Vartta, Arthashastra, and Modern Economics: The Domain of Knowledge

Ram Narain Lohkar*

Knowledge: Vision and Specialization

Knowledge in the academic sense covers the whole gamut of various disciplines pursued in
academic institutions. In our age of specialization, these disciplines seem to have attained
independent status to an extent that the very purpose of acquiring knowledge may be defeated. In
the obsession of more and more specialization, we have perhaps forgotten to remember that the
realms of various disciplines are so closely linked that we cannot afford the consequences of
losing insights into the developments of other specializations.

Our age-old considered vision of education and knowledge was ‘सा व या या वमु तये’; freedom
from the bondage – physical, mental, or spiritual. Whether it is broad categorization of
knowledge into various disciplines or subjects or increasing specialization within the subjects, it
is imperative that the seeker of knowledge is always aware of the findings of other branches of
specializations to test his own findings for consistency; without such moderation, the outcome of
uncoordinated results of various specializations will no longer be able to promote the cause of
knowledge or to the collective wisdom of the society: in fact it may even adversely affect them.

Indian Vision of Education and Knowledge

Indian vision broadly recognizes the man as an entity having body, mind, and soul. It also
speculates the creation of the world as the expression of an infinite, unknowable force referred to
as ‘Brahm’1 which is omnipresent and omnipotent, and as such includes human soul as part of
overall consciousness. This force is also referred to as ‘Paramatma’, or collective consciousness,
and the individual soul is considered as part of the Paramatma.

In this world, the task before the man after birth is to negotiate his journey from childhood to
death in a way which gives him freedom from the bondage of ignorance and imperfections. As
he grows, he understands this world with the help of members of his family, teachers, and
friends. As his understanding of this world grows, he assumes familial and social responsibilities
and thus enters the field of action. For this, he prepares himself with education and skills to
accomplish his desired objectives. As he moves from one objective to the other he gains
experience and insights which determine the course of his life. Wants and their satisfaction
propel his actions up to a stage beyond which he fails to cope up with the pressure of wants
which multiply and fail to give the level of satisfaction he earlier thought he would get. So, the
choice of skills that he would need in life becomes important.

*337-A Mumfordganj, ALLAHABAD. 211002. E-mail address – ramlohkar@gmail.com

 Upanishads (which are supposed to be the supreme revelations of truth to the contemplating
Rishis and saints, who were seekers of truth in the state of pure consciousness) talk of two types
of skills: 1. Vidya, and 2. Avidya. Vidya is the skill to seek the subtle truth (which is real and
unchanging, the consciousness of the Unity). Avidya is the skill to know the mundane, i.e. the
material things of the physical world (the consciousness of the multiplicity).

Avidya, the science and art of multiplicity, is as important for men as Vidya, the science and art
of unity according to the Upanishdic wisdom.2 Man’s quest for more and more knowledge in
multiplicity of this world is meant for attaining the objective of life in this world; to make the
achievement through such skills meaningful, he needs the skill of unity to attain the final end of
realizing his true self, without which he is likely to be trapped in the vicious circle of this
material world.

According to the Upanishdic scheme, a fourfold regime of life’s progression is prescribed as a

systemic journey to his final desideratum3: 1. Dharma, or disciplining the body and mind, 2.
Artha, or earning to have possession of resources to accomplish his personal, familial and social
obligations according to his vrittis or faculties, 3. Kama, or accomplishing the fulfillment of his
desires to remove his imperfections, and 4. Moksha, or freeing himself from the bondage of
maya, the illusory veil of the Almighty to get the unity with Him. For staying in these regimes he
needs to lead a life in Brahmcharya Ashram (for learning), Grihastha Ashram (for earning and
performing familial and social duties), Vanaprastha Ashram (for yearning, or contemplating
detachment), and Sanyas Ashram (for turning to get unity with The Brahm).4

It was a profoundly consistent system of the world of multiplicity (finite, observable, and
changing world) emanating from unity (infinite, mentally incomprehensible, and eternal power)
and again merging into it as it wills.

