Well-Being, Buddhism and Economics

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1 Well-Being, Buddhism and Economics Cassey Lee School of Economics Faculty of Commerce University of Wollongong Wellbeing Conference 7 July 2010

2 Introduction Significant interest in happiness research in economics Traditional: Cardinal vs. Ordinal Utility, Preferences Objective well-being Divergence between material wealth and happiness Happiness research Subjective well-being Complement economics? Subjective vs. objective measures Intrinsic vs. extrinsic factord

3 Buddhism and Happiness Abundant literature highlighting the use of Buddhist principles in cultivating happiness/joy Focus on: Mindfulness Meditation Buddhism is a major spiritual tradition Are Buddhist insights relevant to Economics?

4 Objectives Explore the nature of well-being in Buddhism Discuss implications for economics Similarities Differences

5 Approach / Methodology Discuss the nature of well-being in economics Review basic Buddhist teachings Four Noble Truths Explore the nature of well-being in Buddhism Economic agent Happiness

6 Well-Being in Economics Nature of Economic Agent: Unlimited wants, limited means with alternative uses Utility and Preferences Utility maximization s.t. income constraints Cardinal utility Ordinal utility Revealed preferences observed choice is optimal (welfare blackbox)

7 Happiness in Economics Frey & Stutzer (2003): People evaluate subjective well-being taking into account: Circumstances, comparison with others, past experience, future expectations Subjective measures satisfactory approx. of utility

8 Happiness in Economics Higher income, higher subjective wellbeing but experience diminishing MU Prize material goods less happy Having intrinsic goals happier than having extrinsic goals Pleasures from material goods transitory

9 Buddhist Teachings Siddhattha Gotama Around 2,500 years ago Theravada (or Hinayana), Mahyana, Ch an / Zen and Vajrayana Different emphasis: Practice vs. theory Gradual vs. sudden enlightenment Nature of Buddha / Bodhisattva

10 The Four Noble Truths Dukkha - suffering, unsatisfactoriness of the experiences of life. Buddha s teaching - suffering and the cessation of suffering. Ffour noble truths: 1. The truth of suffering (Dukkha) - 2. The truth of arising (Samud aya) 3. The truth of cessation (Nirodha) 4. The truth of the path (Magga)

11 1. Truth of Suffering Suffering is an integral or intrinsic part of life. Suffering is unavoidable Happiness is transitory

12 Types of Suffering 1. Suffering as pain which is related to biological aspect of existence such as birth, sickness, ageing and death. 2. suffering as change which is related to emotional and psychological distress sorrow, lamentation, pain, grief and despair due to passing of pleasant experiences or the experience of an unpleasant ones suffering as conditions which is related to the frustration and disappointment due to our inability to keep away things, people and situations that we dislike, separation from what one likes and not getting one likes.

13 Aggregates of grasping or attachment 1. Aggregate of Matter - which relates to the material shape or form of existence (4 great elements, 5 sensory organs and mind) 2. Aggregate of Sensations - which relates to the sensations (feeling or hedonic tone of experience) that arise from the interaction between our (five) sense organs and mind with the external world.

14 3. Aggregate of Perceptions - which relates to the cognition, recognition and interpretation of physical and mental objects. 4. Aggregate of Mental Formations - which relates to states which initiate action which can be active (e.g. determination, joy, hatred) or passive (e.g. attention and sensory stimulation). It involves what is usually referred to as volition or will. 5. Aggregate of Consciousness - relates to an awareness of the presence of an object when one of the six faculties interact with its external counterpart.

15 2. Truth of Arising Origin of suffering (dukkha). Suffering arise from craving / thirst Craving can assume at least three forms, namely: Thirst for sensual pleasure - which involves the gratification of the senses Thirst for existence - which involves selfprotection, ego enhancement, and eternal life after death Thirst for non-existence - which involves removal of unpleasant situations, things and people by means of self-annihilation

16 3. Truth of Cessation The state at which cravings, attachments and suffering ceases to exists is Nibbana. This could take the form of Nibbana in this life (enlightenment) and Nibbana at death (cease of re-birth). The achievement of Nibbana also marks the end of ignorance of reality, that is of the impermanence of reality. An individual who has attained Nibbana has also been described as someone who live solely in present. He or she does not any regret over the past. Such a person also do not dwell upon the future. Because the five aggregates are impermanent, the consciousness in the state of Nibbana is said to be unsupported by any conditions. Some Buddhist traditions have interpreted this as void or emptiness.

17 4. Truth of the Path Eightfold Path 1. Right understanding 2. Right resolve 3. Right speech 4. Right action 5. Right livelihood 6. Right effort 7. Right mindfulness 8. Right meditation

18 Well-Being in Buddhism Subjective or Objective Well-Being? Key elements: Complex being embodied mind Nature of Non-Self Impermanence Suffering and Happiness Karma (?) Nibbana

19 Relevance to Economics Elements of transitory happiness is present in economics BUT this is different from impermanence in Buddhist thinking Measurement issues a problem one sided focus on happiness would neglect Buddhist insights Buddhist consumers as a sub-category in market studies?

20 Relevance to Economics Complex elements and impermanence renders formal modeling difficult A physical (biological-sensor) approach is more appropriate? Role for Neuroeconomics? What does it mean to live in the present moment by being mindful? difficulty in using discount factor approach?

21 THANK YOU

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