Economics of Kautiliya Shukra and Brihaspati.pmd

follows the price policy explained by Manu. (Manu-smriti,
1991, 8.410-13)
Kautilya showed a highly refined understanding of the law of
demand and supply and the influence of surpluses that occur due to
imperfections of the market. He recommended an interventionist policy
to situation of glut in the market. In this context he stated that whenever
there is an excessive supply of merchandise The Superintendent of
Market shall centralize its sale and prohibit the sale of similar
merchandise elsewhere before the centralized supply is disposed of
Kautilya realized that the role of the state was to ensure that commercial
activities do not violate laws and if the state did not establish and enforce
codes of conduct it would in fact raise transaction costs. The lack of
trust and guarantee of quality would diminish commerce and increase
search and verification costs for agents undertaking commercial
transactions.
From the view point of commodity price determination their
views are similar to classical views. At the same time Kautilya and
Manu have suggested to have a government control on price fluctuation.
Which is similar to socialist view.
Consumer’s Protection
There are many legal provisions for the consumer’s protection
in Kautiliya Arthashastra and Shukra-niti. In K-M economy two
authorities were responsible for consumer’s protection- The
Superintendent of Market and The Superintendent of Commerce.
The consumer buyer is provided safeguards by the law in
ancient economy. The sale or mortgage of articles such as timber,
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iron, brilliant stones, tropes, skins, earthenware, threads, fibrous
garments, and woolen clothes as superior, although they are really
inferior, was to be punished with a fine.
Adulteration of grains, oils, alkalis, salts, scents, and medical
articles with similar articles of no quality was considered a serious
offense.
It is interesting to note that Kautilya tried to establish guidelines
for professional service providers also, including medical practitioners,
weavers, washer-men, boatmen, shipping agents and even prostitutes.
System of Four Varnas and Asharams
Varna and Asharam system was the basis of economic
progress, personality development and social harmony in ancient times.
The word Varna stands for colour and Asharam stands for institution.
Initial Varna system was based on the function and not on caste. Later
it was converted as caste system .
These Four Varnas are-
1, Brahman or the intelligent class
2. Kshtriya or the warrior class
3. Vaishya or the business class
4. Shudra or the labour class
Intelligent class was responsible for the advancement of
knowledge and regular research for the benefit of the society. The
warrior was responsible for the protection of the country. Vaishya
was the basis of economic system because the developemnt of
K-G-B sectors was the responsibility of this class. The responsiblity
of labour class was to serve the country as a whole. All four classes
were like four organs of a body and therefore complementary to
each other.
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