The Meaning of Sufficiency Economy International Conference

The Meaning of Sufficiency Economy International Conference16-17 February 2012Plaza Athénée Bangkok, A Royal Méridien Hotel, Wireless Rd., Bangkok

The Meaning of Sufficiency Economy International ConferenceCopyright © 2011 by King Prajadhipok’s InstituteNumber of copies: 300Publisher: King Prajadhipok’s Institute The Government Complex 5 th Fl., Ratthaprasasanabhakti Bldg. (Southern Zone)120 Moo 3, Chaengwattana Rd., Laksi,Bangkok, Thailand 10210Tel: 02-141-9550, 02-141-9558 Fax: 0-2143-8174http://www.kpi.ac.thPrinter:Charansanitwong Printing Co.,ltd.285-292 M.4 Petchakasem Rd., Laksong,Bangkae, Bangkok 10160Tel. 02-809-2281-3 Fax : 02-809-2284All right reserved. No part of this publication may be reproduced, stored in a retrieval system, ortransmitted in any form or by any means, electronic, mechanical, photocopying, recording, orotherwise, without the prior permission of the publisher.

The Meaning of Sufficiency Economy International ConferenceIIITable of ContentsThe Meaning of Sufficiency Economy International ConferenceSufficiency Economy : View Point and Experiences from ThailandGrou 1: Sufficiency Economy and Mainstream Economic TheorySufficiency Economy and the Economics of EnoughWhy alternative approaches to development are needed andhow sufficiency economy can contribute?The place of Sufficiency Economy within a unified theory ofsocial bettermentModern Mainstream Economic Science: a Science withoutGratuitousness. The case of the Economy of CommunionSufficiency Economy and Gross National Happiness:Integrated Value for Sustainable DevelopmentNon-monotonic Utility Functions for Microeconomic Analysisof Sufficiency EconomSufficiency Economy: A Pathway to Sustainable DevelopmentGrou 2: Sufficiency Economy and Grassroots DevelopmentGrassroots Development and Sufficiency EconomyStrengthening Sufficiency: Interdependent Selves withinCommunity EconomiesThe Thai social capital of the people in Inpaeng network,Sakonnakhon ThailandThe Village Economy: Capitalist AND Sufficiency-based –A Northeastern Thai CaseBunniyom Buddhist Economics Of The Asoke GroupAn Exploratory Research Study on the Economics ofDeploying Integrated Local Alternative Energy Solutions as a Sufficiency Economy Concept of Sustainable Development at Community Grassroots LevelImpact Of Micro Credit On Women Empowerment –A Study In Mysore District, India“Tha Kham”: Tambon Administration Organization of Learningtoward Self Sufficiency Economy ModelSufficiency Economy Practices in Hill Area of India:Case of UttarakhandGrou 3: Sufficiency Economy, Business and EthicsThe Dialogical Space between Buddhism and EconomicsArguments for peer production in the contextof sustainability and neotraditional self-sufficiency.IV12325435585111135145155157177191213231245277301315331333393

IVThe Meaning of Sufficiency Economy International ConferenceTable of ContentsBangko Kabayan: an experience of an Economy of407 Communion EnterpriseCorporate Fraud in Thailand417The Sufficiency Economy and Business Ethics435Economy of Communion as a Model of Entrepreneurship in East Asia 449Sufficiency Economy Practices in Business:457Enlightening the Ways through the Hindu PhilosophySustainable Development for Common Man:469Case of Indian CompaniesGrou 4: Sufficiency Economy, Education,485Values and Alternatives to GlobalizationCreating sustainable economic systems –487contributions from the Buddhist world viewInherited Values and Sufficient Economy501Self-reliance and Self-sufficiency:531nationalist reaction to globalist impositionAutocentric Development and Sufficiency Economy545Enoughness: Beyond Sufficiency Economy571A Self-Sufficient Economy Attract more Foreign Direct587 Investment Inflows: A Case Study of Indian EconomyAlternatives to Globalization : Sufficiency Economy607Sufficiency Economy; Understanding and Value of the Philosophy 619Biographical Information631

VIThe Meaning of Sufficiency Economy International ConferenceThe conference aims to explore the state of research and practice of thesufficiency philosophy on various levels. Moreover, as initiatives such as the“Commission on the Measurement of Economic Performance and Social Progress”(since 2008) by the French government show, there is increasing awareness globallyabout a need for development indicators beyond GDP and about development goalsbeyond economic development. Thus, in order to further define the meaning of thesufficiency economy concept the conference encourages academics anddevelopment actors from relevant theoretical backgrounds to share their experiencesand express their views on sufficiency economy. This will bring together differentviews and “sharpen the edges” of sufficiency economy vis-?-vis similar approaches.3. VenueThe international conference on Sufficiency Economy will be held Plaza Athénée Bangkok, A Royal Méridien Hotel, Wireless Rd., Bangkok, on 16-17February 2012.4. Working LanguageThe working language of the meeting is English. Interpretation into Thai willbe provided only in plenary session. 5. Organized By• The National Assembly• King Prajadhipok’s Institute• Thammasat University• Office of the National Economic and Social Development Board• Thailand Development Research Institute• Research and Development Institute of Sufficiency Economy PhilosophyFoundation• Pridi Bhanomyong Institute6. Keynote Speakers:Dr.Supachai Panitchpakdi The Secretary-General of UNCTAD (United Nations Conference on Trade and Development)

The Meaning of Sufficiency Economy International ConferenceVII7. Conference Subthemes:Group 1: Sufficiency Economy and Mainstream Economic Theory- Sufficiency Economy and Sustainable Development- The Economics of Enough – A Viable Alternative?- Happiness and Alternative Development IndicatorsPanelists:- Dr. Peter Warr from Australian National University - Dr. Peter H. Calkins from Chiangmai University - Dr. Luigino Bruni from University of Milan-Bicocca, Italy - Dr. Sauwalak Kittiprapas from International Research Associates for Happy Societies (IRAH)Group 2: Sufficiency Economy and Grassroots Development- Sufficiency Economy and Related Approaches on the Community Level- Projects and Practices- Bottom-up vs. Top-Down: The Question of Project OwnershipPanelists:- Dr. Charles Keyes from University of Washington- Dr. Vandana Shiva, winner of the Right Livelihood Award- Linda Nowakowski from Ubon Ratchathani University- Juliana Essen from Soka University of America- Dr. Sutee Suksudaj from Thammasat University- Dr. Adis Israngkura from National Institute of Development Administration (NIDA)- Dr. Marja-Leena Heikkila-Horn from Mahidol UniversityGroup 3: Sufficiency Economy, Business and Ethics- Sufficiency Economy: Beyond Corporate Social Responsibility?- Entrepreneurship, Business Ethics, and ReligionPanelists: - Dr.David Bubna-Litic from University of Technology, Sydney- Michel Bauwens from P2P Foundation- Teresa M. Ganzon from Bangko Kabayan- Dr. Oranuch Pruetipibultham from National Institute of Development Administration (NIDA)- Dr. Deunden Nikomborirak from Thailand Development Research Institute (TDRI)

VIIIThe Meaning of Sufficiency Economy International ConferenceGroup 4: Sufficiency Economy, Education, Values and Alternatives toGlobalization- Buddhist Economics- Developing Self-Immunity: Deglobalization and Delinking (National Autonomous Development), and Community EconomiesPanelists:- Dr. Donald K. Swearer from Harvard Divinity School- Dr. Wolfgang Hein from The GIGA German Institute of Global and Area Studies- Dr. Peter Daniels from Griffith University, Australia

The Meaning of Sufficiency Economy International ConferenceIXThe Meaning of Sufficiency Economy International Conference 16-17 February 2012Plaza Athénée Bangkok, A Royal Méridien Hotel, Wireless Rd., BangkokScheduleFebruary 16, 201208.30 – 09.00 Registration09.00 – 09.15 Gen. Teeradej MeepienPresident of the Senate presides over opening ceremony09.15 – 10.00 Opening Keynote address on “Sufficiency Economy and the Direction of Sustainable Development” by Dr. Supachai Panitchpakdi Secretary-General of UNCTAD (United Nations Conference on Trade and Development)10.00 – 10.20 Coffee Break 10.20 – 12.30 Plenary Discussion on “Sufficiency Economy: Thailand’s Point of View and Experience” by Mr. Prayong RonnarongRamon Magsaysay Award laureate 2004 Prof. Dr. Apichai PuntasenEconomist and Director of Rural and Social Management InstituteM.L. Jirapan DavivongsDeputy Secretary-General of the Royal Development Projects BoardDr. Songkiert TansamritSecretary – General of the Sustainable Energy FoundationModerator: Ms. Suwanee Khamman Deputy Secretary General of the National Economic and Social Development Board12.30 – 13.30 Lunch Break

The Meaning of Sufficiency Economy International Conference13.30 – 17.00 Group DiscussionFebruary 17, 201208.45 – 09.00 RegistrationGroup 1. Sufficiency Economy and Mainstream Economic TheoryChair: Dr. Peter Warr Australian National University Panelists:Dr. Sauwalak Kittiprapas International Research Associates for Happy Societies (IRAH)Group 2. Sufficiency Economy and Grassroots DevelopmentChair: Juliana Essen Soka University of AmericaPanelists:Linda NowakowskiUbon Ratchathani UniversityDr. Sutee Suksudaj Thammasat UniversityDr. Adis Israngkura Thailand Development Research Institute09.00 – 12.00 Group Discussion Group 3. Sufficiency Economy and Business EthicsChair: Dr. David Bubna-Litic University of Technology, SydneyPanelists:Michel Bauwens P2P FoundationTeresa M. Ganzon Bangko KabayanDr. Oranuch Pruetipibultham National Institute of Development Administration (NIDA)Dr. Deunden Nikomborirak Thailand Development Research Institute (TDRI)

12The Meaning of Sufficiency Economy International ConferenceSome Bright Spots along the Pathof Sufficiency Economy MovementAt this level of “comprehension”, the business willtake extra care of their employees by providingthem with both trainings of production skills and lifeskills. The business also treats their employeesmore as its extended family. This way the businessthat usually has a niche market for its productsespecially the niche that has been created byproduct quality, and the customers also preferquality and do not mind to pay more, this businessusually fares well, even though it pay itsemployees more than the average. The reason isbecause the marginal productivity of its employeesis still higher than the pay that these employeesreceive, and all of them work happily for thatbusiness.Some Bright Spots along the Pathof Sufficiency Economy MovementAt the top level of this category is known as“inspiration”. The business must pass through thetwo levels before. At this level the goal of thebusiness apart from being a happy organization,its main aims is to attain happiness from beingmore useful to the public and the society. At thislevel profit is neither the goal nor a by-product,instead the kind of happiness that the businesshas received, is from giving or being useful for thepublic and the society. Profit is only something tokeep business going. At this level a business hasturned into what so called “social enterprise”.

The Meaning of Sufficiency Economy International Conference13Some Bright Spots along the Pathof Sufficiency Economy MovementIn Thailand quite a few business of varioussizes, small, medium and large are practicingSufficiency Economy at this level. In the nearfuture there will be additional standard andmore popular standard for business practicein Thailand that is the Sufficiency EconomyBusiness Standard (SEBS). This factdemonstrates how far Sufficiency Economyhas been practiced among businessenterprises in Thailand and will be more inthe near future.Some Bright Spots along the Pathof Sufficiency Economy MovementAs for the civil society, especially among thefarmers with small holding of farm land. Most ofthem who practice mono-culture and dependfully on the external markets for their survival,they all end up in debt and finally lose their farmlands and turn to be tenant farmers. Accordingto the principle of Sufficiency Economy appliedto a farmer, the farmer must not depend onexternal market that is beyond his control. Heshould aim to produce everything needed tosupport his own family. After then, individualfarmers should organize themselves into acooperative to sell their surplus produce directlyto external markets.

16The Meaning of Sufficiency Economy International ConferenceSome Other Areas of AdvancementAt the same time, the United NationsDevelopment Programme (UNDP) in its2007 issue on “Sufficiency Economyand Human Development” has helpedpropagating this concept further at theinternational level, followed by manybooks and papers in English from theweb-site of the Bureau of the CrownProperty.Some Other Areas of AdvancementThe most effective area in supporting theSufficiency Economy movement is education at abasic level. In 2007 the Ministry of Education withthe strong support from the Crown PropertyBureau began to promote schools at basiceducation level, vocational and technical collegesand centers for non-formal education to developtheir curriculum based on Sufficiency Economyto generate understanding of the concept as wellas its practical aspects to teachers and studentsinvolved. Up to date (09/9/2011), there havebeen altogether 1,092 schools, 72 colleges and70 centers participating this programme. Thismovement serves as a solid foundation forfurther progress in this direction in the future.

The Meaning of Sufficiency Economy International Conference17Some Other Areas of AdvancementThere is an attempt for a movement ofSufficiency Economy among Buddhistmonks in the Northeast led by a group ofmonks at MahachulalongkornrajawithyalaiUniversity of Ubon Ratchathani ProvinceCampus. Thailand Research Fund, hascreated the research platform onSufficiency Economy since 2004 and hasproduced invaluable research works.Unfortunately, this platform will beterminated at the end of March this year.Some Other Areas of AdvancementThe National Research Council hasadopted Sufficiency Economy to be itstop research agenda beginning fromnext year. Unfortunately, all thesescattered attempts have not receivedadequate support from the Thaigovernment because they either do notwant to know or understand the conceptclearly or lack of political will toimplement it or both.

18The Meaning of Sufficiency Economy International ConferenceSome Other Areas of AdvancementOther education institutions that appears tooslow to embrace this Sufficiency Economyconcept in Thailand is higher education. Thereare various reasons for such outcome. Firstly,the kind of mainstream economics taught in alluniversities in Thailand cannot wellaccommodate Sufficiency Economy which goesmuch deeper in term of human spirituality.Secondly, as most top government officials inThailand tends to follow the policy guidelines setby politicians, the Secretary General of the Officeof Higher Education Commission has not yet putenough effort to encourage universities inThailand to do more researches and to developmore curriculum based on Sufficiency Economy.What should be done nextAs explained above, the mainobstacles against Sufficiency EconomyMovement are in the following order,the national government as the result ofbusiness politics, the local governmentas the result of being a mutual sport ofnational politics, business as usual,government agencies, and highereducation institutions.

The Meaning of Sufficiency Economy International Conference19What should be done nextIt is not easy to deal directly with thenational politics that is thriving onknowledge and income gaps of theThai people, under existing condition ofglobalization being dominated bycapitalism. The roundabout way indealing with this problem is to weakenits supporters.What should be done nextAs businesses organizations in Thailandare increasing attracted to the concept ofSufficiency Economy, the more thebusiness organizations practiceSufficiency Economy, the less will be thebusiness as usual type. At the same timemore focus in improving local politics canbe done through empowering more ofvarious “civil society” groups, as well astrying to persuade more of the localgovernment agencies to switch more toSufficiency Economy practice.

20The Meaning of Sufficiency Economy International ConferenceWhat should be done nextAs for government agencies and highereducation institutions, there should bemore researches on how to changefrom their existing practices towardmore of the Sufficiency Economy in thefuture. Strategic research in thisdirection is needed if Thailand wishesto be developed along the SufficiencyEconomy path in the future.ConclusionActually, Sufficiency Economy is notonly good for Thailand. Any globalproblems created by human greed canbe dealt adequately with SufficiencyEconomy. However, it should becautioned that Sufficiency Economyhas been developed from the culturalroot based on most religious ethics.Countries that want to adopt thisconcept must be able to find their owncultural roots and develop the conceptsthat go with them.

Group1Sufficiency Economy and MainstreamEconomic Theory

Sufficiency Economy andMainstream Economic TheoryGroup1The Meaning of Sufficiency Economy International ConferenceSufficiency Economy and the Economics of EnoughPeter WarrAustralian National University

The Meaning of Sufficiency Economy International Conference27Sufficiency Economy and the Economics of Enough*“To be a tiger is not important. The important thing for us is to have asufficiency economy, which means to have enough to survive.”AbstractH.M. King Bhumipol Adulyadej,The ‘Sufficiency Economy’ philosophy has many components, but one is adirect application of Buddhist philosophy - an argument for the moderation of theMiddle Way. Recent events in Thai history show the wisdom of this approach andthe dangers of disregarding it. A review of these events also provides perspective onboth the timing of H.M. King Bhumibol’s important speeches on the subject andtheir central message. This set of ideas is strongly supported by moderndevelopments in the economics and psychology of happiness. Key words: Sufficiency economy; Buddhist philosophy; economic growth;happinessIntroductionSince the 1970s, Thailand’s King, H.M. King Bhumipol Adulyadej, hasdelivered a number of highly influential speeches whose content has come to beknown within Thailand as the ‘Sufficiency Economy’ philosophy. The ideascontained in His Majesty’s speeches have had a considerable impact withinThailand. Today, essentially all major institutions in the country claim to be adopting‘Sufficiency Economy’ principles, although there are different views about what theprinciples mean and how they should be applied. * Helpful discussions with Chintana Sandilands of the Australian National University aregratefully acknowledged. The author is solely responsible for the views presented. Email address:Peter.Warr@anu.edu.au.

28The Meaning of Sufficiency Economy International ConferenceThe issues raised in His Majesty’s speeches on the Sufficiency Economy havebroad applicability, and not just for Thailand. The purpose of this paper is to offer an‘outsider’s’ understanding of some aspects of these concepts. The interpretationpresented here is not comprehensive. There are several dimensions to theSufficiency Economy debate, only some of which are addressed by this paper. Thereis also no suggestion here that the ideas offered in this paper are the correct way tounderstand the King’s thoughts. That would be presumptuous. It is hoped merelythat the paper offers one way of understanding some aspects of the SufficiencyEconomy discussion, which might be of interest for others in reaching their ownunderstanding of these vital issues. The paper attempts this by looking at the Sufficiency Economy discussion inthe following four ways:1. Extracting key themes from Royal speeches on ‘Sufficiency Economy’2. Relating these concepts to Buddhist philosophy3. Relating these concepts to economic events in Thailand4. Relating these concepts to modern developments on the economics andpsychology of ‘happiness’.The following four sections of the paper adopt each of these four perspectivesin turn. The theme of this paper is that the essence of the Sufficiency Economyperspective reflects a basic human wisdom that is supported by fields seemingly asdifferent as Buddhist philosophy, experimental psychology and modern economics.Moreover, it is a message that is relevant not only for Thailand, but for othercountries as well and deserves to be studied more closely by Thais and non-Thaisalike.1. Key Themes from Royal Speeches on ‘Sufficiency Economy’In early December of each year, H.M. King Bhumipol delivers a major speechon the occasion of his birthday. These speeches are reported widely in the Thai pressand are studied carefully. Taxi drivers, school children and academics listen to theradio or television broadcasts of these speeches and reflect upon them. Most, but notall, of the speeches associated with the Sufficiency Economy concept first appearedin this format and were subsequently elaborated upon by the King in graduationaddresses to students and in other forums. The King’s first major speech on thesubject was apparently delivered in 1974, but the most important was his birthdayaddress in December 1997. It will be important for my account that this speech wasdelivered just five months after the onset of the 1997 Asian financial crisis, which,as everyone knows, began with the collapse of the international value of the

The Meaning of Sufficiency Economy International Conference29Thai baht. In these speeches, five central themes can be discerned: the importance ofestablishing sensible, non-excessive, material goals; the importance of avoidingunnecessary risk in the pursuit of material aspirations; the desirability of attainingself-reliance; doing all this while still maintaining concern for the protection ofothers; and also not losing appropriate attention to the non-material aspects of life. Iwill provide below quotations from the King’s speeches and references to his otherwritings which illustrate each of these five themes.The relevance of these Sufficiency Economy themes can be understood atseveral levels. At the level of the individual, they provide guidance for a sensibleapproach to economic life. They provide also helpful guidance at the firm andcommunity level. Finally, they are highly relevant at the national level for a countrystruggling to adjust to a rapidly changing global environment. a. Establishing sensible (non-excessive) material aspirations…“…Development of the nation must be carried out in stages, starting withthe laying of the foundation by ensuring the majority of the people have their basicnecessities through the use of economical means and equipment in accordance withtheoretical principles. Once a reasonably firm foundation has been laid and ineffect, higher levels of economic growth and development should be promoted…”.18 July 1974“…no matter what others say –whether they will accuse Thailand of being oldfashionedor 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 theapex of prosperity, we shall already be considered as the top in comparison withother countries in the present world…”4 December 1974 A book entitled Mahajanaka, written by H.M. King Bhumipol, described thedestructive effects of (a) greed and (b) ignorance or delusion. 1992‘To be a tiger is not important. The important thing for us is to have asufficiency 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 villagewants to employ a full sufficient economy, it would be like returning to the StoneAge… This sufficiency means to have enough to live on. If everyone has enough tolive on, everything will be all right.’1998

30The Meaning of Sufficiency Economy International Conferenceb. … while avoiding excessive risk…The King provided the ilustrative example of a diversified farm with thirtypercent of land for a pond to collect water to be used for cultivation in the dryseason, and to raise fish; thirty percent for rice cultivation sufficient for all yearround home consumption; thirty percent for integrated field and garden crops, andfruits; and ten percent for housing and other activities such as livestock enclosures,mushroom nursery, and roads. c. …combined with self-reliance…1994‘This sufficiency means to have enough to live on. Sufficiency means tolead a reasonably comfortable life, without excess, or overindulgence in luxury, butenough. Some things may seem to be extravagant, but if it brings happiness, it ispermissible as long as it is within the means of the individual…’ ‘Some people translate ‘sufficiency’ from the English as: to stand on one’sown feet… This means standing on our own two legs planted on the ground, so wecan remain without falling over, and without asking others to lend us their legs tostand on…’D. …with concern for the protection of others…1998‘Sufficiency Economy is a philosophy that stresses appropriate conduct andway of life while incorporating moderation, due consideration in all modes ofconduct, and the need for sufficient protection from internal and external shocks.E. … and with attention to the non-material aspects of life21 November 1999‘Progress is not just about planting enough rice to eat. There must beenough 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 has to come from within, based onaccumulation of knowledge. In summary: Self-reliance. Moderation. Resilience.Inner dynamic. Knowledge.’2003

The Meaning of Sufficiency Economy International Conference312. Relationship to Buddhist PhilosophySince H.M. King Bhumipol is a practicing Buddhist, and since Buddhistphilosophy has a great deal to say about economic life, especially as it relates to theindividual, it would be surprising if the King’s speeches on this subject were notinfluenced by Buddhist thinking. At the core of the Buddhist understanding ofhuman suffering is the role of three poisons: - greed;- hatred; and - delusion. Greed arises from a distorted perception of the happiness that can be derivedfrom greater material wealth. Hatred or anger arises when these distorted aspirationsare unrealized or frustrated. All this is supported by a misconception about thenature of the self - as an isolated, independently and inherently existing entity -which is the core of the Buddhist notion of delusion or ignorance. The presence ofthese three poisons leads to an endless vicious cycle of frustrated pursuit ofhappiness from material things – samsara.The antidotes to these poisons are the recognition of:- the unsatisfactoriness of purely material attainments,- the impermanence of human life itself and the pleasures that material attainments can provide; and- the illusory nature of our concept of the self, also referred to as emptiness. Together, these three antidotes lead to wisdom in one’s own life andcompassion towards others. The close relationship between these concepts and thefive themes of the Sufficiency Economy philosophy, as summarized above, is veryclear. 3. Relationship to Economic Events in Thailand Thailand’s economic performance over the past four decades is summarized inFigure 1, showing the level of real GDP per capita in each year (vertical bars) and itsgrowth rate (solid line) for the period 1968 to 2011. The figure distinguishes fourperiods of Thailand’s recent economic history, drawing on Warr (2005). Theseperiods are as follows, with period average annual rates of growth of real GDP perperson appearing in square brackets [.].I– Pre-boom: 1968 to 1986 [3.9 per cent per year].II – Boom: 1987 to 1996 [8.0 per cent per year].

32The Meaning of Sufficiency Economy International ConferenceIII – Crisis: 1997 to 1999 [-3.6 per cent per year].IV – Recovery: 2000 to 2011 [4.32 per cent per year]. During period I, from 1968 to 1986, the average annual growth rate ofThailand’s real GNP was over 6 per cent, compared with an average of 2.4 per centfor low and middle-income countries (World Bank 1998). Then, over the decade1987 to 1996 (period II) the Thai economy boomed, growing at 9.5 per cent per yearin real terms. Over this decade, the Thai economy was the fastest growing in theworld and this is when Thailand came to be called, in some quarters at least, Asia’s‘fifth tiger’, following Singapore, Hong Kong, Korea and Taiwan.The stability of Thailand’s growth over the long period of economic expansionending in 1996 was remarkable. Not a single year of negative growth of real outputper head of population was experienced over the four decades from 1958 to 1996, aunique achievement among oil importing developing countries. Thailand’sperformance was often described as an example others might emulate. Its principaleconomic institutions, including its central bank, the Bank of Thailand, were oftencited as model examples of competent and stable management. The crisis of 1997-99 (period III) reversed these assessments. Domestically,the economy was in disarray: output and investment contracted; poverty incidenceincreased alarmingly; the exchange rate collapsed, following the decision to float thecurrency in July 1997; the financial system was largely bankrupt; the governmentwas compelled to accept a humiliating IMF bailout package; and confidence in thecountry’s economic institutions, including the Bank of Thailand, was shattered.Internationally, Thailand was now characterized as the initiator of a ‘contagioneffect’ in Asian financial markets, undermining economic and political stability andbringing economic hardship to millions of people, both in Thailand and itsneighbours. The economic damage done by the crisis of 1997-99 and the hardship thatresulted were both substantial. The crisis eroded some of the gains resulting from theeconomic growth achieved during the long period of economic expansion, but it didnot erase them. At the low point of the crisis in 1998 the level of real GDP per capitawas almost 14 per cent lower than it had been only two years earlier, in 1996.Nevertheless, because of the long period of sustained growth that had preceded thecrisis, this reduced level of real GDP per person in 1998 was still higher than it hadbeen only five years earlier, in 1993, three and a half times its level in 1968, andseven times its level in 1951. King Bhumibol’s December 1997 speech was delivered at a time when themagnitude of the economic devastation of the crisis was acutely apparent. HisMajesty was pointing out that the causes of the crash were to be found in theeconomic boom that had gone before it. As the decade of boom progressed, thethinking of many Thai people had changed. They were led increasingly to takeexcessive risks in the pursuit of economic gain, thinking that the boom would

The Meaning of Sufficiency Economy International Conference33continue indefinitely. This took many forms, including: the willingness of previouslyconservative Thai banks to borrow short-term abroad in foreign currency in order tofinance long-term lending domestically in Thai baht; speculative real estateinvestments by ordinary Thai people; and on the part of Thai farmers, excessivespecialization in lucrative cash crops financed by borrowing, leading to high levelsof indebtedness and for large numbers of these farmers, the eventual loss of theirland. This behavioural pattern of excessive risk taking during periods of prolongedeconomic boom is not unique to Thailand. In the context of the United States, it wassubsequently called ‘irrational exuberance’ by Alan Greenspan, then chairman of theUS Federal Reserve (Shiller 2000). More recently, it has been recognized as anunderlying cause of the global financial crisis, originating in the United States andWestern Europe, and erupting in late 2008.Another way of describing ‘irrational exuberance’ is being captured by greedto an extent that sober judgment becomes clouded. According to my interpretation,in his pivotal speech of December 1997 King Bhumibol was explaining theeconomic events that had just occurred in Thailand, only months before, drawingupon the insights of Buddhist philosophy. His message pointed out that when weallow ourselves to be carried away by greed, good judgment vanishes and a fall islikely. This was not only a way of understanding what had just happened, but alsosuggested a way of avoiding such mistakes in the future.According to my understanding, the Sufficiency Economy message is not thateconomic growth is unnecessary, or that it is incapable of producing improvementsin human welfare. The message is that excessive emphasis on this goal, to theexclusion of other important matters, including the prudent management of risk, can lead to suffering. In short, it is an argument for the Middle Way.4. Relationship to Recent Developments in Economics and Psychology Economists and other social scientists have lately become interested in thedeterminants of human happiness, based largely on the analysis of large-scalesurveys of self-rated happiness of individuals. Major contributions to this literaturehave included Easterlin (2004), Layard (2005) and Frey (2008). Two central empirical observations lie at the heart of this literature. The firstobservation is based on time series data for particular high income countries. In therichest countries, the only ones for which long time series of data are available,increases in average incomes per capita over fifty years have produced nodiscernable increases in average levels of reported happiness.

