Culpable Inaction (nonfeasance): He (p 372) suggested a fine of 48-96 panas ‘for not coming to the rescue of someone being hurt by his horned or tusked animal’ and a fine of 200-500 panas for ‘failing to respond to cries for help’. Similarly, he (p 373) recommended a fine of 12 panas for ‘not hastening to save his own house on fire’ and a fine of 100 panas (p 376) for ‘not running to help a neighbour in distress.’ Again, it is obvious that Kautilya suggested tort laws to preserve property and save human lives.
SUMMARY Tort law has ancient origins. As presented above, Kautilya proposed tort laws based on simple negligence during the 4th century BCE. Similarly, Aquilius had introduced Lex during the Roman Empire in 286 BCE. M Stuart Madden (2005) offers a fascinating and encyclopedic survey of the cultural evolution of tort laws for all major civilizations since the time of Hammurabi (1796-1750 BCE). Based on Kautilya’s ideas, the choice is not necessarily between ‘eye for an eye’ and the market-based system of monetary compensation to the victim for the loss since non-market methods, such as penance (expiation) by the injurer, could be as effective as the monetary compensation to the victim in reducing his vengeful tendencies. Historically, penance has been accepted as an expression of remorse, and it has, although imperfectly, worked in modifying an injurer’s behavior and also pacifying the victim. Therefore, penance need not be abandoned altogether.11 Secular and spiritual measures may be considered as complements and not substitutes for each other.
According to the ancient wisdom, the expiation measures hit the head by generating a genuine feeling of guilt and the excruciating pain resulting from the pricks of conscience, whereas monetary sanctions hit only the stomach. Kautilya initiated the discussion on the role of secular law only as a complement to the existing expiation measures. He believed that positive or secular law without ethical anchoring was unlikely to have positive outcomes. He suggested compensating the victim for all financial losses but only for serious physical injuries caused due to negligence. He suggested breaking the link between compensation to the plaintiff and imposition of penalty on the defendant, for preventing accidents by lowering the probability of their occurrences. This approach was intended to achieve other objectives also, such as, the victim receiving compensation just sufficient to cover his loss, the defendant not getting hostile to the victim as the punishment was apparently imposed by society and the punitive damages supplemented the general revenue of the government. Thus, ancient insights might help in devising ways to achieve corrective justice without compromising with efficiency.12
FIVE
National Security
Kautilya believed that freedom from wants was not enough to enjoy life if not accompanied by freedom from fear. At that time there was no such thing as live and let live. A country always faced a threat of an aggression. Kautilya considered both defensive and offensive measures to maintain freedom from foreign rule. The following three Chapters present Kautilya’s ideas on National Security.
Reducing the Threat of an Aggression. (Chapter 18) How to balance the Risk-Return Trade-off from Joint Campaigns. (Chapter 19)
Minimizing Losses if Attacked by a Stronger Aggressor.
(Chapter 20)
He developed and applied several important concepts, such as,
public goods, asymmetric information, risk-return trade-off, and
time inconsistency problem in dealing with these issues.
18
Defending Freedom by Every Means and at Any Cost
In times of trouble, the fort provides a haven to the people and the king himself.
— Kautilya (p 658)
Kautilya advanced a people-centric approach to human security. He believed that every individual desired freedom from fear of an attack by a foreign army or an attack by an intruder and freedom from wants. His objective was to ensure freedom from all sources of fear. According to him, protection and prosperity were both necessary and sufficient for enjoying life to the fullest and other requirements, such as dignity, empowerment, etc. were redundant. He considered national security as a subset of the freedom from fear component of human security. He suggested an exhaustive list of measures to reduce the probability of an attack by an enemy.
Kautilya shows some understanding of the distinction between public and private goods. He invariably applied cost-benefit framework to every undertaking, including waging of a war (discussed in the next Chapter). But he did not apply the usual cost-benefit approach to the provision of national security, which he argued was too fundamental to be decided by such calculations. Section 18.1 contains an explicit presentation of these ideas implied in the Arthashastra. According to him, a nation had to match or exceed the power of her potential adversary since national security depended only on the relative power. Section 18.2 develops his relative power equation. He argued that the protection and prosperity components of human security reinforced each other. Section 18.3 presents Kautilya’s ideas on national security and the relative asset hypothesis which is implicit in Kautilya’s arguments and throws some light on the scope of loss-aversion hypothesis. Kautilya’s observations challenge Markowitz’s invariance hypothesis. Section 18.4 contains this discussion. Kautilya argued that power bred more power. This is presented in Section 18.5.
18.1 KAUTILYA’S IDEAS ON
THE PROVISION OF PUBLIC GOODS Kautilya understood that national security was essential to economic development, which in turn promoted national security. He (p 175) argued, ‘A foreign king, on the other hand, is one who has seized the kingdom from a legitimate king still alive; because it does not belong to him, he impoverishes it by extravagance, carries off its wealth or sells it. If the country becomes too difficult for him to handle, he abandons it and goes away (8.2).’ He (p 132) also maintained, ‘Harassment by the enemy’s army not only affects the whole country but also ruins it by plunder, slaughter, burning and destruction (8.4).’1 It is thus clear [from the above statements] that Kautilya had a strong belief that both economic prosperity and dignity were incompatible with [a] foreign rule. He (p 541) asserted, ‘An enemy’s destruction shall be brought about even at the cost of great losses in men, material and wealth (7.13).’
