Sufficiency Thinking ch 3

3 The Sufficiency Economy Philosophy process Harald Bergsteiner, PhD and Priyanut Dharmapiya (Piboolsravut), PhD The essence of the Sufficiency Economy Philosophy (SEP) is that those people who strive to be virtuous and knowledgeable are more likely to make moderate, reasonable and prudent decisions that benefit themselves and their communities in a way that maximises and balances economic, social, environmental and cultural outcomes (Wibulswasdi, Piboolsravut & Pootrakool, 2010). Although the Sufficiency Economy Philosophy was evident throughout King Bhumibol Adulyadej’s reign, the concepts really caught public attention following his 1997 birthday speech—when the country was reeling under the Asian Financial Crisis. Even after Thailand had recovered from this shock, sufficiency thinking became wide- spread across many institutions: individuals, communities, government agencies, development organisations, schools and some businesses have since adopted and implemented KBA’s approach to sustainability in their activities. In this chapter, we explain the Sufficiency Economy Philosophy itself and its three key concepts: ‘sufficiency mindset’, ‘sufficiency’ and ‘suf- ficiency economy’; we explain how and why these concepts contribute to better and more sustainable outcomes; and, in a graphic model, we show how the various elements of the philosophy relate to each other. Later chapters will provide detailed evidence of how well the Sufficiency Economy Philosophy approach works in practice. We start by explaining 32

The Sufficiency Economy Philosophy process 33 the factors that enable these concepts to emerge, namely individuals’ and groups’ enduring virtues and attributes. WHO WE ARE: ENDURING VALUES, ATTRIBUTES AND THE VIRTUOUS PERSON Values and attributes describe who we are. Values can be positive (for example, honesty—a virtue) or negative (for example, greed—a vice). The Sufficiency Economy Philosophy is based on the idealistic notion that, in general, individuals, families, organisations and countries will enjoy more happiness and better outcomes when virtues prevail. The Sufficiency Economy Philosophy, and hence this book, emphasises virtues, fully realis- ing that few people ‘tick every box’, that virtuousness can grow, and that one would like the virtues to be enduring and universal. In other words, virtues ought not to be applied opportunistically, depending on the context. Note that the notion of enduring virtue does not preclude continuous personal change, such as becoming and remaining an expert. Many profes- sional associations require such continuous learning from their members. Furthermore, we deliberately avoid the word ‘moral’ because, although many virtues (for example, honesty, fairness, altruism) invoke morals, other virtues have nothing to do with morals (for example, inquisitive- ness, creativity, intelligence). There is another group of stable traits, such as one’s gender, height for age and being introverted or extroverted. These traits, which we refer to as attributes, are neither virtues nor vices; they may be more or less useful, depending on the situation. For example, tallness is good for basketball players, but can be life-threatening to air force jet pilots. How the virtues come about is not critical for the purposes of this book. They may be inherited, learned or come about through a sudden insight. The important thing is that they endure. Virtues include being altruistic, assertive, challenge-accepting, compassionate, creative, diligent, fair, honest, inquisitive, intelligent, loyal, open-minded, patient, persever- ant, tolerant and trustworthy, as well as displaying integrity and many other desirable qualities. At the group level, people may agree to share virtues. We call such shared virtues norms—or ethics, if the underlying values are morals— that may be informally understood or formalised. Virtuous people and organisations do virtuous things. For this they are admired and respected by those around them. However, virtues by themselves are not enough to produce sustainable outcomes; they need to be exercised in the presence of knowledge.