34The Meaning of Sufficiency Economy International ConferenceThe second observation is cross-sectional - based on looking across countriesat a particular time. If countries are arranged by average income per capita in eachcountry, then when we look across these countries at average levels of self-ratedhappiness, as income increases, self-rated happiness at first increases, then reaches a peak at an income per person of about US$20,000 to $30,000 – roughly half theincome per person of the richest countries. Beyond this level of income, furtherincreases in average income produce no further discernable increases in reportedhappiness. This second observation is illustrated in Figures 2 and 3, drawing on data fromthe World Values Survey. Figure 2 shows data on self-reported ‘Life satisfaction’,and Figure 3 shows self-reported ‘Happiness’. Unfortunately, Thailand is not one ofthe countries included in the World Values Survey data set available for this analysis.Each figure shows the author’s estimated regression equation, based on the dataavailable for these countries. The estimated value of ‘Life Satisfaction’ and‘Happiness’ that would be predicted for Thailand based on Thailand’s actual level ofincome per person and the estimated relationship for the countries for which data areavailable is shown by the square data point in each diagram. Thailand is included in the Roper Reports data set on self-reported happinessand the data are shown in Figure 4. It is notable that Thailand’s level average levelof income is well below the $20,000 to $30,000 at which happiness levels taper off,and that its level of self-reported happiness is well above the regression lineestimated from the data for all other countries. Thailand is seemingly a happiercountry than its level of income would suggest. There is every reason to expect thatfurther increases in income could raise average levels of happiness, but at adiminishing rate. Two kinds of hypotheses have been offered to explain these empirical findings.First, individuals adapt psychologically to higher incomes, becoming accustomed toaffluence, a phenomenon known as the ‘hedonic treadmill’. Second, at low incomespeople spend on necessities, such as food, basic shelter, education for their childrenand medical care. At higher incomes, they spend increasingly on status goods orpositional goods. The crucial point is that if all members of the society obtain thesepositional goods there is no net gain in ‘status’ for anyone and hence no net gain inaverage happiness. The analogy is that all ships in the harbour rise as the tide comesin, and their relative positions (read: status) remain the same. If one individual (orgroup) does gain in status, it is at the expense of reduced status for someone else.The central message is that beyond a certain level of income, economic growthfails to produce further increases in happiness. Indeed, among individuals who havemet their basic needs, further improvements in happiness depend primarily on othermatters, especially social factors such as family and community relations. If thepursuit of material gain distracts from proper attention to these matters it mayactually reduce happiness.

The Meaning of Sufficiency Economy International Conference35Experimental data from the Harvard psychologist Daniel Gilbert providefurther insights into these issues. Gilbert has studied what he calls ‘affectiveforecasting’. When individuals make decisions, they attempt to predict the happinessor unhappiness they will experience under alternative future states of the world. Hefinds that when we do this, we consistently make the same kinds of errors, again andagain, a phenomenon he calls ‘impact bias’. When we imagine how we would feelunder some favourable future state of the world, we over-estimate the degree ofhappiness we will experience from it. Conversely, when we imagine how we wouldfeel under some unfavourable condition, we over-estimate the amount of suffering itwould involve. The interpretation that Gilbert offers is that the mind eventually adjusts towhatever happens, favourable or unfavourable, so that the difference between theway we actually end up feeling in favourable or unfavourable circumstances isconsistently less than we expect. But for some reason, when we are thinking aboutthe future we do not recognise that the mind has this adaptive capacity, so weconsistently make the same kinds of mistakes. In short, we are deluded. Weconsistently over-estimate the importance, in terms of the feelings of happiness thatwe will actually experience, of having good things happen and of avoiding badthings. The point is that our outlook on the future and our decisions about it are basedon the way we think we will feel under this or that circumstance, not on the way wewill actually feel. The result is that we are greedier to ensure that favourable externalcircumstances are experienced in the future than we should be and we are morefearful to avoid unfavourable external circumstances than we should be. The modernfinancial market, alternating between periods of excessive greed and excessive fear,is an illustration of this phenomenon in action. The essence of this psychological argument, reinterpreted in economic terms,is presented in Figure 5. The observed relationship between real income andhappiness is represented by the solid line, labeled ‘actual’. This is the empiricallyobserved relationship shown in Figures 2 to 4, above. Suppose we are initially atpoint , where income is and realized (actual) happiness is . When the possibility ofhigher future incomes (such as ) or lower future incomes (such as ) are imagined theprefrontal cortex of the brain forms an expectation of how this would feel. Decisionsabout actions that might be taken now are based on these expectations of thepsychological consequences of alternative outcomes, rather than the actualconsequences that will later be experienced, which are unknown at the time thedecisions are taken. But these expectations suffer from a consistent bias – Gilbert’s impact bias.The difference between happiness that is actually experienced when good thingshappen (higher income in this case) and when bad things happen (lower income) issystematically exaggerated by our expectations-forming process. These expectationsare represented by the dashed line in Figure 5, labeled ‘expected’. We think it is

36The Meaning of Sufficiency Economy International Conferencemuch more important to attain ‘good’ outcomes and to avoid ‘bad’ ones than turnsout to be the case.What is the solution? Buddhist teaching offers an antidote to the delusion thatlies at the heart of the impact bias – wisdom – and a means for acquiring it. Therecognition of unsatisfactoriness, impermanence and the illusory nature of the selfenables the individual to overcome impact bias and facilitates the development ofcompassion for oneself and for others. According to my understanding, theSufficiency Economy philosophy should be understood in this light.5. Conclusions: The Economics of the Middle WayThis paper has argued that while the ‘Sufficiency Economy’ philosophy hasmany components, one component is a clear application of Buddhist philosophy. Itis essentially an argument for the moderation of the Middle Way. Recent events inThai history show the wisdom of this approach and the dangers of disregarding it.This set of ideas is strongly supported by modern developments in economics andpsychology. A review of recent Thai history helps in understanding the timing andthe content of H.M. King Bhumibol’s important speeches on the subject.In most countries, public policy has yet to catch up with these insights. Thehuman value of economic growth in the rich countries is greatly over-estimated butin the poorest countries, it is vital. In middle income countries like Thailand, stillwell below the levels of income per person at which the gains in well-being fromfurther increases in national income are exhausted, economic growth is capable ofgenerating genuine improvements in happiness, but diminishing returns applies.Other things are also important and it is easy to over-estimate the benefits that willactually accrue from improvements in material circumstances. Wisdom is needed tokeep these matters in proper perspective and this wisdom lies at the core of theSufficiency Economy philosophy.

The Meaning of Sufficiency Economy International Conference37ReferencesEasterlin, Richard A. (2004). ‘The Economics of Happiness’, Daedalus vol. 133, no.2, 26-33.Frey, Bruno S (2008). Happiness: A Revolution in Economics, MIT press,Cambridge, Mass.Gilbert, Daniel (2007). Stumbling on Happiness, Kindle Books, New York, NY.Layard, Richard (2006). Happiness: Lessons from a New Science, Penguin,Harmondsworth, Middlesex.National Economic and Social Development Board (2005). ‘Sufficiency Economy:An Introductory Note’, Bangkok.Roper Reports. Data available at: http://www.gfknop.com/customresearch-uk/expertise/consumertrends/rrw/index.en.htmlShiller, Robert J. (2000). Irrational Exuberance, Princeton University Press,Princeton, NJ.United Nations Development Program (2007). Thailand Human DevelopmentReport 2007: Sufficiency Economy and Human Development, UNDP,Bangkok.Warr, Peter (2005). ‘Boom, Bust and Beyond’, in Peter Warr (ed.) Thailand Beyondthe Crisis, Routledge, London, 1-65. World Bank (1998). World Development Report, 1998, Oxford University Press,New York, NY.World Values Survey. Data available at: http://www.worldvaluessurvey.org/

38The Meaning of Sufficiency Economy International ConferenceAppendixFigure 1 Thailand: Real GDP per capita and its annual growth rate, 1968 to 2007Figure 1 Thailand: Real GDP per capita and its annual growth rate, 1968 to 2007Level of realGDPper person140000120000III IIIGrowth rate ofreal GDPper person20IV151000001080000560000040000-520000-100-1519681970197219741976197819801982198419861988199019921994199619982000200220042006Level of real GDP per capita at 2003 prices, baht, per year - LHS axisGrowth rate of real GDP per capita at 2003 prices, per cent, per year - RHS axisSource: Author’s calculations, using data from National Economic and Social Development Source: Board, Author’s Bangkok. calculations, using data from National Economic and Social Development Board,Bangkok.18

The Meaning of Sufficiency Economy International Conference39Figure 2 Life Figure Satisfaction 2 Life Satisfaction and Income Per and Person Income Across Per Person Countries Across Countries(World Values Survey) (World Values Survey)Life Satisfaction = -0.9 + 0.8*ln(GDP)Life satisfaction, WVS(1 = Dissatisfied to 10 = Satisfied)7.76.75.74.7THA3.70 10000 20000 30000 40000 50000 60000GDP per capita in US$ at PPPSource: Data from World Value Survey, available at:http://www.worldvaluessurvey.org/Regression equation from author’s calculations using these data. Thailand data point (shown by squareSource: Data from World Value Survey, available at: http://www.worldvaluessurvey.org/symbol) estimated from the regression equation, not from actual data on life satisfaction for Thailand.Regression equation from author’s calculations using these data. Thailand data point (shown by square symbol) estimated from the regression equation, not from actual data on life satisfaction for Thailand. 19

40The Meaning of Sufficiency Economy International ConferenceFigure Figure 3 Self-reported 3 Self-reported Happiness Happiness and Income and Income per Person per Across Person Countries Across Countries(World Values Survey) (World Values Survey)Happiness = 2.3 + 0.08*ln(GDP)Happiness, WVS(1 = Not at all happy to 4 = Very happy)3.53.33.12.92.72.5THA2.30 10000 20000 30000 40000 50000 60000GDP per capita in US$ at PPPSource: Data from World Value Survey, available at:http://www.worldvaluessurvey.org/Regression Source: equation Data from World author’s Value calculations Survey, using available these at: data. http://www.worldvaluessurvey.org/Thailand data point (shown by squaresymbol) estimated from the regression equation, not from actual data on happiness in Thailand.Regression equation from author’s calculations using these data. Thailand data point (shown by square symbol) estimated from the regression equation, not from actual data on happiness in Thailand. 20

The Meaning of Sufficiency Economy International Conference41FigureFigure4 Self-rated4 Self-ratedHappinessHappinessand Incomeand IncomePer PersonPer PersonAcrossAcrossCountriesCountries(Roper Reports)(Roper Reports)Happiness = 0.68 + 0.24*ln(GDP)Happiness, Roper reports(1 = Very unhappy to 4 = Very happy)3.53.33.12.92.7INDEGY THAMEX SAUIDN VENBRAPHL ARGCHNZAF CZEPOLTUR HUNKORAUSSWE GBR CANESP ITAFRAHKGDEUUSA2.50 10000 20000 30000GDP per capita in US$ at PPPSource: Data from Roper Reports, available at:http://www.gfknop.com/customresearch-uk/expertise/consumertrends/rrw/index.en.htmlRegressionSource:equationData fromfromRoperauthor’sReports,calculationsavailableusingat:these data. Thailand data point (shown by squaresymbol) is from actual data on happiness in Thailand.http://www.gfknop.com/customresearch-uk/expertise/consumertrends/rrw/index.en.htmlRegression equation from author’s calculations using these data. Thailand data point (shown by square symbol) is from actual data on happiness in Thailand. 21

42The Meaning of Sufficiency Economy International ConferenceFigure 5 Actual and Expected Happiness: The Impact BiasFigure 5 Actual and Expected Happiness: The Impact Bias

Sufficiency Economy andMainstream Economic TheoryGroup1The Meaning of Sufficiency Economy International ConferenceWhy Alternative Approaches to Development are Needed and How Sufficiency Economy can Contribute?Dr. Sauwalak KittiprapasInternational Research Associates for Happy Societies (IRAH)

Why Alternative Approaches to Development are Needed and How Sufficiency Economy can Contribute? 1

The Meaning of Sufficiency Economy International Conference45Why Alternative Approaches to Development are Needed and How Sufficiency Economy can Contribute? 1Based on objectives of the Conference sub-theme “Sufficiency Economy andMainstream Economic Theory”, the paper will demonstrate how alternative humancenteredeconomic approaches (i.e., Buddhist economics, happiness, and sufficiencyeconomy) contribute values and attitudes in addition or contrary to mainstreameconomic assumptions about human nature, human motivations, and economicactivity. The paper discusses the differences between mainstream economics andthese alternative approaches as well as depicts how these alternative approaches canmake sustainable development effective. 1) The differences between mainstream economics and alternativeapproaches. As weaknesses of mainstream economics on human assumptions and thelimitation in GDP are well-known, there have been discussions on the need foralternative paradigms for development. Buddhist economics, sufficiency economy,and happiness economics have been discussed as alternatives. Obviously, there aremain differences between the mainstream and these alternative economics in keyvalues/ perspectives, assumptions, analysis, and development goals and results.Table 1 summarizes key differences between the two lines of thoughts.1The paper prepared for the International Conference “The Meaning of Sufficiency Economy:Theory and Practice in Society, Economy and Business” , organized by King Prajadipok’s Instituteand Thammasat University. Bangkok, February 16-17,2012.

46The Meaning of Sufficiency Economy International ConferenceTable 1. The different perceptions and core values between alternative and mainstream economicsKey differencesUtility componentSelf vs non-self focusDevelopment driven byDevelopment valuesNarrow VS broad meaningof happiness Key analytical factorsDevelopment Indicators/MeasurementMainstream economicsNeo-classic theory of utilityexcluded subjective aspects:feelings, happiness/subjective wellbeing.Utilities based on choices ofgoods/ services.Self-interest, with theassumption that humans arerationale.Happiness, Buddhisteconomics and sufficiencyeconomyHappiness economics referto utilitarianism (of JeremyBentham) that used toinclude happiness in theutility: “the greatesthappiness principle”.Non-self (emptiness /impermanent in Buddhism). Reduce selfishnessCompetition, specializations Cooperation\ compassion;moderation, diversificationfor immunization; integratedapproachMaterials / economicprosperity: moreconsumption/ services andproductionHigher consumption =>higher utilities (used ashappiness ), highersatisfaction of needs andhappinessLimit to only objectiveindicators and choicesDevelopment measurementbased mainly on economicindicator – GDP Add values for spiritualwellbeing, ethic, goodness,giving, concerns about natureand subjective aspects.Wisdom or insight isessentialHappiness from lower tohigher levels depends onmaterials, mind, and wisdom,respectively.Mind and intellectualdevelopment lead to real andsustainable happiness.Satisfaction is the state ofmind.Open for subjective wellbeingdeterminants andprocessesDevelopment measurementshould also be includehappiness/ well-being oralternative indicators

The Meaning of Sufficiency Economy International Conference47Key differencesPerspectivesMainstream economicsHuman well-being dependson material wealth.More limited to assumptionsto explain human mind andsocietal well-being.Happiness, Buddhisteconomics and sufficiencyeconomyBroader perspectives ofhuman well-being (notlimited to material wealth),more holistic and balanceddevelopment. Realizeinterdependence of humanhumanand human-nature,moral, self-immunization,peace of mind, etc.Goal Economic growth State of mind happiness,livings in harmony betweenhuman beings and nature,social/global peace.ResultsCan have social conflicts andunsustainable developmentSocial benefits from peaceand sustainable developmentThe main differences in the above Table are utility concepts and assumptionsof human behaviors that drive development, perspectives and values. All these leadto different analytical framework and indicators for the development and,consequently, different kinds of development goals and results. With the mainstreameconomics’ assumptions that utility derived by concrete choices of good and servicesand human being are rational for self-interest, individual lives can be happier bymore getting consumption and production. Development has been driven byeconomic growth from competition and specialization. People have to complete toearn more and get more goods and more accumulation, etc. This led to differentgoals and development results from alternative approaches. Sufficiency economy, in contrast, focuses on balanced life with moderated life-style and consumption. For production, in stead of specialization forcommercial purpose, the production diversity primarily aims for self-immunization,security for basic needs or social protection, and the recognition of relationshipamong various lives and nature. At social level, the society should live in harmony,empathy, compassion, generosity, and “middle way” life style. The sufficiencyeconomy philosophy fits well with the Buddhist philosophy of avoiding greed,hatred, and ignorance, which can be cured by compassion, wisdom (pañña), and recognition of suffering. The sufficiency economy is in line with Buddhism that placesthe emphasis on knowledge or insight to know what is “appropriate” for happyliving and development. Happiness (driven by wisdom or “panya”) is the ultimategoal of development under these approaches.In present conventional economic theory, happiness- which is subjective, hasbeen ignored in the utility function and economic analysis. However, happiness

48The Meaning of Sufficiency Economy International Conferenceeconomics with the emphasis in subjective well-being has recently gained morerecognition. In fact, happiness was once included in the utility concept sinceclassical economist, Jeremy Bentham (1748-1832) introduced utilitarianismprinciple “the greatest happiness of the greatest numbers”. This approach advocatedthat society should aim to maximize the total utility of individuals, aiming for thegreatest happiness for the greatest number of people. In other words, governmentor the society should try to maximize net effect of happiness from activities. Thisprinciple was more developed by later economist such as John Stuart Mill who alsoconsiders happiness in quality perspectives (i.e., higher level of happiness fromwisdom and morality). However, with the difficulty to quantify this subjectiveaspects, happiness later be excluded from the utility in neo-classical theory whichpresently depends only on bundles of tangible goods and services.Consequently, the idea of development depends mainly on economic growth.As development process has been under the objective framework, in which objectiveindicators, such as GDP per capita, GDP growth, and material consumption havebeen used as the sole indicators of how well a nation is performing. Thedevelopment paradigm has ignored the importance of other subjective elements inhuman nature, social and environment 2 . As development mainly aims for growthdriven by competition, possible tensions or conflicts as well as social andenvironment problems can happen in the development process. However, in the past several years, efforts have been made to developindicators for measuring national well-being which will drive the development for abetter direction and results. Subjective well-being is increasingly concerned atglobal, national, community, and human level. Human mind is more sophisticatethan objective process, therefore, subjective well-being indicator is recommended tocomplement objective ones . Happiness indicator and alternative indicators aresuggested. The essence of using these indicators is to cover the importance of noneconomicaspects such as spiritual well-being which are essential to human life anddevelopment. Buddhist economics as well as sufficiency economy place the emphasis onspiritual well-being with mind and wisdom as key factors for good living anddevelopment. In Buddhism, the highest level of happiness can be achieved only bywisdom or “pañña”. In this respect, sufficiency economy, Buddhist economic and happiness development approach have similar focus on wisdom or intellectualdevelopment.With these differences in attitudes and values, the above alternative approacheswould not focus only on economic growth, but also the growing in happiness ofindividual and society - which can also lead to sustainable development. Thefollowing section will explain this argument.2Extracted from Kittiprapas. S., et. al (2009). Happiness: New Paradigm, Measurement, andPolicy Implications. The synthesis from the International Conference “Happiness and PublicPolicy”, July 2007, Bangkok.

The Meaning of Sufficiency Economy International Conference492): How happiness in Buddhist perspective and sufficiencye c o n o m y a p p r o a c h c a n s u p p o r t t h e w o r l d p e a c e a n d e f f e c t i v esustainable development?The happiness (in Buddhist perspective) discussed here can also representsubjective well-being in sufficiency economy. In Buddhist’s happiness meaning,there are different levels of happiness: from the lowest to the highest level. Beyondthe basic material need for happiness, higher levels of happiness are more subjectivebased on mind and wisdom development. Individual happiness can be developedinto higher levels and more dynamic than what discussed in general Westernhappiness studies. Therefore, the happiness meaning in the following discussionincludes the subjective essence in sufficiency economy that focus on moderation,contentment, and morality. The higher happiness level in Buddhism (or can be called sustainablehappiness) can be generated through mind and wisdom development. Individualscan be developed towards higher level of happiness, which is less dependence onmaterials. Therefore, if this type of happiness can be practiced, less material wouldbe required. Then, the more resources can be released to help others in needed ormore resources can be saved. The whole society would benefit from this type ofhappiness. The givers are happier from giving, and those who suffer become happierfrom receiving helps. Resources can be allocated for appropriate uses and reduceexploitation and over-consumption 3 . To explain the above idea, I have tried to put together similar thoughts to beexplained in an economic manner with clear pictures. The relationship of happinessto material, or represented by income level, has long been a subject of discussionamong thinkers, philosophers, academics/ researchers, and developmentpractitioners. The diminishing return of happiness to income that economists havenow come to realize indicates that, to maximize happiness, way of life based onsufficiency economy philosophy makes sense as excessive gain in materials may notnecessary. Figure 1 and Figure 2 are examples 4 to show that individual happinessand the feeling of contentment can lead to societal happiness and sustainabledevelopment; while excessive material accumulation including consumption andproduction may not bring in more happiness. 3The ideas are summarized from the Dhamma book by Phra Brahmagunabhorn (P.A. Payutto),“Perfect life” (in Thai), Wat Nyannavesakavan.4The pictures were illustrated by adaptation from the idea in the “Perfect life” Dhamma book.However, the author is responsible for any error or misinterpretation that might be occurred.

50The Meaning of Sufficiency Economy International ConferenceFigure 1. The relationship between materials and happiness at different levelsFigure 1. The relationship between materials and happiness at different levelsHappinessH 2H 0H 1H 2 ***H’’’H’’H’H 1H 2 ** H 2 *From the Figure, line H’H* is supposed to show the relationship betweenFrom happiness the Figure, and material line H’H* levels is for supposed ordinary to persons. show the The relationship between shows that, happiness atand material the low levels level for of ordinary material, persons. the relationship The relationship between shows happiness that, and at materials the low level is ofmaterial,positivethe relationshipwith increasingbetweenreturn.happinessHowever,andmovingmaterialsto higheris positivelevelswithof materials,increasingthereturn.relationship to happiness is still positive but with decreasing returns. Happiness lineHowever, moving to higher levels of materials, the relationship to happiness is still positiveH’’H** is supposed to represent those who require less material than ordinarybut with person decreasing to be happy. returns. For Happiness happiness at line H0, H’’H** ordinary is person supposed would to depend represent on material those whorequire less at M0 material (along than H’H* ordinary line), but person those who to be required happy. less For M happiness to be happy at H0, (i.e, ordinary those who personwould depend are self-reliant on material and contentment, at M0 (along or H’H* Dhamma-oriented) line), but those would who need required only M1 less (along M to behappy (i.e, H’’H**) those for who the are same self-reliant happiness and level contentment, at H0. This makes or Dhamma-oriented) their happiness line would stays needabove ordinary persons’ happiness line. Therefore, with the same level of happinessonlyM1 ( along H’’H**) for the same happiness level at H0. This makes their happiness lineH0, this type of persons would need less M – leading to resource saving for M1 M0stays abovewhichordinarycan be releasedpersons’tohappinessgive awayline.for others.Therefore,Withwithhappinessthe sameat mindlevellevel,of happinesstheyH0, this type would of be persons happy from would giving need or less helping M – people, leading and to resource those needy saving who for received M1 helps M0 whichcan be released are happy to from give away the remedy for others. or less With deprivation. happiness Therefore, at mind level, the whole they would society be is happyfrom giving happier or from helping this people, kind of happiness and those development needy who and received human behavior, helps are in happy addition from to theremedy or less less utilization deprivation. of natural Therefore, resources. the With whole individuals’ society is higher happier happiness from in this mind kind offrom giving and helping others, individuals’ happiness line then lift upward tohappiness development and human behavior, in addition to less utilization of naturalH’’’H***– that represent the happier level to H2 level (with materials only at M1).resources.If thisWithhappinessindividuals’line alsohigherreflecthappinesssocietal happiness,in mindthisfromincreasegivingin socialand helpinghappinessothers,individuals’ benefits happiness from line the less then use lift of upward resource to (H1 H’’’H***– H0) and from that represent giving (H0H2), the happier and, as level a toH2 level result, (with materials resource can only be at saved M1). for If this M1M2 happiness or resources line also abundance reflect societal for M1M2 happiness, can be thisincrease released in social or happiness distributed benefits to others. from If the individual less use of has resource ability to (H1 produce H0) M2, and then from he giving(H0H2), can and, donate as a result, or benefit resource others can for be M1M2, saved leading for M1M2 to social or resources benefit and abundance upward social for M1M2happiness line. The development for higher and higher level of happiness whichH qM 1 M 0 M 2Material

This picture demonstrates happiness after it reaches a large amount of material, suchas Md, that it may have 2 types of slope from the two thoughts discussed above. From thepicture, at the lower level of material gain, happiness can increase with the increased inmaterials. But when happiness reaches a peak (Md), the more materials cannot bring in moreThe Meaning of Sufficiency Economy International Conference51happens inside oneself can lead to less and less material dependence and,consequently, social benefits continue to rise. The society would gain positiveeffects from this type of sustainable happiness-led development, which is muchmore than basic/ physical development. This example shows how sufficiency economy concept can raise socialhappiness, as sufficiency economy related to this happiness at mind level. People,who live with moderation and feel contentment with what they have, would be lessselfish and generous enough to share resources with other. As explained above, thewhole society would become happier.In addition to Figure 1, there are more explanations in the case of excessivegains or uses of materials. For example, there are also some studies indicating that,over time, the continued higher income cannot lead to the rise in happiness, asevident in the case of US., Japan, and recent study of both developed and developingcountries including transitional countries (Easterlin, 1974, Kusago, 2007, Clark et.al(2006), and Easterlin and Angelescu, 2009). Furthermore, some thought that thecontinued rising in income may lead to the drop in happiness, after the relationshipof happiness to income reach the peak. I make a simply graph to represent the twoideas in the Figure 2.To represent the first group of thought, when material gain reaches a certainlevel (i.e. at Md), happiness would no longer increase. Then, after Hd, the happinessline will be parallel with M. For the second group of thought (i.e., from somethinkers/ writers, and monks), after the relationship of happiness to materials rise tothe peak (i.e., Hd), happiness starts to decline. The happiness line after material levelMd continues to decrease. The idea behind this is that too much materials beyondappropriate level can bring in suffering (i.e., cases of unhappy millionaires, happyliving with moderation, etc.) that is in line with Buddhist teaching. However, bothcases bring in the same conclusion that will be explained in the Figure 2.Figure 2. The relationship between happiness and materials (in case of excessivematerials)Figure 2. The relationship between happiness and materials (in case of excessive materials)HappinessH dH 2H 2**H 2**H 2*H 3H 4H 0H qH’’’H 1H 1H’’H’M 1 M 0 M 2 M dM 3M 4Material

52The Meaning of Sufficiency Economy International ConferenceThis picture demonstrates happiness after it reaches a large amount ofmaterial, such as Md, that it may have 2 types of slope from the two thoughtsdiscussed above. From the picture, at the lower level of material gain, happiness canincrease with the increased in materials. But when happiness reaches a peak (Md),the more materials cannot bring in more happiness. Suppose there is a possibility that there would be a negative slope ofhappiness and income relation (after Hd and Md), the over-consumption to levelM3 can lead to happiness only at H2 level. That means that we have usedunnecessary resources and over-consumption for M2M3 (for ordinary people) orM0M4 (for Dhamma-oriented or self-sufficient persons), which do not result in theincrease in happiness. On the other hand, suppose the relationship between happiness and incomeis parallel instead of negative, this has not changed the main conclusion above; thatis, when happiness to material reaches a peak, more materials cannot increasehappiness but only over-exploitation of resources. They both show that sometimeswe use unnecessary resources for a certain level of happiness. If the higher materialsat some point cannot bring in more happiness, there may be a misleading indevelopment direction that has resulted in over consumption and excessive naturalresource exploitationThe implication of both cases is that we have to be moderate andreasonable in consumption or material need, which is the sufficiency economyconcept. The peak point, Hd, reflects the fact that we should know what level ofmaterial accumulation is “enough”, and at what level it can turn to be a burden orsuffering. We should know: what is “appropriate” or optimal level; overconsumptionand accumulation are not necessary; or the more we have, the moreburdens we may face and lead to suffering. That is why people can be happy andfeel contentment of what they have. This is sufficiency economy life style whichpeople must have happiness in mind (beyond material level). Buddhist principle onthe middle-way can explain that both two extreme points of having nothing andexcessive material accumulation/ burden can bring in suffering in different ways.Thus, the middle path way of life is suggested.It also indicates that our previous development, driven by conventionalapproaches, have weaknesses in the over uses of natural resources, unbalanced andunsustainable development. Therefore, the development guided by this sustainablehappiness approach or sufficiency economy concept offer a new way to a balancedand sustainable development for both individual and social levels.

The Meaning of Sufficiency Economy International Conference533) The contributions of these alternative approaches to add valuesto mainstream economicsThe higher level of happiness (towards mind and insight, with less materialdependence) a human can achieve, the more resources can be allocated to helpothers - leading to compassion, cooperation, and sharing. The society will have lessconflict than the idea of development by achieving higher materials with highcompetition. This is why the new approach can lead to a more peaceful society. Thistype of approach can also make sustainable development effective because with thishigher level of happiness, the less resources people will use or exploited forthemselves.Sufficiency economy concept, in line with Buddhist’s happiness concept,focuses on moderation, will not exploit or over-use of resources and that is why itsupports sustainable development and social peace. Sufficiency economy, with themiddle way of life, feeling of contentment, and peaceful mind, can lead to thedevelopment of life balance. Overall, sufficiency economy is more balanceddevelopment, covering not only economic development but also other elements inlife necessary for a better living, higher quality of life, happiness, and sustainabledevelopment. In contrast to the conventional economics approach indicating that themore we consume, the higher utility (and happiness) we have, the sufficiencyeconomy focuses on moderation and reasonableness with knowledge and morality. Therefore, sufficiency economy is not only economics, it’s about life. It’s aprinciple how to leave peacefully within society and nature. However, sufficiencyeconomy or happiness development approach do not reject the importance ofeconomic development which is also relevant and can alleviate poverty, inequality,and provide basic needs, but it advocates economic growth with caution, selfrelianceability, economic security, and wisdom (to know what is appropriate orbalance). It also aims towards higher goals in life. It cultivates spiritual well-beingto human and social development, or aim to achieve well-being at higher level. Itlays a strong foundation for livings in harmony for personal and social development.Therefore, the development that guided by happiness and sufficiency economywould lead to a more sustainable goal and is a way to develop both human-beingand the society as a whole.The introduction of Buddhist economics, that sufficiency economyphilosophy is based on, and happiness economics into economics will makeeconomics more human-nature concern with values for human happiness and socialdevelopment. The sufficiency economy philosophy focuses on moderation, selfimmunization,and reasonableness, with morality and knowledge, are necessaryfactors for higher level of happiness of human/ societal development. These aremissing values in mainstream economics.

