15. Auctions in Kautilya’s Arthasastra

Cinematic renditions of the popular story of King Harishchandra such as the tele-serial Upanishad Ganga (The Human Goal: Dharma—Story of Raja Harishchandra—Episode 9) include two instances of auctions. However, auctions do not figure in ancient sources of this story such as Vyasa Mahabharata, Markandeya Purana and Devibhagavata and medieval sources such as Raghavanka's Harishchandra Kavya, a 12th Century Kannada text.

There is perhaps no pre-modern Indian text that discusses economic activities outside the perimeter of law and statecraft.

Soon after it was first translated into English by Shamasastry (1988 [1915]), the Arthasastra won instant recognition as “perhaps the most precious work in the whole of Sanskrit literature” (Thomas, 1922, p. 467) because it possibly “throws more light on the cultural environment and actual life in ancient India than any other work of Indian literature” (Maurice Winternitz quoted in Trautmann, 1971, p. 3; also see McClish, 2019; Olivelle, 2013, p. 39). The Arthasastra’s discovery transformed the ancient Indian from an otherworldly being to a calculative this-worldly being (Gowen, 1929, pp. 174, 178; Trautmann 1971, p. 2; Weber, 1946, pp. 123–124). Since then Kautilya has been equated with Machiavelli. But Kumar (2010, pp. 292–293) argues that popular imagination in India nurtures a complex image of Kautilya, unlike the West where Machiavelli is equated with cunning.

The text differentiates between “scholars and practitioners” (I.5.8).

For the literature on the Kautiliya Arthasastra see Olivelle (2013) and McClish (2019).

Artha is polyvalent: goal, meaning, money, purpose, pursuit, reason, wealth, legal case, profit, self-interest, power, a goal of life, and the name of a god (Doniger & Kakar, 2003, pp. XIII, 1, 219; Doniger & Smith, 1991, pp. 303–304; Kangle, 2006 [1969]; 2003 [1972]; Trautmann, 2012, pp. 2–3).

See Kangle (2006 [1965]), Trautmann (2012), and Olivelle (2013) for consequences of the embeddedness of the state in markets.

The scare quotes are necessary since these markets do not necessarily conform to our contemporary understanding. Consider, for instance, Rosenbaum’s (2000) criteria for identifying markets.

Olivelle (2013, p. 555) suggests that “it may be in the interest of a trader to set an artificially high price, from which it could only come down as a result of bidding.” However, the text does not support this reading.

In ancient Indian law, shouting/calling out played an important role in a variety of contexts in addition to auctions. For instance, shouting to attract potential rescuers played an important role in ancient Indian law regarding distress contracts (III.13.35, see also Asahaya’s commentary on Naradasmriti, Jolly, 1889, p. 130; Lariviere, 2003, p. 342). Also, shouting to alert others relaxed liabilities of a driver/rider of a cart/animal that has gone out of control (IV.13.14, also Manava Dharmasastra VIII.291–292 (Olivelle, 2006) and Yajnavalkya Dharmasastra II.298–299 [Dutt, 2011]). Manava Dharmasastra (VIII.233) suggests that a herdsman is not guilty if an animal is stolen “despite his shouts”, and IV.13.14, which suggests that one cutting a tree is not guilty of hurting others if he shouts, “get out of the way.” Also see Yajnavalkya Dharmasastra (II.303), Brihaspati (XVI.20), and Naradasmriti (VI.13.16) (Dutt, 2011; Jolly, 1889).

Apparently, “the emblem of the king” (Kangle, 2003 [1972], p. 141) established near the customs house “in the vicinity of the big gates” (II.21.1).

See Footnote 19 regarding the translation of “(due) price.”

