PROF.DEODHAR'S ECONOMIC SUTRA

Economic Sutra by Satish.Y.Deodhar ; Published by Penguin ;  Pages 199 ; Price Rs 399/-

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A highlight of my tour to England was a visit to Stratford-upon- Avon—the hallowed birthplace of William Shakespeare. As we –a group of Indians --went round an English guide was waxing eloquent on the Bard of Avon and when he saw a group of Indians he declared that Kalidasa was the “Shakespeare of India”. My pride was hurt and I blurted out—“ No. You are wrong. Shakespeare is the  “Kalidasa of England” . Shakespeare’s period is  1564 –1616 A,D  and that of Kalidasa is 4-5 century C E. Quite obviously you compare the old one as a base  to the new one.

Why  this anecdote?

Dr.Satish Deodhar , the author of the book under review has an identical statement to make on the relationship of Kautilya and Machiavelli, author of the celebrated book “The Prince”. To quote Deodhar --“ In fact, it is  Machiavelli  who should be called “Europe’s Kautilya” of sorts, for Kautilya wrote his treatise close to two millennia prior to Machiavelli ( 1469--1527).”

To come back to my review.

Dr.Satish Deodhar is a distinguished professor in the prestigious Indian Institute of Management in Ahmedabad. He is the author of a highly popular book “Day to Day Economics” which was reviewed by me.

The sub-title of the book under review is “Ancient Indian Antecedents to Economic Thought”.

The volume  offers a striking perspective on ancient Indian economic thoughts by analysing the original and secondary sources with the aid of English translations. It offers a detailed analysis of Kautilya’s ideas on political economy as also economic ideas prevailing before the advent of Kautilya and after. Deodhar provides parallel political thought dominating the Occidental world.

According to the author, India experienced continuous existence of social, religious and economic life. India’s G D P  accounted for 50 per cent of the Global  G D P during the Golden Age of the Guptas. He explains the precipitous decline thereafter. An important point to be borne in mind is that while modern economic theory emphasises the pursuit of material wealth as an end by itself, ancient Indian texts treated economic advancement as one of the four objectives of existence viz., Dharma, Artha, Kama and Moksha.

Deodhar unravels the Indian mind and psyche. Ancient  savants believed in the provision of public goods and quasi-public goods and market  facilitation by rulers who displayed prudence in fiscal matters.

The book throws a flood of light on government policies, working guilds and property rights related to land acquisition. We have a detailed discussion on what characterised ancient India, the echoes of which persist even now—viz.,--division of labour, varna and the presence of jati system in India.

Pride of place is accorded to Kautilya’s “Arthasastra” in which the responsibility of a welfare state are well brought out. Political economy facilitated sustainable generation of wealth, the ensuring of provision of public goods, regulation and use of common property resources and control of natural monopolies. Kautilya identifies the sources of revenue and types of taxes that could be levied and also laid down norms for emoluments of government staff. Kautilya’s theory of public finance is comprehensive and is the world’s most ancient.

The author brings out the applicability today of ancient Indian economic thoughts.

Deodhar provides an appropriate introduction to Kautilya.  His  “Arthasastra” was based on the collation and improvement of many ideas already expressed by his predecessors and in some Vedic texts. Deodhar’s aim is to elicit elements of economic thought that have been put to words in the ancient texts that that are proven to have historical existence.

“Sutra” is a Sanskrit word that means a string on a thread that holds jewels together. We have Patanjali Sutras, Brahma Sutra of Sankaracharya and  Kama Sutra of Vatsyayana.

The  “Economic Sutra” strings together and succinctly presents elements of ancient economic thought.

The book is divided into seven chapters. Chapter I  is a curtain raiser on ancient Indian texts and history. Deodhar introduces these texts in general and highlights the material on economic aspects . He also analyses the causes for the niggardly attention paid to it by Western scholars.

The texts are the Four Vedas, the Epics Ramayana and Mahabharata,six major Dharmasastras, eighteen Puranas, the Nata Sastra, the Natya Sastra, Ashtadhyayi of Panini. Most importantly the Arthasastra--- which was written as a treatise for ideal functioning of the economy, the state administration and the conduct of the ruler. These prove that economic issues were discussed even a millennia ago.

Next three chapters provide elements of pre-classical early economic thoughts from texts dating to 1500  C E—on material desires, wealth, price and taxes, policies of State, Varna as a division of labour concepts and its relation to Jati and caste.

Chapter Two discusses material desires, prices, money, wealth, interest rate, balancing of material and otherworldly pursuits, etc. It introduces the idea of taxes, sources of revenue and government spending in public works in Ancient India.

Chapter Three analyses documented historical evidence of guilds, principles of just governance, absence of Eminent Domain and the presence of private property.

Chapter Four covers Varna, Jati as means of division of labour.

Chapters  Five and Six are dedicated to Kautilya’s thoughts—Economics, Public Goods and Public Finance, Markets, Prices, Interest and Wages . Kautilya had a deep understanding of interest as return on capital and wages as return on labour.

The Seventh chapter offers Dedhar’s concluding observations. Ancient literature show that some of the economic principles that have been identified in the modern world were being put into practice as political economy tools back then. Arthasastra explains how the smooth functioning of the markets exemplify pragmatic application of the elements of economic principles.

Deodhar’s work shows his mastery of this subject, his tremendous ability to present it in simple language  comprehensive to the common man. The book is a great intellectual exercise which skims the cream of the esoteric literature and presents in easily digestible Sutras.

P.P.Ramachandran

8/9/2019.