54The Meaning of Sufficiency Economy International ConferenceReferencesClark, A.E., P. Firjters, and M.A. Shields (2006), “Income and Happiness: Evidence,Explanations and Economic Implications,” Journal of Economic Literature.Easterlin, R. (1974), “Does Economic Growth Improve the Human Lot? SomeEmpirical Evidence”, in P.A. David and M.W.Reder (Eds.), Nations andHouseholds in Economic Growth: Essays in Honour of Moses Abramowitz,New York and London: Academic Press.Easterlin, R. and Angelescu, L. (2009), “Happiness and Growth the World Over:Time Series Evidences on the Happiness-Income Paradox”, paper presentedat the 9 th ISQOLS conference, Florence, July 2009. Kusago, T. “Japan’s Development: what economic growth, human development andsubjective well-being measures tell us about?,” paper presented atInternational Conference on Happiness and Public Policy, Bangkok, 18-19July, 2007.

Sufficiency Economy andMainstream Economic TheoryGroup1The Meaning of Sufficiency Economy International ConferenceThe Place of Sufficiency Economy within a Unified Theory of Social Betterment Peter Calkins Professor, Faculty of Economics, Chiang Mai University, Thailand; and Member, CREA, Laval University, Quebec, Canada.Pimpimon KaewmaneeDoctoral candidate, Faculty of Economics, Chiang Mai University, Thailand.

The Meaning of Sufficiency Economy International Conference57The Place of Sufficiency Economy within a Unified Theory of Social Betterment Abstract The true aim of applying any social philosophy should be to increase thetangible well-being and intangible happiness of the population. In today’s world,however, there is a tendency to pit one theory of economic development againstanother as if they were competitors, instead of emphasizing their complementaritywithin a unified theory of social betterment. The present paper suggests where theKing of Thailand?s sufficiency economy philosophy could fit within such a unifiedtheory. Although “knowledge” as an essential input to the achievement ofsufficiency economy is well-covered by Hinduism, Judaism, and the mainstreamtheories of human capital and technical change; the King?s concept of “selfimmunization”brings insights into risk analysis and the theory of safety nets. WhilePlato, Aristotle, Hume, Smith, Keynes and the world?s religions complementsufficiency economy by helping to define and fill out the concept of “ethics;” theKing?s concept of “sufficiency” is given important new meanings as compared tomainstream economy theory. Finally, since “moderation” is only weakly present inthe theory of the second best in mainstream economics; the sufficiency economyphilosophy shows how to restore it to a central place in a manner consistent with theworlds? religions, notably Buddhism, Confucianism and Islam. Key words: sufficiency economy, mainstream economics, Hinduism, Buddhism,Confucianism, Judaism, Christianity, Islam, Baha?i faith, Plato, Aristotle,Confucius, Mencius David Hume, Adam Smith, J.S. Mill, Karl Marx, J. M. Keynes,E. M. Schumacher, King Bhumibol

58The Meaning of Sufficiency Economy International ConferenceIntroduction The real world problem The problems of massive environmental destruction, failure to predict andrespond to natural disasters, destitution, food insecurity, starvation, fraud, cripplingfinancial volatility, market failure, growing inequalities in the distribution of income,civil unrest, tyrannical governance, the inefficacy of policies, nuclear threats byunstable governments, terrorism, and religious intolerance have been all too visiblein the first 11 years of the 21 st century. Any impartial spectator 1 would agree thathumanity needs to apply a unified strategy to mitigate and overcome these problems,as encapsulated in the United Nations’ Millenium Development Goals (MDG) forthe year 2015. 2 But that strategy must in turn logically depend upon the emergence,based upon man’s higher nature, of a unified theory of the premises, processes, andoutcomes of social betterment. The sources of that theory could be mainstreameconomics (including developmental, natural resource, and welfare economics), therediscovered moral dimension of historical economists, the great ancientphilosophers, the world’s religions, and modern alternative development theories, 3including the His Majesty King Bhumibol Mahadev’s sufficiency economyphilosophy. The scientific problem The problem is that these richly-developed viewpoints are rarely seen ascomplementary; worse still, they are frequently set in opposition to each other, as ifsome exclusive choice had to be made. On the one hand, mainstream economics isfrequently sneered at, both in the press and in the rhetoric of demonstrators againstthe G11 and the World Trade Organization as “neo-liberal,” capitalist, and anti-poor;and attributed a single-minded concern for corporate profit maximization basedupon control/destruction of the earth?s natural resources. Economics’ extensivecontributions to poverty analysis, trade-led development, and sustainable naturalresource management are either completely ignored or glossed over. In this, there isclearly confusion about what is taught in economics graduate programs vs. businessschools. But it is true that, in the way it is actually applied, mainstream economicsdoes have four glaring failings: • an inability to solve the key socioeconomic problems of the 21st century • a self-centered maximizing view of production, consumption and exchange • a polarization of income distribution into a handful of very rich and a vast majority of very poor 1This term is taken from Adam Smith and refers to the individual conscience within each of us. 2http://www.un.org/millenniumgoals. 3Other modern theories include but are not limited to Gandhian self-sufficiency, the Sri Lankansarvodaya movement, and the King of Bhutan?s call for maximizing Gross National Happiness.

The Meaning of Sufficiency Economy International Conference59• an underestimate of human nature In terms of the last failure, for example, such writers as Adam Smith and J.M.Keynes are viewed, respectively, as the cynical fathers of self-centered profit-takingand Big Government. It is conveniently forgotten that Adam Smith’s greatest book,as Professor of Moral Philosophy at Glascow University, was the Theory of MoralSentiments; and that Keynes in his Economic possibilities for our grandchildrenexpressed the poignant hope of the end of the need for all government by the year2030. On the other hand, it is equally easy to caricature the King’s Sufficiencyeconomy. Foreigners and many Thai citizens seem confused by the exact definitionand daily applicability of its key concepts. For example, Standard & Poor’s directorof sovereign ratings after a meeting with Thai Ministry of Finance officials about theneed for “more sufficiency,” noted, “No one knows what [sufficiency economy]really means.” 4 Within religions as well, Judaism, Christianity, and Islam, althoughspringing from the same roots, are frequently pitted against each other in bothdoctrine and bomb delivery. Fortunately, the theory of progressive revelationespoused by the Baha’i Faith integrates these three religions along withZoroastrianism, Buddhism, and Hinduism 5 to demonstrate the inherent unity of allreligions. And the simple fact that religions and philosophies ask the same threequestions -- a) the purpose of life, b) the secret of happiness, and c) ourresponsibility toward others -- is also frequently overlooked. Put simply, the maindifference between philosophy and religion is that the former attempts to answerthese questions without reference to a supreme being; but philosophical andreligious answers are largely consistent. Goal and specific objectives of the paper The present paper therefore seeks to suggest how the King’s SufficiencyEconomy philosophy could both contribute to and benefit from an emerging unifiedtheory of social betterment. As much scholarly work has already been written on theoverall scope, two pre-conditions and three operating principles of the King’sphilosophy; this paper will focus instead on exploring a subset of issues regardingethics, self-immunization, sufficiency and moderation raised by the King’sphilosophy that have not yet been reconciled with the history of economic orreligious thought. We shall seek to pinpoint the overlaps and complementarities amongmainstream economics, sufficiency economy, the world religions other ancient orthird-way philosophies, the neglected thought of the great historical economists, andthe Millenium Development Goals (MDGs, Figure 1.) 4Asia Times, In Thailand, a return to ‘sufficiency’, 5 October 2006. 5Hinduism also recognizes the founders of most other religions as avatars of Vishnu (God-the-Protector).

60The Meaning of Sufficiency Economy International Conference5Figure 1 Contributing currents of thought to the emerging unified theory of social betterment. Other ancient orthird-wayphilosophyReligionSufficiencyEconomyEconomicphilosophyMainstreameconomicsMilleniumdevelopmentgoalsBased on these diverse sources, we seek to broad-brush a skeletal butFigure integrated 1 Contributing model of currents social betterment, of thought to suggest the emerging the internal unified dynamics theory of and social recursive betterment.feedbacks that would animate such a model if it were actively implemented inBaseddevelopedon theseanddiverseless developedsources, weeconomies,seek to broad-brushhighlightatheskeletaloverlapsbut integratedwith andmodeluniqueof socialcontributions of the King’s philosophy, and suggest avenues for further socialbetterment, research into suggest the policies the internal that dynamics might effectively and recursive implement feedbacks the greater that would happiness animate of such aall. model if it were actively implemented in developed and less developed economies, highlight theWhy this focus on increasing happiness? Because there appears to be a 3000-overlaps year-old with consensus and unique that contributions greater happiness of the is King‟s the requisite philosophy, goal and of all suggest social avenues evolution. for furtherIn addition to the world’s early religions and philosophers, Adam Smith for examplesocial believed research that into our the own policies interest that and might happiness effectively regulate implement our conduct; the greater that happiness there should of all.be no conflict in thought or action between the government and the citizen, 6 and thatwe should therefore follow the golden rule and treat our neighbours as ourselves. 7Why Marx this and focus Engels on increasing said that our happiness? actions Because should always there appears endeavour to be to a make 3000-year-old the greatest consensusnumber of people happy. 8 Mill explained those actions in the pursuit of happiness asthat greater happiness is the requisite goal of all social evolution. In addition to the world‟s early6The Theory of Moral Sentiments; Smith, Adam, Part VI. Of the Character of Virtue, Chap. IIreligions Of the order and in philosophers, which Societies Adam are Smith by nature for recommended example believed to our that Beneficence, our own http:// interest andwww.econlib.org/library/Smith/smMS6.html#VI.II.42, February 16, 2011. 7happiness The regulate Theory of our Moral conduct; Sentiments; that there Smith, should Adam, be Part no II. conflict Of Merit in and thought Demerit, or Section action III between Of thethe Influence of Fortune upon the Sentiments of Mankind, with regard to the Merit or Demerit ofActions, Chap. II Of the extent of this Influence of Fortune (II.III.22), http://www.econlib.org/library/Smith/smMS2.html#II.III.22, February 12, 2011. 8Karl Marx, Reflections of a Young Man on The Choice of a Profession, Marx EngelsCollected Works(MECW) Volume 1, Written: between August 10 and 16, 1835, http://www.marxists.org/archive/marx/works/1837-pre/marx/1835-ref.htm, February 23, 2011.

The Meaning of Sufficiency Economy International Conference61the prevention/mitigation of unhappiness; 9 he defined what Buddhists term rightconduct as the promotion of happiness, which in turn must be used as the test tojudge all human conduct and as a criterion of morality; 10 and he asserted thatultimately happiness may be viewed as the sole end of human action. 11 The Baha’iFaith asserts that happiness in the world depends upon humans themselves, 12 so thatwe must show a light and bright face in action and deed. Research questions To realize the above goals, the present paper seeks to provide answers to sixspecific questions: 1. How can the King?s philosophy, mainstream Western economics, historicaleconomic philosophies, the major world religions, and other modernvariants of alternative economics be used to construct a unified theory ofsocial betterment? 2. How could understanding the concept of “ethics” in the King’s philosophyin turn benefit from imports from such a unified theory? 3. How does the King?s concept of “self-immunization” enrich such a unifiedtheory by contributing unique insights and interpretations that go wellbeyond risk analysis and social safety nets? 4. How does the King’s philosophy build upon and extend the concept of“sufficiency” in mainstream economic theory? 5. How could the concept of “moderation” in the King’s philosophy enrichsuch a unified theory by portraying moderation as a final result rather thanas an initial behaviour? 6. What are the implications for further research and social action that flowfrom the answers to the above questions? 9(1-5) John Stuart Mill, 1863, Utilitarianism Chapter 2, http://www.utilitarianism.com/mill2.htm, February 22, 2011. 10John Stuart Mill, 1863, Utilitarianism Chapter 4, http://www.utilitarianism.com/mill4.htm,February 22, 2011. 11John Stuart Mill, 1863, Utilitarianism Chapter 4, http://www.utilitarianism.com/mill4.htm,February 22, 2011. 12The Promulgation of Universal Peace, Pages 239-243: 240, http://reference.bahai.org,February 19, 2011.

62The Meaning of Sufficiency Economy International ConferenceMethods Table 1 lists by time period the six religions and great economic and generalphilosophers to be used in this analysis. This timeline is instructive because in mostcases later philosophers and religious prophets were aware of previous writings. 13 To increase both insight and objectivity, each co-author of the present paperperformed independent content analysis of the original sources listed in theReferences section before combining our results. Table 1: The sources for the current research Before 0 AD Before 1000 1700s 1800s 1900s 2000sHinduism Christianity Hume Baha’i Faith Keynes MDGs Buddhism Islam Smith Mill Schumacher Judaism Marx-Engels SEP Confucius-Mencius Plato Aristotle Note: religions are highlighted.ResultsQuestion 1. How can the King’s philosophy, mainstream Western economics,historical economic philosophies, the major world religions, and other modernvariants of alternative economics be used to construct a unified theory of socialbetterment?Figure 2 presents a first skeletal draft of what may eventually become aunified, recursive 14 model of social betterment. It is inspired by the pioneering workof Puntasen (e.g., 2003, 2007) into the inputs, process, output, outcomes, andimpacts of the King’s sufficiency economy philosophy; as well as the upliftingcontent of the Baha’i Universal House of Justice document Toward a ProsperousHumanity (1994). The process of social betterment flows from left to right. Themore tangible dimensions (environmental, physiological, and economic) areportrayed in the lower half, while the more intangible dimensions (social, political,spiritual) are portrayed in the upper half. As humanity evolves, the problems of thelower half will increasingly be resolved, allowing society to “mature” and to focusmore exclusively on improving the upper half.13As a well-educated monarch, the King of Thailand is clearly no exception to this rule. 14The model is “unified” in the sense that it combines a representative sample of religions,philosophers and economic thought (Table 1). It is “recursive” in the sense that the process has bothinternal feedbacks and is completely repeated over time.

The Meaning of Sufficiency Economy International Conference63Inputs Process Output Outcome ImpactSpiritual/intangible axisReligiousSocialPoliticalMaterial/tangibleaxisEconomicPhysiologicalEnvironmental1_Consciousness of unityEthicsGoodnessVirtuePatienceHonourFreedomIndividual responsibilityBenevolence, charity2_ScienceKnowledgeScienceKnow-howSharing of knowledgeScripture / philosophyUniversal educationPress freedom3_Spirituality/religion/philosophyHuman nature: sinful/good/neutralAfter-lifeExistence of Supreme Being/EvilSuffering5_ConsultationMiddle pathSearch for truthExpression of justiceActors meet beneficiariesReduced contestation,negotiation, compromise4_ ReasonablenessMindKarmaFree willLogical consequencesLocalism6_Governing institutionsStructureJustice, universal lawsPrestige among nationsLimited military/use of forceTrust in democracy7_ Self-immunizationGender equalityDemocratic participationGlobal perspectiveInter-state regionalintegrationReciprocityPreserve cultures, rights8_New economicsSufficiencyModerationBetter, unified theoriesSufficiency in consumption ofluxuries and total possessionsnature of rural lifeTemperance in drink, drugs,gambling, debtWork as adoration and serviceEnvironmental conservationGender-balanced employment11_Civil society/CommunitySocial organizationWomen and men, familyCastes and ethnic groupsSharing and volunteeringActive but stable social structureHuman rights9_HappinessWell-beingPurpose of lifeKinds ofhappinessPleasure in the12_EconomyProsperityReduced extremes of wealth and povertyCorporate social responsibilityPro-globalisation, pro-immigrationDemilitarisation of national budgetFaster economic growthIncreased international tradeReduced inflationKnowledge-based job creation10_PeaceBalanceAbsence of warGlobal, positivepeaceProvided GDP is used to increase health,education, international cooperationFigure 2. A Recursive model the Sufficiency Economy Philosophy enriched by mainstream economics, the world‟s religions and past philosophersNote: Elements of the King‟s philosophy are highlighted in green, and the three institutions for its implementation are highlighted in red.9

64The Meaning of Sufficiency Economy International ConferenceAfter each left-to-right iteration of the model, positive impacts on theeconomy, government, and society ensue; as well as a complete return to the ethicsand knowledge with which the process begins at the left-hand side of the figure. Thekey concepts of the King’s sufficiency economy are highlighted in green in thefigure.While it is hoped that Figure 2 is largely self-evident, five specific pointswithin it are worth highlighting. First, more consultation (stage 5) is a pivotal pointin the model in that it constitutes the meeting place for the consciousness of unity,informed knowledge, spirituality, and reasonableness.Although mentioned in passing by earlier philosophers and religions,consultation attains a prominent place in both the Baha’i Faith and King Bhumibol’sphilosophy. 15 The King explains the strong dynamic role of consultation as follows:People possessing similar knowledge must pool their ideas. Some people areknowledgeable in the same area but are different in their viewpoints. These peoplehave to exchange views in consultations rather than argue. Consultation andargument are different. Arguments involve mostly emotion, whereas consultationsinvolve the intellect. By using sound reasoning in discussions, the problems will besolved, because there is only one truth… and is usually the only way to success. 16Second, some find it difficult to distinguish knowledge (stage 2) fromreasonableness (stage 4). The latter term in the King’s philosophy implies a strongfeature of localism. After all, it is only “reasonable” thata) to conserve the environment, one should reduce the production of goods tothose necessary for individual consumption,b) to reduce transportation costs, an effort should be made to produce thosegoods close to home but that of coursec) to achieve efficiency, international trade based on comparative advantagemay also be necessary.It follows that the King’s philosophy is by no means anti-globalisation.Third, the sufficiency economy clearly mentions the tripod of institutions upona balanced economy must rest: private business firms who meet in the market (stage12), the community or civil sector (stage 11), and the government (stage 6),highlighted in red in Figure 2. The relative strengths of threes institutions must becoordinated to connect sustainable supply from the natural resources (environment)with the growing demand for basic necessities from the population (people, Figure3).15This latter point is not frequently recognized.16Royal Speech Given to the audience of well-wishers on the occasion of the Royal BirthdayAnniversary at the Dusidalai Hall, Chitralada Villa, Dusit Palace on Friday, December 4, 1998.

11The Meaning of Sufficiency Economy International Conference65businessFigure 3. The tripolar model of institutions for social betterment.11Environmentbusiness communityPeopleEnvironmentcommunity governmentPeopleFigure 3. The tripolar model of institutions for social betterment.governmentOther thinkers through the ages in economics and psychology have also grappled withFigure formulating 3. Other The tripolar such thinkers tri-polar model through of visions institutions the of ages the for necessary in social economics betterment. conditions and psychology for sustainable have social also evolutiongrappled with formulating such tri-polar visions of the necessary conditions for(Table 2). Regrettably, their thought was often ignored by their contemporaries and never carriedsustainable social evolution (Table 2). Regrettably, their thought was often ignoredby their contemporaries and never carried forward, enriched, deepened or applied toOther forward, thinkers enriched, through deepened the ages or applied in economics to the extent and that psychology the King‟s have Balanced also economy grappled may with bethe extent that the King’s Balanced economy may be today in an era of globalformulating today communications.an such era of tri-polar global communications.visions of the necessary conditions for sustainable social evolution(Table 2).TableRegrettably,2. Tri-Polartheir thoughtVisionswasof Well-beingoften ignoredinbyEconomicstheir contemporariesand Psychologyand never carriedTable 2. Tri-Polar Visions of Well-being Economics and Psychologyforward, enriched, deepened or applied to the extent that the King‟s Balanced economy may beAuthor ↓ /Axis → Material-economic Political-social Spiritualtoday King in Bhumipol an era of global communications.Sufficiency/reasonableness Knowledge/self-immunization EthicsAdam Smith Wealth/inv.hand Nation SympathyLeon Walras Market equilibrium Cooperation SpiritualityTable John 2. M. Tri-Polar Keynes Visions Markets of Well-being in Economics Fiscal-monetary and Psychology MoralityKenneth Boulding Exchange Threat GiftAuthor Mahatma ↓ /Axis Gandhi → Material-economic Self-sufficiency Political-social Village economy Spiritual SpiritualityKing Shigeto Bhumipol Tsuru Sufficiency/reasonableness Rich Knowledge/self-immunization Strong Ethics Warm-heartAdam French Smith Revolution Wealth/inv.hand Liberty Nation Equality Sympathy FraternityLeon Sigmund Walras Freud Market Id equilibrium Cooperation Ego Spirituality SuperegoJohn Modern M. Keynes psychology Markets Left brain Fiscal-monetary Right brain Morality Whole brainKenneth Boulding Exchange Threat GiftMahatma Gandhi Self-sufficiency Village economy SpiritualityShigeto Tsuru Rich Strong Warm-heartFrench Revolution Liberty Equality FraternitySigmund Freud Id Ego SuperegoModern psychology Left brain Right brain Whole brain

66The Meaning of Sufficiency Economy International ConferenceFourth, the recursiveness of the model of Figure 2 is expressed by the positiveafter-effects of increasing happiness (stage 9) and peace (stage 10) at the end of theeach iteration of the model. These impacts fall upon the three sectors just noted: theeconomy, the community and the government. In addition, the increase in peace andhappiness generates the thirst and potential for more ethics (stage 1), moreknowledge (stage 2) etc, which improve the fundamental conditions of the model;permitting the cycle to restart.Finally, the King is not advocating the complete replacement of themainstream economic model and its institutions by a sufficiency economy, but rathera mixed socio-economy enriched by the sufficiency economy philosophyparticularly at the local level of firms, communities, and government offices. OnDecember 4, 1998, he suggested that the sufficiency economy might constitute aboutone-quarter of the mix:This Sufficiency Economy can be implemented for only half, not theentire economy. Even one fourth is good enough, not one fourth of the area,but one fourth of the action.In other words, “sufficiency economy” is meant to be “partial”localism. It is true that many parts of Thailand still enjoy capitalism.“Sufficiency Economy” calls on those to practice “some” localismparticularly those in the rural areas. However, the oppositions see nodifference between “Sufficiency Economy” and “Self-sufficient economy”,i.e., they are the same as Localism. 17Question 2. How could understanding the concept of “ethics” in the King’sphilosophy in turn benefit from imports from such a unified theory?As noted, Box 1 (consciousness of unity through ethics) is the starting pointfor the process of social betterment in the model given in Figure 1, which is also oneof the first two great pillars of the SEP. Clearly, without a sincere intent to improvehuman society that respects such universal principles as the golden rule, any attemptto create a balanced guideline for social evolution will seem doomed to failure.But although the King’s philosophy is absolutely correct in positing ethics asan essential precondition for any theory of social betterment, it shows a surprisinglack of specificity as to what the term actually means. According to a website on thesufficiency economy 18 such morality means “honesty, patience, perseverance” as thefundamentals of life, but again no details are given as to their content. The Kingimplicitly advocates using morality (righteousness), as well as ethics andcompassion in dealing with others. It may be inferred from this that compassionateethics (คุณธรรม) involves the direct incorporation of the utility function of other17http://en.wikipedia.org/wiki/Localism_in_Thailand18http://thailand.prd.go.th/thailand_illustrated/content.php?s_id=284. Wisdom was alsomentioned, but that actually refers to the separate concept of khwamru (knowledge).

The Meaning of Sufficiency Economy International Conference67people into our own. Indeed, showing compassion to others is a necessary conditionto applying knowledge, self-immunization, reasonableness, and moderation.Ethics must be simultaneous to each of these decisions, or like justice (asubcategory of ethics) it may be divided into two periods. Ex ante justice(commutative equity) provides equality of access to jobs and productive resourcesbefore economic processes begin. It is therefore synonymous with equality ofopportunity. Ex post justice (distributive equity) helps to equalize the final fruits ofeconomic opportunities so that all have at least their minimal needs met. It istherefore synonymous with equality of results. Western welfare economic theory andpolicies have been developed to deal primarily with the latter.But, again, the King’s philosophy does not elaborate much further than this. Itis therefore at this point in Figure 1 that the King’s philosophy can be substantiallyenriched by referring to the other theories and philosophies within the unifiedmodel. These point to the importance of such characteristics as goodness, patience,virtue, honour, benevolence/righteousness, freedom, and individually responsibleaction. Without such virtues, it would be difficult to strengthen the moral fibre of thenation so that everyone, particularly public officials, academics, and businessmen atall levels adheres first and foremost to the principles of honesty and integrity. Inaddition, a way of life based on patience, perseverance, diligence, wisdom andprudence is indispensable to creating balance and being able to cope appropriatelywith critical challenges arising from extensive and rapid socioeconomic,environmental, and cultural changes in the world.GoodnessEarly on, Hinduism clearly stated that happiness is situated in the “mode ofgoodness.” 19 Plato observed that a rich man is never happy unless he is also “goodand gentle.” 20 In Judaism, joy and enthusiasm increase every time we perform a“good deed.” 21 Mill remarked that each person’s happiness is not only a good to thatindividual, but also contributes to the aggregate general good for all persons. 22Keynes warned that we must limit our enjoyment to the class of things which also“happen to be good,” while bearing no harm in mind. 23 We infer from thisconsensus that goodness is part of the คุณธรรม of the sufficiency economy.19Bhagavad Gita 14.620See appendix III, Law Book V21Shab. 30b22John Stuart Mill, 1863, Utilitarianism Chapter 4, http://www.utilitarianism.com/mill4.htm,February 22, 2011.23John Maynard Keynes, Economic possibilities for our grandchildren, 1930, http://www.econ.yale.edu/smith/econ116a/keynes1.pdf, March 1, 2011.

68The Meaning of Sufficiency Economy International ConferenceVirtueVirtue is also one of the most prevalent themes in historical philosophy andreligion. Since, like ethics in general, it is left an undefined, aggregated concept; it isimportant for enriching the King’s philosophy to identify its more specific content.The Buddha taught that virtue should be motivated by good will and compassion,Plato that it actively involves practicing virtuous behaviour. 24,25 Aristotle agreed thathappiness is an activity that emerges from virtue, which in turn is an activity of thesoul. 26 Indeed, he stated that the more virtue exists in its entirety, the greater thehappiness 27 and the more complete the life. 28 Mill, echoing Aristotle, said that thedesire of virtue is the desire of happiness; that happiness itself is composed by virtuedesired and cherished. 29 Hinduism states that virtue means striving that no one is putinto difficulty or disturbed by anyone. 30 Similarly, Adam Smith 31 admonishedhumans to walk in the paths of virtue: 32 i.e., prudence 33 (concern for others), justiceand beneficence (to refrain from hurting), and the love of virtue, most permanentand secure. 34 The Baha’i Faith interprets virtue as being the willingness to sacrificeoneself/everything for each other, even life itself; and the attainment of a state ofself-sacrifice, 35 excellent character, and high resolve. 36 Similarly, Marx and Engels24See appendix III, Charmides25The Republic, Book I, 352d-354a, quoting 354a1 in Plato’s Ethics and Politics in TheRepublic, Stanford Encyclopedia Philosophy, http://plato.stanford.edu/entries/plato-ethics-politics/,January 19, 2011.26See appendix IV, Nicomachean Ethics Book I (9), (13)27See appendix IV, Nicomachean Ethics Book III (1)28See appendix IV, Nicomachean Ethics Book I (9)29John Stuart Mill, 1863, Utilitarianism Chapter 4, http://www.utilitarianism.com/mill4.htm,February 22, 2011.30See appendix I, Bhagavad Gita 12.1531This side of Adam Smith’s thought will come as a surprise to some.32The Theory of Moral Sentiments; Smith, Adam, Part I. Of the Propriety of Action, Section IIIOf the Effects of Prosperity and Adversity upon the Judgment of Mankind with regard to thePropriety of Action; and why it is more easy to obtain their Approbation in the one state than in theother, Chap. III Of the corruption of our moral sentiments, which is occasioned by this disposition toadmire the rich and the great, and to despise or neglect persons of poor and mean condition (I.III.35),http://www.econlib.org/library/Smith/smMS1.html#I.III.35, February 12, 2011.33The Theory of Moral Sentiments; Smith, Adam, Part VI. Of the Character of Virtue,Conclusion of the Sixth Part, http://www.econlib.org/library/Smith/smMS6.html#VI.III.54, February16, 2011.34The Theory of Moral Sentiments; Smith, Adam, Part VI. Of the Character of Virtue, Chap. IOf the Order in which Individuals are recommended by Nature to our care and attention, http://www.econlib.org/library/Smith/smMS6.html#VI.II.21, February 16, 2011.35The Promulgation of Universal Peace, Page 218: gr1, http://reference.bahai.org, February 19,2011.36The Secret of Divine Civilization, Pages 21-40: gr6, http://reference.bahai.org, February 20,2011.

