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Hindu Economics

Introduction: - Hindu views life as one. So all the concepts about life are comprehensive. As in religious ideas so in the political, economical, social and all other walks of life we have an inclusive approach towards all the concepts. This presentation is not a research of ancient ideas. But rather it is application of universal Hindu ideas in the field of economics with historical perspective. This seems to be the secrete of our success in all the ages in the field of trade and commerce. Adam Smiths modern economics is based on the principles of utilitarianism or existentialism or imperialism. So the Hindu economics is based on the Hindu view of aim of life. A very brief reference to these ideas will be helpful in understanding the concepts of economics. Trade is only a small part of economics. It includes taxation policy, fulfillment of needs, Production of wealth, distribution of profit etc. In this paper we will try to understand the Hindu View on all those topics. There is not much effort to quote from earlier works on these issues as the time at hand is scares. But it will be worth mentioning few Books which should be referred by the serious student of the subject. Kautilyas Arthashastra is a great authority though modern economits tend to reject it for it has many political concepts interwoven with economics. Recent works are Integral Humanism by Pundit Deendayal Upadhyaya, The Third Way by Shri Dattopant Thengdi, Hindu economics by M.G. Bokre. The author of this paper has understood the Hindu view of economics through study of these books though at present these are not available for reference as this writing is being done while traveling. Aim of Economics: the Hindu word is Arthashastra. It is more comprehensive than the term economics which is defined as a systematic study of money-generation and distribution, consumption & satisfaction, Demand and supply etc. The word Arthashastra means the science or study of Artha. Artha is one of the Purusharthas mentioned in our Shastras. Purushrtha means the Purpose (essence) of human life. One has to fulfill these four Dharma, Artha, Kama and Moksha. There is another way of putting these for into two distinct aims of life Abhudaya which means material prosperity and Nihshreyas Which means Spiritual Growth. Hindu way of life advocates a beautiful balance of the both. But when we talk about Hindu economics we are essentially referring to the system of acquiring Abbhudaya. Every householder is expected to create, procure, acquire and safeguard wealth. The only condition is do it in a Dharmika way. Artha is earning and Kama is enjoying. Both are to be based on Dharma. Krishna States in Geeta Dharma aviruddho bhuteshu Kamosmi Bharatrshabha I am fulfilling of desires if done in accordance with Dharma. For fulfillment of desire you have to earn. The method of earning also has to be Dharmika. So Hindus aimed at developing an economic system to achieve its goal of welfare of all. Sarve Bhavantu Sukhinah.

Abhudaya: The concept of integrated development of Individual, Family, Society, Nation, Humanity and the Nature. So Hindu economics has both Micro and Macroeconomic principles integrated. The individual is not considered separate from the other ever expanding existences. In fact he is the uninterrupted expansion. Abhudaya etymologically means Abhi (overall) + Udaya (Progress) total progress. It means wealth with satisfaction, creativity and all the rich expressions of Life. Hindus are the worshipers of Mahalaxmi. So we generated immense wealth through the ages. We still continue to do that. Generation Of wealth: Basic generation of wealth is done by the Farmer. You can add Mining to it. All other productions are secondary processes on the raw material created by these two professions. Mining is also limited in the larger sense as regeneration of minerals is toooo long a process. So Farming was considered to be the noblest professions among the Vaishya (the economical class). Uttam Krishi, Madhyam Vyapar adham Naukari Best is Agriculture, Medium is Trading and lowest is employment. Farmers produce, artisans improve and create different products for the use, Traders make it available to all. Every body gets the remuneration for the time, labour and intellect they invest. All contribute to the well-being of all. We created a system where everybody could prosper. It was a fare system of wealth distribution. For effective distribution the unit was kept optimum. Village or town was the economic unit. 12 professions like blacksmith, cobbler, weaver, tailor, carpenter and potter would provide essential services and goods to all. So did the teachers, Farmers, traders etc. The family would engage in the same profession generation after generations with growing efficiency and skill. No insecurity at all. At the same time we had almost monopolistic control over the international trade. The system most effectively catered to all the needs of everybody. At the same time everyone had the opportunity to progress. Your basic wellbeing (Yoga Kshema) was guaranteed. One was sure of an employment or rather a profession or more correctly a duty even before he/she was born. His basic role in the society was made known to him early. At the same time he had the choice to use his capacity to go beyond that and contribute creatively and in turn get the rewards. The individual was trained to aim and concentrate on excellence and creativity the remuneration came along. This is how we had the best artisans and Quality products that were demanded all over the globe. This was done not with the political control but a willing subordination to natures lawDharma. At micro level that is at individual level Dharma means Duty - Duty towards family, neighbourhood, town, village, nation and to nature. More importantly duty unto your own self; the value system that you create for your own aim of life- Your own Dharma. This is essential to the Hindu economic system. The individual behavior in accordance with dharma ensures the working of the system at the macro level, the larger society, nation and even the humanity. So greed was condemned, selfishness was adharma. So you get to be rich by dharmika means and not at the cost of others including Mother Nature.

