By Shrii Ganesh Bhat
General Definition of Economics
The English word economics is derived from the ancient Greek word
Economy in general [is] the art of providing for all the wants of a family, [so the science of political economy] seeks to secure a certain fund of subsistence for all the inhabitants, to obviate every circumstance which may render it precarious; to provide everything necessary for supplying the wants of the society, and to employ the inhabitants … in such manner as naturally to create reciprocal relations and dependencies between them, so as to supply one another with reciprocal wants.– An Inquiry into the Principles of Political Economy (1767)
Over the passage of time, the focus of attention has been changed and different definitions have evolved. These definitions are grouped into three:
- Smith’s Wealth definition;
- Marshall’s Welfare definition; and
- Robbins’ Scarcity definition.
Adam Smith (1723–1790), a Scottish Philosopher and founder of Economics, published “An Inquiry into the Nature and Causes of the Wealth of Nations” was published in 1776. In the book, he defined economics as a Science of Wealth. Some other economists like J.B Say, F.A. Walker, J.S Mills and other also declared economics as a science of wealth.
John Stuart Mill (1806-73) argued that economics is a science of production and distribution of wealth. Another classical economist Nassau William Senior (1790-1864) argued, “The subject-matter of the Political Economics is not Happiness but Wealth.” Thus, economics is the science of wealth.
J.B. Say (1803), distinguishing the subject from its public-policy uses, defines it as the science of production, distribution, and consumption of wealth. Thomas Carlyle (1849) coined ‘the dismal science’ as an epithet for classical economics, in this context, commonly linked to the pessimistic analysis of Malthus (1798). J.S. Mill (1844) defines the subject in a social context as: “The science which traces the laws of such of the phenomena of society as
However, the last decade of the nineteenth century saw a scathing attack on the Smithian definition and in its
Marshall’s Welfare Definition
Alfred Marshall in his book Principles of Economics published in 1890, placed emphasis on human welfare rather than on wealth.
In Marshall’s own words: “Political Economy or Economics is a study of mankind in the ordinary business of life; it examines that part of individual and social action which is most closely connected with the attainment and with the use of the material requisites of well-being.”
According to Marshall, wealth is not an end in itself as was thought by classical authors; it is a means to an end—the end of human welfare.
A. C. Pigou’s (1877-1959), another great neo-classical economist, defined economics as, “… that part of social welfare that can be brought directly or indirectly into relation with the measuring rod of money.”
Robbins’ Scarcity Definition
The most accepted definition of economics was given by Lord Robbins in 1932 in his book An Essay on the Nature and Significance of Economic Science. According to Robbins, neither wealth nor human welfare should be considered as the subject-matter of economics. His definition runs in terms of scarcity: “Economics is the science which studies human
Lionel Robbins (1898-1984) argued that economics should encompass ‘non- material welfare’ also and that Marshall could not establish a link between economic activities of human beings and human welfare. There are various economic activities that are detrimental to human welfare. The productions of war materials, wine, etc., are economic activities but do not promote
Prof. A.C. Cairncross’ definition “Economics is a social science studying how people attempt to accommodate scarcity to their wants and how these attempts interact through
The American Nobel Prize winner in Economics in 1970, Paul Samuelson, observes: “Economics is the study of how men and society choose, with or without the use of money, to employ scarce productive resources which could have alternative uses, to produce various commodities over time, and distribute them for consumption, now and in the near future, among various people and groups in society.”
John Neville Keynes regarded the discussion leading up to the definition of economics more important than the definition itself.
A recent review of economics definitions includes descriptions of economics as the study of:
- the economy
- the coordination process
- the effects of scarcity
- the science of choice
- human behavior
Arthasha’sta can be defined in simple terms as Science of
Shri Prabhat Ranjan Sarkar, seer, philosopher and philologist
The existence of living beings, and especially
ofhuman beings, is based on four principles, four fundamentals: physical; physico-psychic; psychic and psycho-spiritual; and pure spiritual. These four strata are known as caturvargain Sanskrit. But human endeavoursand human expressions are trifarious. Existence itself is based on the fourth one, that is, the spiritual one, so there cannot be any expression in that stratum.”
