From Sabha to the Constitution: Civilisational Roots, Colonial Experiments, Epigraphical Evidence, and the Urgent Renewal of Village Democracy in India

Introduction

India represents the longest continuous civilisational experiment in decentralised governance in world history. Long before the emergence of the modern nation-state, Indian villages functioned as autonomous political, judicial and economic communities. Decentralisation in India is not an imported administrative device but a civilisational principle grounded in dharma, duty, and community. 

Village Democracy as India’s Governance DNA  

The dominant narrative of democracy locates its origins in the Greek city-state, Roman republicanism, or modern European constitutionalism. India followed a distinctly different trajectory. Here, democracy did not emerge from urban assemblies or aristocratic estates; it arose from the village. For more than two millennia, Indian villages governed land, irrigation, revenue, justice, education, charity, and social order through dharmic local assemblies rather than centralised state bureaucracies.

Charles Metcalfe famously described Indian villages as “little republics, having nearly everything that they want within themselves”. Unlike Western political systems that concentrated sovereignty in the state, Indian political life distributed sovereignty across thousands of local dharmic communities.

The Classical Foundations: Sabha, Panchayat, and Dharma  

Ancient Indian governance operated through sabhas (deliberative assemblies) and panchayats (judicial–administrative councils). These were not informal bodies but legally recognised corporate institutions owning property, enforcing contracts, regulating commons, and adjudicating disputes.

Panchayats functioned as the grassroots tier of judicial authority, settling most civil and social disputes without reference to royal courts. The king was not the daily administrator of society but the custodian of dharma.

Dharma served as the ethical foundation of this decentralised order. Unlike modern legality, which depends on coercive enforcement, dharmic governance relied on shared moral obligation and social consensus. Compliance was secured through legitimacy rather than surveillance.

Epigraphical Foundations of Village Self-Governance  

Beyond textual sources, India’s decentralised governance system is **directly attested through hundreds of temple and land-grant inscriptions**, making it one of the best-documented pre-modern local governance traditions in the world.

The Uttaramerur Inscription (c. 920–930 CE)  

The most famous documentary evidence of village democracy is found in the Vaikuntha Perumal Temple inscriptions at Uttaramerur (Tamil Nadu), issued during the reigns of Parantaka I and subsequent Chola rulers. These inscriptions provide a complete constitutional blueprint of village governance.

They record:

- Ward-wise village organisation (kudumbu system)

- Electoral selection through Kudavolai (lottery)

- Strict eligibility qualifications (property ownership, Vedic education, tax compliance)

- Severe disqualifications (corruption, moral misconduct, audit failure)

- Functional committees for irrigation, tanks, justice, temples, revenue, and charity

- Mandatory public auditing of accounts

- Rotation, recall, and disbarment mechanisms

Other Major Epigraphical Records of Local Governance  

1. Chola Nadu Tank Committees – Inscriptions from Tirukkalukkunram, Tiruvallur, and Tiruchirapalli record technical irrigation committees with punishment for negligence.  

2. Karnataka Brahmadeya and Devadana Inscriptions – Village assemblies managing tax exemptions, water rights, and temple economies.  

3. Andhra Satavahana and Ikshvaku Inscriptions – Local guilds and village arbitration councils (nigamas and gramikas).  

4. Western Indian Copper Plate Grants (Guptas, Maitrakas) – Autonomous village land administration and dispute settlements.  

5. Kerala Temple Sabha Inscriptions – Deeply decentralised temple–village financial governance networks.

Together, these records confirm that:

- Villages possessed corporate legal identity

- Assemblies exercised judicial, fiscal, and administrative authority

- Governance was procedural, rule-bound, and audited

- Power was distributed, not centralised

The Chola Kudavolai System: Ethical Electoral Governance  

The Kudavolai system described above represents one of the most sophisticated pre-modern electoral systems in world history. Candidates were selected through lottery only after clearing strict moral, educational, fiscal, and social qualifications. Disqualifications included corruption, abuse of office, financial irregularities, and moral misconduct. Committees managed irrigation, land revenue, justice, temple administration, and public works under strict public audit.

This system integrated:

- Moral filtration  

- Randomised anti-factional selection  

- Continuous public accountability  

- Term limits and recall  

Modern democracies continue to struggle to achieve this combination simultaneously.

Colonial Disruption and the Dismantling of Village Sovereignty  

British colonial rule fundamentally disrupted India’s decentralised equilibrium. Through the Permanent Settlement, Ryotwari, and Mahalwari systems, land revenue was centralised, and villages were converted into instruments of extraction rather than self-governing communities.

Village courts were weakened, customary law delegitimised, and Panchayats reduced to advisory bodies. Maine himself later lamented that the village institutions which had survived centuries of political upheaval were severely weakened under modern administrative centralisation (Maine, 1871).

Early Twentieth-Century Revival Experiments  

A. The Aundh Experiment (1939–48)  

The princely state of Aundh adopted the most radical decentralisation experiment in modern India. Through the Aundh Panchayat Constitution (1939), the ruler voluntarily transferred all authority—administrative, fiscal, and judicial—to elected village panchayats. The state existed only as a federation of self-governing villages. Gandhi described it as the closest living embodiment of Gram Swaraj.

B. Baroda State Reforms (Sayajirao Gaekwad III)  

Baroda pioneered compulsory education, village courts, local boards, and decentralised administration between 1900–1930, building institutional capacity long before Independence.

C. Maratha & Princely State Experiments  

Kolhapur, Indore, and Mysore expanded village self-governance in sanitation, education, public health, and legal access.

D. Bengal & Chittagong Local Self-Government Acts (1919–1930s)  

The Montagu–Chelmsford reforms institutionalised district and union boards across Bengal and eastern India.

E. Travancore & Cochin (Kerala)  

Kerala’s later democratic depth drew directly from early village institutions in health, education, and land governance developed during the princely period.

Gandhi’s Gram Swaraj and Moral Decentralisation  

For Gandhi, swaraj meant ethical self-rule, not mere administrative devolution. Political power without self-restraint produced exploitation. True freedom required villages to be economically self-reliant, politically autonomous, and morally disciplined (Gandhi, 1909/1938). Authority was inseparable from service.

The 73rd Constitutional Amendment as Civilisational Restoration  

The 73rd Amendment (1992) constitutionally recognised Panchayats as “institutions of self-government,” establishing the Gram Sabha as the foundation of rural democracy. While framed as a technical reform, it represents a delayed civilisational restoration of India’s ancient village sovereignty.

Rudolph and Rudolph (1987) interpret this as the re-emergence of “negotiated authority,” where modern institutions operate through continuous engagement with social traditions rather than their displacement.