Vritti, Vartta, and Arthashastra

In this formulation, our education system broadly falls into the avidya category of skills where
avidya does not mean ignorance, but knowledge of the finite world, which is subject to constant
change and which appears to be comprehensible. Its scope is maximum in the grihastha ashram
in which the men are supposed to become part of the formal worldly life based on the
competence he gains on the strength of his endowed vrittis (intrinsic faculties recognized and
trained during the gurukul period by the Guru and developed by their joint effort) giving rise to
vartta (economic activities of agriculture, processing, and trade) and finance (vitta). Upanishadic
codes seem to have been derived after scientific deliberations and application with micro and
macro consistency. It was only appropriate that Vartta (economic activities) and Arthashastra
(Economics) were assigned proper role as a means (to serve the purpose of life) and nothing
more than a means.5

Since vartta derives from vrittis, the mention of only agriculture, cattle-breeding and trade in
the Upanishadic treatises does not circumvent the scope of economic activity; increase in the
traded articles will automatically enlarge the area of economic activities. However, the basic
nature of economic activities has to be circumscribed by their basic feature of being a ‘means’.
Thus, Arthashastra as a discipline of vartta was capable of taking into account an increase in the
scope of economic activities.

Arthashastra and India of Antiquity

There are evidences of satisfactory and homogeneous working of the above mentioned system
which was not only sustainable over a long period of time but reasonable enough to elicit
acceptability in about the entire world in touch with India.6 However, after the renaissance in
Europe and the advent of what is called the Newtonian age, a period began which eclipsed the
oriental wisdom and pushed a major portion of the world of past glory into abysmal exploitation,
penury, and shame.7 The discovery of the New World gave a new dimension to the might of
Europe; with physical gains of the application of knowledge, the European adventurers took
advantage of the missionary work, advanced their colonial interests, and created an
unprecedented new world of material prosperity with scientific and technological advancement,
large scale industrial manufacture, and trade and commerce heaping immiseration on the
countries of the east and on the scant tribes of the western hemisphere and Australia.8 In this
process of the rise of Europe and the new world, the East and its values suffered for a long time
and were almost cut-off from its glorious past. In the quest for material progress, the vision of
values and virtues of the heart got obscured even in the countries and civilizations which were
known to have been its cradle.

Modern Economics

The combined effect of rationalism based on the Newtonian age and the hedonism-based
utilitarian philosophic background gave rise to the application of science in the field of
production of goods, specialization, and trade, and a class of intellectuals emerged propagating
mercantile activities to have as much wealth as possible for the national aggrandizement through
war and tactical methods. After about three centuries of mercantile muzzle, a brief period of
turn-around is witnessed when agriculture and manufacture is given the prime importance and
balanced trade is considered desirable rather than surplus as a trade policy. Shortly thereafter,
Political Economy takes the form of an academic discipline in the West as a moral science9 with
the publication of Adam Smith’s Wealth of Nations. Modern economics is the gradual refinement
of Political Economy of the 19th century into the pure economics of today, incorporating
theoretical economic analysis, economic policy, and applied economics.

In the 20th century, economics came to be considered as a study or science of human

behaviour, initially as a moral discipline but subsequently as a positive science; even though,
after being labelled as a dismal science, the mainstream economists started talking of welfare in
place of wealth without committing themselves to specifying as to what exactly human welfare
is. By making economics a natural science, these economists freed themselves from the issues of
value-judgements; however, in the process, they unintentionally made economics a tool in the
hands of the politicians.10

Thus, modern economics with its western roots is couched in terms of the material world as it
appears to our senses; even though its genesis is supposed to emerge from the moral philosophy
of utilitarianism, it subsequently followed a positive course freeing itself from moral and ethical
considerations as being given to economics from outside.

