Theoretical Economics Letters, 2017, 7, 381-397 http://www.scirp.org/journal/tel ISSN Online: 2162-2086 ISSN Print: 2162-2078 Kautilya and Machiavelli on Justice, Prosperity and National Security Balbir S. Sihag University of Massachusetts Lowell, Lowell, USA How to cite this paper: Sihag, B.S. (2017) Abstract Kautilya and Machiavelli on Justice, Pros- perity and National Security. Theoretical As soon as Kautilya’s Arthashastra was translated into English in 1915, its Economics Letters, 7, 381-397. comparison with Machiavelli’s Prince, particularly by the western Indologists, https://doi.org/10.4236/tel.2017.73029 started in earnest. Their main goal has been to show that Machiavelli’s Prince was pale in comparison to the ruthless realism in Kautilya’s Arthashastra. Received: February 16, 2017 Accepted: March 28, 2017 Several user-friendly tables are constructed from the texts in The Arthashastra Published: March 31, 2017 and Prince to i) strongly refute and correct such distortions and misrepresen- tations of Kautilya’s ideas, and ii) show Kautilya had much deeper under- Copyright © 2017 by author and Scientific Research Publishing Inc. standing of the issues than Machiavelli. Interestingly, a closer look reveals that This work is licensed under the Creative Machiavelli, although far less than Kautilya, but had deeper insights into eco- Commons Attribution International nomic issues than Adam Smith. It is also indicated that Kautilya, just with one License (CC BY 4.0). http://creativecommons.org/licenses/by/4.0/ sentence, captured the essence of liberty as empowerment of the weak against Open Access the powerful, Mill could not do that with his whole book on Liberty. Keywords Child Labor, Kautilya’s Arthashastra, Kissinger’s World Order, Machiavelli’s Prince, Mill’s Liberty, Sexual Harassment, Smith’s Wealth of Nations 1. Introduction As soon as [1] Machiavelli’s Prince was indexed in 1559, his name and the word evil, although incorrectly, became interchangeable. Machiavelli advocated a cruel and callous approach as to how a new king should retain his kingdom. First translation of the Arthashastra in English by Shamasastry was published in 1915 and almost immediately, its comparison with Machiavelli’s Prince started in earnest. Numerous political science scholars, apparently without fully under- standing or reading [2] Kautilya’s Arthashastra, have been inappropriately com- paring Kautilya to Machiavelli. [3] Kangle (1965/2000, Ch. 12) presents the views of several authors on such comparison. Most of the western scholars set DOI: 10.4236/tel.2017.73029 March 31, 2017 B. S. Sihag out to show that Kautilya was as much if not more callous than Machiavelli in his approach. Even seasoned [4] Henry Kissinger (2014) has taken the same dis- torted and beaten track. The primary source of their confusion, misrepresenta- tion or distortion seems to be that all these scholars have focused only on one part, how to protect the nation against traitors and aggressors (national securi- ty), of the Arthashastra and ignored Kautilya’s monumental contributions to economic principles and policies and administration of justice. However, ac- cording to Kautilya, traitors, just like filth, must be flushed out of the system and aggressors must be destroyed so that ordinary people could enjoy both peace and prosperity (Yogakshema). Machiavelli, just like Kautilya, was an honest and hard-working individual. So the intended comparison is not about them as such but related to the approach, purpose, vision, scope and depth of analysis of their works. Kautilya had a long term horizon, was forward-looking and has been acknowledged as a king-maker. He had a vision of a prosperous, secure and secular nation, developed a concep- tual framework and formulated appropriate policies to realize his vision. Every- thing relevant to the wellbeing of the people is discussed in depth. His Arthasha- stra is comprehensive, coherent, consistent and original. Machiavelli, on the other hand was seeking a job. He sent his letter and manuscript of his Prince in support of his application for the job. He had a very short term horizon, was of- ten backward-looking and had no vision. Consequently he covered very few, al- though similar, topics, did not analyze any topic in depth and was often incon- sistent. Also, there is nothing original in the Prince. Machiavelli just collected the insights of others. For fuller understanding of these works some background on differences between Kautilya’s Arthashastra and Machiavelli’s Prince related to: a) the vision and scope of their works; b) their approaches; c) king’s charac- ter, d) human