Diagnosis: Structural Weaknesses of Contemporary Panchayati Raj  

Despite constitutional status, today’s Panchayats suffer from:

1. Limited fiscal autonomy  

2. Misalignment of functions, funds, and functionaries  

3. Ritualised rather than deliberative Gram Sabhas  

4. Weak administrative capacity  

5. Elite capture and micro-clientelism  

6. Fragmented accountability  

7. Disconnection from moral legitimacy  

8. Collapse of local dispute resolution  

9. Short planning horizons  

10. Weak enforcement of social audits  

Reforming Panchayati Raj: A Civilisationally Anchored Framework  

Immediate Measures  

Mandatory Gram Sabha clearance, enforceable social audits, Kudavolai-inspired committee selection, commons registries, village mediation panels.

Medium-Term Reforms  

Statutory 3F alignment, own-source revenues, performance-linked grants, Panchayat secretariats, women’s leadership pipelines.

Long-Term Structural Reforms  

Village judicial systems, decentralised education governance, binding State Finance Commissions, constitutional clarity on village powers.

These align closely with Ostrom’s core principles of durable self-governance.

Conclusion: From Stone Inscriptions to Constitutional Law  

From the stone pillars of Uttaramerur to the text of the Indian Constitution, India’s decentralised governance tradition reveals an uninterrupted civilisational memory of village sovereignty. Ancient sabhas, epigraphical Panchayat constitutions, Chola electoral ethics, Aundh, Baroda, Gandhian Swaraj, and the 73rd Amendment together affirm one truth:  

Indian democracy is strongest when it flows upward from the village, not downward from the state.

Its renewal today is not nostalgia—it is institutional realism grounded in two millennia of governance practice.

Scope Of Smṛti And Nature Of A Dhārmic State – Part 2 by Shankara Bharadwaj Khandavalli

 Nature as Teacher and the Trustee

One of the most important aspects of dhārmic thought is seeing Nature as the ultimate teacher. It is not just about understanding Nature and Her workings, but about basing the design of the most evolved human institutions on such lessons. 

The philosophical schools see matter and consciousness as the two primal principles of creation, and nature to be the primal mother of all beings – the sustainer, the giver of upādhi-s or faculties of experience, the provider of phenomenal experiences that beget beings the three-fold experiences of life. In the capacity of the primal giver, She is also the primal teacher, the giver of the most instinctive to the most sublime knowledge. Thus the knowledge that man gains from his experience of nature, forms the basis both for the knowledge system and the social institutions that he creates and keeps refining. 

For instance the principle of complementarity as learnt from nature, from phenomena like day and night, male and female, matter and consciousness. It is then articulated as nyāya-s like pangvāndha and daghdhāśva-dagdharatha, and applied at all levels of the Hindu knowledge. At the level of epistemology and spiritual philosophy, it is employed for deductively establishing the premises of philosophical schools like Sānkhya. At the theological level it is seen as the complementarity of head and central deities. At the micro level in society it is seen as the complementarity of head and center of family. 

What changes and what does not change, and what should be the basis for a permanent institution and what not, is something that is learned from the transient and intransient phenomena of nature. The longevity of Hindu institutions is owing to the fact that they are based on unchanging principles of world such as consciousness and not on ideals. This is precisely the reason why it is called the eternal order or the Sanātana Dharma. Hinduism reposes trust in Nature and the intrinsic nature of beings. So the Hindu institutions are fashioned after nature – to be self-sustaining, self-regulating and evolving. 

Hindu worldview not only sees nature as a teacher, but sees human as an indistinguishable element of nature. Evolution of human society is a fact learned from the bigger system – evolution in nature. Natural order is inherently “just” (by the principle of dharma), although means employed are just and unjust, moral and immoral, fair and unfair – towards the ends of serving the evolutionary and ultimately just cause. Thus Hindu worldviews trust human nature as much, and assume that if founded on principles close to nature, human society is capable of evolving itself into the highest possible civilized order. Collective morality is a consequence of this, and builds from the individual. 

In stark contrast, the occidental institutions inherently distrust nature. They primarily believe in envisioning a human system that makes use of and exploits nature rather than trusting its inherent fair or moral nature. Ideals like fairness, freedom and equality are sought to be achieved in the western institutions by controlling the society and running it with those ideals. This precisely is the reason why state in the west assumes so much of control over the nation while a Hindu state merely kept facilitating the nation. Thus regulation in occidental societies is imposed by state and not through society’s inherent self-regulation. Ideals are temporal manifestations of the dynamic principle of truth. Western institutions are based on evolving ideals, hence remaining only temporally applicable and valid. So we see new ideologies and institutions emerging, one to fix what the other broke. 

The reason for this is that the west sees nature primarily as a form of matter rather than a form of consciousness. Hence only the cruder and physical aspects are learned from nature, as a physical mother. This concept does not permeate the deeper layers of consciousness, since they are not sought to be seen in the nature. 

Social Order and Morality

In dhārmic worldviews, being is seen as having concentric layers or sheaths, and goals of life are four-fold and orthogonal to these sheaths. Dharma or righteousness forms the bottommost and first to be achieved, based on which any other goal or fulfillment is made possible. This makes dharma an obligation for every fulfillment, for all the pursuits corresponding to all the layers of hierarchy. In dhārmic societies, the consciousness quality and moral scheme form the basis for the social design. 

Dharma is not based on ideals but on nature, and thus defines the functions of each role that beings involve in at different levels of collectivity. As an individual, as a member of a family in different capacities, as a member of society, as a sustaining element of several institutions, he has varied roles, and through all these he is ultimately fulfilling himself and bringing completeness to his being through his experiences. Thus dharma builds from the individual, and does not flow from top as ideals like freedom and equality do. While needs are hierarchical according to Maslow, it does not really mean human pursuits are hierarchical – they are constrained by several factors, situational or otherwise. What ensures the fulfillment of these needs, is the stratification of pursuits corresponding to these needs and creation of spheres where such pursuits are possible. This happens with the definition of goals of these pursuits – which in the Hindu context are the four-fold purposes of life, three-fold experiences, three-fold states and the one experience that underlies all this – happiness. 

Goals of Life

Dharma aligns the being, its aspirations and capabilities with the infinite possibilities of fulfillment of potential of the being. The fulfillment of one’s Dharma results in striking rhythm with one’s true nature. Striking rhythm with the individual’s true nature is the way to uncover the immense potential of the being. Hence Dharma is the first goal of life, whose fulfillment forms the basis for fulfillment of higher goals. It positions people for the highest goals by aligning with the evolution of beings. The more evolved people are, the less personal and more impersonal their pursuits are. Maslow attests this fact too when he says “self-actualizing people…are involved in a cause outside their own skin”. They are driven by needs in the early stage, then by ego, and then by truth-consciousness. 

There are two main phases in life and evolution. The first phase is a growth phase – which is essentially materially enriching. Artha and kāma, the two goals contingent on Dharma, are the ones pursued in this phase. This is the pravṛtti phase. In this phase man not only caters to his self-esteem and other desires, but primarily contributes to the creation of wealth/resources and sustenance of social institutions. The second phase is essentially internal enrichment and outward detachment. Moksha or the state of highest happiness is the goal of human pursuits in this phase. In this phase man continues to contribute in the creation of knowledge. In our worldviews goals are not seen as hierarchical, but as phased. 

