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Arthashastra: The Science of Wealth

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This book is a definitive introduction to the classic text, the Arthashastra, the world s first manual on political economy. The 2000-year-old treatise is ascribed to Kautilya, the prime minister of King Chandragupta Maurya, and is as important to Indian thought as Machiavelli s The Prince is to Europe. Arthashastra, or the science of wealth , is a study of economic enterprise, and advises the king entrepreneur on how to create prosperity. Thomas Trautmann s exploration of this seminal work illuminates its underlying economic philosophy and provides invaluable lessons for the modern age.

208 pages, Paperback

First published January 1, 2012

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Thomas R. Trautmann

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Profile Image for Preetam Chatterjee.
7,396 reviews416 followers
January 25, 2021
In the period betwixt 321 and 185 BC we can identify the culminating points of the tendencies towards methodical speculation on politics. The Mahabharata had identified the state as something different from both the prince and the populace. Now its complete autonomy became the chief focus of political thought. The idea of dharmasastra for the time being receded into the background and its place was taken up by the arthasastra tradition which was more pragmatic in outlook.

It is true that colours and shades of this tradition are also found in the earlier thought. It would be sheer intellectual contortion to prove that the Ramayana or the Mahabharata belonged purely to the dharmasastra tradition; both were equally concerned with the preservation and development of the kingdom by whatever means the king thought expedient. The same could conversely be said of the Arthasastra tradition.

A picture of India during this period is found in the travel records of Megasthenes. The account (from a little before 302 BC) is certainly a mixture of surveillance and parables but three facts emerge with stark clarity:

1) There appears to have been no institution of slavery. Though inequality in property was permitted, there was some sort of equality before law. People had equal right to all possessions.

2) The law did not play much part in the lives of ordinary Indians. People seldom went to the courts. It appears that men of wisdom were highly respected and still played an important role.

3) The state had come to assume a variety of functions. There were different departments looking after not only law and order but also things like trade, commerce, weights and measures, system of production and regulation of price, care of markets and regulation of labour relations.

This complex character of the state apparatus is amply reflected in Kautilya’s Arthashastra.

Kautilya defines wealth in stages, moving from individual wealth to kingship. The fundamental concept is vartta, the closest Sanskrit term we have for the word ‘economics’. More precisely, it means the pursuit of livelihood (vritti) or the production of goods, which has three branches, namely, farming, herding and trading. These economic activities manufacture grain, livestock, money, raw materials (kupya) and labour (1.4.1). Livelihood is the starting point of the Arthashastra’s definition of artha:

The source of the livelihood (vritti) of men is wealth (artha), in other words, the earth inhabited by human beings. The science which is the means of the acquisition and protection of the earth is Arthashastra. (15.1.1–2)

This book is intended to be an introduction to the economic philosophy of the Arthashastra. It aims to get at the underlying logic of economic action in the text, and to that end the author selects particularly revealing examples for analysis.

The author samples significant parts of the text rather than reproducing the whole, since his object is to convey the central ideas that will be valuable to us in thinking about our own world today.

Apart from a fabulous Introduction by Gurcharan Das, the book has been divided into six sections:

1. Introduction: The Science of Wealth
2. Kingdoms
3. Goods
4. Workplaces
5. Markets
6. Conclusion: The Arthashastra in the Long View

The Arthashastra is divided approximately in two parts. The first five books deal with internal administration (tantra) and the remaining part is devoted to foreign affairs (avapa). This would seem to address economics and politics, respectively. The first five books will be most useful for a study of economics, in the sense of vartta, or livelihood or production.

However, the remainder of the text, dealing with foreign affairs, is also economic in the sense of being greatly concerned with the relative valuations of various assets of the kingdom (villages, pastures, trade routes, mines, forests) as these should be assessed when deciding on war, concluding peace, or when dealing with an ally.

When subtlety turns into conflict, the king’s treasury (kosha) is carried in a chest and put under guard in the centre of the army camp.
The whole of foreign policy, therefore, is equally a part of the science of wealth. This will become especially evident in chapter two of this book, when we see the different economic characteristics of kingdoms and republics.

The opening chapter of the book shows us that Arthashastra is about economic enterprises, both those undertaken by private individuals and those undertaken by the king. But more specifically it deals with the wealth-generating activities of kings, such as the acquisition of territory and the taxation of the people inhabiting it. The king himself ran a highly active economic enterprise. The king taxed farmers but was also a farmer himself, in respect of his own agricultural land. Towards the end of chapter one, Trautmann describes the ideal king, or rajarshi, as ‘a king who is a rishi or sage’.

In Chapter 2, named ‘Kingdoms’, the author shows that in the Arthashastra there was only one alternative political form to kingship, the sangha or republic. Kingship, by unifying power in a single royal family, was less cohesive than the republic and was vulnerable to overthrow by assassination or by army takeover as the republic was not.

‘Goods’, the title of Chapter 3 shows that the King required expert knowledge of goods and materials for the triumphant running of the kingdom, particularly the preservation of the palace and the army and also warehousing of grains and other foodstuff for distribution to the people in times of famine.