nature and e) role of advisers are presented in Sections 2, 3, 4, 5 and 6 respectively. Kautilya’s Arthashastra is a manual on how to promote Yogakshema—peace- ful enjoyment of prosperity—for all the people. Sihag [5] presents Kautilya’s policies on enriching the people1. On the other hand, Machiavelli mentions that the king should take care of his public but there is absolutely no discussion about any policy or program to enrich them. This discussion is presented in Section VII. Apparently Machiavelli understood the importance of good laws, but unlike Kautilya, did not discuss how to formulate and implement such laws. Section VIII contains their differences related to administration of justice. Sihag [7] presents Kautilya’s comprehensive, proactive and prudent approach to national security and the link between prosperity and national security. Machiavelli did not offer any comprehensive approach to national security and also did not un- derstand the link between prosperity and national security. Machiavelli makes some ad hoc remarks related to making alliances, role of information and public support and these are collected in Section 4. 1For example, Sihag [7] has shown that Kautily a’s Arthashastra has more depth and breadth than that of [9] Adam Smith’s The Wealth of Nations. 382 B. S. Sihag 2. Comparing Kautilya’s Vision to Machiavelli’s There are sharp differences related to the vision and scope of their works. Kau- tilya was focused on nation-building. He had a grand vision of building an em- pire encompassing the whole of Indian-subcontinent, with diversified and pro- ductive economy in which people were honest and hard-working and could en- joy prosperity and security. Machiavelli was desperately looking for a job and could not afford the luxury of entertaining a vision and therefore did not see the need to develop any conceptual framework or program to bring prosperity or security to the people. The following Table 1 compares the vision and scope of their works. Dharma and Artha: Kautilya gave the highest priority to the preservation and promotion of dharma, that is, to the practice of secular virtues, such as non-violence, compassion, tolerance, freedom from malice, truthfulness and honesty. He, just like the Vedic seers, assigned a foundational role to dharma. He believed if there were no dharma there would be no society. According to Kautilya, role of dharma was not only foundational but also instrumental to the promotion of artha (prosperity), that is, dharma not only paved the path to bliss but also to prosperity. He (p. 142) explained, “Government by Rule of Law, which alone can guarantee security of life and welfare of the people, is, in turn, dependent on the self-discipline of the king (1.5).” That is, economic growth depended on rule of law and that in turn depended on ethical conduct of the king. He (pp. 107-108) emphasized, “For the world, when maintained in accor- dance with the Vedas, will ever prosper and not perish. Therefore, the king shall Table 1. Vision and Scope of the Arthashastra and the Prince. Kautilya Machiavelli Kautilya’s Vision: Kautilya stated his vision as: “The kingdom shall be Machiavelli on Irrelevance of a Vision: He (513, p 48) describes, protected by fortifying the capital and the towns at the frontiers. The “But my hope is to write a book that will be useful, at least to those land should not only be capable of sustaining the [native] population who read it intelligently, and so I thought it sensible to go straight to but also outsiders [when they come into the kingdom] in times of a discussion of how things are in real life and not waste time with a calamities. It should be easy to defend from [attacks by] enemies and discussion of an imaginary world. For many authors have strong enough to control neighboring kingdoms. It should have constructed imaginary republics and principalities that have never productive land (free from swamps, rocky ground, saline land, uneven existed in practice and never could; for the gap between how people terrain and deserts as well as wild and [unruly] groups of people). It actually behave and how they ought to behave is so great that should be beautiful, being endowed with arable land, mines, timber anyone who ignores everyday reality in order to live up to an ideal forests, elephant forests, and good pastures rich in cattle. It should not will soon discover he has been taught how to destroy himself, not depend [only on] rain for water. It should have good roads and how to preserve himself.” waterways. It should have a productive economy, with a wide variety of commodities and the capacity to sustain a high