Measures to Reduce the Probability of Foreign Aggression: He suggested an exhaustive list of measures to reduce the probability of an attack by an enemy. He recommended: (a) building of forts, (b) building a large army and armour, (c) setting up an intelligence gathering and analysis unit and (d) diplomatic initiatives. These are in turn discussed below. The other measures, such as winning public support and hiring qualified advisers are discussed in the next Section.
Building of Forts: Kautilya (p 179) envisages for the king, ‘On the frontiers, he shall construct fortresses under the command of frontier chiefs to guard the entrances to the kingdom. The area between the frontier forts and the settled villages shall be guarded by trappers, archers, hunters, Candalas and forest tribes (2.1).’ Although Kautilya did not have a complete or formal definition of public goods, but his insights relating to their role are quite modern. He (p, 658) recommended to the king, ‘If he lacks [physical] protection, he shall build an impregnable fort. For, he who is defended by forts and allies is respected by his own people and by others (7.14.14).’ He argued, ‘In times of trouble, the fort provides a haven to the people and the king himself (7.14.20).’ It is obvious from the above statements that at the time, forts were a major part of national security and the phrase ‘haven to the people and the king himself ’ and ‘respected by his own people and by others’ truly describe the ‘non-rivalry’ nature of national security, a pure public good.
Maintaining Elephant Forests: Availability of elephants offered a distinct advantage in a battle and therefore, their habitat must be protected. Kautilya (p 620) argued, ‘Some teachers say that land with productive forests is preferable to land with elephant forests, because a productive forest is the source of a variety of materials for many undertakings while the elephant forests supply only elephants. Kautilya disagrees. One
can create productive forests on many types of land but not elephant forests. For one depends on elephants for the destruction of an enemy’s forces (7.11).’
Establishment of Intelligence Administration: He understood the importance of information in deriving sound inference. He (p 506) recommended, ‘A king shall have his own set of spies, all quick in their work, in the courts of the enemy, the ally, the Middle, and the Neutral kings to spy on the kings as well as their eighteen types of high officials (1.12.20).’ He (p 562) added, ‘He shall always station envoys and clandestine agents in all states of the circle. These shall cultivate those acting against the interests of the conqueror and, while maintaining their own secrecy, destroy repeatedly such inimical persons (7.13).’
Work Assignment: Intelligence agents would perform the following tasks: ‘(i) neutralize the principal officers who, though living by service under the king, work for the enemy; (ii) keep under surveillance people of the country who are likely to fall prey to the incitement of the enemy; (iii) wage psychological warfare against the enemy; and (iv) weaken the enemy (5.1.3).’
Similarly, about the functioning of an envoy, he (p 576-577) suggested, ‘On the way to the place of his mission, the envoy shall: (i) establish good contacts with jungle chiefs, frontier officers, chief officers of the cities and countryside; (ii) observe, both the territory of his own king and that of the other king, the places suitable for stationing troops, fighting, support facilities and fall-back positions; and (iii) find out the size and extent of the other king’s territory and forts, the strength of the economy, and the strong and weak points in its defenses (1.16).’
He (p 710) also cautioned, ‘The enemy can ascertain the strength of the conqueror’s army by counting it when they march in single file or from the quantity of fodder, food and bedding, or from the number of cooking fires, banners and weapons the army carries. Therefore, all of these shall be kept well hidden (10.2).’
Diplomatic Initiatives: He (p 568) recommended, ‘When the benefit accruing to kings under a treaty, irrespective of their status as the weaker, equal or stronger king, is fair to each one, peace by the agreement shall be preferred course of action; if the benefits are to be unfairly distributed, war is preferable (7.8).’ It is also clear from another statement. Kautilya (p 635) asserted, ‘That which entails small losses is a gain by diplomacy rather than by war (9.4).’
18.2 KAUTILYA ON RELATIVE POWER EQUATION
Kautilya understood the complexity of the provision of national
security. He believed that national security (and its resultant— independence) depended on the relative power of a king to that of his potential adversary. He considered public support and military strength as the sources of power. He argued that public support depended on economic prosperity and fairness. According to him, military power consisted of three components: power of good counsel (good analysis and good judgment), power of mighty army and rich treasury and the power of enthusiasm and energy. He believed that good counsel was the supreme power.
He offered a very strong justification as to why good counsel was the most important power. He proceeded to justify that in two stages. He first compared the relative power of enthusiasm to that of might and concluded that might was more important than enthusiasm. He (p 627-28) explained, ‘Some teachers hold enthusiasm to be more important than might. [They argue:] so long as a king is himself brave, strong, healthy and expert in the use of weapons, he can defeat, with only the army to help him, even a mightier king. Kautilya disagrees. A mighty king, by his very might, can overpower an energetic one; for, a mighty army, richly endowed with horses, elephants, chariots and instruments of war, can move unhindered anywhere. Further, a mighty king can get the help of another energetic one or he can hire or buy heroic fighters. [It is known that] even women, children, the lame and the blind have conquered the world after winning over or buying heroic fighters with their might.’
