A peep into economic wisdom of the past

Suman K Sharma
Prof Satish Y Deodhar’s Economic Sutra, of IIMA Books Series,is no ordinary book. You are expected to first take a test of sorts at a crossword puzzle appended to it and then re-do the test after finishing the book. It should not come as a surprise. The don teaches economics at the prestigious Indian Institute of Management; Ahmedabad and wants you to know how much you have gained from the treatise he has put together so painstakingly. The140 pages text, barring endnotes et cetera, covers over 3,500 years of India’s history of India’s political economics ‘from the time of the Saraswati-Sindhu civilization dating back to 2500 BCE, through the Golden Age of the Gupta Dynasty until the sixth century CE and ending with the early medieval period when the West Asian incursion into India began around the eleventh century CE.’ (page xvii). This seemingly impossible feat evokes Sutra-how our ancient sages encapsuled a whole lot of information in their aphorisms and then strung these pearls of wisdom together for a keen learner. A thread of continuity runs through the diverse elements of the book, making it a seminal work on the ancient India’s contribution to economic thought.
Not other-worldly
It is generally thought that we in India are other-worldly, content with what we have, and that culturally we are not inclined to improve our lot through economic activity. The Economic Sutragives a lie to such thinking and does it convincingly by way of paraphrased extracts from the relevant texts. Several hymns of Rig Veda (15th century BCE) ‘relate to matters on desire, material prosperity, wealth and interest rate’ (p.24). In circa 700 BCE, Panini, the grammarian, laid down rules and symbols for expressing interest in percentage terms’ (p.27). Hymn 117 of Book X of Rig Veda prescribes charity to alleviate poverty (p.36). There is story in Katha Upanishada of Shukla Yajur-Veda (10th century BCE), about Sage Vajashravas giving away all his worldly possessions in alms (p.39). The varna system, predecessor of the much-maligned jati-pratha (caste system),was developed during the Vedic times to cater to the requirement of division of labour on guna-karma (aptitude and deeds) basis (p.136). It got stratified during the millennia, till a Western scholar like Max Mueller proposed identification of communities as to how long or short a person’s nose was! (pp 74-87).What a travesty of a well-conceived social order!
And then we got Kautilya’s Arthashastra. Written in Sanskrit around 4th century BCE, this treatise stands out as ‘a culmination of the elements of economic thoughts that had appeared in sacred and secular texts over the millennia’ (p.95). It gave to the contemporary world the concepts of private ownership of land, the state acting as a market facilitator for the private sector (p.64). Arthashastra also proposed ‘variability of interest as per the riskiness of business operations, institutional apparatus for the credit market, business contracts, rules of inheritance and jurisprudence for dispute settlement’ (p.126).
The author highlights the distinction between the modern economic theory and the Indian texts. While the former ‘focuses on the pursuit of material wealth and pleasures alone, (the latter) ….have treated economic well-being as one of the four purusharthaor life objectives…..dharma, artha, kama and moksha, that is, righteous conduct, acquisition of wealth, pleasure and love and salvation, respectively.’ (p.22).
Ancient India – a land of riches
It is no wonder then that with such sound ideology to follow, ancient India was at the height of its glory. ‘In the first millennium CE, India’s GDP had acquired about one-third to half of the world’s GDP.’ (p.10). We traded with Egypt, West Asia and South-East Asia to our great advantage. ‘Greco-Roman world imported about 120 items from India, it exported only 30 items to her.’ (p.121). The items they imported from India were much more precious than their exports ‘of scant value’ to our country. That resulted in large scale trade deficit with India. In fact, Pliny, the Elder (23-79 CE) had complained that money was being drained on imports from India. (pp. 121-22). Commercial activities were categorised: agriculture, trade and commerce, animal husbandry and lending at interest. (p.52). Professionals such as astrologers, basket-makers to butchers,…weavers to warriors, jewellers, gold-smiths were an integral part of the socio-economic system. They were well organised into guilds. ‘The guilds were not just for name-sake but they had an economic purpose to discharge.’ (pp.52-54) Kautilya fixed wages – from 48,000 panas per year for the king’s ministers to 60 panas for servants and such like (p.113).
The Fall
If indeed we were conceptually and materially on a such a strong footing historically, it would be natural to ask how ‘the abysmally slow GDP growth in the first three decades of India’s independence was christened and slammed as the Hindu Rate of Growth?’ (p.14) Why had Deepak Lal to pejoratively describe stagnation of Indian economy as ‘Hindu Equilibrium’? (p.19). The answers lie implicitly in physical destruction of the repositories of our knowledge by foreign invaders and deliberate obfuscation of the ancient texts during and after the British Raj. In 1193 CE, the Nalanda University was burnt to cinders by Bhakhtyar Khilji. And so were Vikramshila, Jagaddala and Odantapuri (p.11). As for the ancient texts, the author cites the infamous quote from Lord Macaulay’s ‘Minute on Education’: ‘A single shelf of a good European Library was worth the whole of Indian literature of India and Arabia…’ (p.13).
Prof Deodhar’s style is simple and readily accessible even to the uninitiated. The book is free from any kind of jargon and academese. The Foreword by Raghunath Mashelkar, former Director General, Council of Scientific and Industrial Research (CSIR) and illuminating endnotes appear as value additions. Some repetitions do have crept in and these can be ignored, seeing the overall worth of the book. Economic Sutra is a must read for all those who believe with the author that a keen look at history has many advantages in the study of subjects like economics.