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Maybe this article will be useful: Detachment and Compassion in Early Buddhism
Viraaga literally means the absence of raaga: the absence of lust, desire, and craving for existence. Hence, it denotes indifference or non-attachment to the usual objects of raaga, such as material goods or sense pleasures. Non-attachment is an important term here if the Pali is to be meaningful to speakers of English. It is far more appropriate than "detachment" because of the negative connotations "detachment" possesses in English.
The word which Thanissaro Bhikkhu translated as "dispassion", e.g. starting this sutta, is virāgā.
And,
In fact, at least three strands of meaning in the term "compassion" can be detected in the texts: a prerequisite for a just and harmonious society; an essential attitude for progress along the path towards wisdom; and the liberative action within society of those who have become enlightened or who are sincerely following the path towards it. All these strands need to be looked at if the term is to be understood and if those who accuse Buddhist compassion of being too passive are to be answered correctly.
IMO a simple analogy might be that a doctor doesn't need to be ill in order to help their patients -- it's better if they're not.
I also recommend this article on the Brahmaviharas in general (including compassion and equanimity): The Four Sublime States by Nyanaponika Thera.
There's also for example this essay, Toward a Threshold of Understanding, which says that it's a mistake to see Buddhism as "indifference" toward the world:
he Pontiff describes Nibbana as "a state of perfect indifference with regard to the world," adding that in Buddhism salvation means "above all, to free oneself from evil by becoming indifferent to the world, which is the source of evil" (p.86). By such statements he represents Buddhism to his readers as a quietistic doctrine of withdrawal which can address the momentous problems that face humanity today only by politely turning its back on them. This is hardly a satisfactory depiction of Early Buddhism, in which transcendence of the world is stressed, let alone of Mahayana Buddhism, in which the bodhisattva's compassionate activity on behalf of the world becomes the guiding ideal.
The Pali word that the Pope interprets as "indifference" is presumably upekkha. The real meaning of this word is equanimity, not indifference in the sense of unconcern for others. As a spiritual virtue, upekkha means equanimity in the face of the fluctuations of worldly fortune. It is evenness of mind, unshakeable freedom of mind, a state of inner equipoise that cannot be upset by gain and loss, honor and dishonor, praise and blame, pleasure and pain. Upekkha is freedom from all points of self-reference; it is indifference only to the demands of the ego-self with its craving for pleasure and position, not to the well-being of one's fellow human beings. True equanimity is the pinnacle of the four social attitudes that the Buddhist texts call the "divine abodes": boundless loving-kindness, compassion, altruistic joy, and equanimity. The last does not override and negate the preceding three, but perfects and consummates them.
If Buddhism in practice has not always lived up to the high ideals posited by the original Teaching, this is to be understood as a result of the downward gravitational pull of human nature, not as a consequence of any emphasis on apathy and indifference in the pristine Dhamma. The Buddhist texts provide ample evidence that the attainment of Nibbana does not issue in a stolid indifference to the world. The Buddha himself, the ideal model for his followers, led an active life of 45 years after his enlightenment dedicated to the uplift of humanity. Throughout Buddhist history, the great spiritual masters of the Dhamma have emulated the Awakened One's example, heeding his injunction to wander forth "for the welfare and happiness of many, out of compassion for the world, for the good, welfare, and happiness of devas and humans."
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Passion here means craving, lust etc. It has nothing to do with compassion or kindness.
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Both dispassion and compassion, from a Theravadin Buddhist point of view, must be understood in terms of kusala (wholesome) sankhara, akusala (unwholesome) sankhara, and kriya (functional) sankhara.
According to the Vissuddhimagga (Path of purification), we overcome akusala sankhara(s) only through Vipassana (insight meditation, mindfulness meditation) which is practiced in a state of upacara-samadhi (neighborhood-samadhi). Upacara-samadhi is required because it engages the kriya sankhara(s) that make us intelligent and thereby capable of psychological insight into akusala sankhara(s).
The nature of akusala sankhara is mostly complex and subtle. This is especially true of the relationship between upekkha (equanimity) and karuna (compassion) or metta (lovingkindness). A superficial view of the Buddhist path is to view it as a way to reduce personal suffering (or psychotherapy). But traditional Buddhism was never meant to be a form of therapy. Traditional Buddhism is a path to Nibbana (Enlightenment), which is a lot of hard work. Emotional distress or the lack thereof is a poor indication of either kusala sankhara or akusala sankhara. For example, indifference to the suffering of others is a form of akusala sankhara, even though it is not painful, while finding the suffering of others to be emotionally distressing is a form of kusala sankhara, even though it is painful. There is nothing wrong with using meditation as a form of therapy, but Buddhist psychology is not about feeling better (which is the purpose of psychotherapy). Dispassion (upekkha) is best viewed as a necessary condition for upacara-samadhi rather than as a way of life. (Hence, if you happen to be upset about the suffering of a friend, you let it pass before sitting down to meditate.) Upekkha as a way of life does not deal with akusala-sankhara and results in no progress on the path to Nibbana. Upekkha as a way of life is a fool’s paradise.
Question #1: So, am I not killing my own profit of dispassion by compassion? Answer #1: Being dispassionate about compassion is akusala sankhara and therefore a loss rather than profit.
Question #2: How can I remain compassionate if Dhamma makes me dispassionate? Answer #2: Real Dhamma does not make you dispassionate about metta or karuna. Indeed, the practice of the Brahma-Vihara makes a monk or nun more passionate. Your understanding of the Buddha-Dhamma is false.
Question #3: Or how can I remain dispassionate if Buddha asks me to remain compassionate? Answer #3: You cannot. There is no progress on the path to Nibbana by practicing dispassion. Being dispassionate is not a substitute for psychological insight into one’s own akusala sankhara(s).
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By tending to your own renunciation, you may become dispassionate (which is a way to deal with your own suffering), but by cultivating compassion, you can create the balance needed in dealing with others. Renunciation and equanimity is how you deal with your own suffering. Meanwhile, compassion is how you deal with others' suffering.
Bhikkhu Bodhi wrote in "The Balanced Way":
Like a bird in flight borne by its two wings, the practice of Dhamma is sustained by two contrasting qualities whose balanced development is essential to straight and steady progress. These two qualities are renunciation and compassion. As a doctrine of renunciation the Dhamma points out that the path to liberation is a personal course of training that centers on the gradual control and mastery of desire, the root cause of suffering. As a teaching of compassion the Dhamma bids us to avoid harming others, to act for their welfare, and to help realize the Buddha's own great resolve to offer the world the way to the Deathless.
Considered in isolation, renunciation and compassion have inverse logics that at times seem to point us in opposite directions. The one steers us to greater solitude aimed at personal purification, the other to increased involvement with others issuing in beneficent action. Yet, despite their differences, renunciation and compassion nurture each other in dynamic interplay throughout the practice of the path, from its elementary steps of moral discipline to its culmination in liberating wisdom. The synthesis of the two, their balanced fusion, is expressed most perfectly in the figure of the Fully Enlightened One, who is at once the embodiment of complete renunciation and of all-embracing compassion.
Both renunciation and compassion share a common root in the encounter with suffering. The one represents our response to suffering confronted in our own individual experience, the other our response to suffering witnessed in the lives of others. Our spontaneous reactions, however, are only the seeds of these higher qualities, not their substance. To acquire the capacity to sustain our practice of Dhamma, renunciation and compassion must be methodically cultivated, and this requires an ongoing process of reflection which transmutes our initial stirrings into full-fledged spiritual virtues.