Dharma directed the macro economics also. At the larger level, the macro level Dharma is the bearer or sustainer. One that binds the society. So the Dharma directed economics and Hindus created the Ideal social order with equal economic opportunities to all; a wealthy society and an enlightened nation teaching the humanity how to live. The Hindu economics at the macro level is a balance between Abhudaya prosperity and Nishreyasa- the inner growth. Dharma ensured fare ness, honesty and trust in all the economic transaction. Purity of means was as important as the result. Varnadharma stipulated the economic dos and donts for the society. The spiritually evolved one was expected do the largest sacrifice. He was not supposed to charge anything for his profession- education, rituals etc. He would be sustained by Danadonation. His dharma restricted the hoarding of those Donations also. If more than sufficient is received he was to donate the excess. Not allowed even to store food for more than a day. The stronger members of the society were trustees of the national treasure. They could accumulate wealth in trust to be used for the society in case of emergency. The profit oriented were the creators, distributors and preservers of the wealth. They produced, provided employment, ensured availability, constantly improved quality, sustained society and also traded. Basic necessities were not traded in the Hindu economic system. They were produced in abundance and made available free to all. Food (Annam), Home (Griham) and Health services (Vaidam) were provided free. So it was luxuries which were sold and purchased and the Art. This is what was exported. What was not available in those far off lands was made available through trade- viz. silk, spices, diamonds, jewelry, art, sculpture, steel etc was exported. While that which was not available here was imported. Even these profit minded producers and traders were governed by Dharma. The percentage of profit was to be according to dharma. Their contribution to state (Tax), society (welfare activity), religion, education was fixed by dharma. It was voluntary yet more binding than the modern laws as it had Dharmika sanction. These Vaishyas were allowed to save as it would be used as capital and in the end would serve the good of all. On the employees class there was not much responsibility except to contribute physically. Privileges were enormous. They were free to save as much as they work for. All the basic needs were taken care of by system. The ideal Hindu society was economically content, self-sufficient and fulfilled at all the levels of human existence. Individual was secure, creative, contributing hence fulfilled. The Family was also healthy, wealthy and satisfied. The village or town was self- reliant, content, prosperous, growing and contributing. The republic and the nation vibrant, meaningful and enriching. The world was benefited beyond comparison. Each smaller unit contributed its might to the greater entity at the same time the larger unit cared and provided opportunity and security to the smaller one. This was not only complementary but so homogeneous as if organic. Every economic activity contributed to the peace and harmony off all. We need to elaborate on the principles of Hindu economics that were able to create such a wealthy society.

