Economics of Kautiliya Shukra and Brihaspati.pmd

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1. All the expenses in the process of production, 2. All the materials used to produce, and 3. All the efforts involved. Thus the ratio of the metal prices are as follows- 1 Gold = 16 Silver = 1280 Copper = 7680 Iron5 In Shukra-niti prices of some commodities have been listed in terms of alternative cost. These are listed in the table 5.1. (Shukra-niti 4.2.71-129) 1 camel = 9 buffalos = 18 goats Table 5.1. Alternative Prices Cattle Alternative price 1 buffalo 2 goats 1 goats 2 sheep 1 camel 2 buffaloes Source: Shukra-niti 4.2.71-129 Not only the alternative price but also the market price of cattles is given. According to Shukra, the selling price of one young sheep is one Pala3 , one horse is 500 Nisk4 and one elephant is 2000 Nisk. This schedule of market price reveal that there was a well defined price theory or price policy in Shukra economy. Price is determined by the expenditure incurred to produce the article. This is the cost of production theory of prices. The price depends upon the abundance or scarcity of the articles in the economy. This is the supply side of price theory in economics. Further, price is determined by the intensity of desire to have the commodity. This is the demand side of the theory of price. This guidance has been defined by the teacher Shukra 2400 or more years before Adam Smith. 66 Price theory is the anchor of economics. We have now developed equilibrium price as the concept, when the supply and demand are equal. The great teacher Shukra has stated that the market prices move upward only because of the wicked policies of the king. (Bokare, 2009: 80) Price Theory/Policy in Kautiliya Arthashastra In the Kautiliya economy The Superintendent of Commerce was entrusted with the task of enforcing the pricing policy. The prices of different commodities were to be fixed by him. He however did not fix prices arbitrarily. In fact, a uniform rule was followed throughout the country to determine the just price of each commodity. To quote from Kautiliya Arthashastra, 'The Superintendent of Commerce should be conversant with the differences in the prices of commodities of high value and of low value and the popularity, or unpopularity of goods of various kinds, whether produced on land, or in water and whether they have arrived along land routes, or water routes, also (should know about) suitable times for resorting to dispersal, or concentration purchase or sale'. (Kautiliya Arthsastra-2, 2003: 2.16.1) 'And that commodity which may be plentiful, he should collect in one place and raise the price (ibid: 2.16.2) or, when the price is reached he should fix another price'. According to him, The Superintendent of Commerce should establish in one place trade in state commodities that are produced in his own country, in many places in those produced in foreign lands. And he should cause both to be sold so as to favour the subjects. And he should avoid even a big profit that would be injunctions to the subjects. He should not create a restriction as to time or the evil of a 67
glut in the market in the case of commodities constantly in demand. (ibid: 2.16.3-8) The merchandise which is widely distributed shall be centralized and its price enhanced. When the enhanced rate becomes popular, another rate shall be declared.The merchandise of state which is of local manufacture shall be centralized; imported merchandise shall Table 5.2. Elements of Price Determination Demand side Supply side Popularity Cost of production in land or water or Transportation costs unpopularity Suitable time for sale of goods Nature of good- perishable or durable Source: Kautiliya Arthshastra-2, 2003: 2.16.1 be distributed in several markets for sale. Both of merchandise shall be favoirably sold to people. The elements of commodity pricing as described by Kautilya is presented in the table 5.2. Time element here means the season of high demand or low demand. In a next place (Kautiliya Arthshastra- 2, 2003, 4.2.36) Kautilya expresses his views on price determination as follows, 'In the case of commodities distant in place and time, however, the superintendent of commerce and trade, market expert in fixing prices shall fix the price after calculation the investment, the production of goods, duty, interest, rent and other expense'. 6 Thus the cost of a commodity includes, 1. Investment and interest rate of capital 2. Expenses on raw materials 3. Taxes payable to government 4. Time to produce a commodity 68 5. Rent 6. Profit margin 7. Other expenses The concept of price determination in Kautiliya Arthashastra is a concept of Just Price and not simply a price for price determination. For just price Kautilya says, 'The Superintendent of Markets should set up the pledging or sale of old wares which are furnished with proof of ownership in the market place. And he should inspect the weighs and measures because of likely fraud in the standard of weighs and measures'. (Kautiliya Arthshastra-2, 4.2.1) In ancient times the concept of just price was a real world phenomenon and sprang directly from the ancient Hindu concepts of balance. Kautilya also did not add anything new to this basic concept but simply worked out the detail. According to Arthashastra, prices are to be so determined as to strike a balance between the interests of the buyers and that of the sellers. To fulfill this objective, the following guidelines were recommended- (Basu, 2006: 202-219) 1. Goods were to be sold at places specified by the state and prices had to be aounced (for approval by the state and knowledge of the buyers) by the businessmen. They (the merchants shall make a report of those who sell merchandise in forbidden place or time. The merchandise being placed near the flag of the toll house the merchandise being placed near the flag of the toll house the merchants shall declare its quantity and price. (Kautilya's Arthashastra,1967, 2.21) 2. Goods had to bear official seal and properly weighed measured and numbered. Violation of this rule was subject to punishment. Those whose merchandise has not been stamped with seal mark shall pay twice the amount of toll. Hence commodities shall be sold only after they are precisely weighted measured or numbered. (ibid) 69
Page 1 and 2: CHAPTER ONE INTRODUCTION Hillebrand
Page 3 and 4: was 8800 but at present it consists
Page 5 and 6: view point of modern economics foll
Page 7 and 8: Painna, Mula Sutta, Nandi Sutta and
Page 9 and 10: Kautilya's Definition- The definiti
Page 11 and 12: subject matter of Econmics. Some ot
Page 13 and 14: 24. A given statement that is to be
Page 15 and 16: the control, both his subjects and
Page 17 and 18: supervision were clearly to be supp
Page 19 and 20: He opines that Shali (winter season
Page 21 and 22: only 20 milch cows is given to one
Page 23 and 24: fishes in a very small pond or the
Page 25 and 26: connection that state had framed tr
Page 27 and 28: Regulation of Trade and Protection
Page 29 and 30: judged through the process prescrib
Page 31 and 32: Notes Superintendent of Market was
Page 33: high. I think it unlikely that anyo
Page 37 and 38: situation, Market Price = Normal pr
Page 39 and 40: Introduction CHAPTER SIX GOVERNMENT
Page 41 and 42: h. Monopoly tax i. Royalty j. Taxes
Page 43 and 44: words, 'Fifteen days and nights mak
Page 45 and 46: There were however some other sourc
Page 47 and 48: CHAPTER SEVEN CONCLUSION Kautilya a
Page 49 and 50: follows the price policy explained
Page 51 and 52: and kam helps in selecting the best
Page 53 and 54: Bokare, M G.2009.Hindu Economics, P
Page 55 and 56: Shukra-niti.1987.translated by D B
Page 57 and 58: ECONOMICS OF KAUTILYA SHUKRA AND BR
Page 59 and 60: CONTENT Chapter 1: Introduction 1 C

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