What we can all learn from the ‘Philosophy of the Sufficiency Economy’.
The theory of Development propounded by King Bhumibol Adulyadej of Thailand termed The Philosophy of the Sufficiency Economy and its proposition that it can enhance a balanced development in societies — either for individuals, firms/corporates, or the nation at large has useful principles we can all learn from, either as individuals, households, firms, and the broader society at large.
King Bhumibol predicated his theory on three key principles,
- Moderation — living within one’s means and avoiding debt
- Reasonableness — actions and choices must be ethical, fair, legal, and conform with societal morals and values, and
- Self-immunity — developing capacities to be resilient.
King Bhumibol also provided three behavioral conditions that must accompany these principles; first is the accumulation of knowledge upon which economic choices, plans, and policies should be based, second is is making Ethics and Virtues compliant choices and actions. Lastly is laying a solid foundation upon which continuous progress and resilience can be built.
The following are key lessons I inferred for individuals, organizations, and governments:
For individuals, the three fundamental principles of King Bhumibol’s Philosophy emphasizes the need for self-awareness and creating an environment for self-sustenance by avoiding uncontrolled appetite for unnecessary luxuries (financial discipline), acceptance, and respect for social values and the rule of law, as well as building a savings culture that can initiate the escape from financial inadequacies and debt.
For organizations, the theory reiterates the importance of solid organizational culture, good business ethics, and social responsibility. It also supports the need for every firm to invest in research and development, engages in Business Risk Profiling/Management, and develop a business recovery strategy to build resilience against shocks and the dynamics of the business cycle. In addition, the theory backs the importance of integrating sustainability in Business Continuity Planning to build resilience.
For governments, especially in resource-cursed nations that focus mainly on their resource wealth at the expense of other growth sectors, the theory holds the key to beating the resource curse. Resource-wealthy societies are often characterized by poor governance, deep-rooted corruption, internal conflict for resource control, unmotivated creative class, and citizen’s pursuit for quick wealth. King Bhumibol’s theory brings key lessons that can be learned to avert these tendencies.
First is building a moral and value-laden society where values like honesty, patience, perseverance, respect, work, and contentment are held strongly. Such societies will have a pool of citizens giving to public value where the consequences of all actions and choices are considered before decision making, i.e. reasonableness. To achieve this, Governments must create structures and standards to uphold morals, virtues, and justice and act as the monitor and influencer that will reenact the spirit of a virtue economy every time it is wearing out. Taking this lesson from the theory will translate to building a formidable human capital that can warehouse both the character and the know-how with which to foster growth and development, and also retain the knowledge locally across all strata of the society.
Secondly, with a close tie with the first, it is important that every growth-seeking society avoid unsustainable appetite for consumption — consuming more than the ability to earn or produce. Operating at a point where demand is matched with the ability to produce and production normalized around consumption will help a nation’s import-export balance, local economic value retention, strengthen its currency’s stand globally and support its economy’s stability through the stages of growth.
Apart from its economic stability importance, the principle of moderation is also a necessary ingredient to combating corruption and crimes (fraud, stealing, etc). The principle will correct the get-rich syndrome of the youth and set a process to address the ill-motivation of the creative class often arising from the prevalence of corruption that exacerbates the expectations of free money.
Lastly, the theory admonishes that society builds resilience against shocks and unintended consequences of economic actions. Growing savings, for example, is a key determinant of capital formation, this assertion is also supported by many other economic development theories like the Neoclassical growth theory, etc. Also, practicing good public financial management systems and processes will help the government expand its fiscal space to respond to shocks and to maintain a sustainable debt threshold. The theory also aligns with the importance of climate-smart and environmentally friendly development practices as a way of building resilience through the instrumentality of the government.
Conclusively, self-sufficiency, either for individuals, organizations, or a government requires the three principles of moderation, reasonableness, and self-immunity for it to be attained and sustained - King Bhumibol Adulyadej’s Philosophy comes quite handy here, any individual or society seeking sufficiency should look at these principles.
To read more on the philosophy, visit https://www.un-ilibrary.org/content/journals/24119873/17/1/5/read, or http://thaiembassy.se/en/monarchy/philosophy-of-sufficiency-economy/