The Meaning of Sufficiency Economy International Conference69advocated sacrifice for the benefit of all 37 based upon simple morality, striving forexcellence, and unselfishness. 38 Schumacher felt that virtue involved mainly selfrespect,courage in the face of adversity, and the ability to bear hardship. 39PatienceOf course, developing the multiple facets of virtue takes time. Patience,therefore, is praised by both Islam 40 and the great English philosopher DavidHume. 41 Hume said that sustainable happiness depends upon the ability to resisttemptation of present ease or pleasure, and to carry one’s efforts forward to futureprofit and enjoyment. 42 The King of Thailand also seems to emphasize patience asclearly necessary to implementing reasonableness and balance within the sufficiencyeconomy. In a royal address on 11 July 1980, he proclaimed:In bringing about progress and prosperity, it is imperative to build upgradually, one step at a time, implementing measures, while contemplatingand improving them. Never make the efforts with haste, spurred by theeagerness to bring novelty, just for the sake of novelty. In fact, nothing isreally new. All the novelties are just the continuation of the old.HonourBuddhism feels it is important to build both honour and fame as one improvesone’s karma. In this sense, fame refers to serving as a well-known model of ethicalactions. 43 Adam Smith addedthat we must be recognized as honourable not only by others but particularlyby ourselves. 44 He explained that the best way to make sure one is living honourably37Karl Marx, Reflections of a Young Man on The Choice of a Profession, Marx EngelsC o l l e c t e d Wo r k s ( M E C W ) Vo l u m e 1 , Wr i t t e n : b e t w e e n A u g u s t 1 0 a n d 1 6 , 1 8 3 5 , http://www.marxists.org/archive/marx/works/1837-pre/marx/1835-ref.htm, February 23, 2011.38Marx and Engels, The German Ideology, On Communism and Morality, http://www.marxists.org/archive/marx/works/1845/german-ideology/ch03f.htm, February 25, 2011.39E.F. Schumacher, Small is beautiful, p.13340Fussilat, Chapter #41, Verse #35, refer in http://www.searchtruth.com/search.php?keyword=happiness&translator=5&search=1, January 31, 2011.41Enquiry Concerning the Principles of Morals, section VI: of qualities useful to ourselves, part I,http://www.anselm.edu/homepage/dbanach/Hume-Enquiry%20Concerning%20Morals.htm#sec6a,February 7, 2011.42Enquiry Concerning the Principles of Morals, section VI: of qualities useful to ourselves, part I,http://www.anselm.edu/homepage/dbanach/Hume-Enquiry%20Concerning%20Morals.htm#sec6a,February 7, 2011.43Buddhist economics, Chapter 3, p.a. Payutto, http://www.urbandharma.org44The Theory of Moral Sentiments; Smith, Adam, Part I. Of the Propriety of Action, Section IIOf the Degrees of the different Passions which are consistent with Propriety Chap. II Of thosePassions which take their origin from a particular turn or habit of the Imagination (I.III.35), http://www.econlib.org/library/Smith/smMS1.html#I.III.35, February 9, 2011.

70The Meaning of Sufficiency Economy International Conferenceis to confirm that others’ unsolicited approbation 45 is consistent with the internalapproval given by our own inner Impartial Spectator.FreedomFreedom is of course an essential precondition to choosing to behave ethically.In Hinduism, freedom has the sense of moksha or liberation from bad thoughts andactions. Judaism extols the fact that the human being is the only creature with freewill. Christianity encouraged its followers to be free from the love of money. 46Hume asserted that an ethical person expresses his happiness by freedom, ease,confidence, and calm enjoyment diffused over their countenance. 47 Adam Smith saidthat liberty itself is the freedom from fear and anxiety. 48 The Baha’i faith stresses theimportance of the freedom of the spirit. 49Individually responsible actionOnce the good, virtuous, patient, honourable individual is free to act, it isimportant to do so responsibly. Hinduism admonishes its followers to be active andrejoice within, 50 and to do one’s duty to improve one’s karma. Buddhism emphasizesindustriousness. 51 Plato counsels righteously doing the good things. 52 Aristotleelaborates this in some detail: we should be engaged in virtuous action andcontemplation; 53 exertion, 54 acting justly to preserve happiness; 55 while avoidingvicious actions 56 and aiming for the highest of all goods achievable by action, 5745The Theory of Moral Sentiments; Smith, Adam, Part III. Of the Foundation of our Judgmentsconcerning our own Sentiments and Conduct, and of the Sense of Duty, Chap. II Of the love ofPraise, and of that of Praise-worthiness; and of the dread of Blame, and of that of Blame-worthinesshttp://www.econlib.org/library/Smith/smMS3.html#III.I.10, February 14, 2011.46Hebrews 13:5, refer in Bible Verses about Happiness Source: http://www.bible-verses-bysubject.info/bible-verses-by-topic-starting-with-h/bible-verses-about-happiness.htm,January 30,2011.47Enquiry Concerning the Principles of Morals, section V: why utility pleases, part II, http://www.anselm.edu/homepage/dbanach/Hume-Enquiry%20Concerning%20Morals.htm#sec5b,February 5, 2011.48The Theory of Moral Sentiments; Smith, Adam, Part VII. Of Systems of Moral Philosophy,Chap. II Of those Systems which make Virtue consist in Prudence, http://www.econlib.org/library/Smith/smMS7.html#VII.II.60, February 16, 2011.49Some Answered Questions, Pages 227-229: gr3, http://reference.bahai.org, February 19, 2011.And The Promulgation of Universal Peace, Pages 239-243: 240, http://reference.bahai.org, February19, 2011.50See appendix I, Bhagavad Gita 5.2451Buddhist economics, Chapter 3, p.a. Payutto, http://www.urbandharma.org52Euthydemus53Nicomachean Ethics Book I (10), Book X (6)54Nicomachean Ethics Book X (6)55Nicomachean Ethics Book III (1)56Nicomachean Ethics Book IX (9)57Nicomachean Ethics Book I (4)

The Meaning of Sufficiency Economy International Conference71something final. He says that the best, noblest, pleasantest thing in the world isfound through good action; 58 a good life and good actions thus go hand in hand. 59Judaism explains that the responsible actor will feel joy and enthusiasm over theperformance of a good deed, 60 that we should channel the energy of evil inclinationin the direction of good; that people should seek joy (in their daily work andespecially in their youth) by doing the right thing and acting ethically. 61 Christianityagrees: There is nothing better for men than to be happy and do good while theylive; 62 indeed, practicing and doing good 63 is the best thing for mankind, especiallysince it is never too late to be forgiven. Islam holds that happiness is conditionalupon who one is and how one acts; 64 but all should concentrate on the five pillars(God, prayer, poor-tax, fasting, and pilgrimage). Schumacher stressed the need tohave adequate energy to act in life. 65 All of these ideas concerning action underliethe remaining stages in Figure 1. In the King’s case, this implies that action isinherent in self-immunization, applying the new agricultural theory, and followingthe sufficiency economy philosophy.Benevolence, righteousnessAmong all such actions we may contemplate, benevolent and righteous givingis surely among the loftiest. Hinduism advocated benevolence in the forms ofperforming acts of sacrifice and penance, 66 while never condemning or seeking toconvert non-believers. Buddhism agreed that benevolence and charity should besincere, motivated by true good will and compassion rather than a grudging sense ofduty. Judaism goes so far as to say we must be ready to sacrifice anything for God. 67Specifically in the economic sense, Christianity stated that it is better to be poor, togive all one’s wealth away as a means of demonstrating and achievingrighteousness. Islam formalized this sentiment in the concepts of sadaqat and zakat,the idea being that it is righteous to build a surplus and to give of it to the poor.Smith agreed that mutual kindness and benevolence are prominent moral sentiments.58Nicomachean Ethics Book I (8)59Nicomachean Ethics Book I (8)60Shab. 30b61Does Judaism really lead to greater happiness? Frum (religious) people don’t seem happier tome?, http://www.simpletoremember.com/articles/a/man-self-development-commitment/#0987,January 27, 201162Ecclesiastes 3:12, refer in Bible Verses about HappinessSource: http://www.bible-verses-by-subject.info/bible-verses-by-topic-starting-with-h/bible-versesabout-happiness.htm,January 30, 2011.63Peter 1 and Galatians 6-10, refer in The Christian life, http://www.bibleed.com/bibleteachings/christianlife/happiness.asp, January 29, 2011. 1864Oliver Leaman, Ibn Rushed on happiness and philosophy, studia islamica, no.52 (1980), p.17365E.F. Schumacher, Good work, p.89, http://www.scribd.com/doc/563164/Goodwork-EF-Schumacher, March 3, 2011.66For example in Bhagavad Gita 4.31, 4.33, 17.24, 17.28,18.567“Since the destruction of the Temple God Himself lacks complete happiness” (‘Ab. Zarah 3b)

72The Meaning of Sufficiency Economy International ConferenceThe Baha’i Faith makes the direct link between charity and happiness, stating thateternal happiness is contingent upon giving; service to humanity, sharing with thepoor and helping “every helpless one.” Marx-Engels of course advocatedunselfishness as the very basis of giving according to one’s ability/receivingaccording to one’s need. Schumacher extended the concept of benevolence to lovingkindness towards the plants and animals of “lower creation.”Question 3. How does the King’s concept of “self-immunization” enrich such aunified theory by contributing unique insights and interpretations that go wellbeyond risk analysis and social safety nets?Of course, seeing to the needs of all in the above way is a first step towardsprotecting all in society from going without their basic needs. Self-immunization(ภูมิคุ้มกัน) thus covers, but is not limited to, what is often referred to as “social safetynets” in Western economic thought. The safety net of the sufficiency economyshould also embrace self-immunization in economy, community and government. Itimplies that the production and consumption processes of the balanced economyshould cultivate the inner resilience to deal with unexpected shocks; and immunizethe consumer, the producer, the seller, and the exporting and importing firm fromwhat Western economists might call “down-side risk.” It will no longer be enoughthat a village has enough to eat on average over a ten-year period; each individualmust have enough to eat every day of every year, consistent with the concept of foodsecurity. The philosophy holds that both the rich and the poor should consumeresources only at the level that do not incur any loan.Although the King of Thailand has given new meaning and popularity to theconcept of self-immunization, measures to protect the individual and the communityhave actually been a theme in philosophy and social policies for millenia. In ancientChina, the philosopher Mencius, following on Confucius, devised the “well-fieldsystem,” whereby every eight farmers would set aside a commonly owned andmanaged back-up ninth field for surplus production and storage as a protectionagainst crop failure. Among other non-religious sources, Hume advised not beingaffected from other’s happiness, Smith the complete enjoyment in own’s selfapplause.Hinduism further clarifies the concept of self-immunization with the idea ofdoing one’s hereditary job well, augmented by the practice of yoga, bathing,vegetarianism, and other rituals. Buddhism adds the need to detach oneself; to sharewealth through alms-giving, to protect the people and animals in one’s entourageand to practice right speech and right action. Consistent with this advice, Platoargued for promoting the greatest happiness of the whole, not the disproportionatehappiness of any one class, Judaism advocated obedience to God, eye-for-eyejustice; and protecting oneself from religious and economic persecution.Christianity, meanwhile felt that the greatest form of self-protection was to loveone’s neighbor. Islam more actively promoted zakat (charity during Id), love andmercy, tolerance, honesty, justice, human rights, compassion, and equality for all.

The Meaning of Sufficiency Economy International Conference73The Baha’i faith, as noted, felt that self-protection proceeded primarily throughconsultation and the unity and harmony of the human race.Question 4. How does the King’s philosophy build upon and extend the conceptof “sufficiency” in mainstream economic theory?Contrary to most philosophers, the King gives two definitions for sufficiency.The first is narrow self-sufficiency of a community or nation in the standard westernsense, which is no longer possible in a modern exchange economy; it would,however, be good to improve the balance between the feelings of sufficiency withina mixed economic system. The second is the whole set of philosophical principlesthat allow that portion of the economy to remain self-sufficient, to flourish and to beefficient. Indeed, there is no contradiction between efficiency and sufficiency withina system that mixes partial self-sufficiency with positive globalization. The Kingcarefully distinguished these two definitions 68The term sufficiency economy does not exist in the textbooks; there hasnever been a sufficiency economy. There are other terms but not this one. Theapplication of the [self] sufficiency economy does not necessarily mean fullsufficiency, and I may add that full sufficiency is impossible. …Theapplication of only one-fourth of the sufficiency economy should be enough,and it can be done. This is one point that I would like to clarify what I saidlast year.The word sufficiency has another meaning, a wider meaning. It does not onlymean self-sufficiency but also means to have enough for the individual to live on.This sufficiency was mentioned to those who were present here, in this hall-whenwas it? 20 or 24 years ago, in 1974, [when] some individuals had plenty, but somehad practically nothing. In the past, there was enough to live on, but today,impoverishment is creeping in. Some things may seem to be extravagant, but if itbrings happiness, it is permissible as long as it is within the means of the individual.This is another interpretation of the sufficiency economy or system.Question 5. How could the concept of “moderation” in the King’s philosophyenrich such a unified theory by portraying moderation as a final result ratherthan an initial behaviour?Sufficiency or moderation (พอประมาณ) challenges the very first assumption inmainstream economics that “wants are unlimited.” 69 According to the King’sphilosophy and many other sources, they can be satisfied; and one will be happier ifone can control one’s desires. For example, 2500 years ago at Mrigadava Forest inVanarasi, the Buddha explained that life is full of suffering precisely because we are68An excerpt from the royal speech given to an audience of well-wishers on the eve of the royalbirthday anniversary at Dusit Hall, Chitralada Villa, Dusit Palace, on Thursday, 4 December 1997.69Bade and Parkin, 2006, Foundations of Economics, page 1: “All economic questions arisebecause we want more than we can get”; “Everyone ends up with some unsatisfied wants”; and “Ourinability to satisfy all our wants is called scarcity.”

74The Meaning of Sufficiency Economy International Conferencetempted by the unlimited desires now enshrined in the Western definition ofeconomics; and that the only way to avoid suffering is to avoid greed for things andsituations we don’t need. These themes are present in the Koran, the Bible, and allother world religions.King Bhumibol explains that 70The word to have enough is sufficient; sufficiency is moderation. If oneis moderate in one’s desires, one will have less craving. If one has lesscraving, one will take less advantage of others. Being moderate does notmean to be too strictly frugal; luxurious items are permissible, but one shouldnot take advantage of others in the fulfillment of one’s desires. Moderation, inother words, living within one’s means, should dictate all actions. Act inmoderation, speak in moderation; that is, be moderate in all activities.If we contain our wants, with less greed, we would be less belligerenttowards others.and clearly extends the concept to the macro-economic and international level:If all nations hold this concept - I don’t mean sufficiency economy - thisconcept of moderation, without being extreme or insatiable in one’s desires,the world will be a happier place.If all countries entertain this - this is not an economic system - the ideathat we all should be self-sufficient, which implies moderation, not to theextreme, not blinded with greed, we can all live happily.One misconception is that moderation means a pro-active, voluntary reductionin production, income and consumption as the first step in the application of theKing’s philosophy. In fact, moderation is the result of applying the other principlesof ethics, knowledge-acquisition, self-immunization, and balance. Moderation istherefore not the objective but the by-product of the dynamic process of Figure 2,whose true objective is the people’s well-being, peace, happiness, and prosperity ofeach individual at all times and in all parts of the country. What could be termed“Net Happiness per Capita” (NHC) is thus operationally quite different from theconcept of Gross National Happiness (GNH) put forward by the King of Bhutan.The need for moderation is not just limited to Buddhist nations, however. TheConfucian concept of xiaokang (lesser prosperity) has been re-introduced into Chinaat the same time as the sufficiency economy philosophy has been implemented inThailand. Both seek to moderate the single-minded search for wealth.Even in mainstream economics, the concept of moderation is gaining ground.The well-known Easterlin paradox has found for the United States that great wealthdoes not increase happiness; and that income alone is both an inadequate andindeterminate measure of happiness and subjective well-being. The King’s theory of70An excerpt from the royal speech given to an audience of well-wishers on the eve of the royalbirthday anniversary at Dusit Hall, Chitralada Villa, Dusit Palace, on Thursday, 4 December 1997

The Meaning of Sufficiency Economy International Conference75sufficiency-cum-benevolence contributes one possible explanation of that paradox.Figure 4 portrays the relationship between income (horizontal axis) and happiness(vertical axis) for both the giver and receiver, and how happiness (utility) can shiftupward for both through voluntary charitable donations. Happiness curves Hi risequickly at low levels of income, but the marginal contribution of income tohappiness (dH/dI) eventually becomes zero (potentially even negative) inaccordance with the Easterlin paradox. Rich Person starts on the H1 curve with alarge amount of income, and has the choice of giving away his income or remainingat point r by keeping it. If he gives it away, he will shift first to point r’ (the incomeeffect) but will feel good about himself (the altruism effect), which will shift him tor” on happiness curve H3. He has become distinctly happier. This type of behaviorhas been empirically confirmed by the world-wide tendency of wealthier people togive to charity.Meanwhile, Poor Person starts at a very low level of happiness p on H1. Uponreceiving charity, she also enjoys a two-step effect. The first step shifts her along theH1 curve to p’ (the income effect), but her happiness is further increased by the joyof receiving a gift and of feeling cared for (the altruism effect), which shifts her top”. It is further posited that the altruism effect for the receiver is less than thealtruism effect for the receiver (i.e., it is more blessed to give than receive). Theprocess narrows the gap in incomes between the two persons and may alsopotentially narrow the gap between happiness levels depending on the exact shapesof the curves and the extent to which bridging social capital is created (this must beconfirmed by empirical research). Both types of narrowing are subsumed under theBuddhist concept of the “middle way” emphasized by the King. Empirical researchmust also establish the approximate percentage of income at each level that must begiven away or received (neither too little nor too much) to have a significant effecton happiness. The size of gifts themselves must also achieve a kind of “middle way”to avoid offending the receiver through either niggardliness (trivial gift) or impliedcondescension (exaggerated gift).

76The Meaning of Sufficiency Economy International ConferenceFigure 4. The income and altruism effects of charity on happiness25Happiness (H)H 3b 2r''H 2b 1r'r(rich) H 1a p''2p'a 1 p(poor)Give away moneyGet moneyIncomeSource: Songsak Sriboonchitta, Aree Wiboonponse, and Peter Calkins. 2007. Presentation entitled “Sufficiency Economy” at the National Economic and Social Development Board, Figure Bangkok 4. The income Thailand. and altruism effects of charity on happinessSource: Songsak Sriboonchitta, Aree Wiboonponse, and Peter Calkins. 2007. Presentationentitled“SufficiencyFigure 5, reproducedEconomy”from theatEconomistthe NationalmagazineEconomicprovidesandanecdotalSocial DevelopmentsupportBoard,for Bangkok this interpretation Thailand. based upon the results of a new well-being indicator 71combining 20 dimensions in eleven sectors for 34 OCED countries. It is obvious thatalthough the first derivative of the relationship between income and well-being ispositive, the second derivative is negative. The figure suggests, for example, thatNorwegians Figure 5, average reproduced almost from 40,000 the USD Economist of income magazine per year, provides but they anecdotal are less happy support for thisthan Canadians with approximately 30,000 USD. 72interpretation based upon the results of a new well-being indicator 73 combining 20 dimensions ineleven sectors for 34 OCED countries. It is obvious that although the first derivative of therelationship between income and well-being is positive, the second derivative is negative. Thefigure suggests, for example, that Norwegians average almost 40,000 USD of income per year,but they are less happy than Canadians with approximately 30,000 USD. 7471The indicators range from tangible air pollution to intangible life satisfaction.73 72The Unfortunately, indicators range the from new tangible well-being air pollution index currently to intangible only life covers satisfaction. the 34 member countries, sothat 74 we Unfortunately, cannot see where the new Thailand well-being and other index medium- currently or only less-developed covers the 34 countries member countries, stand. so that we cannot seewhere Thailand and other medium- or less-developed countries stand.

The Meaning of Sufficiency Economy International Conference7726Source: Well-being and wealth: The pursuit of happiness. May 24th 2011, 14:44 by The Source: Well-being Economist and online. wealth: http://www.economist.com/blogs/dailychart/2011/05/well-The pursuit of happiness. May 24th 2011, 14:44 by TheEconomist being_and_wealthonline. http://www.economist.com/blogs/dailychart/2011/05/well-being_and_wealthConsistent with the urgings of Plato (“temperance”), Smith (“good temper” orConsistent “sobriety”) with and the urgings strictures of of Plato Buddhism, (“temperance”), Islam, and Smith the (“good Baha’i temper” faith, moderation or “sobriety”) andmust also extend to alcohol, drugs, gambling, debt, usury, and possessions. It is thethe very strictures entry point of Buddhism, into Buddhist Islam, detachment, and the Baha‟i Christian faith, humility, moderation the must “self-renunciation”also extend to alcohol,of J.S. Mill, and the art of putting oneself “beyond the reach disappointment” ofdrugs, Keynes. gambling, debt, usury, and possessions. It is the very entry point into Buddhistdetachment, Christian humility, the “self-renunciation” of J.S. Mill, and the art of putting oneself“beyond the reach disappointment” of Keynes.

78The Meaning of Sufficiency Economy International ConferenceConclusionQuestion 6. What are the implications for further research and social actionthat flow from the answers to the above questions?This modest introduction to the idea of a unified model for social benefitacceptable to all philosophies and religions of course leaves as many questionsunanswered as it does answered. If this kind of model is of interest, at least foursuggestions might be made for further research and social action:1. Encourage Thai scholars to flesh out the ethics sections of the King’sphilosophy from Thai and other sources beyond the scope of the presentstudy.2. Fill in ideas from the many historical philosophies and or religions thathave been left out of this introductory paper.3. Publicize the King’s philosophy at home and abroad as a convenientvehicle for summarizing the unified model for social betterment.4. Appoint an international Commission to debate and agree upon theeconomic, governmental, and social strategies and policies most consistentwith promoting the model of social betterment in an efficient and timelyway. This process must also involve deciding the weighting, sequentialordering, and timing of the strategies and polices. The very formation ofsuch a Commission would seem the first step in alleviating the many realworldproblems noted in the Introduction.

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82The Meaning of Sufficiency Economy International ConferenceMarx , Karl. Lead Article in No. 179 of the Kölnische Zeitung, Marx Engels Collected Works (MECW) Volume 2, p. 184.Marx, K. and Engels, F. On Communism and Morality, The German Ideology, http://www.marxists.org/archive/marx/works/1845/german-ideology/ch03f.htm,February 25, 2011.Marx, Karl Does the Reign of Augustus Deserve to be Counted Among the HappierPeriods of the Roman Empire?, Marx Engels Collected Works (MECW)Volume 1, p. 639, Written: between August 10 and 16, 1835, 5 http://www.marxists.org/archive/marx/works/1837-pre/marx/1835aug.htm,February 23, 2011.Marx, Karl Letter from Heinrich Marx to son Karl in Berlin, Marx Engels CollectedWorks (MECW) Volume 1, pg 670-673., Written: Trier, March 2, 1837,http://www.marxists.org/archive/marx/letters/papa/1837-fl2.htm, February23, 2011.Marx, Karl Reflections of a Young Man on The Choice of a Profession, Marx EngelsCollected Works (MECW) Volume 1, Written: between August 10 and 16,1835, http://www.marxists.org/archive/marx/works/1837-pre/marx/1835-ref.htm, February 23, 2011.Marx, Karl. Chapter One: A Scientific Discovery, The Poverty of Philosophy. http://www.marxists.org/archive/marx/works/1847/poverty-philosophy/ch01c.htm, February 25, 2011.Marx, Karl. Notebooks on Epicurean Philosophy, Seventh Notebook, I. Cicero, Onthe Nature of the Gods, Book I, Chapter XIX, http://www.marxists.org/archive/marx/works/1839/notebook/ch07.htm, February 24, 2011.Marxists website. http://www.marxists.org/archive/marx/works/1842/07/10.htm,February 25, 2011.Marxists website. First Manuscript, Karl Marx’s Economic and PhilosophicalManuscripts, http://www.marxists.org/archive/marx/works/1844/epm/1st.htm, February 25, 2011.Mill, John Stuart, 1863, Utilitarianism Chapter s 2, 3, 4, http://www.utilitarianism.com/mill2.htm, February 22, 2011.Moss, Walter G. The Wisdom of E. F. Schumacher, 2010, http://www.wisdompage.com/ Schumacher Essay.pdf, March 3, 2011.National Economic and Social Development Board (NESDB) of Thailand.Sufficiency Economy :implications and applications. http://www.nesdb.go.th/Md/book/booksuffwork_eng.pdf. Retrieved 6 May 2010.New Mandala. Interview with Professor Kevin Hewison where he discussessufficiency economy. Undated.

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84The Meaning of Sufficiency Economy International ConferenceSchumacher, E.F., Small is beautiful, pp. 17, 31, 62, 64,71,75,80, 89, 133, 232.Smith, Adam, The Theory of Moral Sentiments; Parts I through VII. http://www.econlib.org/library/Smith/ smMS1.html#I.II.16, February 9, 2011.Thailand National Economic and Social Development Board (NESDB), Sufficiencyeconomy (in Thai), http://www.nesdb.go.th/portals/0/about/suriyanuwat/room/05/room05.pdf, March 6, 2011.Thaingo.org, 31 March 2007The Economist. Rebranding Thaksinomics, 11 January 2007Thongpakde, N. (2007) Thailand’s Economics Development and the Philosophy ofSufficiency Economy, Manuscript.Universal House of Justice. 1994. Toward a Prosperous Humanity. Haifa, Israel.Vathanophas, V. (2005). Applying Sufficiency Economy Philosophy in businessorganizations:A case of Thai. Com. Unpublished manuscript, SufficiencyEconomy Unit. Office of National Economic and Social DevelopmentBoard, Thailand. Examined how a dot-com stat – up firmWehrfritz, George. Buddhist economics, Newsweek International Edition, 22January 2007.Xeniagreekmuslimah, Happiness and Faith in Islam, http://xeniagreekmuslimah.wordpress.com/ 2010/09/02/happiness-and-faith-in-islam/, January 31,2011.

Sufficiency Economy andMainstream Economic TheoryGroup1The Meaning of Sufficiency Economy International ConferenceModern Mainstream Economic Science: a Science Without Gratuitousness. The Case of the Economy of CommunionLuigino BruniMilan Bicocca and IU Sophia (Florence)

The Meaning of Sufficiency Economy International Conference87Modern Mainstream Economic Science: a Science Without Gratuitousness. The Case of the Economy of CommunionWe do not seek out companions by some natural instinct; rather, we seekthe respect and utility they bring us: we first desire advantage, thencompanions.PremiseTHOMAS HOBBESThe world economy in these last few years is facing the most serious crisissince 1929, and all the protagonists of the economic community are called for a newand greater responsibility and commitment in order to overcome this crisis andfinding a new sustainable ways for the market economy. The processes ofglobalisation can offer new opportunities to many who are still excluded frommaterial well-being but, at the same time, there is the real risk of transforming theworld into a place in which the only form of human relationship is the “cash nexus”,where everything becomes a commodity. Our market economy has two possibleways forward: (1) to build a ‘global village’ where, as in every village, moreprinciples are at work (redistribution, gift and market exchange); (2) or, instead, totransform the world into a ‘global supermarket’ where everything becomescommodity and where there is no room for genuine and non-instrumentalrelationships. In this context, the main challenge of the Economy of Communion -both at a theoretical and a practical level - is to show that it is, here and now,possible to build business and communities for authentic relationships wherereciprocity has right of citizenship also within the economic domain. I am convinced that today the capitalistic economy has brought fantasticachievements along these last two century, but nowadays is obsolete and not able tofulfil its traditional promises of wellbeing and human development. Not only theenvironmental crisis, but also the social and spiritual crises today say clearly that wehave to save market economy by going further this capitalistic financial capitalism.There are many concrete signs of hope, the socalled social and civil economy,among those experiences such as fair trade, ethical banks and social enterprise. Inmy presentation I will refer in particular to the Economy of communion (EoC),

88The Meaning of Sufficiency Economy International Conferencedeveloped within ghe Focolare spiritual movement, but my reference to this projectis mainly a way for indicating a new paradigm of business and economy for this newsearch of a new economic system. The structure of my paper is the subdivided in three parts: 1) an outlook ofthe present global financial and economic crisis; 2) an excursion into the history andphilosophy mainstream economy, starting from Adam Smith, in order to underlyingthe challenges of the modern political economy, showing also some newexperiments that say that the philosophical assumptions of standard economics arenot so robust as we thought in the past, referring in particular to the key issue ofreciprocity; 3) finally some hints of new signs of hope, in the light of the economyof communion and the new season of social/civil economy.

