The main features of SEP Following this definition of SEP, the paper will now draw attention to the six main features of the concept. First feature of SEP: moderation within reason SEP urges people to be moderate. Moderation in the sense of not too much or not too little is an Eastern concept, and may seem to contradict the notion found in traditional economic theory of maximizing behavior. However, we should note that moderation is a relative concept, one that relates to one’s means. Living with limited means -- individually, locally and globally -- one should consider exercising moderation in order to protect longer-term interests. As His Majesty the King has stated: “Sufficiency is moderation … Being moderate does not mean being too strictly frugal; consumption of luxurious items is permissible …. but should be moderate according to one’s means” (Royal Speech, given at Dusit Palace, 4 December 1998) Moderation in SEP is also concerned with longerterm and dynamic constraints on means. When they expand their means, individuals can raise levels of consumption. Effectively, such an expansion lowers the constraints that counsel moderation in consumption. It suggests the need to continuously improve on one’s capacity to act.
It may be useful to think of moderation in terms of the economics concept of “bounded rationality” or “satisficing”. For individuals faced with incomplete information and, therefore, constraints on abilities to make optimal choices, aiming for moderate goals emerges as a rational, risk-reducing strategy. Second feature of SEP: emphasis on self-immunity and risk management SEP recognizes that the circumstances that influence our lives are dynamic, so it advocates hedging against uncertainties so as to have good risk management. This advice applies to individuals, organizations and the nation. The emphasis on risk management lends Sufficiency Economy an element of universality and contemporary salience, given the importance of risk management in today’s turbulent times as well as in the business and economics literatures. As our discussion suggests, we believe that the three core principles of Sufficiency Economy conform to neoclassical economic thinking, especially if we assume a world of prudent actors who are risk-averse and far-sighted.