Then he proceeded to justify why the power of good counsel and judgment was more important than the power of might. He argued, ‘Some teachers hold might to be more important than the power of good counsel and judgment. [They argue:] howsoever good a king’s analysis and judgment, he thinks but empty thoughts if he has no power. Just as a drought dries out the planted seeds, good judgment without power produces no fruit. Kautilya disagrees. He explained his disagreement as: “The power of good counsel [good analysis and good judgment] is superior [to sheer military strength]. Intelligence and [knowledge of ] the science of politics are the two eyes [of a king]. Using these, a king can, with a little effort, arrive at the best judgment on the means, [the four methods of conciliation, sowing dissention, etc.] as well as the various tricks, stratagems, clandestine practices and occult means [described in this treatise] to overwhelm even kings who are mighty and energetic.”’
He concluded, ‘Thus, the three components of power,— enthusiasm, military might and the power of counsel—are in ascending order of importance. Hence, a king who is superior, as compared to his enemy, in an item later in the list, outmanoeuvres his adversary (9.1).’
It is obvious that he believed that the relative weight for good counsel, wc, was much higher than the relative weight for might, wm and which was higher than the relative weight for enthusiasm we. It might seem very tempting to construct a power index such as P = S wi xi, where wi is the relative weight and xi is the magnitude of the various kinds of powers. However, despite our knowledge of as to how to construct indices, neither Kautilya nor we could construct such an index. We still do not know how to measure, ‘good counsel, good analysis and good judgment’. The fact is that we cannot measure accurately even the contribution of knowledge-based industries to GDP.
Kautilya adopted an alternative intuitive approach to compare the relative powers of two kings. Most likely, he compared the relative strengths of their armies and their enthusiasm levels, the number of advisers and their qualifications and public support. For example, he (p 609) stated, ‘When, among a group of allies, many give equal help in terms of manpower, it is specially advantageous to get the troops from one whose troops are valorous, able to tolerate hardship, loyal and versatile (7.9).’ He understood that these three powers were complementary.
Public Support to a King Linked to Economic Development: He strongly believed that a king could win public support only by raising their standard of living. He (p 159) argued, ‘When a people are impoverished, they become greedy; when they are greedy, they become disaffected; when disaffected, they either go to the enemy or kill their ruler themselves (7.5).’ He suggested, ‘Therefore, the king shall not act in such a manner as would cause impoverishment, greed or disaffection among the people; if however, they do appear, he shall immediately take remedial measures (7.5).’ Formally, Kautilya’s ideas on relative power may be expressed as follows:
P = A (J, H) (K)λ (E Lm)(1–λ) (18.1)
RP1 = P1/P2 (18.2)
Where P1 and P2 = powers of king one and king two respectively,
A= efficiency parameter, H = experience and analytical skills of the advisers in utilizing the information made available through intelligence, K = horses, elephants, chariots and armaments, E = enthusiasm and training, Lm= military strength, J = level of public support for a just and kind-hearted king and RP1 = relative power of nation one. Kautilya believed that H was the most important factor in enhancing national security.2
According to Kautilya, no country became prosperous under foreign rule, implying national security was essential to prosperity. Similarly, a poor country could not afford to provide for adequate national security, implying prosperity was essential to national security. Kautilya reasoned that the recruitment of soldiers and their enthusiasm and the manufacturing of arms, hiring of qualified advisers were dependent on the tax revenue, which was directly dependent on the level of income. Clearly, he understood the interdependence of national security and prosperity on each other.
18.3 NATIONAL SECURITY AND KAUTILYA’S RELATIVE ASSET HYPOTHESIS He was
always comparing the relative economic strength of a state to that of another state (hostile one) and under no circumstances he wanted a state to slide into a weaker position because that could tempt its enemy to attack it. He wanted to make sure that the investment was directed to the most productive projects and capital accumulation was taking place. For example, he (p 554) stated, ‘It is a decline for the conqueror if the enemy’s undertakings flourish; conversely, the decline of an enemy’s undertakings is progress for the conqueror. Parity between the two is maintained when both make equal progress. A small gain for a large outlay is decline; the converse is progress. A gain equal to the expenditure on an undertaking means that the conqueror has neither progressed nor declined. Hence a conqueror shall seek to obtain a special advantage by undertaking such works [as building forts] which would produce a large profit for a small expenditure (7.12).’
As discussed earlier in Chapter 8, growth in capital was considered as a leading source of growth in income. Kautilya (p 637) argued, ‘Man, without wealth, does not get it even after a hundred attempts. Just as elephants are needed to catch elephants, so does wealth capture more wealth. Wealth will slip away from that childish man who constantly consults the stars. The only [guiding] star of wealth is itself; what can the stars of the sky do? (9.4).’ Keeping that in view, Kautilya paid special attention to capital formation in the native country to that of a potential adversary.
Kautilya- the True Founder of Economics Page 31