34 The Sufficiency Economy Philosophy WHAT WE KNOW: THE IMPORTANCE OF KNOWLEDGE While appropriate virtues are essential, by themselves they will not enable people to make informed and wise decisions: people need knowledge. Without either virtues or knowledge, decisions are likely to be unin- formed, misguided or even harmful to oneself and others. Distinguishing what we know (facts) from what ought to be (virtues) is the subject of much academic debate that essentially suggests both are necessary. Knowledge exists in various forms: explicit knowledge acquired through training, coaching, mentoring, contemplating or other learning processes; tacit (non-expressed) knowledge; and skills and life experience. As this implies, knowledge is gained in stages over a long period of time. Groups also gain knowledge. A group’s explicit knowledge exists in the form of in-house scientific knowledge and publications, as well as external sources such as printed matter, the internet and audio-visual media. Tacit group knowledge is derived through shared experience and exists in the form of organisational and national culture and norms, plus ‘local wisdom’. Knowledge is different from beliefs. Knowledge is based on facts, whereas beliefs are influenced by what we know, think we know or don’t know. To provide a simple example, at one time people believed that the world was flat. To believe otherwise was considered heresy. Today, flat- earth thinking would be considered ignorant. However, knowledge is rarely perfect, so those wishing to improve themselves need to make a critical assessment of the sources and reliability of so-called knowledge. Key traits necessary for making ‘wise’ decisions are being able to under- stand and reason. Reasoning helps people to identify entrenched belief systems, ideology and poor value systems that masquerade as knowledge. KBA therefore advised the Thai people to exercise mindfulness and examine decisions in terms of cause and effect. In other words, people should always give due consideration to whether anticipated or promised effects are likely to eventuate, or indeed have disadvantages. As a common saying goes, ‘when something sounds too good to be true, it probably is’. The unfulfilled promise of a previous Thai government to Thai farmers to buy all of their rice at highly inflated prices demon- strates this adage well. HOW WE DECIDE: WISE ATTITUDES MAKE A SUFFICIENCY MINDSET Enduring virtues and desirable attributes, in combination with con- sidered knowledge, provide fertile ground for wise attitudes to flower.

The Sufficiency Economy Philosophy process 35 Wisdom itself is an elusive concept and was the subject of a 2010 study. Twenty-seven experts agreed that ‘wisdom is a uniquely human but rare personal quality, which can be learned and measured, and increases with age through advanced cognitive and emotional development that is expe- rience driven’ (Jeste et al., 2010: 677). There was also strong consensus that wisdom differs from knowledge and intelligence. Wisdom is charac- terised by virtues such as compassion, empathy and altruism. Attitudes also differ fundamentally from virtues and attributes, because in certain circumstances attitudes can change in the blink of an eyelid (such as losing trust), whereas virtues are meant to be enduring. A positive example of attitude change comes from a farmer who learns of the limitations and dangers of monocultures and acquires knowledge about more sustainable forms of farming. Such attitudes can change quite dramatically, and gradually enable the farmer to make sounder and wiser decisions. Similarly, a greedy manufacturer who shamelessly exploits ­suppliers may eventually learn from highly successful manu­ facturers, such as BMW, that suppliers can be an invaluable resource and partner. Enlightened enterprises such as Marriott Hotels regard all stakeholders—employees, customers, suppliers, the community and even competitors—as potential resources. Extensive research shows that such wise attitudes, indirectly referred to in the Sufficiency Economy Philosophy as the sufficiency mindset, have been highly beneficial to the practitioners themselves and their multiple stakeholders (Avery & Bergsteiner, 2011a). The sufficiency mindset engenders wise decision-making that is char- acterised by moderation, reasonableness and prudence. As Chapter 2 shows, a complete absence of any sense of moderation, reason­ableness and prudence lay behind both the 1997 Asian Financial Crisis and the 2007–2008 GFC. Given the importance of moderation, rea- sonableness and prudence, we define each term below, but first we need to define the term ‘sufficiency’, because these three concepts are integral to the idea of sufficiency. Sufficiency The term ‘sufficiency’ evokes a state of being that is applicable to individu- als, families, organisations and nations, and tends to be most closely linked

36 The Sufficiency Economy Philosophy to a moderate attitude in all material things. However, as King Bhumibol said in his 1998 birthday speech to the nation, moderation applies to all aspects of life: Sufficiency is moderation. If one is moderate in one’s desires, one will have less craving. If one has less craving, one will take less advantage of others. If all nations hold this concept … without being extreme or insatiable in one’s desires, the world will be a happier place. Being moderate does not mean to be too strictly frugal; luxurious items are permissible, but one should not take advantage of others in the fulfilment of one’s desires. Moderation, in other words, living within one’s means, should dictate all actions. Act in moderation, speak in moderation; that is, be moderate in all activities. Sufficiency is therefore a specific manifestation of moderation in action—or, putting it another way, the material state of sufficiency (what one possesses) is the result of the mental state of moderation (what one desires). In short, according to KBA’s definition: Sufficiency describes a state of being that enables individuals, families, organisations and nations to enjoy, at a minimum, a comfortable ­existence and, if conditions permit, a reasonable degree of luxury that balances economic, social, environmental and cultural conditions. Achieving this kind of sufficiency requires us to develop wise attitudes. When these become entrenched, they can acquire the status of principles. This entails making virtuous and knowledgeable decisions with modera- tion, reasonableness and prudence, while being mindful of the challenges that internal and external influences pose. So let us now define these three wise attitudes. Wise attitude 1: Moderation A ‘moderation mindset’ is desperately needed, given the world’s severely stretched global resources, climate change, waste proliferation, defor- estation, biodiversity destruction and other calamities. An attitude of moderation (a state of mind) is a prerequisite for reaching a state of suffi- ciency (a state of affairs).