Modern Economics in India

Modern economics in India grew in the cradle of the British educational system; though
the first Professor of Economics in India was Mr. Manohar Lal (Minto Professor in Calcutta
University in 1909)11, the initial shape to the formal teaching of this discipline in the Universities
of this country should be credited to stalwarts like Professors H.S. Jevons in Allahabad, C.J.
Hamilton in Calcutta (now Kolkata), G. Slater in Madras (now Chennai), and Percy Anstey in
Bombay (now Mumbai) during the second decade of the last century. Of these, Jevons and
Slater, though steeped firmly in the western framework of economics, gave significant
importance to the Indian ethos, the former in north and the latter in south India. But the real
transformation in the theoretical framework of economics came with Professor J. K. Mehta
whose thought process took shape in Allahabad during the second quarter of the 20th century
and flowed freely during the third quarter as well.

Professor Mehta observed life keenly on the material plane in a scientific way, analysed it with
precision and subjected it to deep introspection to understand the paradoxes and riddles of our
existence through the study of economics. He considered knowledge as an integer, a whole
system complete in itself, and not an amalgam of fragmented parts. Since knowledge is too vast
to be comprehended in its entirety by us, we have divided it into several parts for our
convenience; thus when Prof. Mehta talks of physics or philosophy or religion in his analysis of
the economic aspect of a phenomenon, he is neither transgressing into the domain of others nor
digressing from his own domain. These specialties are arbitrary divisions and can be and should
be traversed freely to check the broader consistency of generalizations in a particular field12.
The paradox of wants (a central theme in economics) attracts the attention of Professor
Mehta when in 1937 in his ‘Economic Interpretation of the Philosophy of Wants’13 he points to
the two schools of philosophers; one school stands for control of wants where as the other stands
for an ever-increasing number of wants and their satisfaction. While accepting maximization of
satisfaction as the desideratum of economic behaviour, he does not come to the hasty conclusion
of satisfying as many wants as possible to achieve it. For arriving at a sound conclusion he
analyses wants in relation to the person who wants and what exactly happens when he satisfies it
and what is the nature of the satisfaction thus derived.

Since wants, pain, satisfaction, and welfare are all felt in the human mind and hence
these are important determinants of life of the individual, it is pertinent to examine the economic
(i.e. want-satisfying) activity in the context of the final object of man. Professor G.L.S. Shackle,
one of the finest interpreters of and contributors to modern economics in the west, observes in
his review of Professor Mehta’s Rhyme, Rhythm, and Truth in Economics, “The essential
predicament of human beings, the nature of the life they are set to live, can be looked at from a
viewpoint, and with an intellectual and moral attitude, that are almost the diametrical opposite of
those which prevail in the modern western world, and which, when seen with detachment and
receptive mind, are, to say the least as reasonable and natural a choice of premises as those of the
western frenzy for wealth and material success.”14 He cannot restrain himself but to say further
“The brilliance and suggestive power of Professor Mehta’s thought is matched by a quality for
which I can find no other word than the old-fashioned one of charity in its moral sense.”15

Prof. Shackle is well aware of the paradox in western view of economics and hence he so
frankly appreciates the reasoning put forth by Professor Mehta, “The sheer efficiency of his
exposition, by which arresting ideas are conveyed in a sentence or two of the utmost apparent
simplicity, makes the book astoundingly easy to read. One is carried down a strange current of
thought with no wish to resist.” Professor Mehta confronts paradoxes deftly to the extent that
Prof. Shackle feels “It will occur to the reader from time to time that Professor Mehta has
confronted a deeply paradoxical task. For he has used the light shed by wealth-repudiating
premisses to illuminate that world whose impelling power is the desire for wealth. … The
Western reader, I think, will sighingly acknowledge that Professor Mehta and his Eastern
philosophy are doubtless right, or at least that their logic is irrefutable, but that Western man is
too deeply committed to his motivation to be able to change.”16
Prof. Shackle’s realization of the hollowness of modern man’s entanglement with the
obsession of want-satisfaction prompts him to guardedly quote Professor Mehta: “In a state of
complete wantlessness, the serenely poised mind enjoys a feeling of untainted happiness. But we
are all so busy satisfying our wants and seeking fleeting pleasures that we do not stop to think
what the real, ultimate object of satisfying a want is.”17 However, Prof. Shackle, then, wonders:
“This uncompromising attitude, if logically followed out, would seem to abolish the subject-
matter of economics. Yet Professor Mehta is an economist of deep and original subtlety ….”18

