Economic Ideas of Kautilya free essay sample

Kautilya’s name was Vishnu Gupta. He was a learned Brahmin. He is known by the name of Kautilya because he was an expert in diplomacy and political strategy. He was the chief minister of Chandra Gupta Maurya. He was responsible for getting Chandra Gupta the kingdom of Nand, after destroying its king. Kautilya has given vivid description of the administrative procedures, of the duties of kings, ministers and government officers, in his book. His Arthashastra is based on earlier treaties and is divided into fifteen chapters covering about 430 pages. He has acknowledged his debt to Shukracharya and Brahaspti. He has regarded economic as a continuous process. It covers almost every aspect of the theory and practice of economics. It also deals with the government of town and villages, law courts, rights of women, maintenance of the old and helpless, marriage and divorce, public finance, maintenance of army and navy, diplomacy, agriculture, spinning and weaving and a number of other subjects. We will write a custom essay sample on Economic Ideas of Kautilya or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page His book contains ample ideas on a welfare state. The Ideas of Kautilya: Economic ideas of Kautilya can be broadly explained under the following topics: ? Nature and purpose of material wealth ?Varta ?Agriculture and Animal Husbandry ?Dignity of Labour ?Trade ?Public Finance ?Population ?Slavery ?Welfare State ?Social Security ?Interest: ?Price Control ?Socio-Economic Institutions ?Town Planning Nature and Purpose of Material Wealth: The term Artha (wealth) occupied an important place as one of the Purusharthas, in the system of economic thought during the Vedic Period. The concept of Varta (national economy) as understood by the Vedic seers and sages was the Artha or the material wealth or prosperity was essential for the stability and maintenance of the social structure and organization which provide means and opportunities to every individual for leading a decent life, ensuring adequate self expression, self realization and salvation. The concept of wealth was, thus necessarily correlated with that of want and welfare. During those days, wealth includes, cattle, especially cows and horses. In ancient India, individuals were free to earn and accumulate wealth but only to the extent it was necessary for the satisfaction of one’s wants and those of the members of one’s family. Varta: The term Varta which means the science of national economy, has been most commonly used by the ancient thinkers. Kautilya include agriculture, animal husbandry and trade in Varta. Agriculture and Animal Husbandry; Agriculture and animal husbandry formed important components of Varta. These were regarded as the basic sources of new wealth. Dignity of Labour: According to the Vedas, a man should lead an active life of hard labour for 100 years. The ancient sages thus appreciated the dignity of labour. Kautilya also recognized the ‘ashram vyavastha’ of the more ancient thinkers. He did not recommend slave labour. Kautilya laid down a code of discipline for labour in which he prescribed penalty for those who refused to work after receiving wages. In certain cases, labourers also were entitled to leave. The worker and the employer may also enter into a written contract. Trade: The ancient thinkers approved of trade, whether internal or foreign, only when a surplus, after meeting reasonable domestic or local needs was left over. Broadly speaking, the exchange of commodities of internal trade was considered superfluous. Public Finance: Taxation was one of the most important sources of revenue of the state. It was known as ‘Raj kar’. The rate of tax was determined in accordance with the dictates of Hindu Religion. According to kautilya, the tax receipts can be divided into three parts: ? Income earned through taxes on goods produced within a country; ? Income earned through taxes on good produced in the capital and ? Through taxes on imports and exports. The main principles of taxation were, thus as follows: i)A tax should be levied once a year and should not prove a burden to the taxpayer; (ii)Rich persons should be taxed according to their ability to pay or richness. The burden should be so distributed that the taxpayer is not weakened and no harm is done to the state. Since wealthy people are to contribute more to the state, they should be given a prominent place in the society. Kautilya’s ideas are more or less confined to the organization of central finance. He did not touch the problems of local finance. Kautilya included the following items in public expenditure; National defence; ?Public administration; Salaries of the ministers and expenditures on government departments; ? Expenditure on government storehouses, etc; ?Expenditure incurred on the maintenance of national storehouse and granaries; ? Expenditure incurred on the maintenance of armies; ?Expenditure incurred on the acquisition of valuable gems, stones and ornaments. Whatever was left was deposited to the war chest and the treasury. Population: A large population was not a cause of worry to the ancient Indian thinkers. It was considered as source of strength. According to the Vedas, ten sons to a newly married couple were considered to be just. It was believed that population could not grow beyond a reasonable limit owing to the high death rate due to constant wars between small states and loss of life due to the inadequate medical facilities. Kautilya even recommended that the kind should establish colonies for facilitating immigration. Slavery: In ancient India a slave was a member of the family and was not required to do menial jobs. He used to be a hereditary domestic servant without any rights of accumulation of wealth and private property. He was, in any case, better than a hired worker. Welfare State: The ancient Indian thinkers had a very clear concept of welfare state. ?Wages were determined on the basis of equality and justice. ?There was no exploitation of labour by the employers or of the cultivators by the landlords and the capitalists. ?Manu and Kautilya were against high rates of interest. ?Manu has given instructions in Dharma Shastra for the regulation of the rates of interest. ?He even forbade the charging of compound interest. According to Kautilya profits are the rewards of purely entrepreneurial function. Kautilya’s concept of state is founded on industrial edifice. According to him, ? The state should undertake those industries which help directly in making the nation self-sufficient and self-reliant, e. g. , gold, silver, diamonds and iron and other to farming, spinning, and weaving, livestock farming, arts and crafts, etc. , ? The state should see that the activities relating to production, distribution, and consumption are carried out efficiently and in accordance with the rules framed by it. ?it, thus, implies a perfect domination of the state on the individuals but with the sole object of augmenting their welfare. Social Security: During the time of Kautilya, There was a form of social security for the aged, infirm, widows and pregnant women. The state maintained buffer stocks, not only of grain but also of essentials like timber, rope, tools, etc. to be distributed to the public during times of crises like famines or epidemics. Interest: Although the ancient thinkers approved of the charging of interest, they were not in favour of high rates of interest. Kautilya proposed regulation of the rate interest. The main object of price control was to protect the consumers against the alpractices of the shrewd and dishonest traders. Socio-Economic Institutions: As stated earlier, the socio economic structure in ancient India was based on the dictates of religion. The laws of religion governed every walk of life, family and social relations, economic activities and spiritual life. A study of social and economic relationships is a study of Hindu religion which consists in the analysis of state and ‘varna ashram’. Accordingly, the earth was common property of all. Town Planning: The science of town planning was quite advanced in ancient India, especially during the times of Mauryan emperors. The villages were grouped together from the point of view of economic necessities and for national defense. Town planning included the reorientation of main streets, the subdivision of the city area, and the widening of the main streets. The capital was established after careful planning. Elaborate rules were laid down for prevention of the fire and maintenance of sanitary arrangements. Conclusion: Kautilya, the great Indian philosopher and statesmen, in writing his epic treatise on the art of good government, the Arthashastra, enunciated classified vies on international trade, principles of taxation, and a labour theory of value. Writing more than one thousand years before Hume, Smith, Ricardo and J. S. Mill, Kautilya anticipated their thoughts on the importance of conducting trade in accordance with the principle of comparative advantage, that imports are as important as exports in promoting a nation’s economic development and growth, and that reciprocal demand will determine the value of commodities in bilateral and multilateral trade. He also clearly anticipated Smith and Recardo on the principles of effective taxation that ill result in an ideal system of taxation: one which will promote economic growth and development, ensure that resources are used efficiently, whose burden is borne fairly, and which distorts economic decision-making as little as possible.