The Sufficiency Economy Philosophy process 37 A moderate mindset seeks to avoid extremes—balancing between punitive austerity and unaffordable extravagance, between self- deprivation and over-indulgence, between tradition and modernisa- tion, and between full self-sufficiency and dependency. There are, of course, no hard and fast rules about this; it is always a question of balancing needs with wants. For example, an individual’s dietary needs depend on the person’s physical and physiological characteristics. A diet that is adequate for a small woman with a slow metabolism, engaged in sedentary activities, would be a starvation diet for a large male, with a high metabolism, engaged in manual labour—different needs justify different wants. Similarly, at the organisational level, both not growing at all and growing too fast can make a firm vulnerable. There is nothing wrong with ambitious goals per se, but if the information to make optimal choices is not available and risks are no longer calculable, then more modest goals may be called for. Again, the specific circumstances will determine what is right. Insofar as immodest attitudes (for example, taking excessive risks by accepting ‘perilous equity’ or ‘perilous debt’) make us more vulnera- ble, being moderate makes us less vulnerable, and hence more resilient against further shocks. Therefore, moderation should be the preferred option. Of course, as our personal and collective means increase, our ability to satisfy our wants also increases. However, this should be governed by considering the impact of our behaviour on those around us and also on the environment. Some organisations paid the ultimate price for their lack of moder- ation—going out of business as a result of the GFC, an event that they themselves helped precipitate. Other corporations survived only because of taxpayer-funded government bailouts. Most sinister is when pure greed causes huge harm to innocent others. One example is inappropriate use of antibiotics—it can kill (WHO, 2015): Antibiotics are widely used in food-producing animals [to stimulate growth]. This use contributes to the emergence of antibiotic- resistant bacteria in food-producing animals … persons who consume these foods can develop antibiotic-resistant infections (CDC, 2015).

38 The Sufficiency Economy Philosophy Wise attitude 2: Reasonableness Underpinning the notion of reasonableness is the causality principle. In other words, our actions need to be examined in terms of the effects they produce. For example, drink-driving is an unreasonable thing to do since it endangers the life of others. However, legally limiting the amount of alcohol people can have in their blood while driving is reasonable because it has been shown to save lives. In each case, there is a cause and an effect (drink-driving, endangering lives versus limiting alcohol consumption, saving lives). Reasonableness has to do with the impact that decisions and actions have on others, that is, how valid and fair an action or a process is, or has been. In business, a so-called ‘reasonableness test’ exists. For example, a landlord terminating a lease because of a single minor contract infringement that could easily be fixed would generally be considered unreasonable. Here, a court would examine the likely reasons for both the landlord’s and the tenant’s actions, and would determine whether the landlord’s action was justifiable and reasonable in the circumstances. To be reasonable therefore also means to critically examine whether the reasons for decisions and actions are beneficial, justifiable and fair. Recent examples of gross unreasonableness include the huge bailouts by various governments around the world during the GFC, particularly in the case of banks that were categorised as ‘too big to fail’. In effect, negligent, predatory, unethical and in some cases criminal banks on the verge of collapse had to be rescued by governments with money obtained from the very people who had been damaged by those banks. This example also demonstrates a lack of integrity of monumental pro- portions in corporations and governments. In many parts of the world, the mantra of both is that ‘the markets will fix it’. Clearly, this view is either deluded or hypocritical, for if the corporations and the govern- ments had acted in accordance with what they professed to believe, the corporations should not have begged for money and the governments should not have given it. You might ask whether these bailouts were prudent.