The possibility of pursuing goals arises from (1) capability and potential of an individual (2) social opportunity. In dhārmic societies, the higher the goal is, the lesser is the dependence of man on external means and social opportunity.  Thus, there is a detachment of social opportunity which makes higher goals reachable for society regardless of its stratification in terms of power and economy. 

While there is a natural requirement of qualification for persons to certain offices in the state hierarchy or specialized social functions, the pursuit of highest goals of life does not require any such qualification. Thus unconditional happiness or moksha sādhana is a birth right of every being, regardless of capability, quality of birth (even species of birth as a matter of fact). 

Individual and Society

The way an individual is related to society and state in a dhārmick society is based on an ideal resolution of the vyaṣṭi-samiṣṭi dichotomy. Man’s concentric life layers are well acknowledged – individual, family, community, nation, state, universe etc. In the form of multiple levels of collectivity, there is a graded guard of individual freedom – both in terms of enabling and constraining it. Power is also accumulated at different levels, thus empowering the society without excessively empowering the state. Thus a more intimate and aware collectivity continuously helps individuals guide their lives, while at the same time enabling them to execute social functions with a collective instead of individual capital. The immense social strength that this arrangement gives, can be seen from the resilience of India in the face of relentless attacks on its civilization for centuries – something hardly visible anywhere else in the world. For the most part societies can retain only that identity which the state foists on them – as can be seen all over the Middle-East and Europe for instance. But in India even after centuries of alien state and a currently prevailing proxy-colonial state, the society’s identity remains what her national and social identity had been for ages. 

Concepts of nation and state

The traditional idea of Bhārata has two aspects, the rājyaand rāṣṭra. Rājya corresponds to state (polity, administration etc), and rāṣṭrato cultural – social-national aspects. 

Bhārata – The Rāṣṭhtra

Rāṣṭra is approximately nation-culture, which comprises of 56 geo-cultural units traditionally called the chappan(na) deśa-s (though some of these fall outside present Indian borders). Understanding these deśa-s is essential to understand the diversity and stratification in Indian culture. While the layout of rājya-s kept changing with political vicissitudes, while the rājya-s kept merging and breaking up into different empires, the deśa-s remained to be regarded as the units that comprise the nation/subcontinent (varsha/khanḍa). The practice of describing the span of empires in terms of deśa-s, goes to show the significance of deśa-s in the basic understanding of the subcontinent. Able emperors could control more than a deśa, and a deśa could also have multiple small kingdoms at times. But the deśa as a basic unit transcended the more transient and constantly realigning rājya-s. This is the reason why the stream of civilizational and cultural enrichment continued uninterrupted in the subcontinent irrespective of political realignments. The presence of a strong empire resulted in patronage and high points of civilizational pursuits. However there was rarely any destructive effect on cultural diversity or identities of these deśa-s. 

Importantly, the deśa remained a well-defined concept which is almost agnostic of the rājya. For all non-political purposes, Bhārata’s geography has often been described in terms of deśa-s. For instance Varahamihira in his BṛhatSamhita categorizes the deśa-s of Bhārata into different seismic zones. More on this can be seen in the paper “Earthquake prediction in Ancient India” by Prof. RN Iyengar. Lawgivers dealt with validity of local customs and practices based on deśa-s. Panini alludes to rules of grammar with respect to local language practices based on deśa-s. Thus understanding of deśa is fundamental to understanding Bhārata. 

The cohesion of peoples in the subcontinent and their cultural affinities in the diverse landscape, need to be understood on the basis of these deśa-s. It also needs to be understood that these deśa-s were regarded as part of Bhārata. This tells us the nature of oneness of Bhārata ingrained in the Indian mind for ages. The cultural affinities between peoples of the same deśa are pronounced, and it is easy to find more similarity between cultural units/jāti-s (belonging to the same strata) of the same deśa than people of same jāti of different deśa-s. This is the reason we prefer the word geo-cultural unit for a deśa. 

Besides, an integral view of the entire Bhāratavarsha as a rashtra is visible from several integration themes – for instance the Saktipeetha-s and Jyotirlinga-s, the spiritual unification centers that people cover. What more concept of geo-religious oneness does one require to see, than the sthala-purāṅa of Kanyākumāri saying the Devi waits to get married to Śiva coming from Kailāsa of Himalayas? The landscape covered by Pānḍavas during their exile or Śri Rāma during his exile are other classical integration themes. 

Thus in the traditional Bhārata, the different collectivities like jāti, deśa, sampradaya acted as a web of interrelated unifying themes, comprising the rāṣṭra. History of Bhārata stands witness to the fact that such unity proved to be more powerful than political oneness in keeping the society united. Wherever and whenever this web of unifying motives was torn,, due to political, religious, cultural or social disruption, India suffered. 

Thus Bhārata had an evolved concept of orthogonal institutions of nation and state which give far greater autonomy to the nation than a nation-state does. Geo cultural and Geo political are distinct, as depicted in the figure below: 

Figure 4Cultural-political vs Political geography

The geo-cultural, though it is predominantly about the habited civilization of 56 deśa-s, expands all the way up to khanḍa, dvīpa (continent) and vasundhara (the earth) and gives the sense of vasudhaiva kuṭumbakam (global family of mankind). The inherent openness of Bhāratīya traditions and people, be it in readily accepting other peoples or their ways of lives or the diversity of thought and life systems and worldviews, reflects in and is made possible by the separation of geo-cultural and geo-political. The principle is universal and applicable for all times: be accommodating at people level, at polity level be shrewd and discriminative mindful of nation’s interests. 

Our society runs on the basis of a complex set of institutions with due checks and balances. Hence it has the vitality to self-regulate, self-correct and evolve with times. Most of the course corrections in our institutions came from within the society in the form of seers, teachers, scholars and samskarta-s (civilizers/refiners, not reformers). Thus this nation is used to a far higher degree of freedom (given by responsibility) than a nation-state gives its nation in the west. 

Figure 5Macro view of institutions of Bhārata

Society in India is strong and this is the reason individual enjoys much greater degree of liberty compared to west where state has much larger control over the families and individuals. Whether it is allowing kids to sit in the parent’s lap in a car or choosing the emphasis of “formal” literate education the state decides a lot more about individual lives than the real stakeholders in the individuals’ lives: family community etc. Indian society feels scuttled and its liberties snatched by the present state, as it legislates matters that society is capable of taking care of and make more balanced and calibrated corrections than state can. State/law is a last resort and cannot act as nation/character builder. Society with its self-regulation and cultural-spiritual traditions alone can do it. The case for restoring the nation’s self-control is a significant part of our freedom struggle, whether or not it is well articulated before independence. Post-independence in 1947, state defined by our new constitution has only very partially and unsuccessfully fulfilled this craving. 

