Kautilya’s Concept of Wealth: Artha, Vyartha and Anartha

This article by U. Mahesh Prabhu is a part of “The Kautilya Project”

If you want to know about the importance of wealth, ask a pauper; if you want to know the pains of wealth, ask a billionaire. “It’s a pain to earn wealth, causes stress to retain it, and leads to catastrophe when you lose it. Wealth is a sum of pain and gain,” said revered king-turned-hermit, Bhartrihari. True wealth, like all material things, has its own pros and cons. There are not many texts which explain the nitty-gritties of wealth as much as Vedic scriptures – Kautilya’s Artha Shastra being foremost.

Many consider currency as wealth. But currency is only a legal bill which is worth only in exchange. Besides, it has its own geographical limitations. Conventional currencies like dollar, pound sterling, rupees, yen etc can be exchanged only in set geographical areas. Crypto-currencies like Bitcoin – that which is valued much greater than US dollar – is mostly useful in online transactions. Currency is nomination of wealth – not wealth itself.

Many consider currency as wealth. But currency is only a legal bill which is worth only in exchange. Besides, it has its own geographical limitations. Conventional currencies like dollar, pound sterling, rupees, yen etc can be exchanged only in set geographical areas. Crypto-currencies like Bitcoin – that which is valued much greater than US dollar – is mostly useful in online transactions. Currency is nomination of wealth – not wealth itself.

So, what is wealth? Wealth is defined, in modern English, as “an abundance of valuable possessions or money” or “a plentiful supply of a particular desirable thing.” The father of capitalism, Adam Smith, in his book The Wealth of Nations, described wealth as “the annual produce of the land and labour of society”. This “produce” is “that which satisfies human needs and wants of utility.” In popular usage, wealth is understood as an abundance of items of transactional value.

Wealth is defined, in modern English, as “an abundance of valuable possessions or money” or “a plentiful supply of a particular desirable thing.” The father of capitalism, Adam Smith, in his book The Wealth of Nations, described wealth as “the annual produce of the land and labour of society”. This “produce” is “that which satisfies human needs and wants of utility.” In popular usage, wealth is understood as an abundance of items of transactional value.

Kautilya, also known as Chanakya, had a great understanding about wealth. He often termed it Artha. In the Artha Sutras, he suggests “Artha is the root of happiness.” Kautilya’s Artha is not just currency, but also material property and, most importantly, knowledge. “No wealth is greater than wealth of knowledge,” he argues in his Neeti. That’s because “Knowledge explains our being as well as that which is in our possession (resources) and enables us to use those resources to get that which we want (wealth).”

In the second axiom, he says, “the root of wealth is Dharma.” Kautilya’s Dharma is never to be translated as “religion”. Dharma is good conduct. It’s that “which sustains” and that which empowers us to “do good to us as well around us” – our family and society. Anything that hurts any being (humans as well as animals) for no fault of theirs is Adharma or against Dharma. Therefore, any Artha or wealth gained through the path of Adharma is called Anartha. Anartha, in Sanskrit, also means “disaster”.

Wealth is useless when hoarded without any utility to the one who possesses it. Modern economists will agree that hoarded currencies are detrimental to a nation’s economy. For Artha or wealth to be in shape, it must be used in transaction – either as an investment or expenditure. Kautilya defined hoarded wealth as Vyartha or liability. In Sanskrit, Vyartha also means useless. He advises, “Wealth has only three ends – it’s either spent on deserving people or things, misspent on undeserving people and things or just rots away and falls into the hands of others (deserving or undeserving).” Stagnant wealth is of no utility.  

Wealth is useless when hoarded without any utility to the one who possesses it. Modern economists will agree that hoarded currencies are detrimental to a nation’s economy. For Artha or wealth to be in shape, it must be used in transaction – either as an investment or expenditure. Kautilya defined hoarded wealth as Vyartha or liability. In Sanskrit, Vyartha also means useless. He advises, “Wealth has only three ends – it’s either spent on deserving people or things, misspent on undeserving people and things or just rots away and falls into the hands of others (deserving or undeserving).” Stagnant wealth is of no utility.