level of taxation as well as a [large] army. The people shall be predominantly agriculturists [artisans and craftsman], devoted to work, honest, loyal and with intelligent masters and servants.” Scope: Kautilya explained the scope as: “By following [the principles set Scope: Machiavelli (p 3) wrote in his letter to Francesco Vettori, “I out in] this treatise one can not only create and preserve dharma discuss what a principality is, how many types of principality there [spiritual good], artha [material well-being] and kama [aesthetic are, how one acquires them, how one holds onto them, why one pleasures] but also destroy [their opposites, i.e.,] unrighteousness, loses them.” material loss and hatred. It is a guide not only for the acquisition of this world but also the next.” 383 B. S. Sihag never allow the people to swerve from their dharma (1.3.17).” He (p. 177 added, “Ever victorious and never conquered shall be that Kshatriya, who is nurtured by Brahmins, made prosperous by the counsels of able ministers and has, as his weapons, the precepts of the shastras (1.9.11).” He (p. 141) warned, “A king who flouts the teachings of the Dharamshastras and The Arthashastra, ruins the kingdom by his own injustice (8.2).” Henry Kissinger (2014) remarks, “Like Machiavelli's, his is an analysis of the world as he found it; it offers a practical, not a normative, guide to action. And its moral basis is identical with that of Richelieu, who lived nearly two thousand years later: the state is a fragile organization, and the statesman does not have the moral right to risk its survival on ethical restraint.” Kissinger is correct in claiming that Machiavelli accepted the world as he found it but is dead wrong about Kautilya. As presented above, Kautilya had a vision of shared prosperity, developed a conceptual framework and offered normative yet actionable guide- lines to realize it. [6] Drekmeier (1962, p. 76) puts it very aptly as: “Now the king must concern himself directly with the common good, an idea anticipated in the Arthashastra.” He (p. 201) asserts, “There can never be a thoroughgoing divorce of politics and ethics for Kautilya; he never denies that the ultimate purpose of the state is a moral purpose, the maintenance of dharma.” He (p. 202) adds, “For all his commitment to a philosophy of opportunism and force, Kautilya would not have limited might to mere physical mastery. Such may be the primary obli- gation of warrior and even king, but the ultimate power is spiritual.” He (2003) adds, “Self-mastery and world-mastery are interdependent.” Richelieu certainly pursued national interest and his own interest by following the maxim: end justifies the means. Kautilya believed in the concept of moral duty. But attributing the concept of ‘moral duty’ to Richelieu is incorrect. Riche- lieu was a religious person but not ethical. He was a self-serving and pow- er-hungry monster in a cardinal’s red robe. Machiavelli (chap. 7, p. 27) listed his suggestions as to what a new ruler needed to do to stay in power. These were: “So anyone who decides that the pol- icy to follow when one has newly acquired power is to destroy one’s enemies, to secure some allies, to win wars, whether by force or by fraud, to make oneself both loved and feared by one’s subjects, to make one’s soldiers loyal and res- pectful, to wipe out those who can or would want to hurt one, to innovate, re- placing old institutions with new practices, to be both harsh and generous, magnanimous and open-handed, to disband disloyal troops and form new ar- mies, to build alliances with other powers, so kings and princes either have to win your favor or else think twice before going against your wishes-anyone who thinks in these terms cannot hope to find, in the recent past, a better model to imitate than Cesare Borgia.” But he does not offer any policy or program to achieve any of his suggestions. Use of “force or fraud” implies no role for ethics. Cicero had remarked that fear was incompatible with love so how one accom- plishes to be “loved and feared”. We may summarize that Dharma and artha form the core of Arthashastra and 384 B. S. Sihag Roger Boesche, Henry Kissinger and many others have an inadequate under- standing of Indian culture and of economics and therefore fail to appreciate and acknowledge Kautilya’s unique contribution and keep comparing Kautilya to some mediocre writers. Machiavelli provided inadequate analysis and the Prince has a very limited scope. 