The Meaning of Sufficiency Economy International Conference89PART 1: CRISIS AND HOPES IN THE WORLD ECONOMYCrisis of trust and confidence (before economics and finance)Behind the financial and economic crisis we are experiencing there is, aboveall, a grave crisis of confidence. No one knows any longer where to find reliableinvestments; therefore people sell stocks preferring cash (or gold and safe havens).Today it is clearer than ever how true that the word credit comes from “believe,”from trust. In 1936 the great British economist J. M. Keynes well described, in itsessence, what is happening now, a phenomenon that depends very little onsophisticated financial instruments and more on simple psychological mechanisms:we have fallen into a “trap of negative expectations” a situation in which a seriouscrisis of confidence (in this case in the public debts of “sovereign” States) that theeconomic agents have strong preference for liquid assets and lack of confidence infinancial stocks. And when one falls into these traps, the only effective policy is torecreate that missing trust, recreate positive expectations. The current capitalisteconomic system does not have - and here is the point - anthropological and ethicalresources before techniques, in order to raise these expectations, because they lackcultural perspectives to the challenges posed.In times of crisis, the memory is always an important resource to imagine anddraw scenarios of hope. Trust comes from the Latin fides, a word that meansconfidence, reliability, tie (rope) and religious faith. I trust you, I will give you credit(you are credible), because we share the same fides, that faith which was the mainguarantee of reliability and loan repayments, especially when trading with strangers.On this fides-trust-credibility-reliability-bond-faith, the first European single marketbetween the fourteenth century and modernity was born. With the ProtestantReformation fides enters in crisis, the rope breaks (Christian fides was no longerenough for businesses and for peace), then Europe found new forms of trust in orderto support the emerging markets: it is in fact in the seventeenth century that centralbanks, stock exchanges, which became the new “secular” guarantee of the newfides-free market. Parallel to these new economic institutions the national stateswere also born, which became the new “places of trust,” the great safeguards formarkets and currencies, as were the cities in the Middle Ages. This brief historical overview is just to say that the secular modern economycomes from a very close relationship between economics and national policy,between finance and national states. Behind exchanges and finance there were thestates, peoples, ethnic communities, territories, affiliations. The political andeconomic democracy as we know it was based largely on national markets andeconomic institutions. This national capitalism, in its two great Anglo-Saxon and

90The Meaning of Sufficiency Economy International ConferenceEuropean versions, has held up until a few decades ago, when we entered in a moreaccelerated way in the era of globalization and financial capitalism.?? This crisis istelling us that we still do not know nor understand nor govern the globalizedcapitalism, because while the economy and finance have changed radically, thepolicy and its instruments are still those of early capitalism, including creation ofhuge public debt without control and guarantees, an expression of ancient idea ofsovereignty of nation States. Not to mention the tax issue: to fight tax evasionseriously we should at least acknowledge that there is a mega “tax issue” and ofjustice that plays in the global financial markets, where they create huge profits andreturns that escape tax systems and are still too anchored to the national dimension,which may be used as ex post to the dangerous and immoral trick of taxamnesties.?? It is enough to observe that the guarantees offered by Obama in theU.S. have become inadequate. In reality, we would need a political dimension ofglobalization, a policy that does not yet exist nor does any one have a glimpse of.That’s why in this crisis the new market economy in the era of globalization is inplay, which should be different from what we have created thus far. The global financial economy needs trust but, as in the case of energy, itconsumes without being able to recreate, because its tools create reputation (whichis a standard commodity buyable in the market) which tends to displace the trust(which is instead a relational good).? What is certain today is that the old politicsbased on national governments, partisan balance and sovereignty no longer works.What will emerge from this failure we do not know: we can only predict a few yearsof fragility, systemic risk, uncertainty, and sacrifices for all, hopefully with bit offairness. And we must above all raise the hope which is the great virtue in all timesof crisis, it is the fertile ground from which even confidence can flourish.But which are the cultural and philosophical roots (or at least some of them) ofthe capitalistic market economy?

The Meaning of Sufficiency Economy International Conference91PART 2Adam Smith’s ‘Original Sin’Let us start our analysis by taking a closer look at what Adam Smith was tryingto do; from this point of view, he is truly the father of modern economics. 1 Let us begin with his most famous phrase: It is not from the benevolence of the butcher, the brewer, or the baker,that we expect our dinner, but from their regard to their own interest. Weaddress ourselves, not to their humanity but to their self-love, and never talkto them of our own necessities but of their advantages (Wealth, I.ii.2).Not only is the logic of this passage at the heart of classical liberal economics,it remains today an important key to understanding the humanism that lies behindthe confidence in the expansion of markets and globalization. Smith wanted toemphasize the independence from the “benevolence of our fellow citizens” as apositive virtue related to the new form of sociality introduced by the market. Marketrelationships allow us to satisfy our needs without having to depend on others’ love;by all depending impersonally and anonymously on the ‘Invisible Hand’ of theMarket (with a capital ‘M’), we do not personally depend on anyone else, nor do wehave to encounter anyone personally (and potentially painfully). In depending onmany, we depend on no one with a name: “Each tradesman or artificer derives hissubsistence from the employment, not of one, but of a hundred or a thousanddifferent customers. Though in some measure obliged to them all, therefore, he isnot absolutely dependent upon any one of them” Wealth, III.iv.12). We dependanonymously, and without the risk of injury, on the Market. This is why for Smiththe market economy is an immediately civilizing factor: it is civil society, it iscivilization, though a civilization based on immunitas. In this respect a famouspassage from his Lectures on Jurisprudence is emblematic:Whenever commerce is introduced into any country, probity andpunctuality always accompany it. These virtues in a rude and barbarouscountry are almost unknown. Of all the nations in Europe, the Dutch, themost commercial, are the most faithfull to their word. The English are moreso than the Scotch, but much inferiour to the Dutch (Smith, Lectures, “OfPolice”). 1Though the founders of political economy would not have admitted it, there is a closecontinuity between Hobbes’ and Smith’s designs. Hobbes was perhaps the most radical author totheorize the necessity of the death of the communitas to give birth to a modern society founded on asocial contract between free and equal. Smith was less explicit about it, but no less radical. We find asimilar intent at the heart of the cultural project that he put into practice to found political economy:the contract takes the place of the munus, or better yet, the form of reciprocity of the contract (whichderives from cum-trahere, to bind together) is seen as a form of reciprocity or relationality that is theopposite of that of the munus. The munus obligates, binds and creates a dependence on thegenerosity of others, while the contract frees people and makes them independent.

92The Meaning of Sufficiency Economy International ConferenceTo do justice to the complexity of Smith’s thought, we should immediately addthat the social and cultural target he has in mind is a social relationship typical ofasymmetric and unequal pre-modern societies, in which the benevolence of some(the powerful and affluent) towards others (the poor and beggars) in reality concealswhat G.W. Friedrich Hegel called a ‘master-slave’ power relationship, anasymmetric social relationship that is a direct cultural consequence of a certainunderstanding of the Absolute. This then is the ethical justification of his humanismof independence: “Nobody but a beggar chuses to depend chiefly upon thebenevolence of his fellow-citizens” (Wealth, I.ii.2). The benevolence that Smith hasin mind more closely resembles the munus about which Marcel Mauss wrote (that is,a gift that expresses and reinforces an asymmetry of power and of status in socialrelationships, which in turn obligates the recipient to return the gift) rather than thegift as an expression of gratuitousness and mutual freedom.The ‘other’ that Smith has in mind when he imagines life in pre-modernsocieties is not an other that blesses me and makes me happy, rather, in continuitywith Hobbes, an other that is above or below me, not beside me as an equal. In otherwords, for Smith the direct and personal relationship with the other in the publicsphere is synonymous with the feudal world; as such it must be overcome by a newanonymous and mediated sociality, which for Smith is more civil because it is freefrom dependence on the benevolence and gift–munus of others. The humanisticinspiration of Smith—or of Antonio Genovesi or Pietro Verri—cannot be understoodunless one understands his enthusiasm for the market together with an indignationfor the suffering and humiliation inflicted by a few feudal masters on the manyservants in pre-modern communitas.For these reasons, there is in Smith not only the recognition that friendship isnot sufficient to live in society at large (“In civilized society he stands at all times inneed of the cooperation and assistance of great multitudes, while his whole life isscarce sufficient to gain the friendship of a few persons”, (Wealth, I.ii.2), but we alsofind in his thought the argument that, were we ever to have sufficient friends toobtain the things we need (as can happen in small village communities), the broadcommercial society allows a more civil relationality, a new form of philia, which ismorally higher because it is freely chosen. 2In summary, Smith takes recourse in the mediation of the market (and in acertain sense he invents it, at least theoretically), because, as he said, an unmediatedrelationship is synonymous with an uncivilized, feudal, asymmetric, and verticalrelationship. The other harms me because he or she is a powerful person or a master2Allan Silver writes: “According to Smith, the replacement of necessitudo with commercialsociety brings with it a morally superior form of friendship—voluntary, based on natural sympathy,unconstrained by necessity” (1990, p. 1481). On this basis the conditions can be created for theemergence of civil society free from the categories of indifference or foreignness: the other is neithermy enemy nor my ally, he or she is simply indifferent to me: the “stranger is not a friend from whomwe can expect any special favor and sympathy. But at the same time, he is not an enemy” (Ibid., p. 1483).

The Meaning of Sufficiency Economy International Conference93who rules me, one who does not contend with me on equal terms. The market thusavoids this unmediated, uncivilized relationship and constructs a higher one that ismore humane: when the beggar enters the butcher shop with money in hand, when,that is, he or she can effect an equal exchange with the seller, that relationship—precisely because it is mediated by the market—is for Smith more humane withrespect to the dependent relationships in a world without markets. Of course Smithdoes not deny that in private life there may be an unmediated face to facerelationality, but precisely and only in the private sphere, among one’s family andclose circle of friends. In civil society, including the market (for Smith, the market iscivil society only from this standpoint), it is good to meet others anonymouslybecause the other with a face is not a ‘brother’ who is like me, but a superior (or aninferior). Economics without ‘Beneficence’There is also a second aspect to Smith’s ‘error’. In his The Theory of MoralSentiments Smith reminds us that “Beneficence, therefore, is less essential to theexistence of society than justice. Society may subsist, though not in the mostcomfortable state, without beneficence; but the prevalence of injustice must utterlydestroy it” (Smith, Theory, II.ii.3.5). And on this basis Smith states thatSociety may subsist among different men, as among different merchants,from a sense of its utility, without any mutual love or affection (Smith, Theory,II.ii.3.4, italics mine).This is an important argument that is finding increasing consensus in a globalsociety, and one that apparently we can agree on; in reality it conceals a snare,represented by the idea that civil society can function and develop withoutgratuitousness (which can be viewed as a synonym of beneficence, or charity), orthat a contract can take the place of a gift. It is said that the gift of oneself and offriendship are important in the private sphere, but in the market and in civil societywe can easily do without them; rather, as we have seen, we do well to do withoutthem, precisely because of their burden of pain and injury. Actually, as the growingloneliness and misery of our affluent economies are telling us, a society free fromgratuitousness is not a habitable place, much less a place of joy. This is especiallytrue in post-modern societies, where the boundary between ‘private’ and ‘public’ isdisappearing: in our societies, if we do not live in gratuitousness in public (work,politics, associations, and so forth), neither will we live it in private.Nothing like Smith’s idea is currently posited within the core of economicscience. Smith’s economic theory is not taught in most universities (except for a fewreferences to the ‘Invisible Hand’), but the idea of economic exchange as mutualindifference and of the market as the place of virtuous, anonymous and impersonalrelationships still sustains the entire system of contemporary economics that, fromthis point of view, is heir to ‘Adam’ Smith and his ‘original sin’.

94The Meaning of Sufficiency Economy International ConferenceIn summary, the wound that Smith saw and wanted to avoid by recourse to themediation of the market is not the wound I receive from friendship and horizontalrelationality between peers, but the wound I receive from power asymmetry and byforces objectively present in the field. And who can deny that this wound should beavoided to build a more civil and humane society? Why, then, should this mediationby the market represent a problem?The rest of this book is an attempt to answer these questions. Oneconsideration should suffice for the moment. If the market were limited in scope anddistinct from the rest of life—such as sports or opera, or as were the markets of theancien régime—we could, with less concern and perhaps even with some enthusiasm, accept the existence of this zone where we could encounter each other withoutinjury and pain. Indeed, we would view it (as we once did and as we still do in areaswhere there is excessive communitas that entangles and ensnares people) as a meansof growth and liberation. But—and this is the point—if the market becomes theprincipal means of organizing community life, that is, if it permeates the whole ofcivil society from health care to schools, from child care to elder care, as isincreasingly happening, then entrusting social relationships to the market contractalone is insufficient and dangerous. Nor could the Leviathan State, whichincorporated the same mediated, impersonal logic, heal such a failure ininterpersonal relationships.Smith’s ‘original sin’ (unintentional, thus at most a venial sin), then, was toconsider interpersonal relationships as always uncivilized and asymmetric (which isnot all that different from Karl Marx’s theories), and therefore to have held thatevery mediated relationship is more civilizing than an unmediated relationality. Touse a popular and slightly crude expression, he threw the baby (the interpersonalrelationship) out with the bath water (the asymmetric and feudal personalrelationship, which is but one type of relationship).If then we want to recover a positive relationality within markets—and Ibelieve that this is a decisive challenge for our quality of life in coming years—theneconomic theory must surpass Smith’s methodology and envision an economicscience capable of gratuitousness, beyond a merely contractual and immunizingrelationality.ReciprocityWe conclude this second part by mentioning an important debate that isassuming a normative dimension in economic science in the last few years, whichwill open some interesting perspectives for our discussion. This path of research ismore and more showing that the standard neoclassical homo oeconomicusanthropology does not exist in the practice. In fact, the hypotheses about thepsychological and anthropological characteristics of economic models are basicallya priora that have never had empirical evidence. When instead economists in the lastthree or two decades have begun to text the hypothesis of self-interest and rational

The Meaning of Sufficiency Economy International Conference95behavior they have discovered that real people in the lab act in a different matter,much more open to relationality, sociality, social norms, and in particularreciprocity. The process of re-foundation of the economic theory begun in the 70’s, duringa very creative and alive period of heterodox economic science, when most of thepapers and books that are today considered classics of the non-mainstreameconomics of their time that, however, are rediscovered today as classics of the newparadigm that is emerging now. In 1970 A. O. Hirschman published his Exit Voice and Loyalty, a little book,and mostly misunderstood by his fellow economists, that opened a new season ofdialogue (at least in his desires) between the tools of politics (voice) and those ofmarket (voice). Hirschman claimed the importance of bringing more “voice” intomarket and economy, and more “exit” into organizations and politics. In 1971 N.Georgescu Roegen published his book The Entropy Law and the Economic Process,where he brought into the attention of the economic discipline (that neverthelessremained very inattentive) the innovative issue of the natural limits of naturalresources and of the planet, by applying the laws of the thermodynamics toeconomics, a methodological step that could have changed radically the economicparadigm and that, instead, remained totally unattended. In the 1974 the American economist and demographer Dick Easterlinpublished the seminal paper on the so-called “the paradox of affluent happiness”,showing that US and western society have reached a sort of steady state insubjective wellbeing or happiness. Three years later Tibor Scitovsky published abook in the same topic, The Joyless Economy, denouncing the American way of lifeas not anymore able to produce happiness of its people, who substitute the lack ofauthentic happiness with consumption of comfort goods. Today we know, with thepresent crisis, how true this prophecy was, because of the most deep root of oureconomic and financial crisis is the poverty trap of American society who, facing agreat fall of social and civil life, replace the lack of sociality and relational goodswith commodities: this search for commodity has brought the Western society andfamily (and the US in particular) to increase their debts in order to foster increasingrate of consumption, up to the explosion of the subprime in 2008, that was, however,a finishing line of a wrong relationship between happiness-sociality-consumption. In the 1977 the Indian economist Amartya Sen wrote his paper “rationalfools”, showing that the king of the assumption of economics, i.e. the “rationality ofthe economic man” is naked, opening in this way a season of deep reflection on thenature of rationality in economics, following something similar to what happened inpsychology thanks to the works of H. Simon few years before. Fred Hirsh in hisbook “Social limits to growth” in 1976 introduced into the social sciences the issueof “positional goods”, and launched the central issue of the positional competition asone the key element of the modern economy and society, that brings people tocompete one another in a sort of zero sum game, new forms of “prisoner dilemma”

96The Meaning of Sufficiency Economy International Conferencegames where the social scarcity of most of the contemporary goods (i.e. the“positional ones”) does not allow that the market competition can bear its traditionalbenefit in terms of efficiency and welfare, but only mutual destruction of natural,economic and relational resources. A topic, this, that has old roots in the works of T.Veblen and later of K. Galbraith, and that has been developed later by economistssuch as Robert Frank or Richard Layard.In recent years there is also a new theoretical interest in reciprocity byeconomists. In the lively debate that recently opened on the topic, a number ofinnovations stand out that move in the direction of a serious recovery of thedimension of personal relationality, with its risks and dangers. The development ofthe literature on reciprocity is tied to the emergence and growth of experimentaleconomics and cognitive economics (or behavioral economics), which have shownthe importance of behaviors that differ from those foreseen by conventionaleconomic theory, the heir to Smith’s legacy. 3This new phase of study has been generated mainly by empirical andexperimental analyses that bring to light behavior that could not be explained bystandard economic theory. Among the first anomalies to be studied were somecooperative choices that came to light in interactions in which the theory predictedopportunism, while the experiments registered cooperative attitudes. 4 According tothis theory of reciprocity people are neither generous nor ungenerous withoutdistinction toward anyone, but they demonstrate selectivity in their actions and areconditioned in their actions by the actions of others: “Indeed, the same people whoare altruistic to other altruistic people are also motivated to hurt those who hurtthem” (Rabin, 1993 p. 1281). 5The analysis of the role of intentions is particularly important in this line ofstudy. By now many empirical studies have shown that a subject attempts tounderstand the intentions of others and thus to judge his or her degree of kindness;that is, a subject observes not only what others have in fact done, but also what theymight have done and did not do (or the alternatives that were available). 63The differences in approach between behavioral economics and experimental economics, bothdeveloped in the late 1970s, essentially consist in the role of trust (which is greater in theexperimental approaches of Vernon Smith, Ken Binmore or Charles Plott), the role of the a priori inrational choice, and the role of self-interest in the behavioral economics of Daniel Kahneman orRobert Sugden) for the investigation of the psychological dynamics that lie behind one’s choices.For a comparison between this debate and the similar one between the late nineteenth centuryVilfredo Pareto and Francis Edgeworth (and Maffeo Pantaleoni) cf. Bruni and Sugden (2007).4One of the first authors to directly bring up the concept of reciprocity was Matthew Rabin in1993. In his by now classic article that appeared in the American Economic Review, the openinglines read: “people may care not only about their own well-being, but also about the well-being ofothers. Yet psychological evidence indicates that most altruistic behavior is more complex. People donot seek uniformly to help other people; rather, they do so according to how generous these otherpeople are being” (p. 1281).5In particular, Matthew Rabin based his theory on two assumptions: a) people are willing tosacrifice their own material well-being to help those who have been kind to them; b) people arewilling to bear a material sacrifice to ‘punish’ those who acted unfairly toward them.6For a overview of theoretical and experimental results see Vittorio Pelligra (2002, 2007).

The Meaning of Sufficiency Economy International Conference97The theory of reciprocity has undergone many developments, thanks to the factthat these dynamics lend themselves well to being tested in laboratory experiments,and the paradigm of rational egoism is coming into serious discussion. This hasresulted in a less abstract and aprioristic theoretical approach to studying people’sactual behavior.New models and theories have emerged from this experimental literature thattoday are part of the toolkit of anyone involved in game theory, decision theory and,in general, behavioral analysis. In such theories reciprocity is at once an empiricallystudied phenomenon and a theoretical hypothesis that gives a means of explaininganomalies in the theories based on the hypothesis of self-interested behavior.In this way new models, or games, have emerged that have provided the meansof revealing behavior in which the players tend to respond more generously thanstandard economic theory would predict. This is explainable precisely on the basisof the theory of reciprocity. In particular, many experiments show that economicagents (at least in the laboratory) are willing to earn less money in order to reward orpunish the other players on the basis of a rule of reciprocity: this hypothesis is calledstrong reciprocity.The basic game of such experiments is the trust game, in which a subject, A,receives a sum of money from the tester (say, $10), and A can either give it to theother player, B, or keep it for him- or herself. If A trusts B and gives the money, thesum is multiplied (say, by 3) and B in turn decides whether and how much to giveback to A. According to standard economic theory, there is only equilibrium: A keeps the money and the game ends after the first move. The experimentalevidence shows instead that more than half of all A choose to trust and give themoney to B, who, in the majority of cases, give back some part (X) of the sum to A.B responds to A by rewarding the trust, or kindness, received at A’s expense. Theother player is rewarded (or punished) on the basis of the belief that he or she was(or was not) kind, fair, or just toward oneself. Thus, in this approach, intentionsmatter.Another widely used game is the ultimatum game. A receives a sum (say, $10)and the game permits that A can keep the money only if A succeeds in convincing Bto accept whatever sum is offered (if B does not accept the offer, neither onereceives anything, just as in a contract). On the basis of the assumptions of rationalchoice, A should give B the smallest amount possible (say, $1), on the basis of thehypothesis that for B something is better than nothing (1 > 0). In fact, experimentsshow that B frequently does not accept A’s offer if B does not think it is fair (that is,if the offer is below some threshold, which varies from culture to culture), punishingA at B’s own expense because B also gives up any gain. This type of reciprocity iscalled ‘strong reciprocity’ precisely for the characteristic of entailing a costlypunishment or reward for the subject that rewards or punishes: in an ultimatumgame, if I do not accept an offer that I consider unfair, I punish you (you receivenothing), but I do so at my expense (I give up whatever small sum was offered to

98The Meaning of Sufficiency Economy International Conferenceme). So when I respond favorably in a trust game, according to a criterion ofreciprocity, I reward your trust by giving up a greater gain.Kevin McCabe and colleagues (2003) conducted an interesting experiment.They played the trust game in two very different contexts. In the first game, A (thegiver) did not have the possibility to choose between trusting and not trusting; Acould only give (an involuntary trust game). In the second game, leaving all otherconditions unchanged, A instead had the option not to give to B (a voluntary trustgame). Thus in the second game, A intentionally trusts B and accepts the risk at A’sown expense.What were the results?In the first game, the percentage of B who had an attitude of reciprocity towardA was low (33%), which data confirm James Buchanan’s (1975) famous Samaritan’sDilemma: if the Samaritan’s gift to a poor person has the effect of reducing his orher incentive, then the Samaritan is good if he or she does not give, since thedonation increases the propensity to opportunism by the poor person, and it impedeshis or her growth. In not giving, the Samaritan lives out what Buchanan calls‘strategic altruism’ (see the diagram).However, the interesting aspect comes from the second game, the voluntarytrust game. The data from the second experiment (with a ‘wound’) in fact show areversal: 65% of B respond with an attitude of reciprocity. The awareness alone onthe part of B, that A had the possibility of not taking a risk and instead risked an actof trust, doubled the reciprocated response—though it should be noted thatopportunism was not eliminated (see diagram).This and other experiments have important implications for economic andsocial life, even in areas characterized by indigence and misery. They tell us that therelational signal that my behavior sends counts greatly: if I risk injuring myself inrelationship with you, this risk increases your reciprocity, thus our mutual blessing.The sole knowledge that A could have freely not trusted B, and instead extended thattrust, transformed for B the meaning of A’s gift from welfarism into reciprocity.Trust, which is risky and costly, impels the recipient to behave in a worthy manner,greatly reduces opportunism, and markedly encourages growth.I am convinced that the secret of solidarity in fair trade, of the Economy ofCommunion, and of the Grameen Bank of Muhammad Yunus, the 2006 laureateNobel Peace Prize (a Nobel prize not for economics, but for peace, as ademonstration that “development is the new name for peace”), is precisely inneighborliness: 7 someone who helps another is someone whose intentions areknown, someone who risks his or her own to help the other. Aid withoutneighborliness, even with the best of intentions, can feed the traps of dependencyand welfarism.7Interestingly, the parable of the Good Samaritan is told by Jesus to explain neighborliness(“who is my neighbor?”, Luke 10:25-37): in choosing this metaphor, I wonder if Buchanan wasaware of this?!

The Meaning of Sufficiency Economy International Conference99These theories and experiments on reciprocity have important things to say forour discussion. In the studied relationships, we enter into a risky relationship withthe other that can harm us when the other does not respond: for example, if in a trustgame B does not respond, A loses what he or she has. On the other hand, theliterature tells us that A’s wager to entrust him- or herself to B increases theprobability that B will respond, benefitting A as well (in many experiments B’sresponse leads to A’s being in a better situation than at the beginning) 8 .I conclude this section, which had the objective of showing a few reasons thathave determined how economic science has been shaped as a reciprocal immunitas,with the (perhaps noble) goal of avoiding being wounded by the other.8At the same time, these games still have considerable limitations. First, all interaction ismediated by money: the rewards and losses are monetary, which could be considered a somewhatcrude yardstick when dealing with reciprocity. In fact, we could be more generous in interpreting theuse of money as a reward. One possible reading of these experimental results could be the following:if we observe a behavior in which the choices show other than material components, we are alsoindirectly saying that monetary elements are not the only ones that count in people’s choices.Second, if it is true that A’s offer to B is risky, it can be understood as an offer in a contract (withoutguarantees or enforcement). If in fact B accepts and responds fairly, A will also gain with respect tohis or her initial situation; in other words, the risk can be understood as a classic entrepreneurial risk,without a motive of gratuitousness by A toward B. To further examine this point, which is central toour discourse, together with two colleagues I conducted an experiment (Luca Stanca et al, 2009),designed in such a way that A’s choice to give something to B could be unequivocally interpreted atan act of pure gratuitousness, and we compared the results with the standard trust game results (alsointerpretable, as noted, as a self-interested contract). The results showed that the correlation betweenthe offers by A and the responses by B is significantly greater when B knows that A was motivatedby pure generosity toward B. It seems, then, that people respond more when they think that thegenerous behavior of the other is motivated by gratuity and their own intrinsic worth. In other words,beyond a motivational ‘crowding-out’ effect within a person, (as reported by the studies by BrunoFrey (2005) and Edward Deci and Richard Ryan (2001), when I am paid to do a task which I haddone freely until then, from that moment on gratuitousness, replaced by the contract, is reduced), ourdata show that there is a specific crowding-out effect as well between the motivations of the other(either instrumental or gratuitous) and my behavior; if I see that the other acts on intrinsicmotivations, my reciprocity toward him or her increases.

100The Meaning of Sufficiency Economy International ConferencePART IIIThe Economy of Communion was born of an intuition that came to ChiaraLubich, the foundress of the Focolare Movement, in a little Movement town nearS?o Paulo, in Brazil, in May 1991.While landing on the airplane on the city of São Paulo, Chiara Lubich was struck by the extreme poverty and the many favelas (slums) around the city; a strongimpression due mainly to the enormous contrast between the shacks (where anumber of people from our Movement also lived) and the many and modernskyscrapers.Faced with this scenario, the idea, or the inspiration, consisted in extending thedynamics of communion from individuals or families (already present in theFocolare) to business enterprises, inviting people to start up new businesses and totransform existing ones, all within the fullness of freedom - actually, the full name ofthe project is ‘The economy of communion in freedom’. These firms, therefore, arenot non-profit organizations, but the business profits are to be pooled and used forthree precise goals: first, to finance the development of the business itself; second, tospread the culture of communion by means of press, conferences and various infrastructures;and third, to help people in need with projects, by beginning with thosewho are in contact with the Focolare communities, according to the principle ofsubsidiarity.Another Economy of Communion element was part of the very first intuition:the pulsating heart of the new Economy of Communion would be the ‘businessparks’, innovative ‘industrial districts’ which would rise up near the little towns ofthe Focolare Movement. Today the more developed parks are in Brazil (three),Argentina, the USA, Belgium, Portugal, Italy and the Netherlands. Taking off fromthe few dozen pioneer businesses that joined in 1991, today almost 800 businessesof various sizes are part of the Economy of Communion throughout the world.During these years, the Economy of Communion project has been the object ofacademic research (including more than 300 theses for degrees and various PhDs indifferent disciplines in many countries of the world), conventions, seminars, papersand books in various languages (see the international website: www.edc-online.org).The logic behind this “vital experiment” is straightforward: it is an attempt totake seriously reciprocity and Christian reciprocal love (agape) also in the economicdomain. The Economy of Communion takes reciprocal love or agape as a powerfuldriving force not less effective than self-interest even within the market andbusiness. This logic can be seen, for example, in the way that business people expresstheir own rationale for business: building a better world without exclusion are moreimportant than becoming individually richer. When observed within the economic

The Meaning of Sufficiency Economy International Conference101sphere, this reciprocal love (also called reciprocity or fraternity) results incommunion. This reciprocity is not just contract or exchange, the more familiarcategory of economic reasoning (although the two forms of reciprocity can go handin hand). The basic difference is that classical market exchange is instrumental andconditional. Relations of reciprocity, instead, presuppose the knowledge of theidentity of the other, need genuine (non- instrumental) concern for the others andcannot be fully conditional. This kind of reciprocity can be considered to besynonymous with communion, intended as a way of understanding and living outsocial behaviour.Communion has important consequences on the way we understand therelationship between businesses and the poor, helped by sharing of life and later bysharing profits. The ‘governance’ of the economy cannot be based on the marketalone, but takes into account the needs of the poor. This can be seen in the Economyof Communion most clearly in the willingness to share profits with the poor. Withinthe project, however, this logic of communion extends far beyond the distributivedimension. It relates to he way customers are dealt with, the pricing structure,coping with crises, managing debtors and so on. Whilst clearly, overall efficiency isessential, the ‘case by case’ approach dominates and is governed by a desire tounderstand the needs of the other. The way EoC understands and lives poverty is oneof the building stone of the project: the poor are the first protagonists of their ownlives and developments, and the help coming from the resources given by the firmsare just a secondary help, in line with the “principle of subsidiarity” of the Catholicsocial doctrine: the external help does not take the place or substitute theprotagonism of the poor. What are the consequences of this logic of communion applied to businesslife? What does it mean to love in economic life? And, in particular, in the life of abusiness enterprise?The logic of reciprocal love in the Economy of Communion is not manifestedonly by freely accepting the invitation to give away profits (which is the morevisible aspect), but also in many other daily choices: from employing workers who,in particular situations, do not guarantee economic returns, to showing confidenceand trust in suppliers or customers even in circumstances in which the ordinary logicof business would advise against it. Because it is something more than, and differentfrom, simply giving or doing things gratuitously, love-communion is able to findroom to express itself even when the correct performing of one’s role - as a buyer onbehalf of others, as supervisor, as administrator of capital entrusted by another –would not seem to leave any such space: love finds space for personalised, otheroriented,gratuitous actions even in situations that are usually consideredinstrumental, anonymous and self-interested, as are market relations.Love-communion can imply the will to make use of the margins formanoeuvre at everyone’s disposal, assuming burdens and responsibilities in order tolook for solutions to economic dilemmas: supporting a supplier in difficulty without

