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Balbir Singh Sihag: Kautilya. The True Founder of Economics. New Delhi: Vitasta Publishing 2014. 429 S. ISBN 978-81-925354-9-4. Rs 695,–.

Pages 498 - 502



1 H. Zimmer: Philosophies of India. London 41969, p. 89.

2 P. Olivelle (King, Governance, and Law in Ancient India: Kauṭilya's Arthaśāstra. New York 2013, p. 29) argues for “sometime between 50 and 125 C. E.”

3 R. Boesche: The First Great Political Realist. Lanham 2002.

4 H. Scharfe: Investigations in Kauṭalya's Manual of Political Science. Wiesbaden 1993.

5 A. Sandmo (Economics Evolving. A History of Economic Thought. Princeton/Oxford 2011) has a chapter 2 entitled “Before Adam Smith”. There, he mentions the Old Testament (Joseph in Egypt with the seven fat and the seven lean years), makes a few remarks on Aristotle, before skipping to the scholastics and to mercantilism. Similarly, M. N. Rothbard (Economic Thought before Adam Smith. Aldershot (UK)/Brookfield (Vermont) 1995) deals with “The first philosopher-economists: the Greeks” in chapter 1 and then turns to “The Christian Middle Ages” in chapter 2. Again, in his monumental collection of articles written on “economists” from Aristotle (vol. 2) and St Thomas Aquinas (vol. 3) up to Keynes (vol. 46/47), M. Blaug ([ed.]: Pioneers in Economics. Aldershot (UK)/Brookfield (Vermont) 1991f. [47 volumes]) sees no need to deal with, or did not find serious articles on, Kauṭilya. (Vol. 1 is concerned with the how and the why of the history of economic thought as a subject.)

6 The game that Sihag (pp. 208–209) specifies in this regard does not have much to do with Kauṭilya. Incidentally, there is a small mistake in the payoff matrix where the authority's payoff for the strategy combination (auditing, cheating) should be 0, not –Y. This also affects the equilibrium probability of cheating.

7 H. Wiese: “The Kauṭilyan market tax.” In: JAOS 134 (2014), pp. 699–708.

8 R. P. Kangle: The Kautilīya Arthaśāstra, Part I: Sanskrit text with a glossary. Bombay 21969 (repr. Delhi 1992), p. 58.

9 Note, however, that Sihag disregards the squared brackets that L. N. Rangarajan (Kautilya: The Arthashastra. Delhi 1992, p. 259) has put around “increased” and “powerful”.

10 B. S. Sihag: “Kautilya on Time Inconsistency Problem and Asymmetric Information.” In: Indian Economic Review 42 (2007), pp. 41–55.

11 K. Brockhoff: “Agency theoretic ideas in ancient India: the Arthašāstra of Kautilya.” In: Management & Organizational History 10.1 (2014), pp. 39–51.

12 H. Wiese: Indian principal-agent theory, or, how Varuṇa helps the king to be just. Unpublished manuscript 2015.

13 A specific example of what can go wrong is related to (iii). Rangarajan places apart by more than 100 pages closely related issues (compare footnotes 2 and 5 in Wiese 2014).

14 Sihag (p. 313) writes: “At the time of Kautilya there was no special bank to undertake any monetary policy. Still the problem of credibility was perhaps quite serious, since…”

15 Sihag (pp. 66–67) writes: “During the classical period, concepts like centre of gravity, and normal price were considered central to economic analysis but neoclassical analysis made them obsolete. Similarly, thanks to the information revolution, even the fundamental theorems of welfare are not that fundamental any more.”


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