Economics, Spirituality, Transformation

Embracing Spiritual Economics

In every era of human history humanity has faced a unique challenge.
Not long ago, the challenge was to reconcile science and religion.
And, as we all know, that reconciliation process was not problem free;
e.g., in fact, many people died because they argued that the Earth was

Today, the major challenge in front of us is the reconciliation
between the material and non-material dimensions of our human
existence. What I would like to call “the reconciliation between
economics and spirituality”. For many people this may sound a serious
contradiction in terms, when economics is seen as the best
representative of any material-based-science. It is obvious that
people see economics as money and as the science of material scarcity;
i.e., how to allocate existing and finite material goods and services
among our infinitely large human needs. But even the most material of
sciences have already come to terms with the importance of the
non-material elements of life in this Planet. Scientific materialism
peaked at the beginning of our last century.

At the center stage of the debate of what economics should be all
about there is a fundamental fact we must not forget; i.e., that we,
human beings, are living on this Planet not just in the pursuit of
material welfare. And, therefore, ‘material welfare’ is only one
aspect of ‘human welfare’. So, in this rapid transformation process,
one of the questions we must address today is whether the economics we
practice today will be the economics we will be practicing in the
future. Furthermore, whether we would be able to formulate economic
policies and programs that are essentially void of, or indifferent
with regard to, the spiritual dimensions of people’s lives. In my
view, the answer is a flat “No”. But the story does not end here and,
thus, it is important to establish few grounds to enable us to
understand the full implication of the type of transformation everyone
is looking for.

First, the public is demanding this transformation and it demands it
because judging economic policy making by its results, there is a lot
that has not worked. Simply focus on poverty, environmental
degradation, discrimination of all sorts, and so many other negative
results of the so- called economic progress.

Second, a large number of issues economists are trying to resolve are
multidimensional in nature, with major ethical and moral overtones;
whereby the material dimensions, or the economic and financial
dimensions, are simply only one of many; that in many instances may be
not the most important ones. In the pursuit of eradicating poverty,
examples of these issues are equity, social justice, governance,
participation, equality, empowerment and many more.

Third, it is essential to have in mind that economic analysis, policy
making and development implementation, are not ‘neutral’ with respect
to equity, social justice, and other desired and undesired outcomes.
Thus, economics cannot remain indifferent with regard to the influence
it strongly exercises with regard to these issues.

Fourth, a major revolution in value systems is taking place today, and
its foundation has been led by civil society, like NGOs, spiritual and
religious movements and by the leaders in business, academia, and so
on. The key to this revolution is the move towards the humanization
of welfare economics. Too much attention has been paid to the ‘human
doing’, the ‘human having’ and the ‘human knowing’ and much less to
the ‘human being’. While ‘having’, ‘doing’ and ‘knowing’ are
extremely important, the intrinsic value, direction and identity of
human life (like solidarity, caring, sharing,.) are given by, and are
in the nature of, the ‘being’.

Fifth, many of the solutions to our everyday problems are as much
individual as they are collective; country specific as they are
regional, and regional as they are global. Indeed, the process of
globalization has opened levels and experiences of interconnectedness
like we have never experienced before. Thus, an economics that
remains individualistic – “just compete to get what I need” — will
simply not do. Thus, slowly but surely economics must become the
science of the collective.

Certainly, there are many more dimensions which demand that we
question how economics is practiced today. Most people know that its
value system is essentially “exclusive”, and it is because of this
exclusion that many people have been left behind. Economic practices
have marginalized nearly half of the Planet, as more than two billion
people earns less than two dollars a day. Addressing the challenge of
inclusion is what collective human welfare is all about.

In addition, there is another important consideration. Most
economists, and certainly Adam Smith – one of the founders of economic
thinking – proposed that individuals could pursue their own interest,
and in doing so, through the power of an “invisible hand”, societies
will attain their social or collective optimum. However, empirically
we know that this has not happened, and we see that the material
wealth gap is increasing between the rich and the poor and between
rich countries and poor countries. One immediate lesson is that we
have either failed by design or buy default with respect to this
invisible hand, and that the instruments we have used to translate it
into economic practice have simply not worked for all people. For
example, the ‘market mechanism’ alone has not and will not yield the
acceptable social optimum. The government alone -another expression
of the invisible hand – has also not been able to get to the social
optimum. And one can name many more instruments that have resulted in
discrimination, misery and injustice for too many people. In this
millennium we will see that the real invisible hand is human
consciousness, a subject of critical importance.

It is also worth pointing out that the founders of economic thinking
have not begun as economists, in the way we understand the profession
today. Many of them were philosophers, moralists, ethicists, priests,

For those of us who would really like to see a major human
transformation of the world it is important to ask whether one can
practice economics in a moral, ethical and spiritual vacuum. Not any
longer. But, is this a new question? Certainly it is not. In fact
in the Dumbarton Oaks Declaration of the United Nations, December
1944, the UN forefathers understood many of the functions of the
institution in the context of both material and spiritual growth. Not
long ago, Mr. Koffi Annan, Secretary General of the UN, stated that
policies in the social sector must also be understood within the
context of spiritual well being (3rd Committee of The General
Assembly, 1998-99). Also, Mr. James Wolfensohn, President of The
World Bank, has strongly addressed “the challenge of inclusion”, which
is at the root of the desired collective actions. And some leaders,
including those in the business sector, have begun to alert us to the
fact that it would be impossible to live in a world of 10-12 billion
people without questioning the fundamentals of business and economics.

To finish, let us identify the critical strategic dimensions of the
process towards spiritual economics and of the conditions we will all
need in order to reconcile spirituality with economics.

The first is to realize that many of the states of human welfare we
are all seeking belong to our non-material existence. And, that
attaining our own goals in life – material and non-material,
individual or collective – depend mainly on our process of ‘self
realization’. This is to say, nothing will change if we do not change
from within. Inner change is a the roots of all change. It goes
without saying that we will not be able to buy world peace in the
supermarkets. We will not be able to eliminate economic
discrimination just by pouring more money into the economy. A world
at peace and free of discrimination begins in our inner soul.

The second is that we should promote the humanization of economics and
of economists. Someone told me that the best definition of economics
is “What economists do”. If this is the case, let us start within us
first (I am an economist. And, by implication, one should not be
allowed to practice economics unless one is on the path of self
realization, at least in the arena of public policy at the national
and global levels). The prime step towards the humanization of
economics, on the other hand, is to move away from aggregated
categories of analysis that do not tell the real story. Economics
with a human face must be practiced now. But not only that – the
ultimate step would be to move from an economics with “human face” to
an economics with a “human soul”, so we understand and interact with
the true dimensions of human change and transformation. An economics
that is not just the residual of market transactions (where the
fittest is the only one who wins).

The third is that economics must be at the service of our societal
vision (also a global vision), at the service of what we want our
society to be(come), and not vice-versa. The material expression of
our vision should not be the result of economic and financial
transactions. It is our vision the one that must guide economic
thinking and procedures. And our spiritual dimension is always an
essential ingredient of this vision, as we are not ‘material beings’
having a spiritual experience but ‘spiritual beings’ having a material

Lets us bring the “being” into economics. It is only spiritual
economics and spiritual entrepreneurship that truly embody the being
of what humanity is all about.

As all fields of human existence, including science and religion, are
rapidly evolving towards finding and embracing the true nature of our
human existence – why shouldn’t economics do it too?

* The views expressed in this article are solely those of the author,
including errors and omissions and should not be attributed to the
World Bank or any of its Affiliates.

This article was originally published in the Spring|Summer 2001 issue of Kosmos Journal. To purchase this issue, please click here.