According to the World Bank’s update on global poverty in March 2026, 826 million people live in extreme poverty, surviving on less than $3 per day, down from 847 million in 2024. This simple data illustrates the significant disparity in resources, opportunities, knowledge, and frameworks that exists in the world. The world now has the economic capacity and resources to end this extreme poverty. It possesses sufficient resources, technology, knowledge, and infrastructure; however, it lacks the necessary willpower and a cohesive framework to address these gaps and ensure equitable, participatory, and meaningful prosperity for achieving global peace and harmony. The concept of disparity and unjust distribution suggests that addressing the global inequality crisis demands more than minor policy changes; it requires wisdom.
The framework we need is not new. This 2,500-year-old framework defines the rationality of taxation policy, respects and dignifies merchants and taxpayers, and establishes the government's role as a guardian that promotes ethical business conduct and meaningful economic engagement for youth. It also promotes sustainable resource mobilization, creativity, and a balance with nature for the common good and future benefit.
Buddhism does not offer a spiritual escape from economic suffering; rather, it provides a diagnosis. The Buddha identified that suffering arises from craving and ignorance. In the context of today’s economy, this is evident through unrestrained greed, labor exploitation, environmental destruction, and systemic injustice. The symptoms are clear. Surprisingly, the solution is practical.
As Chanakya viewed economics as critical to state survival, a wealthy state could defend itself, maintain infrastructure, and ensure citizen welfare even during disasters. Economic policies should maximize state revenue while maintaining public welfare and preventing exploitation. In the same way, Buddhism advocates balanced economic practices by rejecting both extreme materialism and severe austerity. When applied to economics, this perspective translates into radical common sense: prioritizing sufficiency over excess, interdependence over ruthless competition, and long-term well-being over immediate gains. This is not idealism; it is pragmatism grounded in human psychology. When people’s basic needs are met with dignity, conflict diminishes. When inequality is reduced, social cohesion is strengthened. When the environment is preserved, future peace is secured and conflict declines.
The current challenge in economic solutions and innovation does not stem from Buddhist philosophy. Rather, it lies in the capacity to translate these philosophical principles into measurable policies and practices, integrating creativity and compassion more deeply. This translation is referred to as welfare economics.
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Does welfare economics work?
Today’s world is characterized by intense resource-based competition driven by unlimited, self-centered greed and pride. Buddhist economic thought centers on a human-focused economy that genuinely fosters sustainable development at both the psychological and societal levels. It prioritizes utility and growth, but these should be grounded in morality, ethics, and mental well-being. Given this context, a pertinent question arises: Does a welfare economy function as advocated by Buddhism?
Many countries are promoting welfare economics while pursuing equitable growth and sustainability for a shared future. Bhutan offers a simple example, demonstrating that a welfare state can be achieved through a welfare-oriented economic system inspired by Buddhist values. Since 1972, Bhutan has rejected an obsession with GDP, embracing Gross National Happiness instead. It measures psychological well-being, health, education, environmental conservation, and community vitality. The result is a country where 71 percent of the land remains forested, while many economies face disasters triggered by large-scale deforestation. Bhutan has sustained both human flourishing and ecosystem integrity.
The Nordic economies also demonstrate this model on a larger scale. Denmark, Finland, Sweden, and Norway implement welfare-oriented policies across millions of people. According to the 2025 World Happiness Report, these nations continue to dominate global rankings. Finland ranks first globally for happiness, followed by Denmark, Iceland, and Sweden. Similarly, life expectancy is among the highest in the world, at around 83–84 years in 2026, exceeding the OECD average of 82 years. Intergenerational wealth inheritance accounts for less than 20 percent in Nordic countries, compared to nearly 50 percent in the United States.
Role of Factors of Production
The classical factors of production may not always be at the core of production systems. Sometimes, different ways of thinking can influence production outcomes as external variables. Traditional factors such as land, labor, capital, technology, and organization are not limited within a Buddhist model of production because labor is not confined to physical effort, organization is not limited to profit generation, technology is not restricted to production efficiency, and land and capital are not merely tools of productivity and mobilization. Beyond these factors are peace, compassion, sustainable natural resources, and the welfare of society as national priorities. These factors also contribute to individual well-being. Both state and non-state actors play important roles in addressing the challenges facing 21st-century economies. Governments alone cannot solve these problems; collective efforts are required to build a compassionate economic model.
At the individual level, right livelihood begins with personal choice. People can reduce consumption patterns that exploit labor and the environment, support ethical businesses, and demand accountability. Every individual decision creates pressure for ethical conduct, resource conservation, and the fair sharing of benefits. Likewise, the state plays a critical role in addressing economic problems such as unemployment, political unrest, climate-induced disasters, and weak economic governance. Governments must establish welfare-oriented economic systems that promote universal healthcare, education, and housing; progressive taxation; environmental regulations that protect common resources; labor standards that ensure worker dignity; and accountability mechanisms that encourage meaningful participation. Uruguay demonstrates that such an approach is achievable, as reflected in its strong economic confidence ratings from S&P, Fitch, and other agencies.
Likewise, non-state actors such as civil society organizations and independent think tanks also play a role in promoting the positive narratives of welfare economies inspired by Buddhist philosophy. They serve as knowledge centers and advocacy groups that innovate, promote, and communicate how welfare economies function and why they are significant in the 21st-century global market and society. According to the Global Cooperatives Report 2025, cooperatives employ nearly 280 million people and generate about $3 trillion in annual revenue. They provide comparatively stronger job security and accountability than many traditional employers, making them a key pillar of sustainable, inclusive, and resilient economies.
From Suffering to Solutions
The Buddhist framework provides the diagnosis, welfare economics provides the prescription, and the four universal economic truths offer practical solutions. These truths are that current systems cause suffering for billions of people; this suffering originates from greed-driven models that prioritize short-term gains over human well-being; alternatives exist but are often ignored; and welfare economies offer a viable solution when guided by truth and compassion. Compassionate economic principles are straightforward: progressive taxation that funds human development, universal healthcare and education as rights, fair wages and labor protections, wealth redistribution through social safety nets, and environmental protection as an economic imperative.
The Choice Before Us
In Buddhism, there is a saying: “Be a light unto yourself.” Today, it is time to become an economic light, serving as a catalyst for compassionate and equitable systems that advance the goals of a welfare economy. Such a vision aligns with the need for a peaceful world where communities flourish and ecosystems remain balanced. This wisdom remains both timeless and relevant. The choice is clear: we can continue with systems that generate crisis, inequality, and suffering, or we can build economies rooted in the profound truth that human flourishing, ecological balance, and lasting peace are our highest economic priorities.
The author is an economist and expert on public policy and planning. He is a former member of the Lumbini Provincial Planning Commission and co-founder of Initiatives for Equitable Earth.