India the nation state

Given the original Hindu understanding of Bhārata, it is easy to notice that the organization of India since independence is not exactly in line with the former. To be fair, the post-colonial Indian organization was an uphill task of integrating hundreds of princely states (which themselves have nothing to do with the deśa-s). And they were subsequently organized into 25+ states, some of them supposedly on the basis of language. While the choice of Hindi instead of Sanskrit as a national language had its issues, the main problem in linguistic division is that it revolts against the very concept of cultural diversity represented by linguistic diversity. For instance, the Hindu rājya-s preserved cultural and linguistic diversity while the states of today impose a single official state language. This is an anti-thesis of the cultural unity-diversity that prevailed in the nation for centuries. 

The post-colonial nation-state is merely a geo-political concept that does not take any cognizance of the original concept of geo-cultural units that built the civilization of this great nation. 

The political organization becomes basis for law, and landscape for such organization in turn is described entirely unrelated to geo-cultural units. This is in sharp contrast to the way kingdoms described their landscape based on geo-cultural units and towns/villages belonging to those units. This is a primary distinction between a nation-state and rāṣṭra. The former is only political in nature whereas the latter is cultural in its essence, and defines political with respect to the cultural landscape.  The implications of such definition are many. In the rāṣṭra, the variety of life, customs, linguistic and cultural preferences, social practices of these landscapes form part, and even drive to a certain extent, the state policies and lawmaking. They do not merely become accommodated factors to an otherwise sought-to-be-uniform union policy pervading the entire nation. Civil and social liberties are not accommodated but drive the policy. 

The education designed by the post-colonial state machinery do not teach native culture or geography or natural resources or civilizational story related to these units which remained a permanent feature of this nation for ages, right from pre-Vedic times to pre-independence. This makes the Indians view the nation through colonial and political prism, in contrast to the way this nation has always seen and identified itself. This colonial consciousness is not merely a hangover of colonial period but a persistent feature of the geo-political concept of nation-state. The education does not teach the essence or nature of the institutions of nation and society, and as a result of this the experiences of one’s society and surroundings is not shaped in consonance with the workings of those institutions. The various integration motives that act as a web, acting in the society, are not taught as a web of motives since the cultural view of nation is not taken cognizance of. Simply put, post-colonial education de-Indianizes one’s experiences of India. 

For instance jāti is presented not as a unit of cohesion but as a unit of rivalry. However, the fact is that multiple jāti-s of the same deśa have greater cohesion than people of same jāti across deśa-s. But unless this is taught in perspective neither kinds of cohesion are treated as cohesion: both are seen as “caste” and “regional” prejudices. Thus the immense positive potential, a real and social experience, presented as a negative feature of the society. Similarly the fact that master-disciple lineages are primary reason for our civilizational continuity, are presented as some sort of principle of exclusion. The fact that extraordinary skill and perfection was achieved in the skill group guilds is presented as a sort of imposition and lack of civil liberty: a notion easily negated by the very fact of excellence achieved. Thus the non-cognizance of cultural view results in seeing as negative even the most positive aspects of the institutions of society. 

Thus in the current arrangement all those collective arrangements that earlier acted as integration motives, are now seen as, hence even acting as disintegration motives. Religious, cultural and linguistic bonds are way stronger than regional urban-rural cultural bonds, and this explains why India today suffers more lack of unity at people level than in the pre-colonial times. Caste, language, region based rivalry and jingoism are essentially colonial and post-colonial phenomena. This is because rāṣṭra the web of integration motives is not taken cognizance of by the nation-state, nor does it form the basis for understanding the nation for which the state is being defined. 

Geo-political linguistic states that bind one language-one polity do not take cognizance of the deśa-s and their cultures and languages. Hindu rājya-s explicitly described themselves as a collection of these cultural units and designed their policies per them (the deśa-kAla layer of constitutions is designed thus), the post-colonial states that unified princely states aggregated themselves into single-language states which caused active discouragement to the development of cultures and languages. While Sanskrit as a link language integrates and does not stifle the development of regional dialects and languages (which is how Indian languages flourished in the first place), English-Hindi as union’s link languages hardly helped such harmony. 

A few prominent examples of conflict because of nation-state’s monolithic political nature can be listed here. 

1. Vidarbha grievances under Marāṭhā state. Marāṭhā Empire was a collection of several deśa-s, vidarbha being one of them. In contrast Maharashtra the post-independence state is a Marathi state not defined as inclusive of these deśa-s and their languages or cultures. 
2. Telangana grievance under Andhra Pradesh: the landscape traditionally is Andhra-Trilinga-Kalinga deśa-s which was unified into Andhra Pradesh, making it a geo-linguistic entity. 
3. Excessive emphasis of Dravidian distinctiveness right from influencing foreign policy 
4. Konkanis grievances under Kannada state: Today’s Karnataka state encompasses konkaNa and karnATa deśa-s, while officially accommodating and pushing Kannada language. 
5. Gorkha grievances under Bangla state, which are again ethno-linguistic-cultural. 

The derecognition of a cultural landscape that can exist agnostic of state conception, and more importantly a proxy-colonial state which is not founded in the long known Hindu ideals, resulted in a near-complete curtailment of Hindu culture and civilizational progress. It can be argued that these grievances are resulting in formation of smaller states which may eventually align with the deśa-s. However, that does not explain why a political entity like state should be unable to, by its design, ably and harmoniously govern a landscape that consists of multiple deśa-s or cultural units and why such grievances should arise in the first place. The answer is the fact that nation-state is about one language-one nation-one people and this does not by design accommodate a multi-cultural multi-language multi-people system like Bhārata.

The nation-state defined by our constitution is thus fundamentally incompatible with Bhārata.

Continued ……

Image credit: The Hans India

Courtesy: https://www.indica.today/research/raja-dharma-series-iv-b/

Scope Of Smṛti And Nature Of A Dhārmic State – Part 1 - Shankar Bharadwaj Khandavalli

 Abstract

After independence in 1947 this is arguably the most opportune time for us to contemplate on a constitution and a state design that aligns best with the nation. Right from the notion of nation-state and union of states, to rights to ideals like equality to choice of democracy to secularism, the modern systems known were adopted in Indian constitution. There has not been an analysis or a debate of whether these align with Bhārata, there has only been an attempt to make these successful in Bhārata with an implicit assumption that Bhārata should scale up to these ideals of modern age. Whether it is on the basis of a theory of polity or morality or social design, the choices never went through enough scrutiny. Today we have both the experience as a nation and the record of post-independence state institutions to make such an evaluation.

To be able to have a constitution and a state that best aligns with the nation, it is necessary to look at the notions of constitution, state, nation, morality and ideals as Bhāratīya-s understood for ages, how they evolved, and which of those were behind our glorious past, which of those need what level of adoption. Great nations can’t be built by a welfare state that focuses on lower functions of human consciousness (including wealth distribution). Great nations are a result of higher functions of human nature, of the highest level of human fulfillment, living the loftiest ideals and realizing the highest human experiences. We are a great civilization and a great nation built by Rāma, Kṛshṇa, Ṛshi-s and Devata-s, and we need a smṛti and a rājya that espouse their ideals to rebuild ourselves from the colonial shadows into glory.