102The Meaning of Sufficiency Economy International Conferencetaking on excessive risks to one’s own business (and therefore, to owners, creditorsand employees) or coming up with a solution different from that which would seemto be the best as far as profits are concerned, but which would necessitate areduction in personnel.In this regard, a manager in a Filipino business had the following experience:‘Some time ago we discovered that one of our men working in the distributionsection had difficulty in carrying out his job because he was having trouble with hiseyesight. He didn’t want to tell us this out of fear of losing his job. We understoodthat he needed to work in order to sup- port his family and we found a solution. Wetransferred him to a new warehouse where he is now working proficiently.’These businesses live the ‘culture of love’ while immersed in the marketeconomy. They produce and sell goods and services working side by side with otherbusinesses in today’s globalised economy: they do not work in ‘alternative’ orinformal economies. This aspect too has important implications, because in pastcenturies, those who assigned a role of love to economics chose to operate outside ofthe market (for example, charities, non-profit organizations, NGO’s andfoundations). The Economy of Communion introduces the concept of free-gift andcommunion inside the market and thus stakes a claim for a ‘multi-dimensional’market: not only a place of efficiency, but also a place in which to practice theculture of reciprocity, the culture of love, and fraternity.What the implications of this project for economic theory? In the second partof my presentation I will focus on just two points that I consider relevant in both thecontemporary theoretical and business debate.Love and reciprocity as an economic categoriesWe said that in the EoC love, i.e. reciprocal love or reciprocity, occupies thecentral place. To affirm that love can occupy this central position in economic life isa revolutionary thought which goes against the current. In fact, the hypothesis thatpeople are motivated by their own self-interest is still the cornerstone of thetheoretical framework of mainstream economic science. During its classical period,however, political economy was based on a more complex anthropological postulatethan the self-interested homo oeconomicus. In fact, even though Adam Smith did notrely on ‘the benevolence of the butcher’ for the functioning of the market,nonetheless he attributed ‘sympathy’ and ‘fellow-feeling’ with a central role in hisvision of both people and society. The Neapolitan Antonio Genovesi, on the otherside of Europe, went even further when he depicted the market as a matter of‘mutual assistance’, mutual love or reciprocity.After the neo-classical methodological revolution at the end of the XIXthcentury, economics was defined as a domain of human life whose effectiveperformance requires only ‘indifferent’ - in the sense of ‘morally neutral’ - selfinterest:‘The hypothesis that the individual is motivated by personal interests hasbecome the dominating thought in economics today, and it has often been considered

The Meaning of Sufficiency Economy International Conference103an adequate explanation both of human behaviour and the efficient behaviour of themarket economies’ (Sen, 2001, 4).The economic man (homo oeconomicus) is not necessary supposed to beselfish: for standard economics what is needed is just indifference to the other’swelfare, or, as the famous Enghish economist (and Pastor) P. H. Wicksteed (1910)used to say, ‘non-tuism’, that is, not interested in the welfare of the other person, ofthe ‘you’ in a market transaction (non-tuism comes from the Latin ‘tu’: you).Therefore, market relations need to be ‘ethically neutral’, relational indifferent: ineconomics there is no place for love or for hate: economic exchange is presented asa sort of third way between “love” and “war”. This is a ‘parsimonious’ or prudentconception of human beings, in A. Hirschman’s words. According to this economist,the exclusion of love from contemporary economics is also a consequence of itsmethodological parsimony. He recalls the well-known thesis of the Englisheconomist Dennis Robertson, according to whom the economist’s job is to help tocreate an institutional pattern of motivation where as small a burden as possiblewould be placed, for the purpose of society’s functioning, on ‘love’ (Hirschman1984, p. 93).In other words, according to mainstream economics an efficient marketeconomy must economize the use of love because love is the scarcest resource inhuman life, and economics must teach people to economize love in the market inorder to have enough of this precious resource in other domains where it is reallyneeded (family, friends, etc.). Therefore, it comes that the more an economic systemutilises love the more it is inefficient.Others less sophisticated economists, instead, exclude love from economicanalyses simply on the grounds of realism, holding that it is useless to discuss thematter because the fact is that people in economic life act out of self-interest and notout of love (this is what the majority of professional economists think). Love canperhaps come into play - under the form of philanthropy - only in a second step,when the entrepreneur as private human being; but during the productive process, inordinary business dynamics, love is seen as a foreign word to economic reasoning.According to standard economics and business Bill Gates (for instance) asentrepreneur serves the common good by making good computer; Bill Gates asprivate citizen, in a second moment, creates a charity for Africa; but during theordinary business activity business is business, or, in the words of the founder ofGeneral Motors, “the business of business is business”.Hirschman, and EoC with him, criticise this approach - today still very popularin economics - on the basis of a very simple consideration: ‘Robertson did hisposition a disservice: he opened his flank to easy attack when he equated love to afactor of production in strictly limited supply that needs to be economized. But whatabout the alternative analogy that equates love, benevolence, and public spirit to askill that is improved through practice and atrophies without it? ... like the ability tospeak a foreign language or to play the piano, these moral resources are likely tobecome depleted and to atrophy if not used’ (Hirschman 1984, pp. 93-94).

104The Meaning of Sufficiency Economy International ConferenceThe idea of business and entrepreneur. Speculation or innovation?The second issue is about the vision (and the practice) of business andentrepreneur coming from EoC.The attainment of a good and prosperous life on the part of great numbers ofpeople – and, at least in theory, by all – would be unimaginable were it not forbusiness leaders who create jobs, wealth and new products, and for innovationswhich are constantly expanding human opportunities and freedom.At the same time, like other aspects of human life and perhaps even more so,the sector of economics and labour is prone to the temptations of selfishness andnarrow self-interest. However we see the world of economics, labour and businessin a positive light as a significant sphere for creativity and service to society, apositive and civilizing element in human affairs.But what does the EOC, together with Church’s social teaching have to say inparticular to the business community? First and foremost, as we are reminded inparticular in these days of crisis, by sound economic theory the business leader isnot a speculator, but essentially an innovator and a builder of projects. As theclassical economics reminds us, the “speculator” makes it his goal to maximizeprofit; for him, business activity is merely a means to an end, and that end is profit.For the speculator, building roads and establishing banks or schools is not the goal,but merely a means to the goal of maximum profit. It should be immediately clearthat the speculator is not the model of business leader that the EoC holds up as anagent and builder of the common good. The true entrepreneur is a different actor.The entrepreneur then is first and foremost an innovator, a creator, whogenerates and pursues projects: for him, for her, business activity is never merely ameans or a tool, but is an essential part of the goal itself. It is not possible to separatethe activity from its goal, since business activity has intrinsic value, it has value initself. The exclusive pursuit of profit proves inadequate as the economy and societynowadays have to deal with new challenges, including the environment, “commongoods” and globalization.When the market functions correctly, it is a place in which innovation andhuman creativity are favoured and awarded. True market competition can be, and ifwe want to understand it in its truest nature, should be seen as a race to innovation.Those who innovate grow and live, while those who do not innovate remain behindand leave the economic and civil game.The author who has most caught this virtuous dynamic of the market (thecapacity to innovate is undoubtedly a virtue, because it is an expression of ar?te, ofexcellence) is the Austrian economist J.A. Schumpeter. In 1911, he published a TheTheory of Economic Development, a classic text of the 20th century. In that book,Schumpeter masterfully describes the dynamic of the market as a “run” betweeninnovators and imitators. To explain the nature and role of innovation, Schumpeter

The Meaning of Sufficiency Economy International Conference105draws upon a model where the starting point is the “stationary state”, the situation inwhich businesses only carry out routine activities and the economic system perfectlyreplicates itself over time, without there being creation of true wealth.Economic development then beings when an entrepreneur breaks from the“steady state” by introducing an innovation, which can be a technical invention, anew organizational formula, the creation of new products or new markets, which onaverage reduce costs and makes it possible for the business to create new wealth.The entrepreneur-innovator is the protagonist of economic development, as hecreates real added value and makes the social system dynamic. The innovator is thenfollowed by a “swarm” of imitators attracted by that created added value, just asbees are attracted by nectar. When they enter into those sectors that verify theinnovation, they cause the market price of that given product to decrease, to thepoint that all the profit generated by the innovation is entirely absorbed. Theeconomy and society return to the steady state until a new innovation restarts thecycle of economic development. Therefore, for Schumpeter, profit has a transitorynature, as it subsists as long as there is innovation, in that time lapse between theinitial innovation and the imitation.What does this century-old theory still have to tell us today? Above all, itreminds us that the truest nature of the entrepreneur and the entrepreneurial functionis the capacity to innovate.The entrepreneur is not necessarily a profit-seeker: profit is only a signal thatinnovation is present. When the entrepreneur (including the social entrepreneur)complains because he is imitated, his vocation is already in crisis. He must bereminded that imitation also plays an important role, as it makes sure that derivativeadvantages that come from an innovation do not remain in the innovating businessalone but are spread to the entire society (for example, through the reduction ofmarket prices, which increases collective well-being).Imitation is important and plays a role in the common good: the positive wayto respond to imitation is to start the race again, continuing to innovate. This isparticularly important in this era of globalization, where the innovation-imitationdynamic is very fast and global. Even today in this age of global crisis, the answer toliving and growing is not complaining or turning to protectionist measures. Rather, itlies in a new start and new investment in the art of innovation.Besides, this theory of innovation tells us that when an entrepreneur stopsinnovating, he dies as an entrepreneur (perhaps transforming himself into aspectator), and so blocks the run or the innovation-imitation relay race, which is thetrue virtuous dynamic that pushes society ahead, not only the economy.One of the deepest reasons for the current crisis was the progressivetransformation of many entrepreneurs and speculators, which took place in the pastdecades following the financial boom.

106The Meaning of Sufficiency Economy International ConferenceThe entrepreneur-innovator, compared to the speculator, thanks to his vocation,sees the world as a dynamic place that can be changed. He doesn’t simply think ofincreasing his own piece of a given “pie”. He creates new “pies”, welcomes newopportunities, looks ahead and not beside him in search of rivals to battle so that hecan hoard the pie.The law of the market as a mechanism that awards innovation places theaccent on people and not so much on capital, finance or technology. Innovation isfirst of all a matter of vision, of a different “eyes” on things and on the world, andtherefore a matter of people that see reality differently. And, in fact, in the 1940s,Schumpeter himself foresaw that the passage of innovation from persons to researchoffices and development of large businesses would have changed the nature ofcapitalism. It would cause capitalism to lose contact with the personal dimension –the only one that can really innovate.And still today, after decades of getting drunk over what’s “big” andanonymous, we’re realizing that the businesses that are able to grow and be leadersin the globalized economy are, more and more, those where there is one or morepersons capable of seeing reality differently, capable of innovation. The only truekey to innovation and every economic value is people’s intelligence (that is,knowing how to “read and see within” things), as an Italian economist even olderthan Schumpeter said. I’m referring to Carlo Cattaneo from Milan, who, in the mid19th century, wrote one of the most beautiful and humanistic theses on economicaction, in which he reminds us that the virtue of innovation is founded on an evenmore radical virtue (because more universal): creativity. “There is not job or capitalthat does not begin with an act of intelligence,” he said, “Before every job, before allcapital…it’s the intelligence that begins the work and stamps the character of wealthinto it.”Finally, the dynamic, the run, the virtuous relay race of innovation-imitation isgreater than just the economic environment. This gives us a beautiful and originalkey to understanding not only the market but also the civil history of peoples. Whensocieties and markets favor people who innovate, when these people do not lamentbut are delighted in being imitated, when even institutions universalize theseinnovations, then common living and the market work, and they are beautiful placesin which to live. BEYOND CSRThis vision of business brings us to the great theme of business and socialresponsibility.Ethical theories concerned with business and social responsibility abound, butnot all of them are acceptable. This is especially true of those cases where sociallyresponsible practices are adopted primarily as a marketing device, without any effecton relationships inside and outside the business itself, the destination of its profits,the demands of justice, worker participation, and so forth. Nowadays business

The Meaning of Sufficiency Economy International Conference107leaders who want to take social responsibility seriously will need to be more daring,not limiting themselves to socially responsible practices and/or acts of philanthropy(positive and meritorious though these may be), but striking out into new territories.I shall mention just one.Entrepreneurs use their innovation and creativity to address challenges aboveand beyond the economy and the market. Specifically, there is a growing demandtoday for labour on the part of entire countries with great numbers of young peopleand few jobs: innovation and new initiative are needed if business, the economy andthe market are to include those presently excluded. Today as in the past, theeconomy and the business sector fulfil their duty to serve the common good whenthey manage to incorporate broad sectors of the marginalized (one need only thinkof the factory workers of the last century) and to ensure that these people become,not problems, but resources and opportunities: for themselves, for business, and forsociety as a whole.Economic and commercial activity, when carried out along the lines indicatedby the Church’s social teaching, is clearly “ethical” activity, since there cannot be acommon good without business leaders that we would describe as “civil”. Businessleaders are either “civil”, in the sense that their commercial activity serves to buildup the common good, the good of all and of every individual, or else they are thereverse, as when they fail to produce quality products, ignore innovation, fail tocreate wealth and jobs, and pay no taxes.Conclusion: An economy (and economics) reconciled with life and well-beingA multi-dimension economy and economics: this is the challenge of theEconomy of Communion. An economy reconciled with life, because it says that loveand reciprocity do not only have a place in family, affective and spiritual life, butalso in the spheres of work, business enter- prises, production and commerce. Life isrecomposed based on unity and becomes happier. An economic activity which wantsto contribute towards well-being, to help people and also, through material goods, to‘flourish’ must make room for the dimension of gift, of love, of communion.Otherwise, economic life becomes the road to serfdom, serfdom of commodities, ofself-interest: human beings are seekers of genuine interpersonal relations even in theeconomic domain, mainly because in the post- industrial society the distinctionbetween the economic domain and other domains does not work any- more. Thevarious dimensions of life are becoming more and more interdependent, and humanbeings are experiencing a strong feeling of urgency in the quest to find a unifiedlogic for existence. The ‘paradoxes of happiness in economics’, that is, more incomeassociated with less happiness in advanced market economies, describe exactly thecurrent unsustainability of the philosophy of separating the logic of non-economic(or private) life from economic life.

108The Meaning of Sufficiency Economy International ConferenceThe experience and culture of the Economy of Communion, born from aspiritual approach to life and economy, is one road, among others, towards a unifiedlogic of existence in the era of globalisation and, I hope, also for the alive andcreative Asian society and economy who must find its own way to market economythat on the one hand keeps its communitarian and spiritual roots, and, on the other, isable to innovate and grow in the globalised economy and society. Maybe in thisgreat and passionate challenge the experience and culture of communion can offerits humble help.

The Meaning of Sufficiency Economy International Conference109Bibliography (to be completed):Bruni, L. (ed.), 2002. The Economy of Communion, New York, New City Press.Bruni, L. 2008, Reciprocity, Routledge, London.Bruni, L., Sugden, R., 2000. ‘Moral canals: trust and social capital in the work ofHume, Smith and Genovesi’, Economics and Philosophy, 16, pp. 21-45.Bruni, L., Zamagni, S., 2004. Civil Economy, Peter Lang, Oxford.Hirschman, A.O., 1984. ‘Against Par- simony: Three Easy Ways of ComplicatingSome Categories of Economic Discourse’, American Economic Re- view,74, Papers and Proceedings No. 2.Robertson, D.H., 1956. ‘What Does the Economist Economize?’, in: EconomicCommentaries, London, Staples Press Limited.Sen, A.K., 2001. Development as Freedom, Oxford, Oxford University Press.Wicksteed, P., 1910, The commonsense of political economy, MacMillan, London.

Sufficiency Economy andMainstream Economic TheoryGroup1The Meaning of Sufficiency Economy International ConferenceSufficiency Economy and Gross National Happiness: Integrated Value for Sustainable DevelopmentMr.Tunchalong Rungwitoo 11D.B.A. Student, Doctor of Business Administration Program, Faculty of BusinessAdministration, Chiangmai University.AcknowledgementThe author is thankful to Associate Professor Dr. Siriwut Buranapin, Head of ManagementDepartment, Faculty of Business Administration, Chiang Mai University, who inspires the idea ofresearching this topic and encourages me to writing down this conceptual paper. This paper wouldnot have been possible without his expert insight, and excellent advice and guidance. Theacknowledgement also goes to my colleagues for their review, comments and supports.

The Meaning of Sufficiency Economy International Conference113Sufficiency Economy and Gross National Happiness: Integrated Value for Sustainable DevelopmentABSTRACTThe paper aims to conceptualize the integrated value between the philosophy ofSufficiency Economy and the concept of Gross National Happiness as the keycontribution to Sustainable Development, as well as to operationalize the philosophyand the concept. Sufficiency Economy, similarly to Gross National Happiness, attemptsto promote balance among economy, society, environment, and culture. Guidance forSufficiency Economy and variables of Gross National Happiness are introduced andconverged for Sustainable Development. The indicators for Gross National Happinessnot only comply with the philosophy of Sufficiency Economy through process factors,including moderation, reasonableness and self-immunity, moderated by conditionfactors, including knowledge and morality, but also introduce happiness indicators asultimate goal for Sustainable Development. KEYWORDS: Sufficiency Economy, Gross National Happiness, SustainableDevelopment

114The Meaning of Sufficiency Economy International Conference1 . I n t r o d u c t i o n : C o n s i s t e n c y b e t w e e nSufficiency Economy, Gross National Happinessand Sustainable DevelopmentIt is now very clear that goal for all economic units is not only to achieveeconomic development, but also to gain human living development. In capitalismworld, countries, organizations, communities, households, and people employ monetaryindicators, such as gross domestic product, income, revenue, profit and value on asset,as their achievement criteria. However, using only financial indicators could lead toimbalance development because they measure only the side of increasing wealth but notthe human lives, such as social security, peace, mindfulness, health, well being, andespecially “Happiness”; which is considered the most important goal for humanexistence.The concept of Sustainable Development is introduced to promote the balancebetween economic, and humanity development among others. It is defined asdevelopment that meets the needs of the present generation, without compromising theability of future generations to meet their own needs (WCED, 1987). The developmentis to enhance balance of 4 pillars, including economy, society, environment, and culture(Sufficiency Economy Organization 2009 and UNESCO 2007). Economic pillarconsiders skills to earn a living as well as sensitivity to the impact of economic growthon society and on the environment (UNESCO 2007). Social pillar calls for anunderstanding of social institutions and their roles in change and development, as wellas participatory systems which provide opportunity for the expression of opinion(UNESCO 2007). In addition, balance within society implies that the choices peoplemake should be wise in that they consider their impact on others and society at large(Wibulsawasi, Piboolsravut and Pootrakool 2010). Also, Sustainable Developmentrequires people to be mindful of the common good and willing to make contribute to it(Wibulsawasi, Piboolsravut and Pootrakool 2010). Environmental pillar focuses on anawareness of resources, the fragile nature of physical environment and effects of humanactivities and decisions on environment (UNESCO 2007). Cultural pillar concernsways of being, relating, and believing that reinforce harmonious living and differaccording to context, history and tradition (UNESCO 2007). To build and maintain Sustainable Development, the philosophy of SufficiencyEconomy, introduced by His Majesty the King of Thailand, is accepted worldwide asguidance for people, communities, organizations, and nations to conduct their balancelife toward the middle path (Isarangkul and Pootrakool 2002, Pantasen et.al. 2003.Piboolsravut 2004, Curry While Thailand introduces the philosophy of SufficiencyEconomy as the guidance for Sustainable Development, there is another approach to

The Meaning of Sufficiency Economy International Conference115determine such development, In Bhutan, happiness is considered as indicator to achieveultimate goal for the development of the country. Initially, Bhutan develops GrossNational Happiness, consisting of various development indicators to maintainsustainable development (Wangchuk, 2008) instead of employing only monetary andfinancial indicators.From these, Sufficiency Economy proposes the optimal approach for SustainableDevelopment, as well as Gross National Happiness that introduces indicators to ensureSustainable Development. Conceptually, both are consistent in that indicators for GrossNational Happiness measure not only outcome but also input and process of SustainableDevelopment. Sufficiency Economy and Gross National Happiness therefore share thecommon value for Sustainable Development.The objectives of this study are to conceptualize the relationship between thephilosophy of Sufficiency Economy and the concept of Gross National Happiness, andSufficiency Economy, and to operationalize the philosophy of Sufficiency Economy andthe concept of Gross National Happiness. The following sessions portray the philosophyof Sufficiency Economy and its guidance, as well as the concept of Gross NationalHappiness and its indicators. Moreover, the relationship between Sufficiency Economy,Gross National Happiness and Sustainable Development are illustrated in details.Finally, the integrated relationship between Sufficiency Economy and Gross NationalHappiness is unfolded as the path for Sustainable Development. 2. Relationship between Sufficiency Economyand Sustainable Development and the Guidancefor Sufficiency EconomyThe philosophy of Sufficiency Economy was addressed by His Majesty KingBhumibol Adulyadej to provide guidance to meet the challenges from globalization andother changes, for sustainable development, for economic recovery, and for revitalizingimbalance development (Piboolsravut 2004). The clear meaning of the philosophy isdefined as follows (NESBD 2007: 7-8)“Sufficiency Economy stresses the middle path as an overridingprinciple for appropriate conduct by Thai people at all levels, from family tocommunity to country. It calls for national development and administration soas to modernize in line with the forces of globalization. “Sufficiency” means moderation, reasonableness, and the need ofself-immunity for sufficient protection from impact arising from internal andexternal changes.

116The Meaning of Sufficiency Economy International ConferenceTo achieve this, the application of knowledge with due considerationand prudence is essential. In particular great care is needed at every step inthe utilization of theories and methodologies for planning andimplementation.At the same time, it is necessary to strengthen the moral fiber of thenation, so that everyone, particularly public officials, academies,businessmen, adhere first and foremost to the principle of honesty andintegrity. In addition, a way of life based on patience, perseverance, diligence,wisdom, and prudence is indispensable to create balance and be able to copeappropriately with critical challenges arising from extensive and rapidsocioeconomic, environmental, and cultural changes in the world. The philosophy of Sufficiency Economy has been constructed and conceptualizedas the development process. This philosophy takes the middle path approach as anoverriding principle for appropriate conduct, integrating 3 key elements includingModeration, Reasonableness, and Self-Immunity. In addition, the process is under 2underlying conditions including Knowledge and Morality. Moderation draws on Buddhism and stresses the middle way between want andextravagance, and between over-consumption and under-consumption (Kantabutra 2006and Sachayansrisakul 2009). If consuming too much, people can create waste and sufferat the end. Too less, may be people can’t reach their objectives of doing things. Peopletherefore should consume just enough for the right purpose or necessity (SufficiencyEconomy Organization 2009). The only way to avoid suffering is to avoid greed or overdemand for unnecessary things and situations (Calkins 2006). Reasonableness is about reasoning prior to making decision (Sachayansrisakul2009). Its principle is not only emphasizes causes and effects in terms of making adecision (Calkins 2006 and Pantasen 2006), but also means being conscious and awareof what and why the decision is made (Calkins 2006 and Sachayansrisakul 2009). Inaddition, thinking for long term benefit is preferable as the reasonableness (Issarangkunand Pootrakool 2002). Self-immunity is about preparation for the protection for risk or unexpectedshocks (Calkins, 2006) as well as ability to with stand shocks (Kantabutra 2006), to dealwith internal and external environment (Issarangkun and Pootrakool 2002 andKantabutra 2007), to adjust to events that are uncontrollable or unpredictable, and not tomange for short term gains (Kantabutra 2006).

The Meaning of Sufficiency Economy International Conference117According to the literature, the philosophy of Sufficiency Economy is proposed asthe pathway for Sustainable Development (Isarangkul and Pootrakool 2002, Pantasenet.al. 2003. Piboolsravut 2004, Curry and Sura 2007, Bunyasrie 2009, Pruetipibultham2010, Supadhiloke 2010). Once the Sufficiency Economy is implemented, theSustainability Outcome will be built with regards to the four pillars, includingeconomic, social, environmental, and cultural pillars.(P1) The three elements of Sufficiency Economy, including Moderation,Reasonableness, and Self Immunity therefore have simultaneous positive effect onSustainability Outcomes in economic, social, environmental, and culture pillars. (P1a) The three elements of Sufficiency Economy, including Moderation,Reasonableness, and Self Immunity, have simultaneous positive effecton Sustainability Outcome in economic pillar.(P1b) The three elements of Sufficiency Economy, including Moderation,Reasonableness, and Self Immunity, have simultaneous positive effecton Sustainability Outcome in social pillar.(P1c) The three elements of Sufficiency Economy, including Moderation,Reasonableness, and Self Immunity, have simultaneous positive effecton Sustainability Outcome in environmental pillar.(P1d) The three elements of Sufficiency Economy, including Moderation,Reasonableness, and Self Immunity, have simultaneous positive effecton Sustainability Outcome in cultural pillar.With two underlying conditions, knowledge and morality are necessary to achievethe three elements of Sufficiency Economy (Supadhiloke 2010). Notably, these twofactors have to go together all the time. Without morality, knowledge may cause harm;and without knowledge, people may not do things proper nor progress (SufficiencyEconomy Organization 2009). Knowledge is required for the improvement of human capital on individual level,and the promotion of the knowledge economy at social level (Calkins 2006). Theprinciple of knowledge requires breadth and thoroughness in planning, and cares inapplying knowledge and in the implementation of plans, and also giving mutualassistance and collaboration (Pruetipibultham 2010). Unlike creating competitiveadvantage to compete with competitors, Sufficiency Economy focuses on sharingknowledge with competitors to develop market because doing so will benefit customers(Kantabutra 2007). In terms of Morality, people uphold honesty and integrity whileconducting their lives with harmlessness, perseverance, and generosity (Issarangkun andPootrakool 2002, Kantabutra 2007, and Pruetipibultham 2010).

118because doing so will benefit customers (Kantabutra 2007). In terms of Morality, peopleuphold honesty and integrity while conducting their lives with harmlessness, perseverance,and generosity (Issarangkun and Pootrakool 2002, Kantabutra 2007, and PruetipibulthamThe Meaning of Sufficiency Economy International Conference2010).Build upon the explanations, (P2) Knowledge and Morality will simultaneouslystrengthen Build the upon relationships the explanations, between (P2) the action Knowledge of Moderation, and Morality Reasonableness, will simultaneously andSelf-Immunity strengthen the and relationships Sustainability between Outcomes. the The action relationship of Moderation, between the Reasonableness,elements andtheandconditionsSelf-Immunityof SufficiencyandEconomySustainabilityand SustainableOutcomes.DevelopmentThe relationshipcan be illustratedbetweenin thetheelements and the conditions of Sufficiency Economy and Sustainable Development canFigure 1.be illustrated in the Figure 1.Figure Figure 1 Relationship 1 between between Sufficiency Sufficiency Economy Economy and and Sustainability Sustainability OutcomeOutcomeKnowledgeModerationReasonableness Self-ImmunityP2P1Sustainability Outcomes- Economic Pillar (P1a)- Social Pillar (P1b)- Environmental Pillar (P1c)- Cultural Pillar (P1d)MoralityThe elements The elements and conditions and conditions of Sufficiency of Economy Sufficiency can Economy be simultaneously can be simultaneouslyapplicable topeople applicable in various to people level including various household level including level, community household level level, and community organizational level level. andorganizational level. At household level, Issarangkun and Pootrakool (2002) provideguidelines and key concerns for implementing the Sufficiency Economy concluded inthe followings: (1) Utilizing their own resources to satisfy their basic needs before using 6their surplus resources to generate more benefits. (2) Encouraging collaboration to otherhousehold in order to lower the cost of raw materials, consumer and social products, aswell as to increase bargaining power. (3) Being aware of growing too fast by overborrowing. (4) Being aware of uncertainty by thinking of medium or worst –casescenario. They should conduct self-immunity by thinking of medium-cases or worstcasescenario rather than the best-case scenario. They would be adhering to the selfimmunityprinciple if they could still survive even if the worst-case scenario occurs. At community level, there is Community Development Plan (CDP), which is theprocess to strengthen community participation and to build capacity for community’smanagement, and encourages communities to implement Sufficiency Economy(Piboolsravut 2004). The process of the CDP encourages community members to

The Meaning of Sufficiency Economy International Conference119organize a consultative meeting. This supports the learning process of communities.Members will explore information and data related to situations of community, presentand discuss the obtained information and data. For such discussion, they will learn thestrengths and weakness of their community. The process of meeting will articulate ashared vision for the community, identify problems or opportunities for the community,and support making work plan to solve the problems or take advantage fromopportunities. In the case where community members cannot figure out the solutions,they may need to visit other communities. In the most advance stage, the communitycan be encouraged to expand their activities through reaching out cooperative firms,bangs, and other outside sources. The expansion across different levels of organizationsor activities can be compared to the development of a value-chain in production. Theexpanded activities include raising funds, creating direct sales channels, and seekingfunds for establishing community rice mill or cooperative stores among others. Thisprocess provides communities an ensuring of their knowledge, an assurance tocommunity members that their decision making is reasonable, and an encouragement tocreate self-immunity from discussion and making plan from step to step.At organizational level, organizations are encouraged to grow from a strongfoundation and to establish their niche in the market with improving quality andcompetitive costs (Isarangkun and Pootrakool 2002). Based on the concept of selfimmunity,organizations, especially in business sector, are advised to not grow too fastby over-borrowing because uncertainty or external unfavorable factors could easilytrigger their downfall (Isarangkun and Pootrakool 2002). Instead of this, they shouldexpand their business gradually by obtaining a reasonable loan and so be able tomanage liability without going bankrupt (Sachayansrisakul 2009). In addition, theyshould think of the medium-case or worst-case scenario rather than the best-casescenario. They would be adhering to the “self-immunity” principle if they could still“survive” even if the worst-case scenario occurs. To support this, Pantasen (2006) studies keys to enhance sustainability for smalland medium enterprises in difficult situations. Ten guidelines for Sufficiency Economyat organization level are presented in the followings: (1) Adopt a long-term perspectiveto management and decision making. Do not manage for short-term gains, but considercause and effect in the long run. (2) Genuinely value and continuously develop humanresources. Avoid laying off employees even in a time of economic difficulty, butconsider them as an investment. (3) Be honest, genuinely concern with and beaccountable for a wide range of stakeholders, including the society, the environment andfuture generations. This often suggests stakeholders’ involvement in business decisionmakingand social contribution. (4) Nurture both incremental and radical innovationthroughout the entire organization, including products and processes. This often means

120The Meaning of Sufficiency Economy International Conferencepromoting cross-functional teams. (5) Utilize resources effectively and efficiently. (6) Adopt/develop effective, but not expensive, technology. Usually, this technology isdeveloped from local materials and wisdoms. (7) Expand business because of its actualgrowth, as opposed to a surge in market demand. This often means a careful and gradualexpansion. (8) Carefully diversify products, markets and investment portfolios tominimize risks. (9) Share knowledge to develop market. This often means knowledgesharing with competitors because doing so helps develop the market to benefitconsumers. (10) Be truly ethical, perseverant and diligent.Despite different applications in various levels, they share the same goal ofbalanced and sustainable development (Bunyasri 2009) and also provide practices toimplementing the philosophy. The guidance for Sufficiency Economy can besummarized into the mix of three components, moderation, reasonableness, and selfimmunity,and two conditions of knowledge and morality, as presented in Table 1.

