happiness, the sufficiency economy and the middle way peter warr
TRANSCRIPT
Happiness, the Sufficiency Economy and the Middle Way
Peter Warr
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To be a tiger is not important. The important thing for us is to have a sufficiency economy, which means to have enough to survive.
H.M. King Bhumipol Adulyadej, December 1997
3
The Economics of ‘Enough’
All major institutions in Thailand claim to be adopting H.M. the King’s ‘Sufficiency Economy’ principles.
There is no debate about this matter, but there is a debate about what the principles mean and how they should be applied.
This presentation attempts to arrive at an “outsider’s” understanding of these concepts by looking at them in the following five ways:
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Five perspectives
1. Extracting key themes from Royal speeches on the ‘Sufficiency Economy’
2. Relating these concepts to Buddhist philosophy
3. Relating the ‘Sufficiency Economy’ concepts to research on the economics of ‘happiness’
4. Relating the development of these concepts to major economic developments in Thailand
5. Relating the ‘Sufficiency Economy’ message to economic policy
5
Five perspectives
1. Extracting key themes from Royal speeches on the ‘Sufficiency Economy’
2. Relating these concepts to Buddhist philosophy
3. Relating the ‘Sufficiency Economy’ concepts to research on the economics of ‘happiness’
4. Relating the development of these concepts to major economic developments in Thailand
5. Relating the ‘Sufficiency Economy’ message to economic policy
6
H.M. King Bhumipol Adulyadej:
Themes of speeches on ‘Sufficiency Economy’
(i) Sensible material aspirations…
‘…Development of the nation must be carried out in stages, starting with the laying of the foundation by ensuring the majority of the people have their basic necessities … Once a reasonably firm foundation has been laid and in effect, higher levels of economic growth and development should be promoted…”.
18 July 1974
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‘…no matter what others say –whether they will accuse Thailand of being old-fashioned or obscurantist. So long as we have enough to live on and to live for – and this should be the wish and determination of all of us – without aiming for the apex of prosperity, we shall already be considered as the top in comparison with other countries in the present world…”
4 December 1974
A book entitled Mahajanaka, written by H.M. King Bhumipol, described the destructive effects of (a) greed and (b) ignorance
or delusion.
published 1992
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‘To be a tiger is not important. The important thing for us is to have a sufficiency economy, which means to have enough to survive.’
4 December 1997
‘I may add that full sufficiency is impossible. If a family or even a village wants to employ a full sufficient economy, it would be like returning to the Stone Age … This sufficiency means to have enough to live on. If everyone has enough to live on, everything will be all right.’
1998
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(ii) … while avoiding excessive risk…
Illustrative example of a diversified farm with thirty percent of land for a pond to collect water to be used for cultivation in the dry season, and to raise fish; thirty percent for rice cultivation sufficient for all year round home consumption; thirty percent for integrated field and garden crops, and fruits; and ten percent for housing and other activities such as livestock enclosures, mushroom nursery, and roads.
1994
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‘This sufficiency means to have enough to live on. Sufficiency means to lead a reasonably comfortable life, without excess, or overindulgence in luxury, but enough. Some things may seem to be extravagant, but if it brings happiness, it is permissible as long as it is within the means of the individual…’
‘Some people translate ‘sufficiency’ from the English as: to stand on one’s own feet… This means standing on our own two legs planted on the ground, so we can remain without falling over, and without asking others to lend us their legs to stand on…’
1998
(iii) …combined with self-reliance…
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(iv) … with concern for the protection of others…
‘Sufficiency Economy is a philosophy that stresses appropriate conduct and way of life while incorporating moderation, due consideration in all modes of conduct, and the need for sufficient protection from internal and external shocks.
21 November 1999
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(v) … and with concern for non-material aspects of life
‘Progress is not just about planting enough rice to eat. There must be enough to create schools, even works of art, so that Thailand prospers in every way, with no hunger or poverty, food for body and soul, and many other things.’
and
‘The driving force for development had to come from within, based on accumulation of knowledge. In summary: Self-reliance. Moderation. Resilience. Inner dynamic. Knowledge.’
2003
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(v) … and with concern for non-material aspects of life
‘Progress is not just about planting enough rice to eat. There must be enough to create schools, even works of art, so that Thailand prospers in every way, with no hunger or poverty, food for body and soul, and many other things.’
and
‘The driving force for development had to come from within, based on accumulation of knowledge. In summary: Self-reliance. Moderation. Resilience. Inner dynamic. Knowledge.’
