The Buddha’s Political Economy

Editor’s note: This is from Chapter 8 of Nalin Swaris’ book Buddhism, Human Rights and Social Renewal, which I will publish in full soon. It contains a radical reassessment of the Buddha’s teaching and it’s relevance to contemporary thought.


The Kūṭadanta Sutta (Dīgha Nikāya 5) is a fine example of how early Buddhists targeted oppressive liturgies passed off as sacred rites ordained by the gods. The title of the discourse, Kūṭadanta, means “sharptooth”, indicating the incisiveness of early Buddhist polemics against Brahminism. It is the nickname of the Brahmin priest to whom this discourse is given, aptly characterising the greedy fire-priests as vampire-like creatures sucking the people’s blood.

The discourse tells a story within a story to clarify the early Buddhist approach to political economy. Kūṭadanta is a wealthy quasi-feudal landowner enjoying the rights of a king over a village and its inhabitants. But Kūṭadanta is an anxious man; he fears that he is losing grip on the people, and thereby his providers of wealth and services, because of their enthusiastic acceptance of the Buddha’s Teaching. The priest decides to accost the Buddha and attack him for his ‘subversive’ teachings. The Buddha receives the bad humoured priest cordially and explains why he rejects blood-sacrifices by narrating a parable about a despotic king.

The story begins with the king surveying with great satisfaction the vast territories conquered and “wealth upon wealth” accumulated in the royal treasury and granaries. But he is filled with anxiety when he contemplates the possibility of being ousted by an equally ambitious and ruthless rival. He could also die an untimely death from natural causes. Fear and anxiety make the monarch religious; he decides to commission a great sacrifice to the gods. He summons his palace chaplain and seeks advice on how to organise a splendid fire-sacrifice. Through the royal chaplain, the Buddha presents his views on political economy. As mentioned, oppressive taxation and the demands of the fire-priests had become unbearable for the working people. The royal chaplain, unlike the arrogant king, is well aware of the real state of affairs in the kingdom. He therefore tries to persuade the king to give up his foolish idea:

Your majesty, the countryside is infested with brigands. In the border areas, you are facing an insurrection because of excessive taxation. If you were to extort more wealth for a lavish religious spectacle, the entire kingdom could break out in open rebellion.

The king haughtily replies that if the people rebelled he would unleash his troops and “eradicate this plague by executions and exemplary punishment”. The chaplain points out that this would be a short-sighted remedy for a grave social problem. The king would merely drive resentment underground and those surviving the war of extermination would rise up against him again. Instead of violent repression, the chaplain recommends a saner course of action:

If you follow this plan you will be able to put an end to social unrest on a permanent basis: provide seed-gain to those engaged in agriculture and pasture land to livestock breeders; give capital to those engaged in trade and pay a just wage to government servants. When the people are gainfully engaged in occupations of their preference the country will prosper and no harm will come to your kingdom. This is the best sacrifice your majesty can perform.

Compared to the amoral political advisers of the period, this was a new type of royal chaplain. The king decides to try this new type of sacrifice. The state incentives stimulate economic activity. Bribery and corruption among government officials come to an end. Wage labourers, till then driven to work “by threats and blows, their gaunt faces covered with tears” were now given the freedom “to do work that satisfied them and no one was forced to do work that did not please them”. The people become happily engaged in their chosen occupations; the kingdom prospers and peace is restored. People live without fear, with doors and windows of their houses open wide, “joyfully dancing their children in their arms”.

The social elite – provincial chiefs and the wealthy property owning classes – impressed by the king’s new policy, decide to follow his example. They voluntarily bring their surplus wealth and place it at the king’s disposal. The king tells them to take it back, as he had acquired sufficient wealth “through just taxation” to run the state institutions. The elites decide that it is not right for them to retain excess wealth for private consumption. Instead of hoarding it, they set up permanent reserves in their various districts, to be ploughed back into production or used in times of natural calamities. Their moral transformation is described by the Buddha through a masterly play of words: the Lords of Wealth – dhanapatis – had become Lords of Sharing – dānapatis. The ancient practice of dāna as equitable wealth distribution had been restored. In this sacrifice, the Buddha observed, no animals were slaughtered, no trees felled and no plants or grasses destroyed. This, the Buddha concluded, is the true meaning of sacrifice: not the glorification of gods but the creation of a humane society.

The Buddha’s economic vision steers a Middle Path that goes through and beyond the two models debated by contemporary economic planners: total control of production by the State, or the laissez faire approach, which gives freedom to market forces that are in reality forces of desire. The Buddha recommends that the State should intervene and establish justice and equity to stimulate the productive skills of all, according to a rational plan that will ensure the “welfare and happiness of the bahūjana”, the manifold subjects of the State. Instead of anarchic production, he advocates regulation of economic activity according to a rational plan implemented with the full and free cooperation of all. The Buddha did not share the pessimistic view that human beings are by nature egoistic creatures and that economic growth must necessarily take the form of a war of all against all. Human beings can infuse economic activity with better values than greed and violence. The Buddha did not moralistically deplore the miseries of the political and economic system while enjoying its benefits. He presented a solution to the problems of social inequality, and the unrest and armed insurrections it inevitably gives rise to. The eminent historian of Indian civilisation D.D. Kosambi has correctly assessed the political genius of the Buddha and the perennial relevance of his vision, couched in plain and simple language in the Kūṭadanta Sutta:

This is a startlingly modern view of political economy. To have propounded it a time of Vedic yajña [sacrifice] to a society that had just begun to conquer the primeval jungle was an intellectual achievement of the highest order (1977: 111).


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