The Sanskrit word Artha has got two meanings, two significances. One is purely psychic. Another is psychic but associated with physical. When it is purely psychic, the word Artha means “meaning”. “What is its Artha?” means “What is its meaning?” Another meaning of Artha is the object, the token, the entity with which one can quench one’s thirst that is… Money! “Artha” is used in the sense of purport, as well as in the sense of wealth which solves a pending problem.
Shabda or sound is in its initial stage a psychic wave. Let us see what
artha, or meaning, is. We hear a sound, but the concept of the word uttered is not clear till the mental waves are brought in contact with the physical concept involved. A child hears the word cat. He sees a cat and the mother says, “See, my son! That is the cat.” The boy associates the word cat with the cat seen. That means he establishes a parallelism between the mental waves created by uttering the word cat and the physical wave coming from the physical form of the cat. Hence psycho-physical parallelism is the meaning of a word which itself (the word) is a psychic wave. So psycho-spiritual parallelism is ideaand psycho-physical parallelism is or meaning. artha,
Shri P.R.Sarkar says that the so-called physical progress is termed Káma in Saḿskrta. The so-called intellectual progress is termed Artha. The progress in the psycho-spiritual field is termed Dharma. And pure spiritual progress, which is progress in the real sense, is called Mokśa. The only difference between the
All human approaches and all human emanations are of four-staged expressions: the physical world and all physical activities concerned in the physical world, which is known as “Káma” in Saḿskrta; all psychic expressions, including the cruder and the subtler psychic expressions, are limited within the jurisdiction of the psychic world, both conscious, sub-conscious and unconscious strata, known as “Artha” in Saḿskrta: the third world, the third stage is psycho-spirituality, that is, that which starts from the point situated within the scope of unit psychic world and touches the extremity, lowermost extremity, of the spiritual stratum. This third stage is known as the stage “Dharma”; and the fourth world – the progress, never-ending progress, in the realm of spirituality, known as the stage of “Mokśa”.
vargais káma, that is, the fulfilmentof the physical longings of life. According to some people, káma means sexual urge, but this is a wrong conception: people lacking in proper knowledge of the Saḿskrta language make this sort of mistake. Káma means longing for the fulfilmentof all physical and mundane necessities, such as food, clothing, education, shelter, etc. The desire for mundane objects – opulence, name, fame ,socialposition, wealth, etc., is káma.
vargais artha. Artha is the fulfilment of needs in the physico-psychic sphere. Through arthathe physico-psychic needs are relieved temporarily. Suppose one feels hungry; go to the market with money; buy something to eat and then their hunger is removed. Now since their hunger is temporarily relieved through the medium of money, money is termed arthain Saḿskrta. That which removes human afflictions is called artha. As the pangs of hunger are removed by food the means of procuring food is called artha. The pain of disease is alleviated by medicine; hence the means of procuring medicine is called artha. Hunger removed today will return tomorrow; a disease cured today may strike again tomorrow. Artha, cannot bring permanent relief to pain and miseries and cannot guarantee permanent security or lasting happiness. That object which removes hunger permanently is called paramarthá: Trividha dukhasyaátyantikii nirttihparamártháh. Artha brings temporary relief, and paramarthá brings permanent relief.
Whenever people don’t understand the meaning of a word – the word
kadalifor example – there is a certain want in the mind. And as soon as one learns that kadalimeans banana, that psychic want is removed. Hence, the meaning of a word is also called “ artha” in Saḿskrta because when one comes to know what a particular word means, the want is removed from the mind. Here arthadoes not mean money. So “ artha” means “money”, “meaning” and that vargathrough which physico-psychic needs are fulfilled.
Artha means that which brings an end to suffering. Human beings usually suffer from triple afflictions: physical, mental and spiritual. That which alleviates these triple afflictions is called artha. We know that in the physical sphere human beings suffer in various ways – not only from the shortage of food and clothing, but also from others pains and sorrows as well. Suppose someone falls down while walking; this is also suffering in the physical sphere.
In the psychic sphere, too, people suffer much pain, for example at the death of a beloved one. Even those people who have no problems of food, clothing, accommodation or education or medical care, also bitterly weep at the loss of their near and dear ones. This is psychic affliction.
When the psychic want is quenched, when the psychic thirst is quenched, when the psychic hunger is satisfied, that quenching of thirst or satisfaction of hunger is called Artha in psychic level, not in physical level. In physical level it is called Káma.