2003
14
Five perspectives
1. Extracting key themes from Royal speeches on the ‘Sufficiency Economy’
2. Relating these concepts to Buddhist philosophy
3. Relating the ‘Sufficiency Economy’ concepts to research on the economics of ‘happiness’
4. Relating the development of these concepts to major economic developments in Thailand
5. Relating the ‘Sufficiency Economy’ message to economic policy
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The three poisonsGreedHatredIgnorance
The three antidotesRecognising unsatisfactorinessRecognising impermanenceRecognising the unreality of the self
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Five perspectives
1. Extracting key themes from Royal speeches on the ‘Sufficiency Economy’
2. Relating these concepts to Buddhist philosophy
3. Relating the ‘Sufficiency Economy’ concepts to research on the economics of ‘happiness’
4. Relating the development of these concepts to major economic developments in Thailand
5. Relating the ‘Sufficiency Economy’ message to economic policy
17
Life Satisfaction = -0.9 + 0.8*ln(GDP)
3.7
4.7
5.7
6.7
7.7
0 10000 20000 30000 40000 50000 60000
GDP per capita in US$ at PPP
Lif
e sa
tisfa
ctio
n, W
VS
(1 =
Dis
satis
fied
to 1
0 =
Sat
isfi
ed)
(1
= D
issa
tisf
ied
to 1
0= S
atis
fied
)
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THA
Life Satisfaction = -0.9 + 0.8*ln(GDP)
3.7
4.7
5.7
6.7
7.7
0 10000 20000 30000 40000 50000 60000
GDP per capita in US$ at PPP
Lif
e sa
tisfa
ctio
n, W
VS
(1 =
Dis
satis
fied
to 1
0 =
Sat
isfi
ed)
(1
=D
issa
tisf
ied
to 1
0 =
Sat
isfi
ed)
19
Happiness = 2.3 + 0.08*ln(GDP)
2.3
2.5
2.7
2.9
3.1
3.3
3.5
0 10000 20000 30000 40000 50000 60000
GDP per capita in US$ at PPP
Hap
pine
ss, W
VS
(1 =
Not
at a
ll ha
ppy
to 4
= V
ery
happ
y)(1
=N
ot a
t all
hap
py to
4 =
Ver
y ha
ppy)
20
THA
Happiness = 2.3 + 0.08*ln(GDP)
2.3
2.5
2.7
2.9
3.1
3.3
3.5
0 10000 20000 30000 40000 50000 60000
GDP per capita in US$ at PPP
Hap
pine
ss, W
VS
(1 =
Not
at a
ll ha
ppy
to 4
= V
ery
happ
y)(1
= N
ot a
t all
hap
py to
4 =
Ver
y ha
ppy)
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ARG
AUS
BRA
CAN
CHNCZE
EGY
FRADEUHKG
HUN
IND
IDN
ITA
KOR
MEX
PHL
POL
SAU
ZAF ESP
SWETHA
TUR
GBRUSA
VEN
Happiness = 0.68 + 0.24*ln(GDP)
2.5
2.7
2.9
3.1
3.3
3.5
0 10000 20000 30000
GDP per capita in US$ at PPP
Hap
pine
ss, R
oper
rep
orts
(1 =
Ver
y un
happ
y to
4 =
Ver
y ha
ppy)
(1=
Not
at a
ll h
appy
to 4
= V
ery
happ
y)
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Experience
Happiness
Income
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Beyond a GDP per capita of about $20,000 there is small additional gain in realised happiness or life satisfaction.
Diminishing marginal happiness.
Why? Some hypotheses:
Individuals adapt, becoming accustomed to affluence. The ‘hedonic treadmill’ (apologies to Paul Frijters)
At low incomes we spend on necessities. At high incomes we spend on status / positional goods. If all obtain these goods there is no net gain in ‘status’, no net gain in happiness.
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Implications:
The concept of ‘enough’ starts to make sense, even to an economist
We expect risk aversion
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A
Expectation I
Happiness
Income
B
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But what if individuals are not good at predicting the happiness they will really derive from greater wealth?
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Actual and Expected Happiness: The Impact Bias
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What if individuals mistakenly think that marginal happiness is increasing?
– They will be dominated by greed– They will be excessively materialistic– They will be excessively risk taking
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Expectation II (Greed)
Happiness
Income
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Expectation II (Greed)
Happiness
Income
A
B
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Five perspectives
1. Extracting key themes from Royal speeches on the ‘Sufficiency Economy’
2. Relating these concepts to Buddhist philosophy
3. Relating the ‘Sufficiency Economy’ concepts to research on the economics of ‘happiness’
4. Relating the development of these concepts to major economic developments in Thailand
5. Relating the ‘Sufficiency Economy’ message to economic policy
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0
20000
40000
60000
80000
100000
120000
1951
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
Level of real GDP per capita
-15
-10
-5
0
5
10
15
20
Growth rate of real GDP per capita
Level of real GDP per capita at 2003 prices, baht, per year - LHS axis
Growth rate of real GDP per capita at 2003 prices, per cent, per year - RHS axis
II IIII IV
Thailand: Real GDP Per Capita and Growth of Real GDP Per Capita, 1951-2006
33
‘To be a tiger is not important. The important thing for us is to have a sufficiency economy, which means to have enough to survive.’
4 December 1997
34
Five perspectives
1. Extracting key themes from Royal speeches on the ‘Sufficiency Economy’
2. Relating these concepts to Buddhist philosophy
3. Relating the ‘Sufficiency Economy’ concepts to research on the economics of ‘happiness’
4. Relating the development of these concepts to major economic developments in Thailand
5. Relating the ‘Sufficiency Economy’ message to economic policy
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The sufficiency economy perspective does not imply that zero growth is optimal.
Long term economic growth generates demonstrable social gains
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Life expectancy at birth (male and female)
0
10
20
30
40
50
60
70
80
1960 1964 1969 1974 1980 1985 1991 1995
0
10
20
30
40
50
60
70
80
Male Female
Source: Public Health Statistics obtained by National Statistical Office
37
Infant mortality (deaths per 1000), 1960 - 2000
Source: Public Health, Division of Vital Statistics, Ministry of Public Health various issues.
Infant Mortality
0.00
10.00
20.00
30.00
40.00
50.00
60.00
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
*
1998
2000
2002
Dea
ths
per
100
0
Infant Mortality
38
Maternal mortality (deaths per 1000 births), 1960 - 2000
Source: Public Health Statistics, Division of Vital Statistics, Ministry of Public Health, various issues.
Maternal Mortality
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
*
1999
2002
Dea
ths
per
1000
bir
ths
Maternal Mortality
39
Thanks for listening
40