The primary focus of the present paper is to present the scope of smṛti and the nature of a dhārmic state. We attempt to make a contrast with the present constitution and nation-state, not with focus on a comparative analysis or critique of the present system. Most of the present day ideals and notions are assumed and taken for granted and this makes it necessary to present a contrast before the true nature of a dhārmic state and smriti can be understood, unbiased by such assumptions.

Such an exercise would begin with a comparison of the foundational texts of collective organization, the smṛti-s of traditional Bhārata with the Indian constitution. The bases for comparing and contrasting a Bhāratīya smṛti with Indian constitution do not merely happen to be ideals or policies. Comparison needs to be of the very bases of the texts and their scheme, the worldview and principles that form the basis for those ideals and policies, the collective organization and manifest results of implementing those ideals and policies in the nation.

This exercise involves multiple challenges. Primary challenge is that there is no clear epistemic basis for such evaluation. For instance, modern constitutions assume several ideals that are not refutable within the framework of constitution. The ideals themselves have to be refuted outside the framework of constitution, while the policies assuming those ideals need to be debated within the framework. In contrast a smṛti text spells out an ontological basis from which its ideals emerge and the source texts that form basis for the axiomatic content of the smṛti. In fact this feature is common to most Bhāratīya texts – there is always a meta content available based on which content could be modified or codified. For instance aṣṭādhyāyi is not a grammar text written in Sanskrit but in upadeśa, a meta language. Similarly smṛti is not directly a constitution or a book of law but includes meta text that enunciates guiding principles for framing such books. The constitution and smṛti are thus texts at different levels, one gospel-like and the other refutable.

In brief, the paper contrasts the salient features of present constitution with a traditional smṛti. Broadly these features are of two kinds –

1. Document level features: These include meta content that contextualizes the core content of the document, helps audit, internal consistency and updates, manages the multiple layers of content in a non-conflicting way.
2. Content level features: These include the universal principles, scheme of morality and ontological bases of the text; considerations such as permanent-temporal and micro-macro underlying the design of institutions; the nature of nation as the text sees it and the nature of state designed by the text.

We propose how a constitution would structure itself, if based on dharma and Bhāratīya principles of constitution and law making. This includes the nature of dharma, multiple layers of text in a smṛti, such as the eternal, temporal, region specific, multiple aspects of the content of the text. There is far little emphasis on political model and executive since they become corollaries and emerge as a result of a right understanding of rāshṭra and dharma śāstra. The primary focus is on how the meta content determines the nature of state and society. The orthogonality of geo-political (state/rājya) and geo-cultural (nation/rāshṭra), the principles underlying various institutions and the bases for their formation and evolution rather than the institutional structure itself, will remain the focus. The considerations in a constitution that explicitly and implicitly allude to the different aspects of the nation and society, their relative significance and insignificance in different layers of the text becomes a secondary focus. For instance, how the assumption of a diverse society results in constitutional provisions as compared to the assumption of a monolithic religious society.

We attempt to present the nature of a dhārmic state that bases itself on such a smṛti. Some of the principles of a dharmic state (such as prajāranjakatva &śikshā dakshata, yāthā rājā tathā prajā etc.), and their influence on policy and law making are identified. Instances from the manifest layers and policies are used more as examples to explicate the point rather than as an attempt to demonstrate the merit of a policy. Some of the problem spaces such as the trade-off between civil liberties and state authority, social order and identities, integration motifs in the institutions, the way they get formalized in a constitution are identified. It is also identified, for completeness, what does not form part of a smṛti and what forms part of a temporal executive.

Introduction

After independence in 1947 there was an opportunity for us to create a constitution and design a state that aligns best with the nation. However, we have adopted a colonial state with little criticism of ideals and institutions, while amending the aspects that appeared coercive in the colonial state. Right from the notion of nation-state and union of states, to rights to ideals like equality to choice of democracy to secularism, mostly the modern systems known were adopted in Indian constitution. There has not been an analysis or a debate of whether these align with Bhārata, there has only been an attempt to make these successful in Bhārata with an implicit assumption that Bhārata should scale up to these ideals of modern age. Whether it is based on a theory of polity or morality or social design, the choices never went through enough scrutiny.

It is therefore necessary to evaluate the ideals of modern Indian state, their suitability and their bases, with Bhārata, her ideals, notions of nation, individual and collective morality forming the frame of reference. Only then could one arrive at the right set of ideals and institutions best suited for the abhyudaya of Bhārata.

Such a contrast could start by comparing the foundational texts of collective organization, the smṛti-s of traditional Bhārata with the Indian constitution. The bases for comparing and contrasting a Bhāratīya smṛti with Indian constitution do not merely happen to be the ideals or policies. Comparison needs to be of the very bases of the texts and their scheme, the worldview and principles that form the basis for those ideals and policies, the collective organization and manifest results of implementing those ideals and policies in the nation.

This exercise involves multiple challenges. Primary challenge is that there is no clear epistemic basis for such evaluation. For instance, modern constitutions assume several ideals that are not refutable within the framework of constitution. The ideals themselves have to be refuted outside the framework of constitution, while the policies assuming those ideals need to be debated within the framework. In contrast, a smṛti text does not base itself on assumed ideals but spells out an ontological basis from which its ideals emerge and the source texts that form basis for the axiomatic content of the smṛti. Smṛti is not directly a law book or constitution, but is multi-layered and has meta content that enunciates guiding principles for framing such books, along with sections of specific content that is modifiable based on the former.

Layout

To be able to examine the scope of a smṛti and the nature of a dhārmic state, the paper is divided into sections that;

1. Draw a brief contrast of constitution from a traditional smṛti to indicate the structural and conceptual differences.
2. The moral scheme underlying a smṛti.
3. A structural and institutional view of Bhārata, the notions of state and nation.
4. Briefly contrast traditional institutional structure from nation-state.
5. Explore how a constitution would structure itself, if based on native principles of constitution and law making.

Constitution

The constitution of a nation gives an idea of how a nation views herself, her identity and her cherished ideals. Constitution at least in the present sense, while broadly identifying the nation and indirectly referring to nationhood, defines a state that governs the nation, ideals of state and a framework of rights. While some of these are universal in nature, the state’s commitment towards nation and her identity, her cherished principles and ways of life, is almost assumed. Laws are derived from these ideals and rights, towards protecting/achieving those.

However, this structure itself is a relatively modern evolution. The traditional constitutions in India, the smṛti-s, are structured not to begin with defining a state but from universal-eternals, then explaining human nature, then the bases for defining a state, and the land where the law of land applies. The structural difference between the foundational documents is equally important to understand as the difference in the content, since such difference is also directly related to the macro aspects of how those documents see the world, man, nation, state.