Principles of Hindu Economics

1. Renunciation (Tyaga) the basis of consumption (Bhoga): Ishavasya Upanishad Says Tena Tyakten Bhunjithaha, Ma Gridhaha kasyswid Dhanam. Meaning: Consume through renunciation. Do not keep a vultures eye on any one elses money. The reason is given in the earlier line which says Ishavasyam idam sarvam, Yatkincha Jagatyam jagat. The whole world is filled with the almighty. So all the beings are his expressions only. How can you deprive anyone for your own enjoyment? You have to earn a right to enjoy and that can be done by giving, Sacrificing and contributing. Here the intention of all the economic activities is mentioned. It should be giving only, do not worry about taking. It is the automatic result of giving. So Hindu economics is like Kapalbhati, you concentrate on exhaling and inhalation takes place on its own. Everybody gives to the maximum capacity so in-turn everybody gets what one deserves. Ultimately you attain Keval Kumbhaka- fulfilled society. A rich society. Hindu economics is not give and take but it is only give and give. Every body gives to the larger unit. Individual earning will be the result of his work in his chosen field with the sense of renunciation as its basis. This is Dharma. It is enshrined in a Subhashita: Tyajed Ekam Kulasyarthe, Gramsyarthe Kulam Tyajed. Gramam Janapadsyarthe, Atmarthe Prithivim Tyajed. One has to sacrifice for the sake of the Family. For the sake of Village family has to sacrifice. Village to be offered at the altar of Republic- nation. The ultimate renunciation is giving up the earth for the sake of realization. 2. The Family Values: For us the whole universe is a Kutumba. A big family. The Yogawashishtha couplate is basically the Global economic vision of the Hindu. Ayam-Nija Proveti, Ganana Laghuchetasam. Udar charitanamtu Vasudhaiva Kutumbakam Meaning:- This is mine and that is yours is the calculation of small-minded. For the noble minded the whole world is a big family. So you view everybody as a Family member. This reduces the necessity of economic transactions at all levels. As in family all the activities by the members of the family are without any economic transaction in the same way we applied it to village, society and nation. Involvement of currency was kept to minimum. At village or town level all the basic needs were taken care of without any economic transaction in the form of currency. Even up to the largest unit World: our universities were free to all. Every body offered the Dakshina as per capacity. But nothing was charged. So the Gurukula will take care of all the students and the students were duty bound to repay in the form of Gurudakshina as an offering. 3. Basic Needs Guarantee: Krishna says in Bhagavadgita, Ananyash Chintyanto ma Ye jana paryupasate; Tsyam Nityabhiyukatanam Yogakshemam Vahamyaham. (9:22) No need to worry, those who worship me fully (Follow the Dharma) to those who are constantly engaged in the pursuit of their goal, I provide them all the means of sustenance and also secure it. Yogakshema includes both Yoga is adding that is earning and Kshema is the Safety and security of what

is acquired. The Divine Guarantee extends home delivery Vahamyaham. When Dharma is established the basic needs of every living being is taken care of. Hindu do not Subscribe to the thinking of Struggle for existence and survival of the fittest. We say Dharma provide for the existence no need to struggle for that. Struggle is for the higher achievements as in the advancement of science and technology, arts and crafts etc. We try to ensure the survival of all. The weaker section is looked after with motherly care by the wealthier as a part of their dharma- duty. That is why Annam, Griham and Vaidyam are free. So there was no poverty no poverty-line. So Sanskrit words Vipanna and Daridyra have a shade of meaning that sounds deprived. 4. Knowledge is for all: Vedas proclaimed, Aa no Bhadrah Kratavo Yantu Vishwatah Let noble thoughts come from the whole world. Knowledge has no propriety so everyone has the right to knowledge. Knowledge is divine revelation. Hence Vedas are called Apaurusheya- not a human creation but a divine revelation. Hence the proclaimer is called Rishi- Seer. He only saw, the truth was already there. So there is no question of intellectual property right, patent or royalty in Hindu economics. We share knowledge. Our ancestors seldom claimed authority to their knowledge. As swamiji proudly declared I have stated nothing new but the ancient wisdom of Upanishads in the modern language. 5. Co-operation and not competition: Hindu lifestyle is based on co-operation so in Economics also there is no scope for competition in Hindu Vision. When the goal of all the economic activity is Highest good of all, then it can be achieved only through co-operation. Bhagavad gita 3:11 says, Parasparam Bhavayantah Shreyah paramvapsyatha By helping each other they attained the highest goal. Shreya means the way which takes to Shri. In Shri-sukta Shri is referred as economic prosperity along with peace and Knowledge. We did this successfully for centuries. Sarve Bhavantu Sukhinah was not only prayed and preached but achieved through economic and social system based on sharing and caring i.e. cooperation. This was done with no compromise on Quality. Creativity was at its best. Knowledge was shared so it enhanced quality and research. Excellence was as the prime goal so the competition was in fact with ones own limits. Because of this we learnt so much from the travelers and even invaders. At the same time we could spread love, peace and knowledge along with the valuables that we traded all over the globe. Traders were cultural ambassadors. So we find Ramayana and Ganesha in remote continents. 6. No government or as less as possible: The governmental control in economic matters was restricted to taxation. But the ideal was that the people will govern themselves by Dharma. As Pitamaha Bhishma says in Shantiparva of Mahabharata, Na cha Raja, Na cha Rajyo aasit, Na Dando na cha dandikah: Dharmenev Praja Sarva Rakshanti/ Vartanti Sma Parasparam. There was no King and no kingdom. No rule and no ruler. Dharma only prevailed and people defended/ behaved with each other by Dharma itself. The question was asked by Yudhishthira about Dharmarajya and we find Bhishma answering in past tense.

