Apichai Puntasen, a good friend and also the author of the first textbook on Buddhist Economics, forwarded me an interesting thesis:

* Thesis: The relevance of Buddhist Economics: Capitalism, Morality, and the Global Financial Crisis. By Timothy Allen Golden, 1033690. Dept. of Economics, Lingnan University. Submitted: May 4, 2009

You can obtain a copy from the author via tgolden2 at gmail.

See Tim’s Literature Review on Buddhist Economics here.

This allows us to further update our budding page on “neotraditional economics“.

I tried to explain before why this project is important, especially in the countries of the South, where most of the population is still agrarian and lives in a lifeworld strongly influenced by traditional religion and spirituality.

I have six arguments outlining the interesting commonalities between pre-materialist and post-materialist mentalities and why a dialogue between those social forces is of great interest, if not crucial.

# 1.1 The Main Argument: the common immateriality of traditional and post-industrial eras
# 1.2 The Second Argument: the nature of post-deconstructive trans-modernism
# 1.3 The Third Argument: the problematic nature of tradition
# 1.4 Fourth Argument: the road to differential post-industrial development
# 1.5 Fifth Argument: Adapting to Steady-State Economies in the Age of the Endangered Biosphere
# 1.6 Conclusion: Can the transmodern peer to peer ethos be mixed with neotraditional approaches

The full treatment is here, but below, the main argument and conclusion:

1.

It is not difficult to argue that modern industrial societies are dominated by a materialist paradigm. What exists for modern consciousness is material physical reality, what matters in the economy is the production of material products, and the pursuit of happiness is in very strong ways related to the accumulation of goods for consumption. For the elite, its powers derive essentially from the accumulation of capital assets, whether these are industrial or financial. Infinite material growth is really the core mantra of capitalism, even if it happens through the medium of money.

But this was not the case in traditional, agriculture-based societies. In such societies, people of course do have to eat and to produce, and the possession of land and military force is crucial to obtain tribute from the agricultural workers, but it cannot be said that the aim is accumulation of assets. Feudal-type societies are based on personal relations consisting of mutual obligations. These are of course very unequal in character, but are nevertheless very removed from the impersonal and obligation-less property forms that came with capitalism, where there is little impediment for goods and capital to move freely to whomever it is sold to.

In the more traditional societies that we have in mind, both the elite and the mass body of producers are united by a common immaterial quest for salvation, and it is the institution that is in charge of organizing that quest, like the Church in the western Middle Ages or the Sangha in South-East Asia, that is the determining organization for the social reproduction of the system. Tribute flows up from the farming population to the owning class, but the owning class is engaged in a two-fold pursuit: showing its status through festivities, where parts of the surplus is burned up; and gifting to the religious institutions. It is only this way that salvation/enlightenment, i.e. spiritual value or merit in all its forms, can be obtained. The more you give, the higher your spiritual status. Social status without spiritual status is frowned upon by those type of societies. This is why the religious institutions like the Church of the Sangha end up so much land and property themselves, as the gifting competition is relentless. At the same time, these institutions serve as the welfare and social security mechanisms of their day, by ensuring that a part of that flow goes back to the poor and can be used in times of social emergencies.

It is still a little bit harder to argue in Asian than in the West, but the current era, despite the rapid industrialization and ‘materialisation’ of East Asia, is undergoing a fundamental shift to immateriality.

Material goods still need to be made, and Asia is furiously industrializing, but nevertheless, for the world system, important shifts have already happened, which are most readily visible in the West.

Here are just a few of the facts and arguments to illustrate my point for a shift towards once again a immaterial focus in our societies.

The cosmopolitan elite of capital has already transformed itself for a long time towards financial capital. In this form of activity, financial assets are moved constantly where returns are the highest, and this makes industrial activity a secondary activity. If we then look at the financial value of corporations, only a fraction of it is determined by the material assets of such corporation. The rest of the value, usually called good will, is in fact determined by the various immaterial assets of such corporation, it’s expertise and collective intelligence, it’s brand capital, the trust in the present and the future that it can generate.

The most prized material goods, such as say Nike shoes, show a similar quality, only 5% of its sales value is said to be determined by physical production costs, all the rest is the value imparted to it by the brand (both the cost to create it, and the surplus value created by the consumers themselves).

The shift towards a immaterial focus can also be shown sociologically, for example through the work of Paul Ray on cultural creatives, and of Ronald Inglehart on the profound shift to postmaterial values and aspirations.

For populations who have lived for more than one generation in broad material security, the value system shifts again to the pursuit of knowledge, cultural, intellectual and spiritual experience. Not all of them, not all the time, but more and more, and especially so for the cultural elite of ‘cultural creatives’ or what Richard Florida has called the Creative Class, which is also responsible for key value creation in cognitive capitalism.

One more economic argument could be mentioned in the context of cognitive capitalism. In this model of our economy, the current dominant model as far as value creation is concerned, the key surplus value is realized through the protection of intellectual properties. While Asia is still (mostly) engaged in producing cheap industrial goods (though it is changing fast), the dominant Western companies can sell goods at over 100 to 1,000 times their production value, through state and WTO enforced intellectual rents. It is clearly the immaterial value of such assets that generate the economic streams, even though it requires creating fictitious scarcities through the legal apparatus.

However, it must be said, and we will develop that issue later, that this model is undermined through the emergence of distributed infrastructures for the production, distribution and consumption of immaterial and cultural goods, which makes such fictitious scarcity untenable in the long run. The immaterial value creation is indeed already leaking out of the market system.

2.

My own philosophical, societal and technical approach is called peer to peer theory. It starts from the premise that many humans want to be free to engage in actions and relations around common value creation, and that this desire has become enabled and empowered through the new affordances generated by the global distributed (computer) networks.

Thus we see the emergence of the capability of the creation of common value, through civil society based voluntary formations, i.e. peer production, but also peer governance, i.e. the ability to manage such associations, and peer property, the ability to protect the common value from private appropriation and subsequent enclosure.

These approaches have become hyperproductive, and outcompete traditional for-profit and industrial era methodologies. It is emerging in every social field, and has created an emergent but already powerful social movement that coalesces around three paradigms: 1) open and free content, software, and designs, as the necessary input for free collaboration; 2) participatory governance and social design, which intends to lower the threshold of participation in such projects around the value of autonomy and diversity; and 3) commons-oriented output, which cannot be appropriated but serves to regenerate a new cycle of open and free input. Through this ‘circulation of the common’, a powerful mechanism is created, that guarantees the social reproduction and expansion of peer production.

As these communities, which are moving from knowledge and free and open source software to open design communities that can be linked to distributed manufacturing, grow and expand, we can see that they overturn both modern and even postmodern sensibilities. Hence, a new alliance becomes possible: that between the most technologically advances open design communities, with the majority of the people that is still strongly linked to traditional practices. Through such an alliance, which combines the traditional injunction for a steady-state economy in harmony with natural possibilities, a differentiated post-industrial future can be created, which can bypass the destructive practices of industrial-era modernism, and can create an ‘appropriate technology’ future, whereby more traditional communities can more freely decide what to adapt and what to reject. While on the other hand, transmodern open design communities can learn from the wisdom of traditional approaches.

Such an alliance needs an ideological vehicle, and I suggest that this is a road that Buddhist Economics should take, lest it become a reactionary force rooted in a unrealizable utopian vision of the past.