Table 1 depicts a high level contrast between smṛti and constitution. Smṛti first engages in explaining the universals, then the specifics of human nature, and the bases for making laws as rooted in those. A scheme of morality is first spelt out even before law is made. Constitution in contrast, spells out the ideals for a state but does not spell out a moral scheme based on which the laws are made.

Broadly, it could be claimed that a smṛti is best designed for inherited societies whose main features are (a) a stream of knowledge traditions (b) an institutional structure that is adaptable and evolutionary. In contrast, a modern constitution is best designed for an organized society where state deals more directly with individuals.

Constitution defines a framework of rights and enlists the rights of individuals that are protected by the state. That rights are subject to state granting those, is implicit in this. In a smṛti there are no individual rights specified, one’s liberty is unbound until it is breaching a law or violating others’ natural liberties. This is vastly different from the notion of right, because rights are granted and protected by state whereas individual liberties are protected and determined by one’s own nature and conduct where the state’s role is passive. The seeds of individual action and human fulfillment through action – individual and collective are sown right in the dharma śāstra-s, as the cherished ideal of the Indian peoples for ages. This, thus, is a nation made by people – not as a euphemism but the way this nation defined herself. Fulfillment of being, through action, through fulfillment of desires and achievements, through inaction and through diverse experiences of life, fulfilling the purposes of life, becomes the basis for defining what state does to protect these. The primal human aspirations are identified, whose legitimate fulfillment (in a way it does not infringe similar fulfillment of other beings) is an ability that nature confers on individuals – through individual actions, through collectivities.

Table 1 Contrast between Traditional smṛti and Constitution

Constitution should reflect an understanding of the characteristic features of a nation and define state in a way that the interests of nation are best served. On the contrary, against the above backdrop, the post-independence Indian constitution tries to define how the nation should be. Instead of defining a state that aligns with and protects the nation, it imposes notions that revolt against the basic nature of this nation. While the table above and sections below keep drawing the contrast between the nation-state envisioned by post-colonial constitution and a dhārmic rājya-rāṣṭra envisioned by smṛti-s, the focus of this essay is not to establish that the post-colonial constitution does not align with the nation. It is a given and natural that it does not align. It is also natural that our constitution and state cause damage to the nation and her institutional structure.

We limit the scope of this essay to anecdotes rather than elaborate data, mainly to convey the thought than to demonstrate it. To clarify, data is important and data does get debated in public discourse today, and there is no shortage of details. For instance, the bad side-effects of discriminative caste policies and politicization of caste, the logical inconsistency in a secular state controlling religious institutions of Hindus, unequal treatment of various groups while setting the ideal of equality are not without mention in the last few decades. There is, however a shortage of debate on the institutional structure and the worldview and concepts underlying that structure.

The contrast between the post-colonial and traditional systems is drawn primarily to take focus back to how we can rediscover ourselves sans colonial thought rather than attempting to quantify the damage.

Morality

A scheme of morality is the primary assumption of a constitution, something that it does not define but makes use of. Indian constitution was derived from western constitutions, many of the acts continued from British times. They are mostly based on Victorian Christian morality. Recent judgments observed the need to change these to a more recent, post-modern moral assumption such as decriminalizing LGBT etc. Many laws are called outdated because the ideals underlying these laws are changing with times.

There are collective ideals and individual morals. Constitution assumes both along the lines of western Christian view of man and world. The impact of this can be seen only when there is a contrast drawn with Hindu moral scheme (dharma), how it works and its implications in individual and collective life and lawmaking.

A proper contrast between Dharma and western morality can come not merely by comparing the moral frameworks of East and West, but by comparing the consciousness frameworks from where the human conduct (ethical or otherwise) is understood and explained.

Dharma

Nature can be understood through two of its primal aspects – consciousness quality (guṇa) and action (karma). Dharma or natural righteous order is determined by these two aspects. This is one of the foundational notions in Dhārmik systems, and is visible in the society, language, culture and view of life. Dharma as the goal of life is the fulfillment of dharma the natural order. Dharma or righteousness is not an imperative (like hypothetical or categorical imperative), but a purpose of life. Goals of life are four-fold, and fulfillment of being and attainment of complete happiness can happen through their attainment. Since dharma is the aligning principle of the nature of a being and its actions and thus its fulfillment, dharma is itself the first and foremost goal whose fulfillment leads to the fulfillment of the remaining three.

Fulfillment of purposes of life, attainment of happiness through the different faculties of consciousness (senses, mind, intellect, ego and the entire being) in a graded way is the basic theme in Sanātana Dharma. Attainment of happiness of the highest order (ānanda) is the end to which all human aspiration is, according to all the worldviews (darśanas). Dharma is natural righteous order which manifests in all beings, something existent and learnt from nature. It is the law which determines the experiences of beings and fruits of action. It is the basic law of cause and effect, on which the theory of karma is based. Dharma is thus the intrinsic nature of beings. And dhārmik acts like speaking the truth and being nonviolent, is the intrinsic nature of beings.

What becomes a “law” in dhārmik framework is something that is in the intrinsic nature of beings. Thus an “imperative” in Dharma traditions if one has to state, would be as simple as– “realize your true nature, be true to your nature”. This actually relates directly to actors, actions, situations and consciousness, and is not limited to stating moral facts. When there is a cosmic order that is pervasive and whose micro manifestation is the intrinsic nature, the order can hardly be subjective – it is universal by definition, while at the same time keeping in tune with the phenomenal diversity.

Nature and action are both rooted in consciousness. To understand dharma it is necessary to understand Indic consciousness studies. Consciousness study is a well-developed subject and influences most of the subjects, metaphysical as well as physical. Understanding consciousness qualities and consciousness layers/sheaths helps us understand the bases for concepts like Dharma too. In Hinduism the source of morality is consciousness itself, and manifests differently at different levels of consciousness. The dhārmik behaviour or morality is in the intrinsic nature of beings, and how dhārmik or adhārmik an action is, is determined not just based on a moral law but on the basis of the consciousness quality and the sheath to which the being belongs.

There are five sheaths of consciousness, which are grouped into three bodies of the being. The outer sheaths have to do with physiological needs, inner/deeper ones with psychic plane and still deeper ones with impersonal knowledge. Human evolution is defined in terms of increasing manifestation of the intrinsic nature and decreasing manifestation of outward nature. An easy way to understand this model is to map these sheaths to Maslow’s pyramid of hierarchical needs. Thus the outward nature of a being is driven more by needs (of the lower layers of Maslow pyramid or the outer sheaths of consciousness) and the intrinsic nature is driven more by urge for knowledge, aesthetics etc. (corresponding to upper layers of Maslow pyramid or inner sheaths of consciousness). So when we say the being’s intrinsic nature is to be truthful, it is because the object of consumption of intrinsic nature is truth-beauty (self-actualization and self-transcendence layers of Maslow pyramid) and not food-sense pleasure-ego gratification (physiological, survival, self-esteem layers of Maslow pyramid). So to speak the truth is the default intrinsic nature, which can be distorted by lower needs of man. We can apply the same logic to another moral fact – of nonviolence. While violence is an extrinsic natural fact and a basic survival method, and life sustains by consuming life, nonviolence still becomes a default in intrinsic nature.