Another equally celebrated economist in the western tradition, Prof. Alec Lawrence
Macfie, Adam Smith Professor of Political Economy at the University of Glasgow (1945–58)
valued highly the contribution of Prof. Mehta, in a review of ‘A Philosophical Interpretation
of Economics’. He was candid in stating “In spite of our specialisms, we in the west continue to
share the same world of basic assumptions – as to progress, social obligation and ultimately
desirable – though very few economists think about these systematically. It is, therefore, a
stimulating experience to read a sustained critique of Western economic theory by one who has
mastered it and is also steeped in the religion and philosophy of a completely different culture –
one which has as long tradition as, and many more adherents than, ours. This it is that gives
rather unique interest to Professor Mehta’s book; specially to-day, as our world grows ever
smaller, and the need to understand Eastern values is ever more urgent.”19

This was around 1963; it is 2018 now, that is more than half a century has elapsed. We
perhaps ignored the wise counsels. Many now feel that the world is facing the consequences of
human greed. Environmental degradation is already at the critical level. The intuitive notion of
the psychological prediction that ‘we are hardwired to be insatiable wanting machine’ is now
said to have found scientific basis with the findings of Dr. Kent Berridge20; two distinct elements
govern the want and pleasure. While the element that produces want is very powerful, the
element that gives us the capacity to find satisfaction is weak and insufficient. Thus, ‘whereas
the dopamine wanting system is vast and powerful, the pleasure circuit is anatomically tiny, has
a far more fragile structure and is harder to trigger’.

Apart from the above theoretical reasoning against the western view of modern economics, it is
interesting to note that though the beginning of the modern economics in the West was marked
by simple common-sense reasoning, gradually it moved, with increasing application of
mathematical tools and sophisticated techniques of applied economics, in the direction of being
an esoteric knowledge making it incomprehensible to the very public which faces the
consequences of its application in public policy. Popularity of ‘Capital in the Twenty-First
Century’ by Thomas Picketty has convincingly put the class of economists in a quandary. Before
the 2nd World War, the basic economic issue used to be ‘growth versus stability’ as a deviation in
contrast to the classical economists’ concern with equilibrium; but in the post-war period it was
growth, continuous growth, and the growth-rate mania in a globalised big business dominated
race which has created suspicion among the nations of various groupings.

So, the animal of the material growth is in the jallikattu (a public celebration in Tamilnadu in
which coins in a cloth are attached to the horns of a bull and members of the crowd try to snatch
it from the bull who runs amuck uncontrollably wounding or even killing the challenger) mode.
Jallikattu has a prescribed period for the play, but the mad race for wealth and power is having a
continuous run. The game seems to have taken control over the players.

Turning to Consciousness
In the fast changing scenario, not much is changing in reality. The change is largely on the
surface and scale. To cope up with the rapidity of change, man has to move faster to retain his
relative position. We are far removed from Nature. Professor Shackle exclaimed in 1969 "Have
the western economists, I wonder, really asked themselves what can be the meaning, character,
and use of a British or American national income which, if it were to increase at 8% per annum,
would in 50 years be 32 times as great as it is now? Professor Mehta’s particular ethical
standpoint is directly fruitful in raising questions which are of concern to the theoretician.”21 In
fact, theoretician’s concern should have been of primary priority of those at the helm of world
affairs. In the absence of a responsible world government, the proportion of world resources
being diverted to the organized destruction of men and material in major and minor bilateral or
multilateral conflicts in this world with simultaneous existence of hunger, deaths, and miseries at
many places on this solitary planet under the protection of the UNO. Even the Nature is in the
revulsive mood.