3. Comparing Kautilya’s Approach to Machiavelli’s Kautilya and Chandragupta Maurya inherited an economy in shambles. At that time there was no such thing as live and let live and threat of an aggression by unscrupulous, murderer and neurotic rulers like Alexander was real. Kautilya wrote the Arthashastra, a manual on promoting Yogakshema—peaceful enjoy- ment of prosperity—for all the people. That is, i) how to engineer prosperity, ii) how to ensure security and iii) of all the people. Kautilya realized that one uni- form set of values or one single approach would not help in realizing his vision. Keeping that in view, Kautilya suggested a people-centric, ethical and proactive approach towards king’s own subjects but proactive and a mix of ethical ap- proach and pragmatic approach towards other rulers. In other words, idealism for the domestic affairs and a mix of idealism and realism for the international affairs. David Wootton (p xxii) believes, “Machiavelli may appear to teach the im- moral pursuit of power by any means. In fact, he clearly teaches two sets of mor- al values: one deals with relations between states, where only success counts; the other much more complex, concerns one’s dealings with one’s fellow citizens, where the means must be justified by the purposes they serve.” Actually, Ma- chiavelli’s approach towards own subjects and towards others was practically the same: king-centric, proactive and pragmatic. Machiavelli does not assign any role to moral values whether the king was dealing with his own subjects or oth- ers, that is, there was only one set of immoral values and not two sets of moral values. The following Table 2 is intended to capture these differences. According to Kautilya (p 182), “Every man has an obligation to maintain his wife, children, parents, minor brothers and dependent (unmarried or widowed) sisters. No man shall renounce the life of a householder in order to become an ascetic without providing for the maintenance of his wife and children (2.1).” The head of the household is primarily responsible for the family and there is a punishment of 12 panas (p. 194) for the failure (2.1)2. Kautilya also suggested remedial measures if a famine or flood occurred despite efforts to prevent them. We may conclude that Kautilya emphasized moral duty of the king to his sub- 2Boesche [10] remarks, “Paternalistic in an almo st literal sense, Kautilya saw the people of the king- dom not as active citizens but as passive subjects cared for by the king and the state. Arguably the entire notion of a welfare state, in which the state was responsible for those in need either by pro- viding jobs or by supporting those who could not survive without assistance, was first described in the history of political ideas by Kautilya.” Kautilya recommends that the government not only should help the old, sick, children and the helpless but also should provide insurance against natural disasters to everyone. Thus the usual distinction between a residual and a universal welfare state may not be a very useful one in describ- ing Kautilyan state (See [11] Barr (1992) for such a distinction). 385 B. S. Sihag Table 2. Comparison of the Approaches. Kautilya’s Approach Machiavelli’s Approach People-centric: (a) “In the happiness of his subjects lies his King-centric: Page 31: “Do all the harm you must at one and the same happiness; in their welfare his welfare. He shall not consider as time, that way the full extent of it will not be noticed, and it will give least good only that which pleases him but treat as beneficial to him offense, one should do good, on the other hand, little by little, so people whatever pleases his subjects (1.19).” can fully appreciate it.” (b) He (p 128) wrote, “Whenever danger threatens, the king Page 49: “Above all, do not be upset if you are supposed to have those vices shall protect all those afflicted like a father [protects his a ruler needs if he is going to stay securely in power, for, if you think about children] (4.3).”2 it, you will realize there are some ways of behaving that are supposed to be virtuous [che parra vjtu], but would lead to your downfall, and others that (c) He (p 180) added, “He shall, however, treat leniently, like a are supposed to be wicked, but still lead to your welfare and peace of father [would treat his son], those whose exemptions have mind.” ceased to be effective (2.1).” (d) Kautilya (p 182) suggested, “King shall maintain, at state expense, children, the old, the destitute, those suffering from adversity, childless women and the children of the destitute women (2.1).” (e) Kautilya (p 128) believed, “It is the duty of the king to protect the people from all calamities (4.3).” Ethical: He (p 180) wrote, “For, when adharma overwhelms Unethical: page 55: “A ruler, and particularly a ruler