He is not setting forth a goal to be achieved but stating what existed and asks Dharmaraja to reinstate it. In economics it means there has to be very less governmental involvement. Governments role was to defend and to provide infra-structure. Most of the other things like education; social welfare etc was taken care of by the society on its own. Even police were not needed. Defense meant external threats. Many small sovereign republics like Vaishali in Chandragupta/ Kautilya period did not even need army of there own. For governments duty people willingly paid tax. In some texts it is said to be 1/6th of the net income. But people paid it happily as there was no other tax to be paid so even 17% rate of the income-tax was bearable. King was guided by Dharma so the extra tax he received was held in trust for emergency. Even international trade was independent of governmental sanctions. One reason was economy did not depend on currency. There was currency no doubt; the oldest of the coins found are Bharatiya currency. It was real value currency. The face value of the coin matched the intrinsic value of the valuable metal. So the trading was almost like barter. But much evolved and mature in trust. The Hindus word was as valuable and pure as the gold in the coin he carried. Many instances are quoted by Chinese and European travelers which tell us that transactions would be completed after many many years. Many a times the original person entering the contract had died and his generations fulfilled the promise. Governments collateral guarantee was not needed. Dharma was the Guarantee. 7. Milking of mother nature: Not exploitation: Hindus are sensitive even to the so called inert matter. We consider earth as our mother and respect her nay worship her. The day starts with asking forgiveness for touching her with the feet. Vedas declared that Earth is our mother and we are her children. (Mata Prithvi Putro aham prithivyam) So for any amount of profit or monetary gain Hindu would not allow the mother to be hurt. So the concept of Milking was adopted in all kinds of production and industry. Dohana To milk and not Shoshana- to exploit. So much of wooden work was done but no trees were cut fully. There are rituals asking permission of the tree for one branch ore more to be cut. The tree should be able to regenerate what is cut. Even now most of the vanavasi (Tribal) follow these rules of Dharma. Metallurgy was advanced in Bharat centuries before Christ or any of the modern scientists was born. But the mining was not indiscriminate. We even now have the tradition of re-cycling all types of metals. There are castes like Kasera in northern part devoted to this task only. Economics was subjected to the natures law. No amount of profit or earning will motivate a true Hindu to exploit Mother Nature. So the main profession Farming was also developed in such a way that it produced more in accordance with nature. Now we are relearning the organic farming. 8. Trust and not Doubt: The whole Hindu economics is based on trust and trustworthiness. This was of prime importance to all the Hindu traders, Producers, middlemen and employers. Word used to inculcate this work culture through ages

