The traits of Buddhist Economics

"Buddhist Economics" often means different things to different people, and now that its concepts converge with "Sufficiency Economics", "Sustainable Economics", etc., I would like to describe what I think are the most important characteristics of it.

Let us start with the three E's, Economics, Ecology, and Ethics.

Basically it means that economy cannot be considered in isolation, we must apply systems thinking, which will automatically bring factors, traditionally considered as non-economic, such as social cost, global warming, bio-diversity, damage to culture, consumerism, health hazards into play.
We then must look at products in their whole life-cycles. Cigarettes are a health hazard and pollutes the air. It also brings addiction and make poor people poorer. Looking at paper as a product in the context of Buddhist Economics, leads to deforestation questions and to global warming. However paper is also useful for books in education. Which in turn leads to the need for recyclable paper. These are simple examples of the interconnectedness in systems thinking.
The interconnectedness of all things is also an aspect which is stressed in Buddhism.

One could object that it would make economics very complex, and indeed it would. All too often economics is simplified into quantitative (i.e. monetary) considerations only, and declares itself free from ethics, politics, etc., when in fact they are non separable in practice.
The attempt to introduce social costs and environmental taxes are well intended, but can also be seen as an attempt to make everything quantifiable.

The fact that it makes everything more complicated is a big challenge for systems thinkers. Approximations are often necessary, but we must constantly improve them. Computer technology can be a help here.
Traditional Economics dealt mostly with simple relations expressed in closed form mathematical formulae such as the yield curve, and the Black Scholes option pricing model. More complicated situations cannot be expressed in such terms. One of the more recent developments is the multi agent-based approach for analysis, which rely much on computers.

In this context, Ethics plays the important role of defining goals and constraints in the above systems thinking approach to Economics and Ecology. Without ethical guidelines on what is right and what is not right, the outcome can only be muddled.
Buddhists can fall back to the precepts of non-violence, non-stealing, telling the truth, no sexual misconduct and narcotics, and to the eight noble path, particularly right livelihood.
Right livelihood means making money honestly, e.g. not cheating or misleading in advertisements.
Ethics matters in how we make a living, in what products or services we offer, and what we consume.
Note that creating wealth is not taboo in Buddhism. But we must accumulate wealth ethically, not to become attached to it when we have wealth, and generously use wealth for the good of all.

Traditional supply and demand relations in the market are recognized in Buddhist Economics, but they are only considered as a first approximation, since the assumptions made are not true, e.g. disregard of ethics, politics, environmental factors, social costs, etc.
Take the law of supply and demand. In practice demand is often manipulated by the producers by advertising. Selling products not as they are, but considering them as part of life-style is another trick. We know the phenomena of consumerism, where we buy something not because we need it.
The pretext that it is good for economic growth is fallible, uncontrolled growth has done much damage to our planet.
A modest measure of economic growth is good, in fact studies show that people are happy when the economy is not stagnant, but there is some economic growth. Such growth must be sustainable, in order to benefit not just us, but the future generations.

What shall we do to resist consumerism? The consumer was the king, but not anymore if the supplier can manipulate our needs. Here we are dealing with the battle of the minds. The answer is general awareness of what constitutes wholesome living and mindfulness in everyday life. Constantly being mindful of what we consume, what we eat, buy, etc.

I think the above are the most important traits of Buddhist Economics, interconnectedness, ethics, and mindfulness. Buddhist Economics is a movement similar to the Green movement. As formulated above, I think many non-Buddhists would endorse it as well.

There are other characteristics of Buddhist Economics, but I consider them of secondary importance. For instance, with regard to property, the precept of not stealing means that Buddhists respect property (even when knowing that everything is an illusion). Here there are Buddhists who lean towards capitalism, and other towards socialism. I think such things are not of secondary importance.

Related;
Buddhist Economy in Practice