Parama Puruśa is mine, and I am His – this I realize. Yet I cannot make Him exclusively my own at all times.” This affliction of not attaining Parama Puruśa as close as one desires, is spiritual affliction.
So artha means money and artha also means meaning: that which removes suffering in the physical, psychic and spiritual spheres is called artha. “
Artha functions in psychic level. So for a devotee, this movement will be from Káma, pointed towards Artha. The supreme point of Káma should merge, should be one with the stratum of Artha. There must not be any want in your mind. Unless and until this thirst is quenched, there won’t be any mental concentration.
These thirsts are of
mind, and mind has got so many flows, so many propensities andso many propulsions. You have to withdraw all these propensities and goad them to a higher level. Again it is to be pinnacled, and that point is to come into contact with spiritual level. When it is from psychic level to spirituallevel, the movement is psycho-spiritual. This psycho-spiritual movement is the third phase.
Shri P.R.Sarkar explains further, “Human existence is based on four fundamentals, but human
Thefirst bondage is the bondage in the physical stratum. Hungry people are compelled to search for food with hunger pangs in their stomachs. When they eat something, they will get temporary relief from hunger; that is, they will attain temporary liberation from the influence of the bondage of hunger. It is procured with the help of money. So in this case money is one’s temporary liberator;so money is called arthain Sanskrit.
Today a hungry person may get relief from hunger with the help of money, but tomorrow the hunger will again return and the person will require more food. Liberation with the help of money can never be permanent. Yet, in this ephemeral world we need to use transient objects. It is a relative world composed of relative objects and entities. And that’s why our natural question is, “How should we live our lives?” The answer is that we should move towards the Supreme Entity while maintaining an adjustment with the relative world. We cannot ignore the external world; we cannot live without Artha or money. To obtain temporary liberation from pains and miseries, money or Artha is required but to attain permanent liberation, we need Paramártha. This is the basic difference between Artha and Paramártha.”
Shri P.R.Sarkar explains about the trifarious afflictions of humans and the
Human capacity is very limited – we cannot ignore this truth. Human afflictions are trifarious: physical, psychic and spiritual. The physical afflictions originate from the material world and the psychic afflictions from the unmanifest world or human mind. In some countries of the world people have abundant supplies of food and clothes, but they too suffer from pains and miseries, troubles and diseases. They too mourn the loss of their nearest and dearest ones. These are psychic afflictions. Next are the spiritual afflictions. The periphery of human mind is small, and this small mind remains engrossed with limited objects. The mind must be raised above these limited objects, above the world of limited happiness, into the limitless spiritual world. Limited psychic wealth is the root cause of spiritual afflictions. The state of breaking the bondages of limitations is known as “spiritual liberation.” When that liberation is permanent it is called salvation.
To live in this physical world, to preserve our existence, Artha or money is essential. However, we also require Paramártha. Paramártha is that factor which brings about the permanent cessation of the triple afflictions. Here permanent cessation means cessation of those afflictions which, once removed, will never return again in the future.
preyaare both completely opposite in principle. But in spite of their being at variance, their dual influence is sometimes discernible on the human mind at the same time. The mixed influence of these two agitates the human mind simultaneously, and those who, without having discerned the implication of this agitation, get caught up in the sádhaná of preyaand distract themselves from their Paramártha or spiritual goal. Preyaor extroversive tendency gives human beings arthaor temporary pleasure and relief, but keeps them away from paramártha, from spiritual bliss. But shreyais essentially benevolent, for it relieves pain forever and thus it is called Paramártha.
The lasting cessation of the three kinds of afflictions can only be achieved in the state of valid cognition, attained through sádhaná or intuitional practice; and so establishment in valid cognition alone is Paramártha and sádhaná is the stepping-stone to the lasting cessation of pain. That is why Brahma Sádhaná is the only achievable effort for the unit entity, for it is the highest accomplishment.
Shri P.R. Sarkar, accepted as a Spiritual Master says,
“The physical bondages which keep people confined to gross physicality and deny the fullest expression of human genius are called ádhibhaotik. The
endeavourto liberate one from these physical bondages becomes meaningless if freedom from psychic bondages [ádhidaevik] is not attained.
“Human beings must continue their efforts to attain
arthaif they have not yet attained paramártha. I declare in unambiguous terms that people will have to continue their mundane efforts to attain artha, and will try in the future to do just that.”