It was realized by the wise men long back that the salvation of mankind rests in an educational
system which promotes thinking faculty of the students. Quality of the answer decides the grade
of the students, however, the type of question that is put to the students to answer is no less
important, if not more. The knowledge and skills offered to the student should be decided on the
basis of his innate faculties. Proper system of education should facilitate the inherent latent
faculties which will inspire him to develop his personality in accordance with his endowments
and his natural energy will enable him to find a proper place in the system. Such youths will do
justice to the task that they undertake and will find the performance of the task rewarding in
itself. It is only when the performing of a task is not satisfactory either due to lack of interest on
his part in the task at hand, or he lacks proper skill to perform the task, that he wants to get more
in reward for very little of his performance.

After getting freedom from colonial exploitation, a number of countries of Asia, Africa and
South America embarked on a scheme of fast development with the aid of developed countries
(their erstwhile colonizers) which led to the structural imbalances, dependence on big countries,
and other human resource problems. In quantitative terms, such countries may have enough
progress to show on paper; but they remain vulnerable. Most of them are in a critical stage as far
as the health and education are concerned. Extreme disparities in income and wealth, and
disjointed, self-centered, valueless information-oriented education is the real bane of contention
turning areas of tranquility into minefields of conflict zones. Professor Gilbert Slater might be
having the past world-wide cultural glory of India in his mind when he expressed the following
solemn hope in his Presidential Address to the 4th Indian Economic Conference held at
Allahabad in 1920 :-

“India is on the threshold of its independent career. It may enter upon that career in the
Prussian spirit of narrow nationalism, thinking only of its own interest; but if Indian future
history is to be honourable to India, Indians must seek, not the good of India only, but that of all
humanity.”22

Even after a gap of about 100 years, if we decide to strengthen our spiritual heritage, it will
not require any back gear. It will require only a firm resolve on the part of the youth to eschew
the hollow path of finding solutions in measures based on false hypothetical grounds which
undermine the inner strength of the individual. The world remembers those who produce
Himalayan success out of nothing. If we seek material resources for their own sake, it is
worthless even if we get it23 and if we work as an instrument of the Providence, we will not feel
want of it as He provides aplenty. When we work at the command of the Providence, we get
what we need at the right time without wanting; that is the essence of wantlessness; and not the
physical suppression of it when it arises out of our imperfections. Wants are the measuring rod of
our imperfections irrespective of whether we satisfy them or not. More wants we have, more
imperfect we are. Our miseries are also associated positively with our wants and imperfections
irrespective of whether these wants are satisfied or not.
ईहा धन य न सुखा ल वा च ता च भूयसी। ल धनाशे यथा म#ृ युल$ धं भव&त वा न वा ।। महाभारत, शा.प., 177/26

(Keen desire to seek wealth is painful, it creates a lot of worries if achieved, its loss after
achieving it is deadly whereas getting it is uncertain.)

Shackle, so convinced by the economics professed by Mehta, was perhaps echoing the
apprehension of the mainstream economists in observing that “This uncompromising attitude, if
logically followed out, would seem to abolish the subject-matter of economics”. However, even
this apprehension seems to be false, as economics, then, will not be required to conceal the false
human behaviour and will come out stronger as ergonomics.

In recent years, strong voices have been raised against unethical conduct. When the world
economy is confronted with crisis after crisis, there is an urgent need for a paradigm shift; the
animal of wild economic forces has to be tamed to turn it into protecting agent of the Providence
to guide humanity to move on from imperfection to perfection in a virtuous and harmonious
world.
Notes