The Meaning of Sufficiency Economy International Conference121Table 1 Guidance for Sufficiency EconomyTable 1 Guidance for Sufficiency EconomyElementsConditionsGuidance for Sufficiency EconomyModerationReasonablenessSelf-ImmunityKnowledgeMorality1) Utilizing their own resources to satisfy their basic Xneeds before using their surplus resources to generatemore benefits (Issarangkun and Pootrakool 2002)2) Utilize resources effectively and efficientlyX(Pantasen 2006)3) Being aware of growing too fast by over borrowing X(Issarangkun and Pootrakool 2002)4) Expanding business because of its actual growth, as Xopposed to a surge in market demand(Pantasen 2006)5) Developing technology from local materialsX(Pantasen 2006)6) Adopting and developing effective, but notXexpensive, technology (Pantasen 2006)7) Developing technology from local wisdomsX(Pantasen 2006)8) Conducting plan providing step for developmentX(Piboolsravut 2004)9) Being conscious of the thing is done (Bunyasri 2009) X10) Being sensible and insightful in taking decisions(Bunyasri 2009)11) Discussing the obtained information and data formaking decision (Issarangkun and Pootrakool 2002)12) Adopt a long-term perspective to management anddecision making (Pantasen 2006)13) Encouraging communication and discussion amongmembers (Issarangkun and Pootrakool 2002 andPiboolsravut 2004)14) Encouraging stakeholders’ involvement in businessdecision-making and social contribution(Pantasen 2006)15) Carefully diversify products, markets and investmentportfolios to minimize risks (Pantasen 2006)16) Building protection against shocks despite differentapplications (Bunyasri 2009)17) Being aware of uncertainty by thinking of medium orworst –case scenario(Issarangkun and Pootrakool 2002)XXXXXXXXXXX9

122The Meaning of Sufficiency Economy International ConferenceElementsConditionsGuidance for Sufficiency EconomyModerationReasonablenessSelf-ImmunityKnowledgeMorality18) Nurture innovation throughout the entireorganization, including products and processes. Thisoften means promoting cross-functional teams(Pantasen 2006)19) Encouraging collaboration with others (Issarangkunand Pootrakool 2002)20) Sharing knowledge with competitors (Pantasen 2006and Kantabutra 2007)21) Exploring information and data related to situationsof community (Piboolsravut 2004)22) Genuinely value and continuously developing humanresources (Pantasen 2006)23) Having responsible activities to contribute to society(Issarangkun and Pootrakool 2002)24) Being honest (Pantasen 2006, Bunyasri 2009 andPruetipibultham 2010)25) Being truly ethical, perseverant and diligent(Pantasen 2006, Bunyasri 2009 and Pruetipibultham2010)XXXXXXXXFrom Table 1, Twenty five items of the guidance—7 Moderation items, 7 Reasonableness items, 5From Self-Immunity Table 1, Twenty items, five 6 Knowledge items of the items, guidance—7 and the other Moderation 3 Morality items, items—can 7 Reasonableness be proposed asoverlapping variables of the 3 elements and 2 conditions. . items, 5 Self-Immunity items, 6 Knowledge items, and the other 3 Morality items—can beproposed as overlapping variables of the 3 elements and 2 conditions. .3 . R e l a t i o n s h i p b e t w e e n G r o s s N a t i o n a lHappiness and Sustainable Development andthe Indicators for Gross National Happiness3. Relationship between Gross National Happiness and Sustainable Development andthe Indicators for Gross National HappinessThe ultimate goal for development nowadays is not to achieve economic purpose but insteadThe ultimate goal for development nowadays is not to achieve economic purposetobutsustaininsteadbalancedto sustaindevelopmentbalancedamongdevelopmenteconomy,amongsociety,economy,environment,society,andenvironment,culture. GrossandNational culture. Happiness Gross National is introduced Happiness and accepted is introduced as the new and direction accepted for as such the new development. direction for“Gross such development. National Happiness” “Gross or National GNH was Happiness” initiated by King or GNH Jigme was Wangchuck initiated by of Bhutan King Jigme in1972. Wangchuck GNH is based of Bhutan on Buddhist in 1972. theology GNH is and based on the on belief Buddhist that happiness theology is and the on supreme the beliefaimthatforhappinessall humanityis the(Suphadiloksupreme2010).aim forIt impliesall humanitythe gross(Suphadilokhappiness of2010).the peopleIt impliesin thethegross happiness of the people in the nation as the ultimate development goal (Wangchuknation as the ultimate development goal (Wangchuk 2008).2008).10

The Meaning of Sufficiency Economy International Conference123In Bhutan, the national development plan focuses on the contentment bothphysical and mental of the people, consisting of the four pillars of GNH, includingequitable and sustainable socio-economic development, preservation and promotion ofits culture, conservation and environment, and promotion of good governance. Fromsuch pillars, indicators of happiness are constructed and divided in 9 core dimensionsincluding (1) psychological well-being, (2) time use, (3) community vitality, (4) culture,(5) health, (6) education, (7) environmental diversity, (8) living standard, and (9) governance (Wangchuk 2008).Psychological Well-Being Dimension measures satisfaction with all elements oflife, life enjoyment, and subjective well-being, as well as general psychological distressrate, rebalance rates of both negative emotions, including jealousy, frustration,selfishness, and positive emotions, covering generosity, compassion, calmness.Moreover, spiritual activities such as meditation, prayers, and consideration of karmiceffects in daily life are measured. Time Use Dimension analyzes the nature of time spent and type of activity withina 24-hour period. The value of non-work activities such as sleeping, personal care,community participation, education and learning, religious activities, social and culturalactivities, sports and leisure, travel, provide more diversity and contribute to higherlevel of happiness instead of only work activities. These indicators consist of sleepinghours and total working hours. Community Vitality Dimension focuses on the strengths and weaknesses ofrelationships and interactions within communities. The happiness in society can bemeasured by trust, belongingness, and vitality of caring relationships, personal safety,volunteering, together with family vitality, safety, reciprocity, social support,socialization, and kinship density. Cultural Diversity and Resilience Dimension focuses on the diversity andstrength of cultural traditions, including the nature and number of cultural facilities,language use patterns and diversity, participation in community festivities, traditionalrecreations. These indicators estimate core values and perception of changes in valuesand traditions: dialect use, traditional sports, community festival, artisan skill, valuetransmission indicator, and basic precept indicator. Health Dimension assesses health status, the determinants of health and healthsystem, information on self-rated health, disabilities, body mass index, number ofhealthy days per month, as well as the prevalence of knowledge about health. Education Dimension measures the effectiveness of education to reach the goalof collective well-being, including the level of education, skills among others, educationattainment, and national language and folk and historical literacy.

well-being, including the level of education, skills among others, education attainment, andnational language and folk and historical literacy.124The Meaning of Sufficiency Economy International ConferenceEcological Diversity and Resilience Dimension evaluates the impact of domestic supplyand demand on ecosystems. The indicators are ecological degradation, ecological knowledgeand afforestation.Ecological Diversity and Resilience Dimension evaluates the impact ofLiving domestic standard supply Dimension and demand involves on ecosystems. the basic economic The indicators status are of the ecological people. The degradation, measuresin ecological this dimension knowledge are levels and of afforestation. income at individual and household level, sense of financialsecurity, Living room standard ratio, food Dimension security and involves house the ownership. basic economic status of the people.The measures in this dimension are levels of income at individual and household level,Good sense Governance of financial security, measures room how people ratio, and perceive food security various government and house ownership. functions in terms oftheir efficacy,Good Governancehonesty, and quality.measuresThishowindexpeopleincludesperceivehumanvariousright andgovernmentleadership,functionsand trustin various terms of levels. their efficacy, honesty, and quality. This index includes human right andleadership, and trust in various levels.The CentreThe Centreof Bhutanof BhutanStudy (2008)Studyintroduces(2008) introducesindexes andindexesindicatorsandtoindicatorsmeasure theto measureGrossNational the Gross Happiness National of Happiness Bhutan. These of Bhutan. can be These categorized can be into categorized 9 dimensions into as 9 presented dimensions in asTable presented 2. in Table 2. Table 2 Variables of Gross National Happiness in Each DimensionTable 2 Variables of Gross National Happiness in Each DimensionNumberDimensionsIndexesof Examples of indicatorsindicatorsPsychological Mental health index 1 General Health QuestionnaireWell-BeingSpirituality index 2 Frequency of meditationEmotional balance index 7 Frequency of feeling ofselfishnessTime Use Time Index 2 Total working hour andNumbersleeping hourCommunity Dimensions Community Indexes trust index of 1 Sense Examples of trust in of neighbors indicatorsVitality Social support index indicators 2 Availability of social supportReciprocity index 3 Amount of donation in cashvalueSocialization index 1 Socializing with friends 12Family index 5 Members of your family reallycare about each otherKinship index 1 Number of relatives living inthe same communitySafety index 3 Feelings of safety from humanharmDialect Index 1 Speaking first languageCulturalDiversity andResilienceTraditional recreationalindex1 Frequency of playing traditionalgamesArtisan skill index 1 Zorig chusum skillsValue transmission index 2 Teaching children importanceof disciplineCommunity festival index 1 Knowledge of mask and otherdances performed in tshechusBasic perception index 2 Attitude towards killingHealthHealth index 4 Self reported health statusHealth knowledge index 2 Knowledge of transmission ofHIV/AIDS virusHealth barrier index 1 Walking distance to health carecentre

CulturalDiversity andResilienceDimensionsHealthEducationCulturalEcological Diversity andDiversity ResilienceandResilienceLiving standardHealthGoodGovernanceEducationthe same communitySafety index 3 Feelings of safety from humanharmDialect Index 1 Speaking first languageTraditional recreational 1 Frequency The Meaning of playing of Sufficiency traditional Economy indexgamesInternational ConferenceArtisan skill index 1 Zorig chusum skillsValue transmission index 2 Teaching children importanceof disciplineCommunity festival index 1 Knowledge of mask and otherNumberdances performed in tshechusBasic perceptionIndexesindexof2 AttitudeExamplestowardsofkillingindicatorsindicatorsHealth Reciprocity index index 34 Amount Self reported of donation health status in cashvalueHealth knowledge index 2 Knowledge of transmission ofSocialization index 1 Socializing with friendsHIV/AIDS virusHealthFamilybarrierindexindex 15WalkingMembersdistanceof your familyto healthreallycarecarecentreabout each otherEducationKinship indexindex 21LiteracyNumber ofraterelatives living inthe same communityDzongkha Safety index language index 13 Ability Feelings to of understand safety from lozey humanHistorical literacy index 2 harm Knowledge on local legend andDialect Index 1 folk Speaking stories first languageEcological Traditional degradation recreational 31 Pollution Frequency of of rivers playing traditionalindexgamesEcological Artisan skill knowledge index 1 Names Zorig chusum and species skills of plantsindex Value transmission index 2 and Teaching animals children importanceAfforestation index 1 Tree of discipline plantations around yourCommunity festival index 1 Knowledge farm or house of mask and otherLiving standard index 4 Income dances performed sufficiency in to tshechus meetBasic perception index 2 everyday Attitude towards needs killingHardship index 3 Postponement of urgent repairsHealth index 4andSelfmaintenancereported healthof housestatusGovernment Health knowledge performance index 2 Performance Knowledge of of transmission fighting ofindexHIV/AIDS corruption virusFreedom Health barrier index index 21 Right Walking to freedom distance of to speech health care andopinion centreInstitutional Education index trust index 23 Literacy Trust in central rate ministriesConcluded from Wangchuk Dzongkha (2008), language URA index (2008), and the 1 Centre Ability of Bhutan to understand Study (2008) lozeyConcluded from Wangchuk (2008), URA (2008), and the Centre of Bhutan Study (2008)The operational definitions Historical of GNH, literacy conducted index for macro 2 level, Knowledge can be categorized on local legend into 4 andfolk storiespillars Ecological of The Sustainable operational Ecological Development; definitions degradation including of GNH, economic, conducted 3 social, Pollution environment, for macro of rivers and level, culture. can be13The Diversity categorized dimensions and into of GNH 4 index pillars can be of categorized Sustainable Development; line with the pillars including of Sustainable economic, social,Resilience Ecological knowledge 1 Names and species of plantsDevelopment environment, as and presented culture. The dimensions of GNH can be categorized in line with theindex in Table 3.and animalspillars of Sustainable Afforestation Development index as presented in 1 Table 3. Tree plantations around yourfarm or houseTable Living 3 standard 3 Dimensions Living of Gross of standard Gross National National index Happiness Happiness 4 the Pillars in Income the of Pillars Sustainable sufficiency of Sustainable to meetDevelopmenteveryday needsHardship index 3 Postponement of urgent repairsPillars of Sustainable DevelopmentDimensions and maintenance of GNH of houseGoodGovernment performance 2 Performance of fightingGovernance Economic Pillar indexLiving Standard corruptionSocial Pillar Freedom index Community 2 Right Vitality to freedom of speech andGood Governance opinionInstitutional trust indexHealth3 Trust in central ministriesEducationConcluded from Wangchuk (2008), URA (2008), and Psychological the Centre Well-Being of Bhutan Study (2008)Time UseEnvironmental PillarEcological Diversity and ResilienceCultural PillarCultural Diversity and Resilience131254. Integrated Value between Sufficiency Economy and Gross National Happinesstowards Sustainable DevelopmentThailand’s Sufficiency Economy philosophy and Bhutan’s Gross National Happiness

126The Meaning of Sufficiency Economy International Conference4 . I n t e g r a t e d V a l u e b e t w e e n S u f f i c i e n c yE c o n o m y a n d G r o s s N a t i o n a l H a p p i n e s stowards Sustainable DevelopmentThailand’s Sufficiency Economy philosophy and Bhutan’s Gross NationalHappiness concept, introduced by the Kings of the two Buddhism countries, both arealternative models for Sustainable Development in balancing the four pillars includingeconomic, social, environmental, and cultural. Through the action of moderation,reasonableness and self-immunity, moderated by knowledge and morality, SufficiencyEconomy conceptually promotes development outcomes in economic, social,environmental, and cultural pillar. Also, the indicators of Gross National Happiness arekey measures to ensure the development in the four pillars. The integrated modelbetween Sufficiency Economy and Gross National Happiness for SustainableDevelopment is drawn in the Figure 2.Figure Figure 2 Integrated 2 Integrated Model Model between between Sufficiency Sufficiency Economy Economy and Gross and Gross National National HappinessHappiness for Sustainable Developmentfor Sustainable DevelopmentThe guidance for implementing Sufficiency Economy provides operational definitions tomeasure the three elements and the two conditions of Sufficiency Economy, as presented inTable 1. The practices can be applied to build, enhance and maintain sustainability outcomesin economic, social, environmental, and cultural pillars as the model proposed in Figure 1.For Gross National Happiness, its indicators can be categorized into the pillars of SustainableDevelopment, as presented in Table 3.Using matrix table to integrated the relationship between Sufficiency Economy, GrossNational Happiness, and Sustainable Development. With interpretation from the definitions

The Meaning of Sufficiency Economy International Conference127The guidance for implementing Sufficiency Economy provides operationaldefinitions to measure the three elements and the two conditions of SufficiencyEconomy, as presented in Table 1. The practices can be applied to build, enhance andmaintain sustainability outcomes in economic, social, environmental, and culturalpillars as the model proposed in Figure 1. For Gross National Happiness, its indicatorscan be categorized into the pillars of Sustainable Development, as presented in Table 3. Using matrix table to integrated the relationship between Sufficiency Economy,Gross National Happiness, and Sustainable Development. With interpretation from thedefinitions of the variables in Sufficiency Economy, GNH indexes can be classified intothe elements of moderation, reasonableness, self-immunity, and the conditions ofknowledge and morality. In addition, the GNH indexes can be noted as SustainabilityOutcomes. The matrix table is presented in Table 4.

128The Meaning of Sufficiency Economy International ConferenceTable 4 Integrated Matrix between Sufficiency Economy and Gross National Happinessfor Sustainable DevelopmentTable 4 Integrated Matrix between Sufficiency Economy and Gross National Happiness for Sustainable Development16

The Meaning of Sufficiency Economy International Conference129From Table 4, the relationships between the GNH indexes are founded. BecauseGNH indexes can be categorized in the elements and conditions of SufficiencyEconomy, their relationships should be consistent with the philosophy of SufficiencyEconomy. From this, (P3) the indexes of GNH are correlated in consistent with thephilosophy of Sufficiency Economy. In Economic Pillar, Hardship is defined as the indicators in Moderation, whileLiving Standard is regarded as sustainability outcome. Build upon the philosophy ofSufficiency Economy, Hardship should have positive association with Living Standard.In Social Pillar, Mental Health is defined as the sustainability outcome forPsychological Well-Being. Emotional Balance is regarded as Reasonableness.Spirituality is proposed as Morality. According to the proposed relationship forSufficiency Economy, Emotional Balance, strengthened by Spirituality, is associatedwith Mental Health. The same pattern in other dimensions, Community Trust and Safetyare proposed as sustainability outcomes for Community Vitality Dimension. SocialSupport, Socialization, Family, Kinship are categorized as Self-Immunity. Reciprocity isdefined as Morality. From this, Social Support, Socialization, Family, Kinship,strengthened by Reciprocity, should have positive association with Community Trustand Safety. As well as these, people health status will be good from having healthbarrier. This relationship is strengthened by health knowledge. For Ecological Diversityand Resilience dimension, the relationship between indexes is converse. Ecologicaldegradation will be reduced by from planting trees, Afforestation. The relationship ispositively moderated by ecological knowledge. Notably, Education is defined inKnowledge and Time is categorized in Moderation. From the concept of SufficiencyEconomy, Education Dimension may play moderating roles to straighten theachievement in other dimensions. As well as Time that can be an antecedent in themodel of the every relationship in Social Pillar. Moreover, the indexes in Table 4 are incomplete in some elements and conditionsof Sufficiency Economy. For example, in Economic pillar, the indicators for knowledge,morality, reasonableness and self-immunity are missing. Although there are missingfactors in blank column for the Sufficiency Economy, GNH remains maintain theHappiness of people. This can be explained by the implication of Sufficiency Economythat complete application is not prerequisite but only 25 or 50 percent is adequate togain benefit from implementing Sufficiency Economy (Royal Speech, 1998).Consider the implications of the philosophy of Sufficiency Economy that thepractices can be implemented in various levels and aspects, the guidance for SufficiencyEconomy, exhibited in Table 1, should be supplement in the missing cells that they arebelongs to. For example in Living Standard Dimension, to gain balance of livingstandard, people should not only reduce their hardship but also moderately utilize their

130The Meaning of Sufficiency Economy International Conferenceown resources to satisfy their basic needs, be conscious of what they are doing and alsoencourage communication and discussion among members, and also being aware ofworst case scenario. Accumulate knowledge about data and information effective theirlife and consider morality with honesty and integrity as their part of living, are keysconditions to maintain their happy living status. Since the guidance for SufficiencyEconomy and the Gross National Happiness indicators are convergent, (P4) Practicesof Sufficiency Economy are correlated with achieving indicators for Gross NationalHappiness. In addition, both Sufficiency Economy and Gross National Happiness provide keyvalue to maintain Sustainable Development and introduce happiness as the ultimate goalfor such development. Therefore, (P5) households, communities, organizations, andnations that continuously practices Sufficiency Economy and that aim at achievingindicators of Gross National Happiness will be more sustainable than those who donot. Consequently, (P6) the members of those that gain sustainability will behappier than those who do not.5. ConclusionThis conceptual paper has provided explanations for the philosophy of SufficiencyEconomy, the concept of Gross National Happiness, and also conceptualized theirrelationship towards Sustainable Development. The Philosophy of Sufficiency Economyand Gross National Happiness both provide integrated contribution to SustainableDevelopment. Operational definitions of the philosophy and the concept are presented.The practices to implement Sufficiency Economy are proposed, as well as the indicatorsfor Gross National Happiness are summarized. Sufficiency Economy provides the optimal approach for SustainableDevelopment. The Guidance for Sufficiency Economy can be implemented forSustainable Development and achieving indicators of Gross National Happiness. GrossNational Happiness introduces indicators as the path way to ensure Sustainability. Theindicators are consistent with the philosophy of Sufficiency Economy, through the threeelements of moderation, reasonableness, and self-immunity, and the two conditions ofknowledge and morality. In addition, Gross National Happiness introduces happinessindicators as the sustainability outcome in economic pillar, social pillar, andenvironmental pillar.

The Meaning of Sufficiency Economy International Conference1316. Limitations and Recommendations for FutureResearchThe guidance for Sufficiency Economy and the indicators for Gross NationalHappiness are categorized into three elements and two conditions based on theexplanation of Sufficiency Economy interpreted by the researcher viewpoint. Viewpointfrom different researchers can be various. Notably, there are several practices ofSufficiency Economy that are not classified in only one group. Therefore, empiricalstudy should be employed to examine the validity of the operational definitions if theyare consistent with the concept of Sufficiency Economy. In addition, this paperprovides practices for Sufficiency Economy from literature in various levels, includinghousehold level, community level, and organizational level, while variables for GrossNational Happiness are at only national level. This is because the practices forSufficiency Economy can be applied in multilevel whereas Gross National Happiness isintroduced as in national indicators. Future research should explore operationaldefinitions on Gross National Happiness in household level, community level andorganizational level and also examine how the concept can be generalized. In addition,the development among four pillars, including economic pillar, social pillar,environment pillar, and cultural pillar is not operationalized in this study. Futureresearch should introduce measures to indicate to what extent of such balance.

132The Meaning of Sufficiency Economy International ConferenceREFERENCESBunyasrie, V. 2009. The Thai Financial Crisis and the Sufficiency EconomyPhilosophy. International Business & Economics Research Journal. Aug 2010, Vol.9 Issue8, p7-13.Calkins, P. 2006. The Sufficiency Economy at the Edges of Capitalism [online]Available at: [Accessed 1 August 2011]Curry, RL. And Sura, K. 2007. Human Resource Development (HRD) theory andThailand’snSufficiency Economy concept and its ‘OTP’ program. Journalof Third World Studies. vol. 24. no. 2: 86-94.Isarangkun, C and Pootrakool, K., 2002. Sustainable Economic Developmentthrough the Sufficiency Economy Philosophy, Paper for internal discussion,Crown Property Bureau and NESBD. November.Kantabutra, S. 2006. Relating vision-based leadership to sustainable businessperformance: A Thai Perspective. Leadership Review. No.6: 37-53.Kantabutra, S. 2007. Development of the Sufficiency Economy Philosophy in theThai Business Sector: Evidence, Future Research & Policy Implications[online] Available at: [Accessed 1 August 2011]NESBD (Office of the National Economic and Social Development Board), 2007.Sufficiency Economy Implications and Applications. Bangkok: NESBD.Piboolsravut, P. 2004. Sufficiency Economy. ASEAN Economic Bulletin. vol. 21, no. 1:127-134.Pantasen, A., Premchuen, S. & Keitdejpunya, P. 2003. Application of the royalthought about the Sufficiency Economy in SMEs. Bangkok: ThailandResearch Fund.Pantasen, A., and Prayukvong, W. 2006. Buddhist Economics that is beyond that ofSchumacher’s and Sufficiency Economy. Paper presented at the SufficiencyEconomy and Global Transformation seminar. Bangkok, Thailand, 20-21April.Pruetipibultham, O, 2010. The sufficiency economy philosophy and strategic HRD:a sustainable development for Thailand. Human Resource DevelopmentInternational. Vol.13, No.1, Feb: 99-110.Royal Speech, December 4, 1998. [online] Available at: [Accessed 1 August 2011]

The Meaning of Sufficiency Economy International Conference133Sachayansrisakul, N. 2009. Sufficiency Economy: A Reasonable Approach forThailand’s Future. Journal of Nida. Vol.49. No.2/2549.Sufficiency Economy Organization, 2009. Thoughts on Sufficiency Economy,interview with Dr.Priyanut Piboolsravut. [online] Available at: < http://www.sufficiencyeconomy.org/userfiles/imagesfiles/Thoughts%20on%20Sufficiency%20Economy.pdf> [Accessed 1 August 2011]Suphadilok, B, 2010. Synergy of ‘Gross National Happiness’ and ‘SufficiencyEconomy’ as an Imperative Paradigm for Communication and SustainableSocial Change. Paper accepted for presentation at International ConferenceFuture Imperatives of Communication and Information for Developmentand Social Change, Bangkok December 20-22.The Centre of Bhutan Study, 2008. GNH Index Variables [online] Available at: [Accessed 1 August 2011]UNESCO (United Nation Educational, Scientific and Cultural Organization), 2007.Education for Sustainable Development: Linking learning and happiness,Bangkok: UNESCO Bangkok.Ura, Karma, 2008. Explanation of GNH Index [online] Available at: [Accessed 1 August 2011]Wangchuk, Lily, 2008. Facts about Bhutan: the land of the Thunder Dragon,Absolute Bhutan Books.Wibulswasi, C., Piboolsravut, P., and Pootrakool, K., 2010. Sufficiency EconomyPhilosophy and Development. Sufficiency Economy Research Project,Bureau of The Crown Property: Bangkok.WCED (World Commission on Environment and Development), 1987. Our commonfuture Oxford, Oxford University Press

134The Meaning of Sufficiency Economy International Conference

Sufficiency Economy andMainstream Economic TheoryGroup1The Meaning of Sufficiency Economy International ConferenceNon-monotonic Utility Functions for Microeconomic Analysis of Sufficiency EconomyKomsan SuriyaFaculty of Economics, Chiang Mai University

The Meaning of Sufficiency Economy International Conference137Non-monotonic Utility Functions for Microeconomic Analysis of Sufficiency EconomyAbstractThis study invents four types of non-monotonic utility functions that suit thesufficiency economy. With these utility functions, an individual may not get higherutility when consume more goods. Therefore, an individual requires an optimal levelof income rather than a maximized level of income to achieve the highest utility. Keywords: sufficiency economy, utility function, microeconomic analysis,consumption, optimalityJEL:D11, Q01, B591.IntroductionTraditional economics assumes monotonic utility function for the calculationof the equilibrium of consumption (Varian, 1999; Binger and Hoffman, 1998;Pindyck and Rubinfeld, 1998; Mas-Colell, et al, 1995). It ensures that the higherconsumption level yields the higher utility. This monotonic utility functionencourages people to consume as much as possible. However, it may be unrealisticsuch that an individual may obtain negative marginal utility (MU) after passing athreshold of consumption. Sufficiency economy encourages people to consume at optimal levels(Piboolsravut, 2000). Mathematically, the optimal point cannot be reached withoutthe presence of the peak of utility function. Monotonic utility function has nodecreasing part which means it has no peak. Therefore, traditional utility functioncannot yield the optimal consumption. It does not fit for microeconomic analysis ofsufficiency economy.Non-monotonic utility function is more suitable for sufficiency economy. Thefunction does not guarantee that the more units of consumption will yield the more

138The Meaning of Sufficiency Economy International Conferencepleasure or higher utility to an individual. The optimality obtained by using nonmonotonicutility function can be considered as the ‘middle path’ of consumptionwhich follows the philosophy of sufficiency economy (Sachayansrisakul,2009;Piboolsravut, 2000).Only a few academic works emphasize on technical details of microeconomicanalysis of sufficiency economy. Suriya(1999) used non-monotonic utility functionto find the optimal working productivity to achieve the happiness of life. Howeverhis work described the idea using graphs but not mathematical equations. After that,the works of Piboolsravut (2000), Calkins -2- (2008) and Sachayansrisakul (2009)elaborately interpreted the philosophy of sufficiency economy but in descriptivestyle. This article, therefore, may be possibly among the first academic works thatOnly present a few the microeconomic academic works emphasize analysis of on sufficiency technical details economy of microeconomic by mathematical analysis ofsufficiencyapproach.economy. Suriya(1999) used non-monotonic utility function to find the optimalworking productivity to achieve the happiness of life. However his work described the idea usinggraphs but not mathematical equations. After that, the works of Piboolsravut (2000), Calkins(2008) and Sachayansrisakul (2009) elaborately interpreted the philosophy of sufficiencyeconomy but in descriptive style. This article, therefore, may be possibly among the firstacademic2. Microeconomicworks that present thetheorymicroeconomicof consumptionanalysis of sufficiency economy bymathematical Indifference approach. curves (IC) are located like a mountain seen from an air- plane.The larger oval is the lower altitude of the mountain and also the lower level of2. Microeconomic theory of consumptionpleasure. The smaller oval is the higher altitude of the mountain which yields greaterIndifference pleasure. A curves combination (IC) are of located X* and like Y* a mountain brings an seen individual from an to air- an plane. altitude The which larger is oval isthe still lower not the altitude peak of the mountain. and The also peak the is lower at a point level inside of pleasure. the smallest The smaller oval.oval is thehigher altitude of the mountain which yields greater pleasure. A combination of X* and Y*Figure 1: Non-monotonic utility functionbrings an individual to an altitude which is still not the peak of the mountain. The peak is at apoint inside the smallest oval.Goods YY* UoX*Figure 1: Non-monotonic utility functionGoods XAn individual has a limit of budget. In figure 1, he or she can choose his or her budget for acombination of goods X and Y. A straight line combining two points represents the spending ofall money to Y on the y-axis and the spending of all money to X on the x-axis. Points along theline are the combinations of goods X and Y. This line is called the budget line.An equilibrium is at X* and Y* where the utility function is tangent to the budget line. Anindividual chooses to consume X* units of goods X and Y* units of goods Y. The individual gets

The Meaning of Sufficiency Economy International Conference139An individual has a limit of budget. In figure 1, he or she can choose his orher budget for a combination of goods X and Y. A straight line combining two pointsrepresents the spending of all money to Y on the y-axis and the spending of allmoney to X on the x-axis. Points along the line are the combinations of goods Xand Y. This line is called the budget line.An equilibrium is at X* and Y* where the utility function is tangent to thebudget line. An individual chooses to consume X* units of goods X and Y* units ofgoods Y. The individual gets the utility at Uo level.Figure 2: Higher income yields greater pleasure-3-Goods YY* UoU2X*Goods XAn increasing income Figure makes 2: Higher the budget income line yields expand greater to the pleasure right hand side ofthe initial line. In figure 2, the tangency between the new budget line and theindifference curve yields a higher utility level which is U2. People perceive that theAn increasing income makes the budget line expand to the right hand side of the initial line. Inhigher income yields the higher pleasure for their lives. Therefore, people spend allfigure 2, the tangency between the new budget line and the indifference curve yields a highereffortsutilitytolevelcompetewhichtoisgainU2.higherPeople perceiveincome.thatIt willthe higherhappenincomelike thisyieldsasthelonghigheras thepleasure forutility their function lives. Therefore, is monotonic. people spend all efforts to compete to gain higher income. It will happenlikeUnderthis asthelongnon-monotonicas the utility functionutilityisfunction,monotonic.the higher income may not yieldhigher pleasure for an individual. In figure 3, the higher income drives the budgetUnder the non-monotonic utility function, the higher income may not yield higher pleasure forline an further individual. to the In right figure hand 3, the side. higher The income combination drives at the the budget new line tangency, further X4 to the and right Y4, hand side.yields The the combination same pleasure at the at new U2. tangency, It means X4 that and the Y4, higher yields income the same is pleasure meaningless at U2. for It means thathappiness. the higher income is meaningless for happiness.Law Law of diminishing of diminishing marginal marginal utility utility is behind is behind the decreasing the decreasing utility. It utility. occurs It when occurs an individualwhen consumes an individual a good consumes or a combination a good of or goods a combination too much of in goods a short too period much of in time. a short An individualperiod will get of time. bored by An the individual consumption. will The get law bored is concerned by the as consumption. an important principle The law of is economics.However, it is ignored when an economist solve the equilibrium of consumption by imposing theassumption of monotonic utility function.An individual achieves the highest pleasure at the combination of X3 and Y3 in figure 4. Thiscombination requires less income than that of combination X4 and Y4. This idea shows that anindividual does not need too much income. They can live by the optimal consumption as well asthe optimal income in the sufficiency economy.