The Sufficiency Economy Philosophy process 39 Wise attitude 3: Prudence In Wibulswasdi et al. (2010: C), KBA is quoted as saying: Sufficiency means moderation, reasonableness, and the need for self-immunity to gain sufficient protection from impacts arising from internal and external changes. To achieve this, the application of knowledge with due consideration and prudence is essential. In other words, to achieve immunity (the desired outcome) requires the application of prudence and considered knowledge (the required input mechanism). In King Bhumibol Adulyadej: A life’s work, Grossman and Faulder (2011: 269) paraphrase KBA as follows: A second principle was about prudence, working carefully, proceeding by stages, growing from an internal dynamic, achieving a level of competence and self-reliance before proceeding further, and taking care not to overreach one’s capabilities. All of these actions are designed to both manage risks carefully and minimise vulnerabilities. Prudence means to be mindful of, prepared for, and conduct oneself so as to be able to ward off foreseeable upheavals or damage to oneself. Individuals, families, organisations and governments can and should exercise prudence. If the consequences of possible failure are likely to be disastrous and irreparable, then perhaps one should not proceed with an action. If risks are identifiable, they should be managed, among other things, by having a Plan B. In the case of unforeseeable risks—that is, risks that any reasonable person could not have foreseen, such as an earth- quake in an area that had never experienced one before—there should be standard procedures for assessing and dealing with the unexpected. Risks can manifest themselves in many ways: wrong information, changing cir- cumstances, unrealistic projections and numerous other possibilities. Clearly, in the example of the banks mentioned above, managers had acted immoderately, imprudently and unreasonably. They plunged their organisation, employees and customers into dire straits by simply

40 The Sufficiency Economy Philosophy ignoring knowable and quantifiable risks, focusing instead on their own greed. These managers may well have known, and certainly hoped, that if the worst came to pass their governments would bail them out. In other words, immoderation combined with imprudence led to gross unreason- ableness. The managers themselves were never at risk, drawing massive salaries and bonuses until the last moment. Few managers went to jail, since it is their employer that gets fined under such circumstances, which hurts the shareholders. Is this prudent leadership? Is this a prudent and fair accountability system? Did the governments act prudently? Is it prudent of governments to allow this kind of situation to continue? As the above examples show, moderation, reasonableness and prudence are closely intertwined, reflecting the fact that all three are informed by virtues and knowledge. In most of our endeavours, we are probably well advised to practise all three. After all, since all three involve possessing certain virtues and knowledge, a lapse in one is likely to lead to a lapse in the other two. However, in some exceptional situations, prudence may reasonably have been stretched to the limit. For example, when Marco Polo, his father and his uncle set off in 1271 on their 24-year journey to China, few people at the time would have called this a prudent move. It may also not have been moderate, but it was certainly reasonable as it did not damage others. In some philosophies and religions, including in Buddhism and Christianity, acting moderately, reasonably and with prudence is referred to as the middle path or the middle way. Had this mindset prevailed in the decade leading up to the GFC in business, in government, in academe (especially in business schools) and in the media, then very likely the GFC would not have happened. HOW WE BEHAVE: ACTION PRINCIPLES The concepts of moderation, reasonableness and prudence are relatively abstract, which makes it challenging for some people to use them as a basis for making wise decisions. This is particularly so given that wisdom is a rare quality (Jeste et al., 2010). To provide more specific guidance to the Thai people, 23 work principles from KBA’s theory, specifically tailored to the needs of Thailand, were gradually identified. However, when generalised to a more global context, they are largely consistent with 23 sustainable leadership practices that demonstrably contribute to economic, environmental and social sustainability (Avery & Bergsteiner, 2011a). The latter are derived from research in 46 countries. We explain what sustainable leadership is, and how and why it works, in Chapter 14.

The Sufficiency Economy Philosophy process 41 Importantly, there is a high degree of overlap between the 23 SEP princ­ iples and the 23 sustainable leadership practices researched by the Institute for Sustainable Leadership (ISL). OUTPUTS AND OUTCOMES: THE SUFFICIENCY ECONOMY The sufficiency economy obviously embraces the sufficiency mindset and the sufficiency action principles, but it is more than that. The sufficiency economy is a set of national values, principles, systems and institutions that provide the economic, environmental, social and cultural frameworks and conditions that allow and ensure that ‘sufficiency’ is within reach of all. The Sufficiency Economy is charac- terised by self-reliance, resilience and immunity. To achieve a sufficiency economy, all actors of the economy—its citizens, organisations, institutions and the nation as a whole—need to improve their measurable outputs and achieve three somewhat abstract, and hence more difficult to measure, outcomes: self-reliance, resilience and immunity. Outputs are relatively concrete measurable sufficiency results that people want to achieve in the material, societal, environmental and cultural domains. For example, a company may want to increase its range of goods and/or services while decreasing its carbon footprint, or a farmer may wish to raise yield per hectare and decrease debt. These are relatively simple outputs to measure. By contrast, outcomes—self-reliance, resilience and immunity—are more difficult to measure. Outcomes are less tangible, have to do with a remote, shared vision and long-term goals, and tend to be idealistic in so far as they are important aspects of long-term sustainability.