was Kuladharma. The tradition of the Family. You have to keep the glory of Kula ancestry. Honesty was not a policy but Dharma. Goodwill was not created by propaganda but was earned and preserved by sustained practice of Dharma for generations together. No amount of temporary profit would lure the Hindu to give away the permanent Name of the Family. Because it is said kuladharma Shashwata. This trust extended to Practices like Hundi (Promicery note). The money lending and saving i. e. basic banking was also based on word of the man. No cheating or going back on the promise as he was bound by Dharma. So even today the traditional bankers are called Mahajan- Great men. 9. Glory of the labour: Shrama (Labour) was considered to be most sacred in Hindu tradition. It was worshiped. The Lord of Labour- Wishwakarma is brother of Laxmi (the deity of wealth) and Dhanwantari (Lord of Medicine). All of them appeared from churning of ocean- Samudra Manthan. All kinds of physical labour had equal importance. Economically speaking it was more remunerating. The largest part of the profit of the production went to one who worked for it. He had the complete propriety of his work. The investing agency had only the 10th part of the share. Artisans were wealthiest and also most respected. Even the Kings revered the great workers. This resulted in continuity of great traditions for centuries and even millennia. There are many gifted communities even today who have more than thousand years of tradition in their profession as goldsmith or carpenter or sculpture. Rampurias of Punjab and gadiya Lohars of Rajasthan are such gifted blacksmiths. Many more examples are there where the trade has gone into the genetic tradition. 10. Concept of Yajna: This is the most beautiful, most distinguished and the unique concept developed by the Hindu Thought and practice of more than 100 centuries. The concept of Yajna-sacrifice. It has two Dimensions. First is the cyclic nature of existence. It is based on the law of conservation of energy. You can only change the form of energy; can neither create nor destroy energy. So everything is recycled. Understand this and you will understand why the earning should be based on Dharma. Dharma is giving everybody the due. You can fulfill all your desires if you abide by this law if nature. Bhagavadgita 3: 10 to 16 tell us this secretes of Yajna way of life. The economic interpretation is first you pay then you enjoy. The payment has to be proportionate and appropriate. But the Yajna concept puts it in reverse order. It calls upon everybody to recognize the indebtedness that we inherited as soon as we came into being. Then live to repay these debts. Thus the Five great debts were enshrined in our way of life. Sticking to the economic part of the principle; we can say that this formed the foundation of Hindu expansion of trade and commerce. Concept of Yajna is explained in the last two lines of Kendra Prarthana, Jeevane Yavad aadanam Syat pradanam Tato adhikam In my life let me contribute more than what I receive. How can you give more than what you receive? You must create, produce, multiply and add to what you have. You must improve qualitatively; you must cut down the input in form of time, energy and capital. After putting this effort in production you should be able to contribute more than the initial. This is constant creation of

wealth with foolproof guarantee of fare distribution as the importance is on Pradanam-the contribution. At every stage individual, family, society and nation we take care to follow this principle of Yajna. This is the only way to total prosperity (Abhudaya) of all. Duty first no rights. The second dimension of yajna is every body concentrates on his/ her duty. Does the duty religiously. No need to bother about the rights. Rights of everybody will be taken care of automatically if everybody concentrates on duty. The only right that a Dharmika understands is to perform his duty perfectly. This is how we had giant Karmayogis in the field of economics also. Gita says by following this path of Yajna you will get all the desired Bhogas. Ishtan Bhogan hi vo devan dasyante yajnabhavitaha. But if you consume without contributing your share you are the Robber. Tairdttana Pradyebhyo yo bhunkte stena eva saha. (3:12) This is the basic of Dharmika earning and spending. The veda gives a clarion call Shata haste Samahara Sahastrahaste Sankira. Earn with hundred hands but give with thousand. So sense of contribution and giving was the basis of respect and not the capacity to consume or purchase. These can be called as the fundamental principles of Hindu economics. Though we can add a few more in the list like importance to Creativity Vs standardization; Quality vs Quantity, Population as asset and not liability etc. These are minor concepts when we consider only the Hindu economics but when compared to the modern view they become the distinguishing references. We will go into details of these if need occurs during further discussion. One important comparative point is Hindu economics does not relate to law of demand and supply. The cost does not vary with the demand and supply when the margin of profit is governed by the Dharma that is Yajna Concept. The next question is whether these principles are the glory of the distant past? Or are they relevant to the present economics? We will deal with these questions one by one. Only one preliminary remark Hindu believes in eternal values in the changing society. Sanatana Dharma. Ours has been a vibrant society, a living society. We have been able to apply these eternal principles to the situation of the moment Yugadharma. This is the real aim of Shastrartha- To understand the Yugadharma in right perspective. Before going into the discussions of Yugadharma we can see two models representing this Hindu view of life. It will be somewhat repetition of the earlier discussion but a recap is also needed after so much of gap. Ever-expanding Oneness of existence : Akhandamandala :- Normally individual is considered the basic unit while formulating all economic, social and political theories. The principles of Justice, equality, fraternity are all based on this Individualism. Even the capitalistic values like consumerism are also individual based. The communist or socialist models are also based on the individual consideration though named social. Our concept of all larger units of humanity is the gathering of individuals. Individual is the center. Family is a larger circle comprising of more than one individual related to each other. Society is still larger circle containing large number of families & individuals

0. Individual 1. Family 2. Society 3. Nation 4. Humanity

4 3 2 1

related loosely or even unconnected. And Nation is a conglomeration of many such circles of different, sometimes opposing groups. Hence the notions like mosaic or composite culture. The world is the gathering of Nations. This is the present understanding and it can be represented by a model of concentric circles with individual as a center.