Scope and Jurisdiction of Arthasha’stra
Shri P.R.Sarkar explains the scope of Artha
For one’s development in this crudest, physical layer, we should build up a strong society. We should see that everyone gets enough food, clothing, housing, medical treatment, education. It is our social duty. Human life is expressed in four major ways (vicarańa). Carana means movement, a special kind of movement by which people find the solution to the pressing problems of their lives – problems concerning their food, clothes, education, medical treatment, shelter, etc. are Vicarańa. Those minimum necessities should be provided to all through the implementation of a socialideology. It is useless to preach the gospels of Paramártha to a person who has no food to eat.
If in a country afflicted by
scarcityof food grains, grain is distributed freely, or financial aid is granted, that is arthato those people, but this arthacannot remove their afflictions permanently. If instead some irrigation facilities are made available – river irrigation, well irrigation, subterranean irrigation, lift irrigation, etc. – in that case, their hardships are relieved to a great extent. They will not have to depend on the mercy of others,or wait for the favourof the rain clouds. They need not stand helplessly before others with begging bowls in hand. So the arrangement for scientific facilities is called madhyártha.
But even an effective system of irrigation will not last forever. The underground water level may sink; perhaps the water table will dry up altogether
; andthe river water may dry up some day. The water vapourin the atmosphere which fills our reservoirs and ponds may also become exhausted.
So the best arrangement will be to distribute grain and to grant financial aid as
artha, and as madhyártha to provide for various kinds of irrigationsystem and artificial rainfall system.
Shri P.R. Sarkar says,
“In all those three strata [physical,
-psychic and psychic/psycho-spiritual] where human endeavour functions, there are several bondages. Those bondages are personal, spatial and temporal. From the very dawn of human civilization, human beings have been trying to get liberation or emancipation from these three bondages. People make efforts to get rid of these triple bondages and whenever they could solve a particular problem or a particular bondage, partially or temporarily, they called it physico . That which leads to temporary success, but on a larger scale, is called madhyártha. And when they liberated themselves permanently, they called it Paramártha. artha
According to Shri P.R.Sarkar
The principal aim of human life is to be free of sorrow and misery. Otherwise, one cannot hope to attain peace. Relief from sorrow is called
nivrttiand is of two types: nivrttiand atyanatikii nivrtti. That which helps in attaining relief or nivrtti, that which brings about temporary cessation of sorrow is called arthawhich is only physical and psychic and gives only temporary relief; arthais a crude object, thus it can only bring crude and temporary satisfaction. For everlasting freedom from , paramártha is the only remedy; to attain permanent relief from sorrow and affliction, Paramártha is the only means. Paramártha can only be attained through spiritual practice. duhkha
Economics Is Not Arthashástra
Economists opine that human wants are unlimited; wants multiply—luxuries become necessities. There is no end of wants. Had there been no wants there would not have been any human activity. Prehistoric people had
Adam Smith’s theory was
Because people look out for their own self-interests, Smith argues, others benefit. Money is more likely to flow from investors into viable companies, which creates companies, jobs
Modern capitalism prevailing in almost all the countries of the
Despite various definitions, criticisms
Features and Characteristics of Arthasha’stra
After knowing the scope and role of Artha in the background of Indian philosophy, it can be stipulated that any ideology or socio-economic theory or economic thoughts to get qualified as Artha
- The theory should be based on the firm foundation of spirituality
recognisingand addressing the higher realms of human existence. It should acknowledge the nature’s law of unity in diversity.
- Socio-economic system should guarantee the Minimum requirements of life to every member of the society, neither by government doles nor by the donations of well to do persons or institutions, but by providing gainful employment opportunities with adequate purchasing power to everyone.
- There should be constant effort to increase the standard of living of every person while
recognisingthe special needs of meritorious persons.
- Since physical wealth, money and resources of the earth are limited, nobody should be allowed to accumulate physical wealth by depriving others.
- Resources of all kinds and places should be properly identified and used rationally for the benefit of all; there should be proper utilization and adjustment amongst different resources.
- Policies and programmes of the system should be flexible to adjust with the time, place and person.