The different aspects like morality, purposes of life, consciousness, happiness and excellence, epistemology and cosmic philosophy form part of a complex concept like Dharma which acts as the main guide of life in dhārmic worldviews. There is a common structure of knowledge and society in the east that reconciles and develops the several aspects of life and different forms of knowledge, and that is rooted in dharma.

Continued …….

Image credit: picxy

Courtesy: https://www.indica.today/research/raja-dharma-series-iv-a/

Kautilya and Modern Economics by Balbir S Sihag

Introduction to Kautilya and his Arthashastra 

Kautilya was a learned, ethical, wise, experienced, secular, progressive, independent and original thinker. He believed that poverty was death while living. His Arthashastra is a manual on promoting Yogakshema—peaceful enjoyment of prosperity—for all the people. It is shown that his approach is more suitable to our economy than the currently adopted western approach. He understood the economic system as an organic whole with interdependent parts. He undertook an in-depth and detailed analysis of each part at the micro level without losing sight of the macro goal of engineering shared prosperity. He believed in the power of persuasion, moral and material incentives and not in coercion or force to elicit effort. He designed material incentives in such a way that no crowding-out occurred, that is without weakening the moral incentives. He advanced a holistic yet logical and comprehensive approach to bring shared prosperity. 

In fact, a stakeholders-model in which the businessmen, workers and consumers share prosperity, is discernible in his Arthashastra. He relied both on the invisible hand (the market) and the direct hand (principles, policies and procedures) to enrich the people. Kautilya was deeply influenced by the Mahabharata (3102 BCE) and it appears as if it had happened in not too distant a past. Secondly, Rao (1973) points out that the measurements used in the Arthashastra are very similar to those prevalent during the Sindhu-Sarasvati Civilization (2600 BCE-1800 BCE).1 

 According to the new research, Chandragupta Maurya ruled around 1534 BCE and not during the 4th century BCE. The preponderance of emerging evidence indicates that Kautilya wrote his Arthashastra—science of wealth and welfare—several centuries earlier than the fourth century BCE which has been advanced by the Western Indologists. They had taken upon themselves the selfless and tortuous task of dating, without any margin of error, all the historical events, such as the Aryan Invasion Theory and providing authentic interpretations of our ancient texts. They really need their well-deserved retirement from this demanding responsibility and leave it to the native amateurs. 

Kautilya was far-sighted, foresighted, ethical but not very religious, believed in designing an efficient organizational structure but was not a bureaucrat. Kautilya: The True Founder of Economics The following table lists some of the concepts innovated and used by Kautilya. It also provides the time-periods of their re-emergence. 

Table 1: Concepts Developed and Used by Kautilya 

On the other hand, Adam Smith did not innovate a single concept in economics. Barber (1967, p17) observes, “Little of the content of The Wealth of Nations can be regarded as original to Smith himself. Most of the book’s arguments had in one form or another been in circulation for some time.” 

Kautilya as a One-Man Planning Commission and More 

Kautilya's Arthashastra is comprehensive, coherent, concise and consistent. It consists of three fully developed but inter-dependent parts. 

(a) Principles and policies related to economic growth, taxation, international trade, efficient, clean and caring governance, moral and material incentives to elicit effort and preventive and remedial measures to deal with famines. 

(b) Administration of justice, minimization of legal errors, formulation of ethical and efficient laws, labour theory of property, regulation of monopolies and monopsonies, protection of privacy, laws against sexual harassment and child labour. 

(c) All aspects of national security: energetic, enthusiastic, well trained and equipped soldiers, most qualified and loyal advisers, strong public support, setting-up an intelligence and analysis wing, negotiating a favourable treaty, military tactics and strategy, and diet of soldiers to enhance their endurance. 

II Kautilya’s Ethics-based economics Versus Modern Self-interest based Economics 

Modern Economics Based on Self-interest: Complex contracts are written to safeguard against potential harm that might be caused by the partners’ opportunism. It seems that propensity for opportunism is the dominant phenomenon everywhere. Economists and organizational scholars believe that it is not possible ex ante to differentiate a trustworthy person from an untrustworthy one, so it is prudent to adopt a ‘calculative’ approach to trust, that is, treat trust as a risk and suggest taking necessary protective measures. 

Kautilya’s Ethics-based Economics: Ancient sages realized that genuine trust was an ethics-intensive concept since non-violence, truthfulness, honesty and benevolence were the foundation for trust. Kautilya accepted that insight wholeheartedly. That is, trust flourished only in an ethical environment. How to make sure that children grow-up to be ethical adults? Kautilya suggested teaching ethical values at an early age. Kautilya believed that dharmic (ethical) conduct paved the way to bliss and also to prosperity. That is, according to Kautilya, a society based on contracts alone is less productive and more anxiety prone than the one based on conscience and compassion. If the social environment is predominantly ethical, there is less of a need to take defensive measures to protect against opportunism. He emphasized ethical anchoring of the children for replacing the ‘culture of suspicion’ with a harmonious and trusting one. 

Critical Role of Trust in a Knowledge-based Economy: Trust may be an intangible asset/good but has the most tangible role in creating and sustaining the social, economic, cultural and political structures. It is the brick and mortar to the building of inter-personal relationships. In an industrial economy, trust (a) reduces transaction costs by reducing opportunism, enhances a feeling of wellness by reducing anxiety and (b) also might increase GDP by reducing the demand for lawyers and turning them into engineers. 

Trust is the most valuable asset in a knowledge-based economy. Both creation and sharing of ideas depend on trust. The distinguishing characteristic of a knowledge-based economy is a frequent sharing of tacit knowledge and exchange of information among the cognitive labor. As soon as a person codifies his/her tacit knowledge everyone has access to it. Knowing this fact a person will share tacit knowledge only if s/he is sure of not getting fired. Creating ethical-based trust is the key to realizing all the potential gains from creating and sharing of knowledge. 

Adam Smith focused only on invisible hand. But economists now deal with cases II and III also. Kautilya was the only one discussed all four cases. 

Table 1: Interests and Incentives 

Dharma and Prosperity 

Since the mid-90s, a considerable amount of intellectual effort has been devoted to study the nature of relationship between institutions, good governance and economic growth. One group of economists argues that institutions are the most important determinant of economic growth. In fact these economists call institutions as the ‘deep determinants’ of growth. For example, Dani Rodrik, Arvind Subramanian, and Francesco Trebbi (2004) (2004) claim, “This exercise yields some sharp and striking results. Most importantly, we find that the quality of institutions trumps everything else.” 

