Holistic development central to Indian economic thought

ancient indian economic thought
There is a need to revisit ancient Indian economic thought as the world grapples with climate change and social instability.

Ancient Indian economic thought: The idea of scientific enquiry or an emerging knowledge society is perhaps not as new as we believe it to be. Historically, India has had several knowledge epochs. The theory of atoms was first proposed by Kanada as early as 5th Century BCE. Panini discussed the science of linguistics in 6th-5th century BCE. Aryabhatta worked extensively in trigonometry, astronomy and the decimal system in 5th and 6th century CE. These examples show that inquisitiveness and scientific enquiry is not new to Indians, as is believed by the world.

Pride for one’s heritage is necessary for nation building, as seen in Europe and China. This could be why the British began colonising India by ridiculing its culture and embarking on a “civilising mission”. The ridicule, unfortunately, continued to persist even after Independence for various political, social and institutional reasons. However, it must also be noted that swabhiman (pride) should not translate to ahankara (arrogance).

READ I  An unkept promise: What derailed the Indian Economy

Indian economic thought through the ages

To understand  the ancient Indian idea of economic science and knowledge, we must first understand the Indian idea of knowledge itself. The purpose of education is best reflected in the ancient saying “Sa vidya ya vimuktaye”, which reminds us that the purpose of education is independence from bondages, bias and prejudice. It propounded a holistic approach to knowledge, separating knowledge from knowledge holder. It is the noble attributes of the knowledge holder which processes information for the welfare of society.

The idea of human development was much more multidimensional in the ancient Indian view. We must distinguish between information, knowledge and wisdom. Information can only be translated into knowledge and wisdom through our sense organs (indriyas), mind (manas) and intellect (buddhi). The control over these aspects form the very core of Bhagavad Gita. Today, as we enter into an information age and grapple with new ethics, these ideas can prove to be a beacon of light in these times.

The modern social science thought considers Adam Smith the father of modern economics. Similarly, the roots of Indian economic thought can be dated back to Kautilya’s Arthashastra, which says, “Sukhasya moolam dharma, dharmasya moolam artha, arthasya moolam rajasya, rajasya moolam indriyajaya”. This translates to, “the basis of happiness lies in right conduct (dharma), the basis of dharma lies in wealth, the basis of all wealth is state, and the basis of stability in state lies in control over our senses (indriya)”.

READ I  Vaccine hesitancy in rural areas threatens India’s Covid-19 response

Kautilya propounded a multidimensional theory of welfare, in line with the Indian thought of self-control, stability and capital formation (wealth). Unlike western economic thought, the Indian thought recommends a complementary interaction between the state, individual and society to maintain harmony. Thus, the concepts of development, welfare and management are more holistically seen in the Indian ancient view than in modern western thought.

Another fundamental difference in Indian and western economic thought is the differing definition of man in the two systems. The western economic thought considers man to be an ‘economic being’ who works in only self-interest’. The self-interest in western perspective is also limited to increased profits, income and consumption, blind pursuance of which is today visible in form of negative social and environment externalities.

Ancient Indians considered man to be a complex being with material and spiritual needs. This is reflected in the four purusharthas or four-fold goals of life, as envisaged by Indian texts — dharma (righteousness), artha (wealth), kama (consumption and basic needs) and moksha (freedom from bondages). The idea propagates not the maximisation of consumption, but rationalisation of needs, thus maintaining harmony with nature.

READ I  Indian economy 2022: Striving for self-sufficiency, growth

Besides recognising human complexities of everyday life and the contradictions that one often encounters within oneself, the classical Indian thought also provides a comprehensive theory on managing dilemmas and the resulting stress in one of the most profound texts on human behaviour, the Bhagavad Gita. When confronted with dilemmas, it is better to take Arjuna’s path of consultation with the soul and mind to achieve a middle path rather than that of Duryodhana, who ridiculed wise counsels in his overconfidence.

To be able to make an objective analysis of a given situation, one must remove oneself from the situation, as Arjuna did by coming in the middle of two forces. Selfless performance of one’s duty and adoption of a policy of maximum social good are the biggest lessons of the Bhagavad Gita. Emphasising on attributes of good leadership, the Bhagavad Gita depicts a good leader as someone who develops arguments in a logical manner and motivates people in crisis to perform their duties.

The Bhagavad Gita also spells out an integrated theory of activity based on Sankhya Shastra. This theory spells out five determinants of any activity — contextual setting (adhisthanam), attributes of the performer (karta), types of instruments (manas, buddhi and indriya), different types of interaction between them (vividh cheshtha) and finally, the divine hand (daivam). This theory  proves to be more comprehensive than any of those provided by western economists.

National welfare, as seen through modern lenses, is generally defined in terms of materialistic gross domestic product. Even welfare economics superimposes non-economic dimensions of human welfare on a material self-interest model. The Indian classical social science model, however, gives gross national welfare in terms of both gross material product and gross value product, as reflected a holistic approach to welfare.

Furthermore, the economic structure in ancient India can be seen as a broad 4×4 matrix. There were four varnas/ professions – education, health and R&D (brahmin), defense and administration (kshatriya), production and commerce (vaishya) and service activities (shudra). Unlike the later times, when the system degraded into a social evil, severely compromising with human dignity, the earlier scriptures didn’t see varnas in terms of birth, but occupation and personal attributes.

The ancient Indian system also divided life into four stages or ashramas — brahmacharya (student), grihastha (householder), vanaprastha (forest-walker/forest-dweller), and sannyasa (hermit).

Thus, welfare and management are more broad, multidimensional and holistic in the Indian economic thought. They may appear utopian to some, but given the urgency posed by challenges like climate change and global instability, there has to be a movement to revitalise these ideas, not only for the welfare of India, but of the entire world.

(Dr VR Panchmukhi is former chairman, Indian Council of Social Science Research, New Delhi. This article is a reproduction of his presentation at a webinar organised by EGROW Foundation, a Noida-based think tank.)