42 The Sufficiency Economy Philosophy Indeed, until things go seriously wrong, there is no cause or opportunity to test an organisation’s resilience and immunity. After all, you cannot measure what has not happened yet. Perhaps this is one reason why long-term outcomes are often neglected. Countries and companies that suffered badly during the Asian Financial Crisis and the GFC learned the hard way that self-reliance, resilience and immunity are essential to long- term sustainability. Unlike the sufficiency mindset inputs (moderation, reasonableness, prudence), where some latitude in one or other of these elements may be tolerable in certain circumstances, when it comes to the Sufficiency Economy Philosophy outcomes we can think of no condition where neglecting any one of these would be tolerable. The classic three Borromean rings graphically illustrate this relationship (Figure 3.1). As the figure shows, the three rings taken together are inseparable: remove any one ring and the other two fall apart. Because of this property, the rings have been used in many fields as a symbol of strength in unity. To achieve the Sufficiency Economy Philosophy outcomes is challeng- ing, because the required attitudes, decisions and actions do not emerge in a vacuum, but rather occur in highly complex and often conflicting Figure 3.1: Self-reliance, resilience and immunity shown as Borromean rings Self-reliance Resilience Immunity Source: Adapted from: Piboolsravut (2004); Wibulswasdi, Piboolsravut & Pootrakool (2010).

The Sufficiency Economy Philosophy process 43 conditions. That is, the various actors referred to above are subject to a bewildering array of internal and external influences that can obscure or distort knowledge, particularly when making decisions. At the personal level, influences include a person’s situation (for example, hierarchical status, peer relationships with others), age, personal goals, motivation, self-esteem and health. At a group level, internal influ- ences can include the group’s structure, norms, traditions and culture. For an enterprise, internal influences include the business model, vision, strategy, work practices and leader-relationships. External influences on individuals and groups include the availability of tangible and intangible resources, laws and rules (many with a moral component, some simply practical), market conditions, local knowledge and the prevailing culture and leadership. As KBA pointed out, the things that confound knowledge, and an appreciation of the impact of internal and external influences, require a great deal of mindfulness, particularly in relation to causes and effects. Next, we explain what is meant by self-reliance, resilience and immunity. Self-reliance KBA made clear in his 1998 birthday speech (Grossman & Faulder, 2011: 273, 277) that self-reliance does not mean self-­sufficiency and it is not anti-globalisation: full sufficiency is impossible. If a family or even a village wants to employ a full Sufficiency Economy, it would be like returning to the Stone Age … as we are in the globalisation era, we also have to conform to the world … Self-reliance essentially means not to be overly dependent on others. As several chapters in this book show, self-reliance might be improved in small farming communities through health centres and social safety nets; cooperative forms of production and water management and community-b­ ased savings groups; and mutual support and sharing. Once cooperative behaviour has become entrenched inside the group, inter­ actions and exchanges outside the community can be embarked upon to achieve self-reliance on a wider scale. Using an international example, at a national level Germany has the goal of increasing renewable sources of

44 The Sufficiency Economy Philosophy electricity consumption from 20.3 per cent in 2011 to over 80 per cent by 2050. This is to reduce Germany’s dependence on foreign oil and gas. Already, over 150 ‘bioenergy villages’ produce all of the electricity and most of the heat they consume. Their renewable energy systems are also driving economic growth (Dey, 2015) and self-reliance. Resilience Sometimes events are so severe that even the best-prepared people and organisations suffer setbacks. This demands that individuals, families, organisations and nations possess resilience. Resilience refers to the ability to bounce back from shocks, be they soaring fuel prices, natural disasters, ill health in families, water short- ages or bad harvests. At the national level, resilience means being able to cope with the vagaries of the global economy and the negative effects of globalisation. Another example from Germany occurred in 2008, when BMW needed to reduce its staff costs by around 20 per cent because car orders had dropped dramatically as a result of the GFC. What to do? Sack thousands of people? Put people on a four-day week and reduce wages accordingly? This was not the BMW way. Instead BMW (and other German car manu­facturers) sat down with workers’ representatives and the government to nut out a very clever plan. Employees worked a four-day week and received pay for these four days from BMW. The government paid workers 80 per cent of the fifth day’s wages. In other words, the employees gained one day off a week but lost 20 per cent of one day’s pay only—equal to a 4 per cent cut in the weekly wage. A win–win–win: the company was happy, the employees were happy with more time off, and the government was happy because it had pre- vented many people from becoming unemployed. As soon as things picked up, workers went back to a five-day week, enabling BMW to achieve its best result ever in 2010, a result on which it has continued to improve since. Immunity In Thailand, this is referred to as self-immunity; however, because of the risk of confusing this with auto-immunity (a process of self-destruction), the ‘self ’ has been dropped for the purposes of this book. Immunity means more than resilience.