The other group of economists gives primary importance to good governance and only secondary to institutions. Edward Glaeser, Rafael La Porta, Florencio lopez-de-Silanes and Andrei Shleifer (2004, p 298) conclude, “But institutional outcomes also get better as the society grows richer, because institutional opportunities improve. Importantly, in that framework, institutions have only a second-order effect on economic performance. The first order effect comes from human and social capital, which shape both institutional and productive capacities of a society.” 

Apparently, economists, even now in 21st century, are debating about the relative importance of institutions versus to that of good governance. Kautilya settled this debate more than two thousand years ago. He argued that good governance created opportunities and institutions allowed them to be availed of implying that both were essential to prosperity and it was futile to compare them. However, according to Kautilya, most important was the ethical environment, which improved the quality of both. 

Kautilya on Importance of Institutions: Kautilya believed that poverty was a living death and also not conducive to the practicing of ethical values. He argued that maintenance of law and order was a prerequisite to economic prosperity. He (p 108) observed, “By maintaining order, the king can preserve what he already has, acquire new possessions, augment his wealth and power, and share the benefits of improvement with those worthy of such gifts. The progress of this world depends on the maintenance of order and the [proper functioning of] government (1.4). 

Importance of Good Governance: Similarly, according to Kautilya, good governance was needed for prosperity. He (p 149) suggested, “Hence the king shall be ever active in the management of the economy. The root of wealth is economic activity and lack of it brings material distress. In the absence of fruitful economic activity, both current prosperity and future growth are in danger of destruction. A king can achieve the desired objectives and abundance of riches by undertaking productive economic activity (1.19).” 

Kautilya’s ideas if expressed in today’s language imply that quality of institutions reduced risk and good governance increased return on investments. This may be captured by the following figure. 

The risk-return possibility frontier, AB shifts to A'B' and also becomes more concave. That makes it possible for an investor to move from point E to point E'. U1 and U2 are the indifference curves. Two points may be noted. Kautilya’s insights may be expressed not only as a shift in the feasibility frontier but also as a change in its curvature.

Table 8.1: Conceptual Framework on Dharma and Prosperity 

Conduct and Prosperity: Kautilya argued that a king, whether he fulfilled his moral duty or followed his enlightened self-interest, had to enrich his subjects. However, he understood the major differences between them: according to the moral duty, the king wanted to enrich the public whereas according to the enlightened self-interest, the king had to enrich the public. He preferred an ethical king rather than a king motivated by his enlightened self-interest. The following figure may be used to express his ideas on comparing the relative consequences of following moral duty to those of enlightened self-interest. 

AB is the income possibility frontier. Point M denotes the combination (high public income, low king’s income) if the king follows his moral duty. Point F denotes the combination (very low income for the public, very high income for the income) when the king is immoral. Point S denotes the combination (somewhere in between points M and F) when the king is amoral, that is, follows his enlightened self-interest 

Kautilya specified three possibilities. (i) His argument based on moral duty implied that a rajarishi (king, wise like a sage) would take a very modest amount for his own consumption, that is, point M would not be too far away from point A on the vertical axis.8 Such a king would promote ethical behavior, use almost all the tax revenue on the provision of public goods and welfare programmes and follow judicious polices to encourage economic growth. As a consequence there would be both spiritual and economic (i.e. over time the income possibility frontier would shift outwards) enrichment of his subjects. 

(ii) A king motivated by his enlightened self-interest would promote public interest to the extent that it promoted his own interest, that is, promotion of public interest was merely a means to the promotion of his own interest (whereas in the above-mentioned case (i) promotion of public interest was an end in itself). Kautilya’s argument based on enlightened self-interest implied that the king might choose a point like, S. 

(iii) According to Kautilya, a myopic and unethical king would try to grab almost all the resources for himself. This is indicated by point F on the possibility frontier. Such a king would ruin himself as well as the economy. This is comparable to Olson’s ‘roving bandit’. Since such a king would leave very little for the public, that is, point F would be very close to point B on the horizontal axis. Such extortion and myopic behavior would adversely affect future economic growth (i.e., most likely, the income possibility frontier would shift inwards). 

Minimal and Maximal Economic Growth: Thus two types of growth models are discernible from The Arthashastra: one based on moral duty and the other based on enlightened self-interest. Kautilya preferred the one based on moral duty since that would lead to the highest possible growth in income of the people. Whereas the growth rate based on enlightened self interest was the minimum required of a king to stay in power. That is, so long as the king managed to keep income above the poverty line, y > yPl, (the poverty level of income) and judicial fairness, J > JR at a reasonable level of fairness (that is, punishment somewhat proportionate to the crime and low probability of judicial errors), there would be law and order and the king could stay in power. However, the king had to provide some infrastructure and have pro-growth policies to promote economic growth. Thus, even in this model, both institutions and governance were needed for generating economic growth and institutions alone could not be labelled as the ‘deep determinant’ of growth. 

III Ethical Anchoring of Children 

According to Kautilya, it is better to pass on good values rather than ill-gotten wealth to the younger generation. If we insist on labeling reforms as the ‘first generation’ reforms and ‘second generation’ reforms, Kautilya might suggest a more appropriate distinction: to undertake reforms of the ‘old generation,’ which is running the country at the moment and whose unethical behavior could be casting a long shadow on the character building of the younger generation. Kautilya (pp 155-156) wrote, “‘There can be no greater crime or sin’, says Kautilya, ‘than making wicked impressions on an innocent mind. Just as a clean object is stained with whatever is smeared on it, so a prince, with a fresh mind, understands as the truth whatever is taught to him. Therefore, a prince should be taught what is dharma and artha, not what is unrighteous and materially harmful (1.17).” In a democratic country every child is a prince. Moreover, he (p 123) pointed out, “Whatever character the king has, the other elements also come to have the same (8.1).” 

IV Kautilya’s Insights 

(a) An ounce of ethics was better than a ton of laws. Ethical anchoring could be more effective in preventing systemic risk than a heap of rules and regulations. (b) Principles were only as good as the people who practiced them, and policies were only as good as the people who formulate and implement them. (c) Material incentives should complement and not substitute moral incentives so that there is no crowding- out. (d) Education should include ethical education also. Secular values, such as non-violence, honesty, truthfulness, compassion and tolerance do not violate the separation between religion and state. (e) Market failure is bad, government failure is worse but moral failure is the worst since moral failure is true cause for other failures. (f) Ethics and foresightedness could improve governance and bring sustainable prosperity for the whole of humanity. (g) Sound organizational design could complement the ethics-based approach by enhancing specialization and reducing the scope for conflict of interest situations. (h) Wisdom is the most valuable asset and knowledge-management is a subset of management by wisdom. References: Kautilya: The True Founder of Economics, 2014, Vitasta Publications, New Delhi, India

Article courtesy: https://ignca.gov.in/invitations/About_the_lecture.pdf