Chapter 4, named 'Workplaces’ shows that Kingship organized the geographic landscape into a characteristic pattern of economic zones, of which agricultural land was the largest and the most important priority. Other lands were designated for pastures, trade routes, markets, cities and forests. Workplaces were habitually located near the source of raw material or in the city near marketplaces to diminish high transportation costs.

The final chapter, named ‘Markets’ shows that private property and true markets existed, but the general objective of the Arthashastra was to treat extremes of price as detrimental to society, both buyers and sellers. Extremes of price were to be contradicted by intercession of the king’s officials. There is a fundamental feeling that everything has a proper price and that deviation from it should be policed.

Kautilya lived at a time when monarchy was the prevalent form of government. But he was against randomness and totalitarianism and thus stood against unconditional monarchy. The king was subjected to a thoroughly disciplined life and bound by an elaborate code of conduct. The Arthashastra details a taxing programme for observance by the king. The king’s salary was fixed and he could not draw more than that. Similarly, the members of the king’s family received fixed allowances which could not be raised except with the approval of the council. Salary administration received detailed attention from Kautilya.

The author of this book illustrates the enormous detail into which Kaultilya could go while discussing statecraft and administration. The annual salary ranged from 48,000 panas (the unit of currency) to the eldest queen and the purohit (priest) to 250 panas to the ministers of the palace. There was provision for travelling and even on duty allowances, which is a broad indication of the meticulous care with which the ‘nuts and bolts’ of administration received attention.

Kautilya’s Artliashastra is a political dissertation and, what is more, a work of matter-of-fact advice to the king on how best to oversee his kingdom and build up his power. An appropriately guided administration was the sine qua non for ensuring human welfare. Kautilya’s state was a militant one with direct accountability for promotion of agriculture, animal husbandry and trade and commerce.

The most important finding to emerge from this reading of the Arthashastra deals with the ancient concept of the relation of the king to the land and his people.

A must read, this one.

638 reviews8 followers
October 21, 2025
The Political Economy.

Notes
Kautilya vs Durkheim on supremacy of republics (mechanical solidarity - homogeneous society) over organic solidarity of more complex societies (division of labor, interdependent groups).

In preparation for the ultimate catastrophe (escaping assassination), the king must bury treasure in the border lands by people condemned to death.

Day divided into 16 90-min blocks. 3 blocks of sleep. 1. wake and study 2. dispatch secret agents 3. priests, physician, cook 4. military updates 5. city affairs 6. bath, meal, study 7. economy 8. information from spies 9. recreation 10. review 4 limbs of army 11. military plans - break for twilight worship. 12. debrief agents 13. bath, meal, study 14-16 sleep.

Granary gets its own overseer - koshtagara adhyaksha. One half of king's granary set aside for times of distress. Stock is cycled.

Rome paid for Indian pearls with amber, copper, lead, coral, and coinage - which matches Arthashastra’s description of coinage thus dating it during Indo-Roman trade period.

Pottery mentioned trivially, taken for granted, not as luxury, unlike in China/Japan and in pre-metal Indus. Textiles, on the contrary, prominently mentioned both as staples and luxuries, and king’s obligation to support widows/orphans by employment in spinning.

3 grades of horses - best from Indus, Punjab, Arabia; middle from Bactria, and others are inferior. Horses thrive in Indus and interior peninsula’s arid grasslands, vs Elephants in the forest.

Elephants can only be used for human purposes after age 20, so not domesticated at birth (expensive to raise) but captured as adults. Quality of elephants declines from East (orissa) to west (punjab).

Seleucids and Ptolemies (at war) both seek elephants from Mauryas, including the skilled elephant-handlers. Indios means elephant-driver. Carthaginians use their technique to tame African elephants, taking them across alps to Rome. Indian model of kingship in S.E.Asia brings war-elephants there.

Farming villages as root of king’s wealth - visavis merchant whose profits are from luxury trade with distant lands). King turns empty land into wealth-producer and takes a share - needs to attract farmers from foreign lands or overpopulated regions of his kingdom (contrast with modern migration). King’s own farmland (sita) under the overseer of royal farmland sita adhyaksha, an expert in farming, water, etc. Farms are settled first, in villages of 1-500 families.

Next important economic zone is pasture, designated only after all arable land is set aside. Overseer of pastures vivita adhyaksha establishes pastures between villages. Clears lowlands and forests of danger (robbers, animals), sinks wells. Network of fowlers, hunters help him report on movement of enemies. Livestock is horse, buffalo, cow, donkey, camel, goat, sheep, pig. Herds owned by king are given on 2 terms - tended for wages (give all produce to king) or paid a share.

Treasury has its source in mines. Akara-adhyaksha is an expert in metallurgy, smelting etc, managing both the mining and the workshops that manufacture goods. Overseer of mint, lakshana adhyaksha for minting of coins which are monopoly og the king. Salt is also a monopoly.