The Hindu concept is of natural expansion. The individual is not alone, he is the part or rather a living organ of the larger existences. Family is the first expansion. Individual is one with the family. He is ready to do sacrifice for the good of the family. 0. Individual The family expands into 1. Family society. Again the 2. Society organic oneness is felt 3. Nation and kept alive. Nation is the next natural 4. Universe expansion. All the organs 5. Divinity individuals as well as collective entities like family, society etc are one with the personality of Nation, The Rashtrapurusha. Rashtra is a living organism. Then it extends into the whole universe and even beyond. Ultimately to the Divine infinity. Everything that exists is interconnected, interrelated and even interdependent. This is the central theme of Hindu way of life and this is expressed in all walks of life including Economics. This can be represented by the Ever-expanding spiral - The Akhandamandala. When we understand this model our understanding of Dharma matures. Then we understand that experiencing this organic unity and expressing it in our conduct at all levels is Dharma. The Cycle of Cycles, Concept of Yajna :- The next Step is putting this understanding of oneness into practice. That is done by performing the assigned role in the scheme of mother nature. The whole creation expresses and maintains the oneness and balance by a chain of cycles. We study it in the name of Life cycles, Rain cycles etc. This beautiful rhythm of nature is often broken by humans. Hence the Hindus created a socio-economic concept of Yajna to reestablish and re-vitalize these cycles. It not only relieves oneself of the debt of nature and society but also keeps on enriching the whole creation. It works like this. When the child is born a small entity of life is created out of the larger one, society. The society takes care of the child by providing food, education, culture, social security and everything else. In one term it is called Yogakshema. This child thus grows up to be a capable member of the society and starts working in his own profession which in Hindu way of life is aimed at contributing to the society. This is his Karma. But he gets

remuneration for his work. That is Karmafala. But the individual is not supposed to enjoy the earning for only his selfish goals. He has to contribute to the society out of his own earning. This contribution is to be without nay expectation. This is called Yajna. This is what really enriches the Society to provide Yogakshema to the next generation. This is how we became a prosperous society. When the Yajna stops the society becomes poor. So a society full of multi millionaires may also be a poor society and the government has to take care of the socially backward individuals. That is why the so called developed countries have to spent a large percentage of their budgets on social security. This concept of Yajna must continue as an Akhandamandala Cycle as all the cycles of the nature. This can be represented by following model.



Karma Yajna Smaller Entity Larger Entity

Yugadharma Application of the principles. VyashtiDharma - Applying the principals of hindu economics at the Individual level. Darmika Earning. - One must earn, produce, procure and protect. But according to Dharma. Here Dharma is ordained duty. The concept is that we are born with a purpose of life and each has to fulfill his/her duty. Play your allotted tune in the beautiful symphony of divine existence. Your profession should also be according to your Dharma. Swa-Dharma. The Swadharma is based on Swabhava. Your own nature. For understanding our nature we can use the broad classification provided by Varna. Let us not go into the heredity of it. But our nature, Swabhava fits in either of the four Varna. Understanding this may help us in selecting our profession. The choice of profession based on these factors, the inclination will help in contributing our best and most.

Even if you have crossed the stage of choice of profession, you have the choice of the way you do it. So if you do your ordained/ though not chosen duty with the sense of contributing it is Dharmika. In both the cases the Dharmika way of working is in concentrating on doing the duty perfectly, giving more than what is invested. Earning, remuneration, salary, profit is only incidental and logical outcome and not the prime motive of our Profession. We can have some practical pointers to tell us whether our earning is Dharmika or not. Is our earning proportional to our contribution in terms of time, labor and investment. Do we try to give more than what we receive? In any case we should not aim for earning without giving first. The chronology is important. The giving, the contribution has to be voluntary and prior to the remuneration. The law of Karma says that you can get nothing free of cost. So if you try to earn without giving first. You must pay later, willingly or unwillingly. So if your earning is out of proportion, you will have to pay later in different indirect forms. Contributing willingly gives joy and fulfillment on the other hand when one has to pay