who is new to power, dharma, the King himself will be destroyed (3.16.42).” He (p cannot conform to all those rules that men who are thought good are 639) stated, “Wealth is like a tree; its roots are dharma and the expected to respect, for he is often obliged, in order to hold on to power, to fruit is pleasure. Achieving that kind of wealth which further break his word, to be uncharitable, inhumane, and irreligious. So he must promotes dharma, produces more wealth and gives more be mentally prepared to act as circumstances and changes in fortune pleasure is the achievement of all gains (sarvarthasiddhi) require. As I said, he should do what is right if he can; but he must be (9.7.81).” prepared to do wrong if necessary.” Proactive: He (p 116) wrote, “In the interests of the prosperity of Proactive: Page 11: “It is necessary not only to pay attention to immediate the country, a king should be diligent in foreseeing the crises, but to foresee those that will come, and to make every effort to possibility of calamities, try to avert them before they arise, prevent them.” overcome those which happen, remove all obstructions to Page 35: “They all have appropriate moats and ramparts, and more than economic activity and prevent loss of revenue to the state (8.4).” enough artillery. They always keep in the public stores enough food and drink, and firewood, to be able to hold out for a year.” Pragmatic: (p 541): “An enemy’s destruction shall be brought Pragmatic: Page 55: “So if a ruler wins wars and holds on to power, the about even at the cost of great losses in men, material and wealth means he has employed will always be judged honorable, and everyone will (7.13).” praise them.” jects like a father to his children. He envisioned a well governed, well organized, prosperous and progressive state but not a welfare or centrally planned one. His approach was people-centric. On the other hand, Machiavelli focused exclusively on the self-interest of the king. 4. Their Relative Views on King’s Character Machiavelli’s king was more like a stationary bandit whereas Kautilya’s king was a rajarishi whose goal was to uplift people out of poverty. According to Kautilya, king was a faithful servant of his subjects. This concept is alien to the west. Kau- tilya believed that only a rajarishi could follow a people-centric and ethical ap- proach. Drekmeier (1962, p. 25) notes, “In conclusion, we may say that early In- dian kingship was broadly contractual, conceived of as a trust, subject to popular 386 B. S. Sihag approval, and, most important, subject to higher law and certain other restraints, normative and practical. It was basically a secular institution.” (Table 3). Thus, according to Kautilya, a king must have a good knowledge of philoso- phy but should not be an idle philosopher, or a dictator rather should be an im- partial, benevolent, far-sighted, foresighted, disciplined and energetic doer. On the other hand, Machiavelli suggested that a king should pretend to be ethical but need not behave ethically, that is ready to cheat. Then in his other writing, he suggested that a king should be a role model. 5. Their Underlying Assumptions Regarding Human Nature Kautilya believed that there were moral, amoral and immoral types of people whereas Machiavelli believed that all people were amoral or immoral (Table 4). Kautilya believed in ethical anchoring of young children. He (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 Table 3. Differences Regarding the Character of the King. Kautilya Machiavelli (p 145): “A rajarishi [a king, wise like a sage] is one who: has (Chap. 18, p 54): “So you see a wise ruler cannot, and should not, keep self-control, having conquered the [inimical temptations] of the his word when doing so is to his disadvantage, and when the reasons senses, cultivates the intellect by association with elders, is ever that lead him to promise to do so no longer apply. Of course, if all men active in promoting the security and welfare of the people, endears were good, this advice would be bad; but since men are wicked and will himself to his people by enriching them and doing good to them not keep faith with you, you need not keep faith with them.” and avoids daydreaming, capriciousness, falsehood and Page 55: “So you should seem to be compassionate, trustworthy, extravagance (1.7).” sympathetic, honest, religious, and indeed, be all these things; but at the (p 169): “Unless there are dangers in it, succession of the eldest son same time you should be constantly prepared, so that, if these become is praiseworthy. An only son, if he is wicked, shall not [under any liabilities, you are