmoy, (1995) My meditation service at the United Nations for 25 years

Conclusion

Economics starts from a model of human behaviour, that is limited. It is only a partial glimpse into one aspect of man’s possibilities. It is true, economics has to deal with the current state of society; it has to deal with the fact many people do act in a selfish way, without regard to consequences of actions.

But, in striving to find the perfect economic theory, we always come up with the limitation of individual behaviour and action. If the world makes progress in spirituality, then perhaps one day economics will be reduced to the minority subject – similar to dentistry, just as Keynes predicted.