The Sufficiency Economy Philosophy process 45 Immunity arises when an individual, organisation and even a country has been armed with the economic, social, environmental and cultural defences needed to resist and ward off internal and external threats. Immunity is well illustrated by the case of Fongkam Lapinta, the founder of Sa Paper Preservation House, a small firm reported on in the Thailand Human Development Report (2007: 52, 55): She [Fongkam] started making sa paper on a small scale with attention focused on low cost … As the business took off, banks came to offer her loans. Fongkam refused. Through to the present, she has never operated on credit, although she uses bank services for transactions. She always used income first to pay her employees and suppliers. If there was any surplus, it was stored in a fund to guard against risk. Only when funds accumulated beyond a cushion did she invest in expansion. The pace of growth was determined by the availability of raw materials, and the capacity of her own accumulated capital … She has built resilience into the business by careful expansion. The 1997 crisis created no problem since the business had no debt. This is not just resilience—it is immunity! As the above example shows, to achieve immunity requires prudence on the input side and self-reliance on the outcomes side. SUFFICIENCY CONCEPTS In pursuing a sufficiency economy, the ultimate question is whether cause and effect are in harmony—that is, whether wise attitudes (moderation, reasonableness, prudence) are likely to achieve desired outcomes (self-re- liance, resilience, immunity). If so, then we have a state of sufficiency. In other words, sufficiency is about the state that people seek, whereas the sufficiency economy refers to the broader environment that enables this to occur. Above we introduced several sufficiency concepts. How do these concepts relate to each other in a temporal (time) sense? At the begin- ning stands the Sufficiency Economy Philosophy. Those who grasp and embrace this philosophy can be said to possess the sufficiency mindset. When this mindset actually governs people’s reasoning in how to behave,

46 The Sufficiency Economy Philosophy they display sufficiency thinking. The prevalence and institutionalisation of this thinking constitutes the sufficiency economy, the ultimate outcome of which is sufficiency in the broadest possible sense. So far, we have outlined the key concepts of the Sufficiency Economy Philosophy, provided examples to flesh out their meaning and touched on how they relate to other sustainability frameworks. Next we introduce the Sufficiency Economy Philosophy Model to show more clearly how these various concepts relate to, and build on, each other. GRAPHIC MODEL OF THE SUFFICIENCY ECONOMY PHILOSOPHY While KBA’s Sufficiency Economy Philosophy constitutes a compelling intellectual framework that intuitively captures the imagination, its com- plexity, theoretical breadth and structural logic have, up to this point, not been comprehended adequately. To better appreciate the efficacy of the philosophy, we express it as a model that serves four key objectives. The model provides: • a means to effectively display the complexity, logic and inte­ grative nature of the Sufficiency Economy Philosophy • a research framework that ensures that researchers’ endeavours are coordinated and complementary in a disciplined way • a teaching tool that provides an overall framework, while also offering opportunities for customisation, and • a structured, step-by-step process to guide change and help people adopt the philosophy. To strike a balance between making the model neither overly complex nor overly simplistic, it is useful to put related concepts into groups. Classification is powerful because, instead of dealing with many individ- ual variables, related variables are clustered into categories. For example, moderation, reasonableness and prudence belong to the category of ‘wise attitudes’. Models rely on categorisation and set theory, where the main com- ponents of the model—in this case virtues, knowledge, attitudes, work principles, outputs and outcomes—make up a set. A set is a group of elements that share certain well-defined characteristics, which are clearly different from the elements of other sets. Some of the sets in our model are very large (for example, virtues) and some are quite bounded (for example, wise attitudes = moderation, reasonableness, prudence). As new

The Sufficiency Economy Philosophy process 47 elements are identified, they are simply assigned to a relevant component of the model. Of course, new elements need to be closely examined to ensure that they are assigned to the proper set in the model. This will become clearer as we develop the model further. Basic model In the following, we build up a very simple graphic model step by step to help readers unfamiliar with generating and reading graphic models (Figure 3.2). According to the model, a virtuous person uses knowledge to make wise decisions and acts accordingly to achieve envisioned results. For example, a compassionate society (Step 1 = virtues), which is aware that there are needy people (Step 2 = knowledge), may consider it wise to help these people (Step 3 = attitudes) by financially supporting charit­able causes (Step 4 = actions), thereby increasing social cohesion (Step 5 = results/vision). Following the model, someone lacking in compassion has little moti- vation to help the needy. Likewise, if someone is unaware that there are needy people, they have no reason to act. In other words, both virtues and knowledge are necessary before wise attitudes can emerge. These attitudes then give rise to wise decisions and behaviour that ultimately result in beneficial outputs and outcomes for individuals, families, communities and whole nations. Figure 3.2: Simplified Sufficiency Economy Philosophy process model with create that to Results predispose achieve and a Virtues Knowledge vision Wise Decisions/ e.g. e.g. there attitudes actions e.g. compassion are needy increase e.g. one e.g. social people should support cohesion help the charitable Step 2 needy causes Step 5 Step 3 Step 4 Step 1

