Kautilya on People-Centric, Proactive and Pragmatic Approach to Prosperity and Protection

Kautilya, popularly known as Chanakya (son of Chanak), was an ethical, wise, foresighted, far-sighted and action oriented thinker. He was a visionary as well as a practical intellectual. He believed that poverty was a living death and sovereignty was essential to prosperity. He wrote the Arthashastra to provide human security, that is, freedom from wants and freedom from fear to every citizen.

Kautilya, popularly known as Chanakya (son of Chanak), was an ethical, wise, foresighted, far-sighted and action oriented thinker. He was a visionary as well as a practical intellectual. He believed that poverty was a living death and sovereignty was essential to prosperity. He wrote the Arthashastra to provide human security, that is, freedom from wants and freedom from fear to every citizen.


The Arthashastra has 150 chapters that cover a wide range of topics related to (i) economic principles, formulation of ethical and efficient policies and devising an appropriate organizational structure (Arthaniti), (ii) formulation of ethical and efficient laws to facilitate commerce, protect consumers against fraud, and monopolies and ensure safety (Dandaniti) and (iii) providing protection against foreign aggression (Videshniti). He conceptualized the whole system with its various inter-dependent elements along with micro details of each element. The Arthashastra is not just an inquiry into the nature and causes of wealth of nations but also a manual on how to create and preserve wealth. Incidentally, Adam Smith did not write anything original. He merely collected ideas Balbir Singh Sihag, Ph.D. (MIT) of other intellectuals and showed reluctance in acknowledging this fact. It is possible that he had access to Kautilya’s ideas since some of the lines in his The Wealth of Nations are very similar to those in the Arthashastra.

Kautilya believed that only an ethical ruler could follow a people centric approach and enlightened self-interest was just sugar-coated self-interest. This is discussed in the next Section. Kautilya has been the only economist who identified the sources of systemic risk and discussed preventive and remedial measures to deal with it. He argued that, only a foresighted decision maker could adopt a proactive approach to prevent calamities and foreign aggression. This is presented in Section 2. On the other hand, a ruler must follow a pragmatic approach in dealing with other countries. Section 3 contains this discussion. In other words, his approach was ethics-based for the domestic economy but utilitarian in dealing with foreign affairs. He was a sophisticated intellectual and one has to read the whole of Arthashastra to understand and appreciate his deep insights. Unfortunately, many researchers read a page or two of the Arthashastra and consider themselves as experts and start blatantly misrepresenting it.

1 Kautilya on People-Centric not Politician-Centric Approach
Definition of a People-Centric Approach: According to Kautilya, a king should serve his royal public like a loyal servant. He (p 149) wrote, “In the happiness of his subjects lies his happiness; in their welfare his welfare. He shall not consider as good only that which pleases him but treat as beneficial to him whatever pleases his subjects (1.19).” A king should take care of his subjects like a father takes care of his children. He (p 128) wrote, “Whenever danger threatens, the king shall protect all those afflicted like a father [protects his children] (4.3).” He (p 180) added, “He shall, however, treat leniently, like a father [would treat his son], those whose exemptions have ceased to be effective (2.1).” Kautilya (p 128) believed, “It is the duty of the king to protect the people from all calamities (4.3).”

Welfare Programmes: Kautilya (p 182) suggested, “King shall maintain, at state expense, children, the old, the destitute, those suffering from adversity, childless women and the children of the destitute women (2.1).” He (p 293) added, “If a government servant dies while on duty, his sons and wives shall be entitled to his salary and food allowance. Minor children and old or sick relatives shall be suitably assisted. On occasions such as funerals, births or illnesses, the families of the deceased government servants shall be given presents of money and shown honor as a mark of gratitude to one who died in the king’s service (5.3).” He (p 385) stated, “The judges themselves shall take charge of the affairs of gods, Brahmins, ascetics, women, minors, old people, the sick and those that are helpless [e.g., orphans], [even] when they do not approach the court. No suit of theirs shall be dismissed for want of jurisdiction, passage of time or adverse possession (3.2).”

Two remarks are in order. First, Kautilya did not want to create any kind of dependency on these welfare programmes since those were targeted only towards the helpless. He (p 405) wrote, “No one shall renounce his marital life [to become an ascetic] without providing for his wife and sons (2.1).” Secondly, these were provided to the deserving ones irrespective of their castes. No preference was given to Brahmins as some researchers try to portray.

Not to Harass Public: Kautilya (p 284) argued against an overzealous tax collector, “He who produces double the [anticipated] revenue eats up the janapada [the countryside and its people, by leaving inadequate resources for survival and future production] (2.9).” He (p 181) suggested to the king, “He shall protect agriculture from being harassed by [onerous]) fines, taxes and demands of labor (2.1).”

