The relevance of Kautilya

Kautilyanomics for Modern Times 

Author: Sriram Balasubramanian 

Publisher: Bloomsbury 

Pages: 266 

Price: Rs 600

What do Confucius, Sun Tzu, Machiavelli, Mark Twain and Groucho Marx have in common? As Bibek Debroy, chairman of the Prime Minister’s Economic Advisory Council, cleverly points out in his superb Foreword, many pithy sayings are attributed to them, often without supporting evidence.

Now India has its own combination of the people mentioned above. Kautilya or Chanakya and maybe a few other people too, all of whom are now said to be Chanakya or Kautilya.

Mr Debroy says no one really knows if Kautilya or Chanakya were one person or many who lived over a few hundred years.

Not to worry, though. As the author of this book tells us, it’s the wisdom that counts, not the name of the wise person or persons. Kautilya, like Machiavelli nearly 1,800 years later, taught statecraft to muscle men who became kings. Both were coaches, in a sense, to men who lacked nous.

Sriram Balasubramanian, who is an economist, has taken five years to write this book and the application of mind is abundantly evident. He, however, frequently points out that although the context was different when these guys lived and wrote, there’s a lot that has remained the same or is similar. Or, as the saying goes, “plus ça change, plus c'est la même chose” . The more things change, the more they remain the same.

For Mr Balasubramanian this book is a labour of devotion. The scholarship is impressive and the determination to make people sit up and notice Kautilya is truly commendable.

The central message of this book is that Kautilya’s advice, suggestions and recommendations are still relevant. He gives several examples and relates them to the world as it is now. That makes for fascinating, if somewhat hard, reading. The book falls just short of being a mass-market paperback.

The problems of sovereigns over the millennia, it turns out, have remained the same. So, fortunately, have the solutions.  Only the ways and means have undergone some dynamic adjustments.

Take three of the more important problems that have persisted over time:  Taxation, debt and the enforcement of contracts. The three are more closely interconnected than independent India’s governments have realised. That’s why we don’t get much investment.

Mr Balasubramanian diligently shows what Kautilya’s view was on these things, as also on a host of other issues of second order importance like, say, trade and inequality. It quickly turns out that he could have taught a course in public policy in any university in the world.

On taxation, as Mr Balasubramanian reminds us, Kautilya anticipated Jean Jacques Baptiste who had been the finance minister to Louis XIV of France, by around 1,900 years. Baptiste is famous for saying that taxation was like plucking goose feathers. “The art of taxation consists in plucking the goose so as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.” Kautilya likened it to plucking ripe fruit while leaving the unripe ones on the tree to ripen.

But what of expenditure? Kautilya appears to have confined himself to the need for infrastructure. On other forms of government expenditure he doesn’t seem to have had a view. Defence of the realm isn’t a focus area. One must assume, therefore, that he took defence and other things, like welfare spending during hard times, as being self-evident duties of the sovereign. He did think health was important, though. Moving on to debt, Kautilya took a dim view of it but probably regarded it as necessary. Anyway, the problem  for sovereigns has never been access to debt but of repayment. 

Mr Balasubramanian has devoted a lot of space to Kautilya’s views on debt and its recovery. These are basically about rule-based contract enforcement.

Clearly, Kautilya wanted to keep the atmosphere friendly so that the business environment was conducive to more rather than less, and honest rather than dishonest, business practices. It is what is called “Ease of Doing Business” nowadays.

Kautilya had many other concerns of relevance today. One of these, says Mr Balasubramanian, was the environment, if not the climate itself. The key message is keep the balance. That’s fine, except countries that have grown at a superfast rate, haven’t kept it.

Anyway, one must ask: What’s the point of this book?

Mr Balasubramanian tells us in the last chapter. “The need for discussion and debate on Kautilya’s ideas arises… because he was a visionary whose ideas were much ahead of his time and remain relevant even today.”