PROUT Only Is Arthashástra
Capitalism, Communism, Socialism and various shades and combinations of these systems are the socio-economic theories prevalent in almost all countries of the world. Communism is nothing but state capitalism, whereas socialism is
PROUT an acronym of Progressive Utilization Theory – a new socio-economic theory, was propounded by Shri Prabhat Ranjan Sarkar in 1959
Profounder of PROUT emphasizes on a sweet adjustment between the objective world and the subjective world. He quotes Lord Shiva’s, Átmamokśarthaḿ jagaddhitáya ca [“For self-realization and for the welfare of the universe”] and says,
Those who think that they can concern themselves with parávidyá only, and finally, through its help, arrive at self-knowledge, are mistaken. Because while working exclusively for self-realization – átmamokśarthaḿ – the worms of selfishness will burrow deep into the human mind and finally sap all the sweeter and finer human sensibilities, all the generous expansiveness of the human mind, and fling the person into a quagmire of remorse. So the
endeavourto attain spiritual realization exclusively cannot be considered an ideal way of life.
If someone works exclusively for the welfare of the world – jagaddhitáya – one should realize that to render selfless service, an absolutely pure mind is required, with the expansiveness of the vast ocean and the serenity of the blue sky. Otherwise, while promoting the welfare of the world, one may develop a selfish desire in one’s mind in a weak moment, as a result of which one may bring harm to oneself as well as to the universe. So those who do not aim at self-realization cannot promote the welfare of the world either.
For self-realization, a pure science of spirituality is required, and for jagaddhitáya a happy blending between parávidyá and aparávidyá is necessary. In all mundane activity (for which the word káma is used), and for those
endeavourswhich require mental force, the artha varga[psychic pabulum] is necessary, and for the attainment of artha, aparávidyá is indispensable.
Economics i.e. Dhanasha’stra has remained as the bread-and-butter science. The argument that since scarcity is the fundamental economic problem of any society,
Economists say that the means or the resources to satisfy wants are scarce in relation to their demands. Had resources been plentiful, there would not have been any economic problems. Thus,
PROUT philosophy states, “The universe is the thought projection of Brahma, so the ownership of the universe lies with the Supreme Entity. Everything is the common patrimony of all, and the Father of all is Brahma…We must not forget, even for a single moment, that the entire animate world is a vast joint family. Nature has not assigned any portion of this property to any particular individual. Private ownership has been created by selfish opportunists, as the loopholes in this system provide them with ample scope for self-aggrandizement through exploitation. When the entire wealth of the universe is the common patrimony of all living beings, can the system in which some roll in luxury, while others, deprived of a morsel of food, shrivel up and starve to death bit by bit, be said to have the support of dharma?”
Shri P.R. Sarkar firmly says
Before everything else, one must first provide physical food to a hungry person. Once the physical needs have been satisfied one may impart spiritual knowledge and instruct him or her to sit in meditation. But before
thatwe’ll have to make provisions for their food, winter clothes, shelter, medical treatment etc. Without fulfilling these basic necessities it will be impossible to promote the collective welfare of the human race.
PROUT stipulates that a developed economy should consist of four parts – people’s economy, psycho-economy, commercial economy
People’s economy is directly concerned with the guaranteed provision of minimum requirements such as food, clothing, housing, medical treatment, education, transportation, energy and irrigation water. Continuous improvement in and ready availability of these requirements is the key factor in people’s economy. The minimum requirements can be assured through guaranteed purchasing capacity which should be enshrined in the constitution as a fundamental or cardinal human right.
People’s economy includes economic decentralization, cooperative dynamo
Psycho-economy is concerned with increasing the psychic
Psycho-economy has two branches. The first branch
This part of the economy is concerned with the development of scientific, efficient methods of production and distribution which will not incur
General economy includes the organization of the industrial structure and the coordination of economic planning at all levels to ensure collective welfare.
According to Shri P.R.Sarkar,
“This quadri-dimension of the economy is a vast expansion on the contemporary and co-contemporary conceptions of economic activity. Most economists today understand only a little of the principles of general economy and something of commercial economy, but both of these parts are still in an undeveloped stage. People’s economy and psycho-economy are totally overlooked by modern economists, and as such could find no place in the present mode of economic thinking.”
These four parts of the economy should be integrated and adjusted according to Neo-Humanistic principles to ensure the maximum utilization and rational distribution of all resources, and to harmonize human progress with all creation.
Among the various economic theories and
(Thanks to Shri Dinpal Roy of Azamgharh for hints).
Sirsi / 22-01-2019