Ruler must be Ethical: He expected the king to be ethical. He (p 145) stated, “A rajarishi [a king, wise like a sage] is one who: has self-control, having conquered the [inimical temptations] of the senses, cultivates the intellect by association with elders, is ever active in promoting the security and welfare of the people, endears himself to his people by enriching them and doing good to them and avoids daydreaming, capriciousness, falsehood and extravagance (1.7).”

Moral Motivation: Kautilya provided some moral motivation to a king. He (p 377) wrote, “A king who observes his duty of protecting his people justly and according to law will go to heaven, whereas one who does not protect them or inflicts unjust punishment will not (3.1.42).”

Succession: Kautilya (p 169) wrote, “Unless there are dangers in it, succession of the eldest son is praiseworthy. An only son, if he is wicked, shall not [under any circumstances] be installed on the throne. A king with many sons acts in the best interests [of the kingdom only if he removes a wicked one from succession (1.17).” Incidentally, there are no requirements for a legislator or bureaucrat to be ethical or foresighted and therefore, no one should get surprised for the current state of affairs.

According to Kautilya, it was the moral duty of a king to commit himself fully to the uplifting of his public and a comparison with Machiavelli would be very inappropriate. Machiavelli’s approach was king-centric since he was looking for a job with the king. Kautilya was a king-maker and there was no need to appease the king.

We should give up nakal (fake) and start using our akal (intelligence). We should look to Kautilya for bringing shared prosperity and national security rather than follow the hallow model of the West. Kautilya provides a far better model of economic growth than provided by Adam Smith or anyone else in the West. According to Kautilya, government should provide infrastructure, tax incentives, good institutions and governance to promote Artha (economic growth) guided by dharma (please read my book for a detailed presentation).

2 Proactive not Reactive
Wealth Preservation: Kautilya put heavy emphasis on prevention of losses. He identified three sources of systemic risk: foreign aggression, moral decay and famines. He emphasized foresightedness. He (p 116) wrote, “In the interests of the prosperity of the country, a king should be diligent in foreseeing the possibility of calamities, try to avert them before they arise, overcome those which happen, remove all obstructions to economic activity and prevent loss of revenue to the state (8.4).”

According to Kautilya, decision-makers must possess foresightedness. Our leaders blindly followed British- type Constitution and ignored not only our own rich heritage but also stipulated no effective measures to prevent corruption. They did not realize that there is no conflict between being secular and ethical. Ethical values, such as non-violence, compassion, tolerance, honesty, truthfulness and cleanliness could have been taught in schools without violating the boundary between religion and state. Framers of Constitution also did not pay attention to conflict of interests situations. They should have foreseen the problems from putting CBI and other investigative bodies under the control of government. Kautilya did not look for god’s help, instead believed in devising good organizational structures. Whosoever comes to power becomes corrupt implying something is wrong with our system. We should seriously look into our educational system, our method of selecting our bureaucrats and electing our legislators.

Other Measures to Minimize Losses: He suggested other measures, such as (a) traffic codes to reduce the probability of an accident, requiring a license to practice medicine to reduce the probability of wrong treatment, building codes to protect privacy and industrial zones to reduce the probability of a fire.

3 Pragmatic Approach
Incompatibility of Prosperity and Foreign Rule: Kautilya understood the menace of a foreign rule. He (p 175) argued, “A foreign king, on the other hand, is one who has seized the kingdom from a legitimate king still alive; because it does not belong to him, he impoverishes it by extravagance, carries off its wealth or sells it. If the country becomes too difficult for him to handle, he abandons it and goes away (8.2).” He (p 132) also said, “Harassment by the enemy’s army not only affects the whole country but also ruins it by plunder, slaughter, burning and destruction (8.4).” It is clear from the above statements that Kautilya had a strong belief that economic prosperity and foreign rule were incompatible with each other.

Preferred Peace over War: He was not a war monger. He suggested pursuing peace but with strength. He (p 568) advised, “When the benefit accruing to kings under a treaty, irrespective of their status as the weaker, equal or stronger king, is fair to each one, peace by the agreement shall be preferred course of action; if the benefits are to be unfairly distributed, war is preferable (7.8).” It is also clear from another statement. Kautilya (p 635) asserted, “That which entails small losses is a gain by diplomacy rather than by war (9.4).” Clearly, he preferred peace to war. However, he recommended to use every available means and at any cost to protect independence. He (p 541) asserted, “An enemy’s destruction shall be brought about even at the cost of great losses in men, material and wealth (7.13).”

Our ancestors created a golden age in India way before others had climbed down the trees. We have the potential to create our own golden age.

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