48 The Sufficiency Economy Philosophy Below, we develop this simple model further to include other aspects of the Sufficiency Economy Philosophy. The final model will be fairly complex—after all, it needs to encapsulate many important variables identified by KBA and other researchers. However, we will build up the model step by step so that even those who are unfamiliar with reading models can understand the final result, and use it for research, educa- tional and change-management purposes. We show the rest of the model (i.e. the later stages) in grey tone to provide some idea where this model is heading. Adding details to the Sufficiency Economy Philosophy model For simplicity’s sake, we limit the model to the broad categories of vari- ables shown in Figure 3.2, having already identified the elements of each category above. Stage 1 of model: Virtues and attributes As Figure 3.3 shows, Stage 1 shows ‘who we are’—that is, our virtues and attributes. However, who we are has both an individual and a group dimension to it. Therefore, the first step is to generate both a personal and a group domain on the model. This reflects research evidence that teamwork and collaboration aid performance (Delarue et al., 2007). For Figure 3.3: Stage 1 of Sufficiency Economy Philosophy model: Virtues and attributes P E R S O NA L W I S D O M – M I D D L E PAT H WHO WE ARE Enduring virtues Attributes Shared virtues (ethics) Group attributes G E N E R A L W I S D O M – M I D D L E PAT H LEGEND Inputs Outputs/outcomes Influences Process direction Influence direction Feedback loop

The Sufficiency Economy Philosophy process 49 example, in the case of the German bioenergy villages, the key success factors were the presence of local champions; a strong sense of commu- nity spirit, trust and engagement; clear and frequent communication; a comprehensive and reliable feasibility study; and efficient, determined and transparent planning and implementation. Similarly, Thailand’s Royal Initiative Discovery Foundation implements its projects only where local communities are motivated to participate by investing their own time and effort (Diskul, 2013). Figure 3.3 thus shows the enduring virtues and attributes of individu- als in the top box and the shared virtues (i.e. ethics) and group attributes at the bottom. The vertical arrow linking the two boxes shows that individuals’ virtues have an impact on the group, and vice versa (see Bergsteiner, 2012). Starting the model with people’s virtues is no accident. It reflects what sustainable organisations first look at when they choose new employees. Only when they are satisfied that the person is a good fit on values do they look at knowledge and skills. Improving people’s skills is something sustainable organisations do all the time (Avery, 2005), but changing a person’s value system is extremely challenging, and is not something with which organisations generally want to burden themselves. Figure 3.4: Stage 2 of Sufficiency Economy Philosophy model: Adding knowledge P E R S O NA L W I S D O M – M I D D L E PAT H Enduring Personal virtues knowledge Attributes WHO WE ARE WHAT WE KNOW Shared Shared virtues knowledge (ethics) Group attributes G E N E R A L W I S D O M – M I D D L E PAT H LEGEND Inputs Outputs/outcomes Influences Process direction Influence direction Feedback loop

50 The Sufficiency Economy Philosophy Stage 2 of model: Knowledge As noted above, to be able to make sound and wise decisions, people require continually updated knowledge. Knowledge is thus added to the model (Figure 3.4), consisting of an individual’s personal knowledge and knowledge shared by groups. The latter demands the presence of a key virtue often missing in groups, namely to share information and knowl- edge. In dysfunctional organisations, so-called gatekeepers often damage their organisations by hoarding information. Stage 3 of model: Wise attitudes and a sufficiency mindset When virtues and knowledge are present, the three wise attitudes (moder- ation, reasonableness and prudence) that KBA identified as being crucial to achieving a sufficiency mindset, arise, as shown in Figure 3.5. Notably, at this stage we no longer differentiate between the individual and the group domain since the objective would be that the attitudes of individu- als and of groups would align. Stage 3 of model continued: Internal and external influences It is quite obvious that how we decide is not only a function of who we are and what we know, but also of internal and external influences. We show these influences above and below the ‘sufficiency mindset’ box in the Figure 3.5: Stage 3 of Sufficiency Economy Philosophy model: Adding wise attitudes and influences P E R S O NA L W I S D O M – M I D D L E PAT H EnduringWHO WE ARE Personal Internal virtues WHAT WE KNOW knowledge influences HOW WE DECIDE Attributes Shared Sufficiency knowledge mindset Shared virtues moderation (ethics) reasonable- Group attributes ness prudence External influences G E N E R A L W I S D O M – M I D D L E PAT H LEGEND Inputs Outputs/outcomes Influences Process direction Influence direction Feedback loop