140The Meaning of Sufficiency Economy International Conferenceconcerned as an important principle of economics. However, it is ignored when aneconomist solve the equilibrium of consumption by imposing the assumption ofmonotonic utility function.An individual achieves the highest pleasure at the combination of X3 and Y3in figure 4. This combination requires less income than that of combination X4 andY4. This idea shows that an individual does not need too much income. They canlive by the optimal consumption as well as the optimal income in the sufficiencyeconomy.-4-Figure 3: Higher income may yield the same pleasureGoods YY4Y2U2U2X2X4Goods XFigure 4: The Figure optimal 3: Higher income income yields may the yield highest the same pleasureGoods YY4Y3Y2U2U2X3X2X4Goods XFigure 4: The optimal income yields the highest pleasure

The Meaning of Sufficiency Economy International Conference1413. Monotonic utility functions-5-A famous class 3. of Monotonic monotonic utility utility functions functions is the constant elasticity ofsubstitution 3. Monotonic (CES). utility functionsA famous class of monotonic utility -5- functions is the constant elasticity of substitution (C A famous class of monotonic utility functions is the -5- constant elasticity of substitution (CES). 3. Monotonic utility functions3. Monotonic where utility U functions = Utility level -5-where A famous U class = Utility of monotonic α, level β = Share utility parameters functions is the constant elasticity of substitution (CES).where U = Utility levelA famous α, β = = class Share of monotonic X parameters = Unit utility consumption functions of is goods the constant X elasticity of substitution (CES).3. Monotonic utility Y functionsX = Unit consumption = Unit of consumption goods X of goods YY X = = Unit Unit consumption s = elasticity of goods of goods of Y substitution. Xwhere A famoussU class= elasticity= Utility of monotonicoflevel utility functions is the constant elasticity of substitution (CES).substitution.where Y U α, = When β = Unit Utility Share the consumption elasticity parameters level of of substitution goods Y (ES) is 1, it is Cobb-Douglas utility function,When the S elasticity α, X=β =elasticity ofUnit Share substitutionconsumption parametersof substitution. (ES)ofisgoods1, it is XCobb-Douglas utility function,Y X = Unit consumption of goods Y X .Whenwherethe elasticity Y U s = Unit elasticity Utilityof substitution consumption level of substitution.. of (ES) goods is Y 1, it is Cobb-Douglas utilityfunction, s α, When β = = elasticity Share ES is parameters zero, of substitution.is Leontief utility function,When the X elasticity = Unit of consumption substitution (ES) of goods is 1, X it is Cobb-Douglas utility function,When ES is zero, it is Leontief utility function, When the Y elasticity = Unit of consumption substitution (ES) of goods is 1, Y it is Cobb-Douglas . utility function,s = elasticity of substitution..Marginal utility (MU) of . all functions do not follow the law of diminishing marginTherefore, the utility function does not contain the peak of the function. The optimaWhen Marginal WhenES is utilityES the is elasticity zero,zero,consumptionit (MU)itis Leontief ofis of Leontief substitutionall functionsutility (ES)cannotutilitybefunction, dofunction, is 1, it is Cobb-Douglas utility function,not follow the law of diminishing marginal utility.Therefore, When ES the is utility zero, function it is Leontief does utility not achieved. contain function, the peak of the function. The optimal level of consumption cannot be achieved.. .. Marginal When ES utility 4. is zero, Non-monotonic (MU) it is Leontief of all functions utility functions function, do not follow the law of diminishing marginal utility.4. Non-monotonicTherefore, Marginal utility theutilityutility (MU) functionsfunction of all functions does not do contain not follow the peak the of law the of function. diminishing The marginal optimal level utility. ofMarginal consumption Therefore, utility This the (MU) cannot utility section of be all function achieved. will functions present does do not four not contain . types follow the of the peak non-monotonic law of of the diminishing function. utility The functions optimal for level micro ofmarginal This utility. consumption section Therefore, will analysis. cannot present the Marginal be four utility achieved. types utilities function of non-monotonic of does them not follow contain the utility law the functions of peak diminishing of for the microeconomicmarginal utility. Efunction. analysis. The Marginal optimal Marginal function utility level utilities of (MU) consumption contains ofofthemall the functionsfollow peak cannot of thedo the be lawnot achieved. function. offollowdiminishing Therefore, the lawmarginalof the diminishing optimal utility. level Eachmarginal of utility consumpti utility.function4. Therefore, Non-monotoniccontains achieved. thetheutilitypeakutility functionof thefunctionsfunction.does notTherefore,contain thethepeakoptimalof thelevelfunction.of consumptionThe optimalcanlevelbeofachieved. 4. consumption Non-monotonic cannot utility be achieved. functionsThis section will present four types of non-monotonic utility functions for microeconomic4. Non-monotonic analysis. This section Marginal Type will 1: present utilities Linear utility marginal four of them types functionsfollow utility of non-monotonic the law of diminishing utility functions marginal for utility. microeconomic Each utilityTypefunction analysis. 4.1:Non-monotonicLinearcontains Marginal marginalthe utilities utility peakutilityfunctionsof them function. follow the Therefore, law of diminishing the optimal level marginal of consumption utility. Each can utility beThis section achieved. function will contains The present first the type four peak of utility types of the of function. non-monotonic has Therefore, linear marginal utility the optimal utility functions level functions. of for consumption Marginal utility can be camicroeconomic The achieved. firstThistype analysis. sectionof obtained utilitywill Marginal functionpresent by taking utilities hasfour the linear partial types of marginal them of derivative non-monotonic follow utility of the functions. law utility utility of function Marginal diminishing functions subject utilityforcan to microeconomiceach be goods,marginal obtained utility. analysis.by Each takingMarginal utility the partial function utilitiesderivativeof contains themoffollowthe utility peak thefunctionlaw of the of function. diminishingsubject to Therefore, eachmarginalgoods,utility. Each utilityType function 1: Linear contains marginal the peak utility of the function. Therefore,the optimal level of consumption can be achieved. and the optimal level . of consumption can beType achieved. 1: Linear marginal utility and .The first type The of utility utility function of has this linear class marginal can be obtained utility functions. by the integral Marginal of marginal utility can utility be funcType 1: Linear obtained marginal by taking utility the partial derivative of the utility function subject to each goods,The utility The first function type of of utility this class function can be has obtained linear marginal by the integral utility functions. of marginal Marginal utility functions, utility can beThe first obtained Typetype1:of by Linearutility taking marginalfunction the partial utilityhas derivative linear marginal of the utility utility function functions. . subject Marginal to each goods,and .utility can be obtained by taking the partial derivative . of the utility function subjectThe first type of utility function hasto each goods,and linear marginal utility functions. . Marginal utility can beThe obtained utility by function taking of the this partial class derivative can be obtained of the utility by the function integral subject of marginal to each utility goods, functions, The utility function of this class can be obtained by the integral of marginal utility functions,and ...The utility function of this class can be obtained by the integral of marginal utility functions,.-5-

achieved.142The Meaning of Sufficiency Economy International ConferenceType 1: Linear marginal utilityThe first type of utility function has linear marginal utility functions. Marginal utility can beobtained by taking the partial derivative of the utility function subject to each goods,and .The utility function of this class can be obtained by the integral of marginalutility functions, The utility function of this class can be obtained by the integral of marginal utility functions,-6--6--6-Type 2: Parabola marginal utility with one goods in a termType2: Parabola marginal utility with -6- one goods in a term -6-Type2: The second Parabola type marginal of utility utility function with has one parabola goods in marginal a term utility functions. Ineach Type2: The term second Parabola of the type marginal of marginal utility utility, function utility only with has one parabola one goods marginal is presented, a term utility functions. In each term of theType2: marginal Parabola The second utility, Type2: marginal type only Parabola of utility one goods with function marginal is one presented, goods has utility parabola in with a term marginal one goods utility in a functions. term In each term of theThemarginalsecondtypeutility,of utilityonly onefunctiongoodshasis presented,parabola marginal utility functions. In each term of theThe second type of The utility second function type has of utility parabola function marginal and has utility parabola functions. marginal In utility each . term functions. of the In each term of themarginal utility, only one goods is presented,marginal utility, only marginal one goods utility, is presented, only one goods is and presented,.The The utility utility function function is is and .The utility function is and and ..The utility function is.The utility function The is utility function is....Type3: Parabola marginal utility with two goods in a termType 3: Parabola marginal utility with two goods in a termType3: Parabola marginal utility with two goods in a termType3: The The third Parabola third type type of marginal utility of utility function utility function also with has two also parabola goods has parabola in marginal a term marginal utility functions. utility functions. However, in eachType3: ParabolaHowever,term, The both third marginal Type3:ingoods type of Parabolaeach term,X utility andbothgoods with function marginal twogoodsY are also goods utilityXpresented. has in parabola with a termand goodsIt twoYmeans marginal goodsare presented.that in utility a an term individual functions.It meanswill However,thathaveangreater in eachpleasure term, both when goods consume X and both goods X and Y are Y presented. at the same It means time. In that the an first individual and second will have type, greater anindividual The third type will of have utility greater function pleasure also has when parabola consume marginal both X utility and functions. Y at the same However, time. in eachThe third individual type pleasure of utility The can when third get function consume the type utility also of utility both has from parabola X function the and consumption Y marginal also at the has same parabola utility of only time. functions. marginal one In goods. the However, utility first In this and functions. in third second each type, However, type, the an in eachIn term,consumptionthe individual first both and goodscan justsecond X andonly get the type, goodsone utility goodsan individual Y are presented.from will yield the can consumption lessget Itutilitythe means utility thatthan of only consumingfrom an individualone the goods. consumption will haveboth of In them this third becauseof greaterterm, both goods X term, and both goods goods Y are X presented. and goods It Y means are presented. that individual It means that will an have individual greater will type, the have the greateronlypleasureinteraction consumption one goods.when consumeterm just In between this only thirdbothone X and goods type,X and will Ywill be consumptionat the same time.yield zero. less utility just than onlyIn theconsuming onefirstgoodsandboth willsecondof them yieldtype, anpleasure when consume pleasure both when X consume and Y at both the same X and time. Y at In the the same first time. and second In the type, first and individual can get the utility from the consumption of only one goods. In this third type,because secondthethe type, anindividual less utility interaction can get than individual the term consuming utility between can from get both the X the and consumption of utility Y them will from because zero. of the only consumption the one interaction goods. of In term only this between one third goods. type, X and In the this third type, theconsumption just only one goods will yield less utility than consuming both of them because theconsumption Y interaction The will marginal be just zero. only consumptionterm utility one goodsbetween of this just willX and type only yieldY of onewill utility less goods utilitybe zero. function will than yield is consuming as less follows: utility both than of consuming them because both the of them because theinteraction The term marginal between interaction utility X and term of Y this will between type zero. of X utility and Y function will be zero. is as follows:The marginal utility of this type of utility function is as follows:The marginal utility of this type of utility function and is as follows:.The marginal utility The of this marginal type of utility of function this type is of as utilityand follows: function is as follows: .The utility function isand .The utility function isand and ..The utility The utility function function is is .The utility function The is utility function is....Type4: Parabola marginal utility with flexible termsType4:Parabola marginal utility with flexible termsTypeType4: The last4:Parabola type of utility marginal functionmarginalutility hasutilitywith parabolawithflexible marginalflexibleterms utility functions. In each term of MU, it isType4: Parabola possible The last to marginal Type4: type present of Parabola only utility one function with goods marginal flexible has or both parabola utility terms goods. with marginal This flexible terms type utility terms is more functions. flexible In than each the term third of MU, type, it isThepossiblelast The typetolast ofpresenttype utilityonly one goods or both goods. This type is more flexible than the third type,of utility function function has parabola has parabola marginal marginal utility functions. utility functions. In each term In of each MU, it isThe last type of utility The function last type has of utility parabola function marginal has utility parabola functions. marginal In utility each term functions. of MU, In it each is term of MU, it isterm possible of MU, to present it is possible only one to goods present or both only goods. one goods This type both is more goods. flexible This than type the is more third type,possible to present possible only one to goods present or both only goods. one goods This or type bothandis goods. more flexible This type than more the third flexible type, than.the third type,flexible than the third type,and .The utility function isand .The utility function isand and ..The utility function is.The utility function The is utility function is.....

Type4: Parabola marginal utility with flexible termsThe last type of utility function has parabola marginal utility functions. In each term of MU, it ispossible to present only one goods or both goods. This type is The more Meaning flexible of Sufficiency than Economy the third type,143International ConferenceThe The utility utility function function is is 5. ConclusionThis study invents four types of non-monotonic utility functions formicroeconomic analysis of sufficiency economy. The utility functions allow anindividual to find an optimal level of consumption and income. It supports theconcept of sufficiency economy such that people need not to gain too much incomefor their livings because the higher income may not yield greater pleasure to theirlives. People only find the optimal level of income, the middle path, to achieve thehighest happiness of life.and ..

144The Meaning of Sufficiency Economy International ConferenceReferencesBinger, Brian and Elizabeth Hoffman. 1998. Microeconomics with Calculus. 2 nd ed.Massachusetts: Addison-Wesley.Calkins, Peter. 2008. The Sufficiency Economy at the Edges of Capitalism. [online]www.sufficiencyeconomy.org/old/en/files/25.pdfMas-Colell, Andreu, Michael Whinston and Jerry Green. 1995. MicroeconomicTheory. New York: Oxford University Press.Piboolsravut, Priyanut. 2000. Sufficiency Economy: An Introductory Note. Excerptpartly from the conference of 10th UNCTAD, February 2000, Bangkok.Pindyck, Robert and Daniel Rubinfeld. 1998. Microeconomics. 4th ed. New Jersey:Prentice Hall.Sachayansrisakul, Navarat. 2009. Sufficiency Economy: A Reasonable Approach forThailand’s Future. NIDA Development Journal 49, 2, pp. 1-22.Suriya, Komsan. 1999. Optimal productivity for a happy life. Journal of EconomicsChiang Mai University 3, 3 (September – December), pp. 12-15. (in Thai)Varian, Hal R. 1999. Intermediate Microeconomics: A Modern Approach. 5 th ed.New York: W.W. Norton & Company.

Sufficiency Economy andMainstream Economic TheoryGroup1The Meaning of Sufficiency Economy International ConferenceSufficiency Economy: A Pathway to Sustainable DevelopmentAmit KumarCollege of Information Science and Technology, NanjingForestry University, Nanjing, ChinaManav Bharti University, Solan, Himachal Pradesh, IndiaDr. Yunfei LiuCollege of Information Science and Technology, NanjingForestry University, Nanjing, ChinaTanvir SinghDepartment of ECE, I.E.T. Bhaddal, Ropar, Punjab, IndiaDr.Sawtantar Singh KhurmiDeptt. of Computer Science & Engg., Bhai Maha SinghCollege of Engineering, Muktsar, Punjab, India

The Meaning of Sufficiency Economy International Conference147Sufficiency Economy: A Pathway to Sustainable DevelopmentAbstract:Globalization and economic integration are giving more consumers access tomore products and services. Local and national boundaries are breaking down in thesetting of social standards and aspirations in consumption. Also, Rapid urbanization,population explosion and increase in income and consumption inevitably lead tomass generation of waste. Traditional environment management pursues reactivepolicies with monitoring, legal regimes to reduce pollution, which is not sustainable.In order to achieve sustainable development, a paradigm shift is needed fromreactive policies towards more preventive policies. In this paper we have addressedthe Philosophy of “Sufficiency Economy” which takes a middle path approachtowards sustainable development and is based on the foundations of moderation,reasonableness and resilience. The philosophy is underpinned by knowledge andmorality.Keywords: Sustainable Development, Sufficiency Economy.1. IntroductionAdvances in science and technology have made the world smaller throughrapid communication, faster and accurate information flows, and reliable knowledgeexchanges, among others. Over the past decade, the world has witnessed rapideconomic growth. This growth has put enormous pressure on the environment in theform of water shortage, air and water pollution, depletion of natural resources,biodiversity loss, and land degradation [5]. World population is projected to reach 9billion by 2050, driven largely by growth in developing countries and countries withlower per-capita incomes (see Figure 1). Recent studies show that we are alreadyexceeding the Earth’s ability to support our lifestyles, and have been doing so forapproximately twenty years [6].

aspirations ind urbanization,d increase inThe Meaning of Sufficiency Economy 148evitably lead International to Conferenceste. Traditionalpursues reactivelegal regimes tonot sustainable.ble development,d from reactiveventive policies.addressed thency Economy”path approachlopment and isof moderation,silience. Theby knowledgeDevelopment,technology havethrough rapidand accurateiable knowledgeOver the pastFigure 1: World population is projected to reach 9 billion by 2050;unsustainable approximately at a middle twenty income years level [6].(global average).Source: World Resources Institute (WRI)/Earthtrends, 2008.Action is needed to enhance innovative partnerships between governments andcivil society including Source: the private World sector. Resources Action is also needed Institute to build capacity tomainstream environment in the decisionmaking processes to sustain adequate supply(WRI)/Earthtrends, 2008.of ecosystem services from local, national to global levels. More should be done topromote regional cooperation to collectively address common and transboundarychallenges. Given Action the population is needed and the to growth enhance rate present innovative a linear growth modelof “grow now partnerships and clean up later”, between which governments is not sustainable and [5]. According civil to WorldBusiness Council of Sustainable Development (WBCSD) Current globalsociety including the private sector. Actionconsumption patterns are unsustainable. Efficiency gains and technological advancesalone will not be sufficient to bring global consumption to a sustainable level;changes will also be required to consumer lifestyles, including the ways in whichconsumers choose and use products and services [6]. In order to achieve sustainabledevelopment, a paradigm shift is needed from reactive policies towards morepreventive policies, which should integrate ecological principles into development.There are numerous practices and examples of policy responses around the globe but“Sufficiency Economy” in Thailand is a stupendous success of them all, which leadsthe way to sustainable development [5].World population is projected to reach 9billion by 2050, driven largely by growth indeveloping countries and countries withlower per-capita incomes (see Figure 1).Recent studies show that we are alreadyexceeding the Earth’s ability to support ourlifestyles, and have been doing so forFigure 1: World population is projected toreach 9 billion by 2050; unsustainable at amiddle income level (global average).2. Sustainable DevelopmentSustainable development encompasses economic, social, and environmentperspectives of conservation and change and may be defined as “development that

ing toinableglobalinable.logicalent toinablered toays inoductschieveshiftwardsshouldintoacticesroundy” inf theminabledamage agricultural or industrial production.2.2. EnvironmentalAn environmentally sustainable systemmust maintain a stable resource base,The Meaning of Sufficiency Economy International Conferencemeets the needs of the present without compromising the ability of futuregenerations avoiding to meet their over-exploitation own needs” [7]. Sustainable development of renewable is designed toserve the needs of all peoples, enough and forever [5]. Sustainable developmentdoes resource not preclude the systems use of exhaustible or natural environmental resources but requires that sink any usebe appropriately offset [9].functions, and depleting nonrenewableresources only to the extent that investmentis made in adequate substitutes. Thisincludes maintenance of biodiversity,There has been a growing recognition of three essential aspects of sustainabledevelopment (see Figure 2) [12]:2.1. EconomicAn economically sustainable system must be able to produce goods andservices on a continuing basis, to maintain manageable levels of government andexternal atmospheric debt, and to avoid stability, extreme sectoral and imbalances other which ecosystemdamage agriculturalor industrial production.functions not ordinarily classed aseconomic resources.2.2. EnvironmentalAn environmentally sustainable system must maintain a stable resource base,avoiding over-exploitation of renewable resource systems or environmental sinkfunctions, 2.3. Social and depleting nonrenewable resources only to the extent that investmentis made in adequate substitutes. This includes maintenance of biodiversity,atmospheric A socially stability, sustainable and other ecosystem system functions not must ordinarily achieve classed aseconomic resources.fairness in distribution and opportunity,adequate provision of social servicesincluding health and education, genderequity, and political accountability andFigure 2: Sustainable Development [13]participation.2.3. SocialA socially sustainable system must achieve fairness in distribution andopportunity, adequate provision of social services including health and education,gender equity, and political accountability and participation.149passesnmenthangent thatithoutfutures” [7].ed toh andFigure 2: Sustainable Development [13]Technically, sustainable development can

150The Meaning of Sufficiency Economy International ConferenceTechnically, sustainable development can be defined as a development pathalong which the maximisation of human wellbeing for today’s generations does notlead to declines in future well-being. Attaining this path requires eliminating thosenegative externalities that are responsible for natural resource depletion andenvironmental degradation. It also requires securing those public goods that areessential for economic development to last, a healthy environment and a cohesivesociety. Sustainable development also stresses the importance of retaining theflexibility to respond to future shocks, even when their probability, and the size andlocation of their effects, cannot be assessed with certainty. Sustainable developmentalso emphasizes the importance of taking a longer-term perspective about theconsequences of today’s activities, and of global co-operation among countries toreach viable solutions. [11].3. Philosophy of Sufficiency EconomyThe philosophy of the Sufficiency Economy guides the people to a balancedway of life and to be the main sustainable development theory for the future. Thetheory is based upon a Middle Path between society at the local level and the marketin the global context. By highlighting a balanced approach, the philosophy allowsthe nation to modernize without resisting globalization, but provides a means tocounteract negative outcomes from rapid economic and cultural transitions.The Sufficiency Economy became critical during the economic crisis in 1997,in which Thailand needed to maintain stability to persist on self-reliance anddevelop important policies to recover. By creating a self-supporting economy, Thaicitizens will have what they need to survive but not excess, which would turn intowaste [2].The Sufficiency Economy Philosophy proposed by His Majesty KingBhumibol Adulyadej to the people of Thailand, can be applied to the individuallevel, the community level and the national level. According to his Majesty theKing, Sufficiency Economy is a philosophy that stresses the middle path as anoverriding principle for appropriate conduct by the people at all levels. This appliesconduct starting from the family, community, as well as national level indevelopment and administration so as to modernize in line with forces ofglobalization. “Sufficiency” means moderation, reasonableness, and the need forself-immunity for sufficient protection from impact arising from internal andexternal changes. To achieve this, an application of knowledge with dueconsideration and prudence is essential. At the same time, it is important tostrengthen the moral fiber of the nation, so that everyone, particularly publicofficials, academicians, businessmen at all levels, adheres first and foremost to theprinciples of honesty and integrity. In addition, a way of life based on patience,perseverance, diligence, wisdom and prudence to create balance and be able to copeappropriately with critical challenges arising from extensive and rapidsocioeconomic, environmental, and cultural changes in the world [3].

nomy guides the people to a balancedof life and to be the main sustainablelopment theory for the future. Thery is based upon a Middle Patheen society at the local level and theket in the global context. Bylighting a balanced approach, theosophy allows the nation to modernizediligence, wisdom and prudence to createbalance and be able to cope appropriatelywith critical challenges arising fromextensive and rapid socioeconomic,environmental, and cultural changes in theworld [3].The Meaning of Sufficiency Economy International ConferenceThe philosophy of the sufficiency economyout resisting globalization, butTheprovidesphilosophycomprisesof the sufficiencythree pillars:economymoderation,comprises three pillars:eans to counteract negative outcomes reasonableness and self-immunity (asmoderation, reasonableness and self-immunity (as illustrated in the figure 3), andrapid economic and cultural illustrated in the figure 3), and requires tworequires two conditions for the philosophy to work: knowledge or wisdom and ethicssitions.conditions for the philosophy to work:i.e. hardwork and honesty knowledge [3, 5, 10]. or wisdom and ethics i.e.Sufficiency Economy became critical Figure hardwork 3: Three and pillars honesty of [3, sufficiency 5, 10]. economyng the economic crisis in 1997, inh Thailand needed to maintain stabilitypersist on self-reliance and developortant policies to recover. By creating asupporting economy, Thai citizens willwhat they need to survive but notss, which would turn into waste [2].Sufficiency Economy Philosophyosed by His Majesty King Bhumibol lyadej to the people of Thailand, can beied to the individual level, themunity level and the national level.ording to his Majesty the King,Figure 3: Three pillars of sufficiencyiciency Economy is a philosophy 3.1. Moderation that or the economy middle pathses the middle path as an overridingThe Thai term for sufficiency (pho phiang), just like the English, has the dualmeaning of both not too much and not too little. The right course avoids extremes ofboth extravagance and excessive economy.1513.2. ReasonablenessIt is the sense of being aware of both the causes and consequences of anyplanned action.3.3. Self-immunity or ResilienceIt is the ability to deal with unexpected shocks.3.4. Knowledge or WisdomThe knowledge condition requires thorough study of all available informationand experience in order to make prudent decisions.3.5. Ethics or MoralityThe morality condition stresses integrity, trustworthiness, honesty and thehard-work of individuals.

152The Meaning of Sufficiency Economy International Conference4. ConclusionThe world has witnessed rapid economic growth over the past decade. Thisgrowth has put enormous pressure on the environment in the form of water shortage,air and water pollution, depletion of natural resources, biodiversity loss, and landdegradation. Traditional environment management pursues reactive policies withmonitoring, legal regimes to reduce pollution, which is not sustainable. In order toachieve sustainable development, a paradigm shift is needed from reactive policiestowards more preventive policies. Sustainable development means attaining abalance between environmental protection and human economic development andbetween the present and future needs. It requires an integration of economic, socialand environmental approaches towards development.The Sufficiency Economy Philosophy, discussed in this paper, takes a middlepath approach towards sustainable development and is based on the foundations ofmoderation, reasonableness and resilience. The philosophy is underpinned by knowledge and morality. Thus, bypracticing Sufficiency Economy, people would live in harmony and with security ina sustainable society and environment; and they would be able to tolerate and copewith all kinds of malign impacts of globalization.

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