The number forty is also important in other contexts in the Arthasastra, e.g., “for one doing harm to members from forty neighbouring families, the fine shall be 48 panas” (III.20.15, emphasis added). Cities were divided into “unit[s] of ten households, 20 households, or 40 households” (II.36.2, emphasis added). State officials could cheat people in forty different ways (II.8.20–21). The number forty also finds mention in the context of measurement. A nalika, which was a measure of time, consisted of 40 kalas (II.20.34). The denominations of weights manufactured included 40 suvarnas (II.19.8). Also, the “work month for the elephant corps [of the army]” (Rangarajan, 1992, p. 729) or “months for calculating wages of attendants of horses and elephants” (Kangle, 2003 [1972], p. 141) was equal to 40 days and nights (II.21.53). Even otherwise the number forty must have been important insofar as four, five, and eight were units of counting in a variety of contexts (for a compilation of a few usages see Olivelle, 2013, Appendix 2; Rangarajan, 1992, Appendix 1). In medieval India, a particular genre of poetry was known as chālisā, i.e., a collection of forty verses on a specific (mostly devotional) theme (e.g., Hanumān Chālisā, Durgā Chālisā, etc.). The number forty was also important across the world in ancient and medieval times. In the Biblical story of Noah it rained for forty days and nights (Genesis 7:4). Joseph mourned his father’s death for forty days (Genesis 50:1), Moses spent forty days on Mount Sinai (Exod 24:18), and Jesus fasted for forty days and nights (Matt 4:2; Mark 1:13; Luke 4:2). More generally, the number forty is closely associated with life cycle ceremonies across cultures. The widespread importance of the number could possibly be linked to its mathematical properties or astronomical facts of interest to ancient civilizations.

The requirement of price announcement thrice reminds of modern English auctions. The number three is also used elsewhere in the Arthasastra where decision under uncertainty is involved, e.g., “when there is agreement in the reports of three (spies), credence (should be given)” (I.12.15), “In case of non-admission [of the claim], however, witnesses shall decide, those who are trustworthy, honest or approved, three at least in number” (III.11.26), and the period of retraction of sale for agricultural produce is “three days” (III.15.5) whereas for “quadrupeds” is “three fortnights… [f]or, it is by that time that purity or otherwise can be known” (III.15.17–18, emphasis added).

The number seven is also important in other contexts in the Arthasastra, e.g., sale of “means of livelihood” could be retracted within “seven days” (III.15.6).

As in the sutra that says that state officials can cheat people in forty different ways (II.8.20–21). For a discussion on the use of numbers in ancient Sanskrit literature see Doniger and Kakar (2003, pp. xxi–xxv).

While the restriction on the rate of profit may be interpreted as the state’s hostility to traders, the state also protected the interests of traders. See Kumar (2012) and Trautmann (2012) for a discussion on the variety of ways in which the Kautilyan state intervened in favour of traders.

There is no phrase in the Arthasastra that translates exactly as just price (Kumar, 2012). A wide range of closely associated expressions are used in the literature. Different authors use different phrases: “normal price” (Olivelle, 2013, p. 148), “(due) price” (Kangle, 2003 [1972], pp. 142–143), and “proper value” (Shamasastry, 1988 [1915], p. 122). At times even the same author uses several different expressions to capture the intent of the treatise. For instance, Trautmann (2012) uses several different expressions to describe the idea of fairness in transactions involving goods or land: fair (99, 129, 130, 140), true (99, 124, 125, 127), just (112, 124), proper (116, 124, 127), reasonable (129), stable (129), steady (130), customary (112, 124, 127), and commonly accepted (124).

Other texts like Manu (VIII.403) suggest that prices ought to be publicly fixed “every five days or every fortnight” (Olivelle, 2006), while Brihaspati (XIII.7) suggests that transactions happened “before an assembly of merchants, the king's officers being aware of it (also)” (Jolly, 1889).

II.16.4, II.16.11–13, 19, II.21.7–13, II.21.22–23, 31, II.22.8–14, III.9.5.

Pana refers to the basic unit of currency—a silver coin, whereas the smallest unit was 1/2 Kakani = 1/128 Pana (II.12.24, Kangle, 2006 [1965], p. 181; Olivelle, 2013, pp. 458–459). The lowest annual salary of employees of the Kautilyan state was 60 panas and the highest legal fine was 1,000 panas. Among goods generally sold in market those priced 2 panas were considered to be high value goods.