The Sufficiency Economy Philosophy process 51 centre of the model. The arrows indicate that the entire process is subject to these influences, but the main impact occurs when making decisions. Stage 4 of model: Actions and behaviours Now that people have committed to moderate, reasonable and prudent decisions—while being mindful of many other variables—the next step is to embark on specific actions and behaviours that reflect these wise attitudes. Here we add a set of sustainable work principles such as the Sufficiency Economy Philosophy’s 23 work principles and Avery and Bergsteiner’s (2011a) 23 sustainable leadership practices (Figure 3.6). Stage 4 of the model concludes the input phase of the Sufficiency Economy Philosophy. Together, the first four stages of the model consti- tute what KBA and others refer to as the middle path. This reflects wise actions and behaviours that are the result of wise attitudes and decisions made by virtuous and knowledgeable people. The middle path itself is a practical manifestation of wisdom at the personal and group levels. Figure 3.6: Stage 4 of Sufficiency Economy Philosophy model: Adding work principles and practices P E R S O NA L W I S D O M – M I D D L E PAT H EnduringWHO WE AREPersonal Internal SEP’s 23 virtues WHAT WE KNOWknowledge influences ‘work HOW WE DECIDE Attributes HOW WE BEHAVESharedSufficiencyprinciples’ knowledge mindset Shared ISL’s 23 virtues moderation ‘sustainable (ethics) reasonable- leadership Group practices’ attributes ness prudence External influences G E N E R A L W I S D O M – M I D D L E PAT H LEGEND Inputs Outputs/outcomes Influences Process direction Influence direction Feedback loop Stage 5 of model: Outputs and outcomes The final two stages of the model are jointly highlighted as Stage 5 in Figure 3.7. These two stages contain the outputs and outcomes. Achieving a shared vision is not the end of a linear process but is part of a cycle. Here, achieving the envisioned outcomes—even if only in

52 The Sufficiency Economy Philosophy Figure 3.7: The Sufficiency Economy Philosophy model P E R S O NA L W I S D O M – M I D D L E PAT H EnduringWHO WE AREPersonalInternal SEP’s 23 Sufficiency WELL-BEING virtues WHAT WE KNOWknowledgeinfluences‘work balance in the SUSTAINABILITY HOW WE DECIDE Attributes HOW WE BEHAVESharedSufficiencyprinciples’economic, • Self-reliance MEASURABLE OUTPUTSknowledgemindsetsocietal, • Immunity Shared ENVISAGED OUTCOMESISL’s 23environmental• Resilience virtues moderation ‘sustainable and cultural (ethics) reasonable- leadership domains Group practices’ attributes ness prudence External influences G E N E R A L W I S D O M – M I D D L E PAT H LEGEND Inputs Outputs/outcomes Influences Process direction Influence direction Feedback loop part—affects people’s knowledge, attitudes and behaviours. Over the long term, people who have experienced the benefits of the middle path first- hand may adopt certain virtues that they previously treated with suspicion or even rejected as unrealistic. This transformation process, illustrated in Chapter 7, involves three stages: compliance, comprehension and inspiration. CONCLUSION: A VIRTUOUS CYCLE In short, as the complete model in Figure 3.7 shows, the Sufficiency Economy Philosophy developed by King Bhumibol Adulyadej of Thailand constitutes a cyclical process. In this process, the combination of: • people’s enduring virtues and attributes with true knowledge engender … • wise attitudes in a sufficiency mindset … (moderation, reason- ableness, prudence) that predispose people to engage in … • wise actions and behaviours (the middle path), thereby facilitat­ ing … • balanced economic, societal, environmental and cultural outputs (sufficiency), so ultimately, delivering … • a range of sustainable outcomes (chiefly self-reliance, resilience, immunity) at the individual, family, group and national levels. Now that we have constructed a ‘sufficiency thinking’ framework, the followi­ng chapters discuss its application in action.