The Concept of Artha in Kautilyan Economics Versus Mainstream Western Economic Theory: A Comparative Deep Study

Abstract

Purpose: This research paper undertakes a rigorous comparative investigation of the concept of Artha as articulated in Kautilya's Arthashastra and the foundational principles of mainstream Western economic thought, tracing their divergences and convergences across six analytical dimensions: philosophical foundations, taxation and public finance, labour and wages, trade regulation and pricing, governance structures, and environmental and resource management.

Methodology: In this paper, the exploratory qualitative research method is used. The relevant information is collected using keyword-based search in Google search engine, Google Scholar search engine, and AI-driven GPTs. This information is analysed and interpreted as per the objectives of the paper.

Analysis/ Results: The paper argues that these two traditions, separated by geography, culture, and more than two millennia of independent development, nevertheless arrive at several structurally similar practical conclusions — on progressive taxation, infrastructure investment, anti-monopoly regulation, and worker welfare — while diverging fundamentally on the question of whether economic activity is embedded in a moral and social framework or constitutes an autonomous domain governed by self-interest and price signals.

Drawing on classical primary sources, modern translations, and contemporary scholarly literature, the paper situates the Arthashastra within the broader tradition of Indian political economy (including the Purusharthas framework and Dharma-Artha complementarity), traces the philosophical trajectory of Western economic thought from Adam Smith through neoclassical economics to contemporary heterodox critiques, and identifies the specific points of divergence and convergence between the two traditions. Attention is paid to the 2026 Economic Survey of India's citation of the Arthashastra as an early model of economic statecraft, which signals a renewed policy-level interest in integrating Kautilyan insights into contemporary economic governance.

Originality/ Values: The paper concludes that the Kautilyan framework's most distinctive and enduring contribution lies not in its specific policy prescriptions — many of which have been independently approximated by Western policy evolution — but in its insistence on the moral embeddedness of economic activity within a larger framework of human flourishing (Purusharthas) and civilisational welfare (Lokasamgraha). As contemporary mainstream economics increasingly grapples with the inadequacies of the homo economicus model and the failures of purely market-driven approaches to address inequality, environmental degradation, and social cohesion, the Kautilyan tradition offers a philosophically rich alternative architecture that rewards serious scholarly engagement.

Type of Paper: Exploratory Research.