trained and ready to become their opposites.” circumstances] be installed on the throne. A king with many sons Page 56: “You become hateful, above all, as I said, if you prey on the acts in the best interests [of the kingdom] only if he removes a possessions and the women of your subjects.” wicked one from succession (1.17).” He (p 144) stated, “The sole aim of all branches of knowledge is to inculcate restraint over the senses (1.6.3). Self-control, which is the basis of knowledge and discipline, is acquired by giving up lust, anger, greed, conceit, arrogance and foolhardiness. Living in accordance with the shastras means avoiding over-indulgence in all pleasures of [the senses, i.e.,] hearing, touch, sight, taste and smell (1.6.1, 2).” He (p 144) wrote, “A king who has no self-control and gives himself to excessive indulgence in pleasures will soon perish, even if he is the ruler of all four corners of the earth (1.6.4). Why a King should be Ethical: (p 121): “A king endowed with the Why a King should be Ethical: P (Discourse, 204): “Princes should not ideal personal qualities enriches the other elements when they are complain of any failings to be found in the people over whom they rule. less than perfect (6.1).” For such failings are likely to be caused either by their own negligence or they themselves have the same faults (p 123): “Whatever character the king has, the other elements also come to have the same (8.1).” (Discourse, P 205): “And Lorenzo de’ Medici made the same point, remarking: “What the ruler does one day, many others do the next, for they all have their eyes on him.”.” 387 B. S. Sihag Table 4. Differences Related to Human Nature. Kautilya Machiavelli Page 124: “For the fort, the treasury and the army all depend on the people; Page 52: “For of men one can, in general, say this: They are so do the reservoirs. All economic activity has its source in the countryside. ungrateful, fickle, deceptive and deceiving, avoiders of danger, Bravery, stability and cleverness are also found among the country people eager to gain.” He adds, “Men are less nervous of offending (8.1.28-31).” someone who makes himself lovable, than someone who makes himself frightening. For love attaches men by ties of obligation, P 169: “Sons are of three kinds: a wise son is one who understands dharma which, since men are wicked, they break whenever their and artha when taught and also practices these. A lazy son is one who interests are at stake. But fear restrains men because they are understands what he is taught but does not practice them. A wicked son is afraid of punishment, and this fear never leaves them. Still, a he who hates dharma and artha and [therefore] is full of evil.” ruler should make himself feared in such a way that, if he does Page 664: “There are three types of aggressors: (i) The righteous aggressor is not inspire love, at least he does not provoke hatred. For it is satisfied with submission. (ii) The greedy aggressor is satisfied with seizing perfectly possible to be feared and not hated. You will only be land and goods. (iii) The monstrous aggressor is satisfied only when he takes hated if you seize the property or the women of your subjects the land, goods, wives, sons and [even the] life of the defeated.” and citizens. ” 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 conclusion we may say that Kautilya understood the link between charac- ter-building and nation-building. Clearly, he wanted to create a more harmo- nious and caring world and did not accept the existing one as claimed by Henry Kissinger. 6. Role of Advisers There are sharp differences regarding the role of advisers. According to Kautilya, due to bounded rationality a king could not solve complex problems alone by himself. So Kautilya advised appointment of advisers and pooling of their in- formation, knowledge and wisdom with that of the king to arrive at the best possible decision. According to Kautilya, as the number of advisers increased the king would get better advice due to the increased pooling of information and knowledge but as the number of advisers increased the probability of keeping it confidential would be lowered. Thus, Kautilya analyzed the trade-off between ef- ficiency and confidentiality and concluded that the optimum of advisers should not be higher than four (see Sihag (2014, Chap. 10) for a detailed presentation) (Table 5). Machiavelli thought in the absence of an adviser the king would change his mind due to the influence of his near and dear ones and would appear to be in- consistent. It is not a convincing argument for hiring advisers. First of all, if the king were wise, then