Arthashastra, written by Kautilya (also known as Chanakya), is an ancient treatise dealing with the governance of a country. Chanakya was a very learned scholar at the Takshashila University (an ancient Hindu university, located in present-day Pakistan) and the acharya of Chandragupta Maurya. He had mastery over political science, economics, accounting, and governance, and was the driving force behind the creation of the Maurya dynasty. Apart from Arthashastra, Kautilya wrote several other books such as Chanakya-Sutras (Rules of Science) and Chanakya-Rajanitisastra (Science of Government Policies).
The Hindu way of life describes 4 purusharthas (goals): Dharma, Artha, Kama, and Moksha. Artha refers to material progress, which is necessary in order to live a balanced life. The basis of Arthashastra is that one must strive to generate wealth, resources, and money, and share it equitably to create happiness for oneself and others. Such generation of wealth must be through ethical means, which alone will lead to overall happiness.
Arthashastra takes a holistic approach to governance and explains several areas critical to the functioning of a country in depth. The main sections deal with National security and Foreign Policy, Administration of Justice, Policies related to economic development, Taxation, Labor Management, and Financial Management.
The discussion in Arthashastra is as relevant today as it was in Kautilya’s time. Kautilya was well-versed with the characteristics of bureaucrats and statesmen and laid down rules to prevent misuse of power. He emphasized the importance of accounting methods in economic enterprises to properly measure economic performance. He explained that no amount of rules and regulations or auditing can prevent unethical behavior and that character-building and action-oriented ethical values were essential.
Kautilya explains the necessity of having strong government finances and an able army. Arthashastra has detailed sections on topics such as mineralogy, mining and metals, agriculture, animal husbandry and medicine. The book describes in great detail, the characteristics of the ruler and their duties. It states that the moral duty of the king is to increase prosperity, ensure judicial fairness, and provide national security. The book also describes duties of other key positions in the government such as Police chief, Chief Justice, Treasurer, Defense minister, Commerce Minister and others. The Arthashastra predates any similar body of work from the Greek, Roman or Chinese civilizations and is the source of many modern practices such as double-entry book keeping method, audits, etc.
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