1. सव0 खि2वदं 45म।

2. अ धं तमः 8 वशि त योS व यामुपासते। ततो भूय इव ते तमो य तु व यायाम ् रताः।। ईशोप&नष ।।9।।
Those who engage in the pursuit of (the skills of) the transient (avidya only) enter the darkness of
ignorance; however, those who engage in the pursuit of (the skills of) the Real alone (vidya only) enter
greater darkness (without knowing the nature of the transient, how can one go through the phenomenal
world and get the unity with the Real).
तथा, व यां चा व यां च य त ृ म>नुते ।। ईशोप&नष ।।11।।
वेदोभयं सह, अ व यया म#ृ यंु ती#वा$ व ययामत
Those who are conversant with both, the avidya and the vidya, cross the mortal world with the
skills of the transient and reaches immortality with the skills of vidya.
3. P.V. Kane, History of Dharmasastra, Vol. 2, Part 1, Bhandarkar Oriental Research Institute, Poona,
1941, Pp 8-9.
4. Patrick Olivelle, The Āśrama System: The History and Hermeneutics of a Religious Institution; OUP,
1993.
5. According to the wisdom contained in Ish Upanishad, all the resources coming in the category of
wealth are only ‘means’ and hence have functional utility in their ‘use’ and not in their possession for
accumulation.
6. E. Pococke, India in Greece; John J. Griffin and Co., London, 1852. Will Durant, The Case for India;
Simon and Schuster, New York, 1930.
7. “America Not a Christian Nation, Says Dr Pentecost.” The New York Times, February 11, 1912. See
also Arthur Judson Brown, New Forces in Old China; F.H. Revell Company, New York, 1904, P. 125.
8. The apparently glorious period of European history from 15th century onwards is replete with unique
coincidences, clever manipulations and horrendous brutalities perpetrated under the cunning garb of
valour, trade and law. See The Spanish Armada by Robert Hutchinson; The Decline and Fall of the
British Empire by Piers Brendon; The Case for India by Will Durant; British Rule in India by William
Jennings Bryan; England’s Debt to India by Lala Lajpat Rai; New Forces in Old China by Arthur Judson
Brown.
9. Adam Smith was a moralist on the basis of the observed phenomena in his studies of ethics as a moral
science. However, self interest was apparently the driving force of human behaviour, and as such he was
not confident of virtue remaining part of ‘self-love’ with opulence which he saw was forthcoming;
therefore, he postulated rational self interest as the basis of economic behaviour of man.
10. Om Prakash, The Economic Sins of Nations; Progressive Publishers, Calcutta, India, 1978, P. 452.
R.N. Lohkar, “The Challenge of Humanising Economics”; Indian Journal of Economics, July 2016.
11. Jayasankar Krishnamurty, “Manohar Lal: Scholar, Economist and Statesman”; Modern Asian Studies,
Vol. 44, No. 3 (May 2010), pp. 641–662.
12. J.K. Mehta, Lectures on Modern Economic Theory; Chaitanya Publishing House, Allahabad, India,
1967, P. 1.
13. J.K. Mehta, “Economic Interpretation of the Philosophy of Wants”; Indian Journal of Economics,
Vol. XVII, Part III (January1937), pp. 309–313.
14. The Economic Journal, September 1969, P. 579.
15. Ibid.
16. Ibid.
17. Ibid.
18. Ibid, P. 580.
19. The Economic Journal, March 1963, P. 106.
20. Intelligent Life Magazine, May/June 2015.
21. The Economic Journal, September 1969, P. 580.
22. Indian Journal of Economics, Vol III, P. 380.
23. When Abdul Karim Telgi (the convicted counterfeiter of Stamp papers) was being taken to prison, he
is stated to have told the Investigating Officer, “Money is very bad, sir. It makes a man as well as destroys
him.” However, he might have been convinced by then that it is toil and good intention that makes a man
and it is the ill-gotten money that destroys (The New Indian Express, November 05, 2017). Newspapers
cannot pursue any story to its final end, else an economist could propound an economic law which would
be in accord with
अधम?णैधते तावत ् ततो भBाCण प>य&त, ततो सप#नाDजय&त समूल तु वन>य&त।
(By unrighteousness man prospers, gains what appears desirable, conquers enemies, but perishes at the
roots.)