3 royal forests, mriga (wild animals), dravya (raw materials), and gaja (elephant), single entry surrounded by a moat. Elephant-keepers, masked with elephant urine/dung, with a decoy convoy of female elephants patrol and record details of every single elephant in the forest.

Aristotle contrasts Greek freedom (private property, land) vs Persians (king owns all the land, everyone is a tenant): concept of Oriental Despotism that was applied by British first to Mughals and then to all Indian rulers in general.

Arthashastra aims for a ‘just price’ not a market price by free interaction of supply-demand. King levies tax on this transaction, and also confiscates the excess price if bidding among buyers pushes it up - suppresses fluctuation. Buyers are not all equal, kin have priority.

Long distance traders arrive at city-gate, sell to local-traders who are then allowed to sell retail. Custom duties levied at the city-gate. If trader under-prices to reduce duty or over-prices to gouge, king confiscates the difference. Overseer of trade Panya adhyaksha expert in prices and value.

In contrast to now, import is encouraged and export is controlled to allow only that which is in abundant supply internally - prioritizing availability over trade balance. Overseer of trade protects trade routes, foreign traders.

2 kinds of law - 1. Vyavahara (law of transactions) contractual disputes by 3 judges (dharmastha) of minister-rank available at frontier post, HQ of 10 villages, HQ of 400 villages, capital city. Civil wrongs, torts, where it comes to the judge when brought by a complainant. 2. Criminal law, called Removal of Thorns, where king sets the process in motion, wrongs against kingdom at large, 3 magistrates of minster-rank.
Profile Image for Lourens.
133 reviews2 followers
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June 12, 2024
Three objectives of Hinduism are, in order: Dharma (justice/piety/morality), Artha (Wealth), Kama (Passion). The Kamasutra is well-known; it is lesser known that Dharma and Artha are to be taken care of first. This text, dated approximately 300 BC, is a sort of instruction text for a king, how to organize their economy and ensure proper government oversight. This reveals the time's conception around market prices (goods have a true price, shocks in demand and supply steer away from this price and should be corrected) and trade (in large part arranged between kings).

Profile Image for Vibhu Rishi.
25 reviews5 followers
June 1, 2020
A very high level overview of the Arthashastra. Good for getting to know what the book is all about and how it applied to Ancient India and how it probably does not apply to modern India (Kingship vs Democracy). A starting point if you want to study Arthashastra.
Profile Image for Er. Alam.
Author 5 books4 followers
December 1, 2022
A nice summary and new insight into one of the richest book of Ancient India.
Profile Image for Amrendra.
349 reviews15 followers
December 12, 2017
The book is an introduction to the famous treatise Arthashastra by Kautilya by professor emeritus in History and Anthropology at the University of Michigan - Thomas R. Trautmann.

The author has examined the book from several perspectives like Kingship vs Republic, Dharma vs Artha, etc. He clearly states that Dharma is superior to Artha but economy and politics are closely intertwined and at the time Arthashastra was written both were considered to be one. Arthashastra has been written with this philosophy of optimising economy and politics.

The book is divided into 4 sections namely Kingdoms, Goods, Workshops and Markets apart from the introduction and conclusion. The author opines that though more stable in ancient days the days of kingship are over because of the heterogenity of people resulting in functional solidarity rather than mechanical solidarity of kingship days as conceptualised by Durkheim. He discusses the life of the king, his schedule, his threats, the goods and stores and their keepers, farms and land tenure system, taxation of trades, luxury trade with Rome and China, rule of Law (Removal of Thorns), regulation by the state, etc. and has beautifully expostulated on the original text's idea on these matters of practical detail.

He concludes by dwelling on how the American and the French Revolution changed the paradigm and how the system of popular sovereignty marked the closure of kingships. He winds up by saying that Arthashastra should not be read for advice but for seeing things in a broader field of vision.
Profile Image for Luke Meehan.
183 reviews2 followers
July 17, 2015
Rare and fascinating, this broad interpretation of the political economy of ancient India was a revelation - I had no idea such documents existed and I'm grateful for Trautmann and the translators of the Arthashastra for making it available to me. Trautmann errs somewhat on the positive economics occassionally, but not enough to mar the challenge of this immense work by an anonymous, practical, ancient, sub-continental Machiavelli-cum-Smith.
Profile Image for Sanath Kumar.
11 reviews2 followers
April 9, 2012
I bought this book just because of Gurucharan Das's name. I had read his earlier book "Difficulty of being good" and thoroughly enjoyed it. The disappointment for me is one my expectation and two is lack of arguments,logical relationship to the present scenario. Nothing was mentioned about " The secrete science of creating wealth".
188 reviews4 followers
October 19, 2016
The book "Arthashastra" written by Trautmann speaks on the balance between politics and business they had during maurya's time. The book speaks pros and cons of mudiyarasu (authoritarian) and kudiyarasu (power distributed) and how they managed to keep foods in stock to tackle during drought time. Great book.
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