he would have realized the inadequacy of his capabilities and also anticipated the reactions of his near and dear ones and consulted them before taking a decision. Secondly, the near and dear ones, according to Ma- chiavelli, most likely were protecting their own interests. So the king could ig- nore their suggestions. Moreover, the king could still change his mind even if he consulted an adviser, that is, Machiavelli could not justify the hiring of an advis- er. +++ 388 B. S. Sihag Table 5. Differences over the role of advisers. Kautilya Machiavelli Bounded Rationality: He (p 177) observed, “A king can reign only Page Chap 23, 72: “For the emperor is a secretive man, he keeps with the help of others; one wheel alone does not move a chariot. things to himself and never asks anyone’s advice. But, when his Therefore, a king should appoint advisers as councilors and ministers decisions begin to be discovered, which is when they begin to be put and listen to their advice (1.7).” into effect, he begins to be criticized by those who are close to him, and, as one might expect, he is persuaded to change his mind. The Emphasis on pooling of Knowledge and Information: Kautilya stated, result is that he undoes each day what he did the day before; that “Vishalaksha says ‘never can a single person arrive at the right nobody ever knows what he really wants or intends to do; and that decision. The work of government is dependent on [complete] one cannot rely upon his decisions. knowledge––that which the king personally knows, that which is reported to him and that which he has to infer. To find out what is Chapter 23, Page 72: “A ruler, therefore, always take advice, but only not known, to clarify doubts when there are alternatives, to obtain when he wants to, not when others want him to; he should discourage more information when only a part is known––all these can be done everybody from giving him advice without being asked; but he should only with the help of advisers. Hence a king shall conduct his be always asking, and, moreover, he should listen patiently to the deliberations with advisers of mature intelligence. (As the saying answers, provided they are truthful.” goes :) ‘Despise no one, [but] listen to all views; for, wise man pays “For this is a general rule without exceptions: A ruler who is not heed to all sensible advice, even those of a child’ (1.15).” himself wise cannot be given good advice.” Page 73: “This is how it has to be, for you will find men are always wicked, unless you give them no alternative but to be good. So we may conclude that good advice, no matter who it comes from, really comes from the ruler’s own good judgment, and that the ruler’s good judgment never comes from good advice.” Qualification of an Adviser: He (p, 120) described, “A councilor or Qualifications of an Adviser: Chapter 22, page 71: “For there are three minister of the highest rank should be a native of the state, born in a types of brains: One understands matters for itself, one follows the high family and controllable [by the king]. He should have been explanation of others, and one neither understands nor follows. The trained in all the arts and have logical ability to foresee things. He first is the best, the second excellent, the third useless.” should be intelligent, persevering, dexterous, eloquent, energetic, bold, brave, and able to endure adversities and firm in loyalty. He should neither be haughty or fickle. He should be amicable and not excite hatred or enmity in others (1.9).” How many Advisers: He concluded, “[There should be no more than No discussion on how many advisers a ruler should have four advisers] because, with more than four, secrecy is rarely maintained. [While, normally, the king should consult three or four advisers,] he may, depending on the nature of the work and the special circumstances of each case, take a decision by himself, consult just one adviser, or even two. The opinions of the advisers shall be sought individually as well as together [as a group]. The reason why each one holds a particular opinion shall also be ascertained (1.15).” Conflicts of Interest: Kautilya (p, 200) also recommended, “No one Conflicts of Interest: Page 71: “When you see your adviser give more who belongs to the side likely to be adversely affected by the project thought to his own interests than yours, and recognize everything he shall be consulted (1.15).” does is aimed at his own benefit, then you can be sure such a person will never be a good adviser.” However, Machiavelli, just like Kautilya, did understand the principal-agent problem, and the role of efficiency wages. For example, he (p 71) wrote, “On the other hand the ruler, in order to get the best out of his adviser, should consider his adviser’s interests, heaping honors on him, enriching him, placing him in his debt, ensuring he receives public recognition, so that he sees that he cannot do better without him, that he has so many honors he desires no more, so much wealth he desires no more, so much status he fears the consequences of political 389 B. S. Sihag upheaval. When a ruler has good advisers and knows how to treat them, then they can rely on each other; when it is otherwise, either ruler or adviser will suf- fer.” Kautilya in addition to paying decent wages, suggested moral incentives al- so to elicit effort (see Sihag (2014a, Chap.11))3. Kautilya considered advisers as prized employees since he understood the concept of bounded rationality and the importance of pooling information and knowledge whereas Machiavelli could not justify the need to hire advisers as he was ignorant of the importance of pooling information. 7. Kautilya and Machiavelli on Economic Growth Kautilya just like his predecessors believed that ethical conduct paved the way to bliss but he added that it also paved the way to prosperity, that is, it was the ‘deep determinant’ of prosperity. He believed in the power of persuasion and moral and material incentives but never in coercion. According to him, the king was a role model to his employees and public. If he were ethical all elements would also behave in the same manner. Ethical decision-makers would place public interest ahead of their own interests in formulating laws and policies and 3Let me provide a small sample of very odd asser tions made by Roger Boesche (2002): (i) He (p 34) writes, “But then, again, Alexander the Great, who must have been one of Kautilya’s models, was happy to conquer and assimilate those whom earlier Greeks regarded as strangers or barbarians (barbarous).” Arthashastra literature started in India somewhere between 600 - 650 BCE. India was way ahead of Greeks so there was not much to learn from them. Well Alexander could not be a role model for anyone. He was a murderer of his good friends and most likely he lost the battle to an Indian king and returned back. (ii) He (p 32) writes, “As with Hobbes, the goal of science was power. “Power is (possession of) strength and “strength changes the mind,” which means that Kautilya’ wish would be for power to control not only outward behavior, but also the thoughts of one’s subjects and enemies.” He not even come close to what Kautilya was concerned about. Kautilya was worried about a very important concept in economics known as: Time Inconsistency or Credibility Problem that a part- ner or an ally might not keep his promises. This concept re-emerged after more than two thousand years later and Presscott and Kyland received Nobel Prize for rediscovering it. (iii) He (p 62) remarks, “If detailed record-keeping is a sign of new despotism, as some such as Weber and Foucault have claimed, then indeed Kautilya’s kingdom was despotic.” Kautilya originated the concept of taking Census. He was the founder of statistical economics ([12] Sihag (2013). United States and European Countries undertake census. Are these countries despotic? (iv) He (pp 61-62) writes, “The king “should conceal, as a tortoise does his limbs, any (limb) of his own that may have become exposed.”” He shows his ignorance of the concept of asymmetric information. Kautilya strongly believed that the possession of private information provided advantages over in bargaining and in preparation against potential adversaries. Akerlof won the Nobel Prize for rediscovering this concept. (v) He (p 59) writes, “Demanding that subjects work hard in their specialized functions of the di- vision of labor also leaves no time for public life. “For, men being of a nature similar to that of horses, “ wrote Kautilya, “change when employed in works…They should carry out the works ac- cording to orders, without concerting together.” He misses the point and misinterprets this statement. Shirking, stealing is a serious problem all over the world. In USA employees steal more than the customers, they write emails, talk on the phones and do other things unrelated to their jobs. Nobel laureate Joseph Stiglitz and others rec- ommend paying efficiency wages (higher than the market wages), and supervision to reduce this moral hazard (shirking: not doing what they are supposed to do). Kautilya noticed this problem and suggested efficiency wages, supervision along with moral persuasion to check it. It had nothing to do with the private lives of individuals at their homes. 390