When wealth is used for something good, which includes satisfying one’s needs, needs of dependants, helping those who are less fortunate as well as those who are despondent is Artha. It is important to note that Artha also means “meaningful” in Sanskrit.

According to Kautilya, the understanding of the ideas and ideals of Artha, Vyartha and Anartha are key to earning, retaining as well as rightful dispensation of wealth for one’s own as well as universal welfare. It also helps in establishing peace and prosperity in one’s family, society, nation as well as the world at large.

A despicable person bereft of wealth is often one who’s bereft of knowledge or Gyaana. Knowledge, one must understand, is not just data or information. Modern educational institutions often offer courses with the apparent intent to provide knowledge, but only end up providing some form of data or information.

If “knowledge” does not help you sustain yourself or those who depend on you, it is not “knowledge”, but data or information. They are subject to change. This does not mean data is useless, rather it is pointless without knowledge and its application. Knowledge provides us with the ability to interpret data and information and use it to our best advantage. In the absence of knowledge, we suffer. In the absence of knowledge, we are ignorant. In ignorance, there is uncertainty bound with certain fear. Fear causes mental unrest. Mental instability often makes us take detrimental decisions, causing loss of wealth and even poverty.

If “knowledge” does not help you sustain yourself or those who depend on you, it is not “knowledge”, but data or information. They are subject to change. This does not mean data is useless, rather it is pointless without knowledge and its application. Knowledge provides us with the ability to interpret data and information and use it to our best advantage. In the absence of knowledge, we suffer. In the absence of knowledge, we are ignorant. In ignorance, there is uncertainty bound with certain fear. Fear causes mental unrest. Mental instability often makes us take detrimental decisions, causing loss of wealth and even poverty.

Many governments in the free world, during the early 1900s, gave significant importance to literacy. Their argument was that, with literacy, poverty would end on its own. But, today, with the collapsing of financial systems, we see so many literate as well as educated people in the free world living on the streets. Literacy is a form of data and information; it only helps us to read and write. It fails to empower us to chart a course of action to make the best use of this data and information for even our own welfare.

It cannot be called knowledge if you possess information which only makes your uncertain and fearful. Unfortunately, our academic systems are churning out candidates with diplomas, bachelor and master’s degrees, who end up failing to employ themselves! If theirs was true knowledge, they’d have known what to do with it and find a way to employ and provide for themselves and even others. Kautilya’s Artha Sutras explicitly suggest that, “an educated person who cannot find a way to employ oneself is as good as an uneducated person”. He perhaps implied that an education that does not provide for sustenance is not education at all.

The current system of education needs to be redesigned to provide knowledge, not redundant data and information. For, according to Kautilya, such “knowledge” is Vyartha – useless – and often results in Anartha – disastrous consequences.

Kautilya’s axioms on Artha have rarely been wrong. When the global economy collapsed in 2009 – the tremors of which can be felt even to this day – it was not because illiterates were at the helm. Wall Street honchos were Ivy League graduates – they were apparently the “smartest guys in the room”. Somehow, they failed the system as well as themselves because they didn’t understand the concept of Artha and did everything that resulted in Anartha. When these grand “leaders” occupied positions of power, their alma maters felicitated them with awards and honorary doctorates, but when they were put behind bars, there was no course correction or even acknowledgment of failure. The students should have been taught the reasons behind the past students’ fall from grace. The should have learned and taught the ideas and ideals of Artha, Vyartha and Anartha.

3 responses on "Kautilya’s Concept of Wealth: Artha, Vyartha and Anartha"

  1. Nice article. It is application of data or information gathered over the years for collective usability. Principles of application is explained under dharma.
    Everything required for a sorted out life is already given…we just need to pick the book.

  2. Absolutely Brilliant explanation of Life Truths.History repeats itself because no one learns from the past;
    Chanakya was and is a Great Acharya totally dispassionate in his life and his Wisdom is sharp and striking

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