Krishval Musings

Sunday, 14 December 2014



                                     An Artist impression of Kautilya

Kautilya’s Artha Sasthra was a guide for the practice of statecraft.  It advises elaborately about the techniques, tactics and policies  required for a king to manage his local administration, foreign relations, enemies, friends, relatives, armed forces, his cabinet ministers and a few more.  This 2000 years old and well researched work on politics, public administration  is being hailed by many Indian and foreign scholars.    

Kautilya gave four broad tactics for a king to handle his enemies, competitors and adversaries:
SAMA:    It is a peaceful approach and he gave six types of peacemaking.
-         Praising the Merits, Mutual connections, Mutual benefit, Inducements, Identity of interest, Awards and honours.
-         Reward with Money, Grants, Favours, Gifts and Exempt from taxes.
-         Create confusion, Make threats.
-        Use of physical force, Depriving liberty & wealth, Harassment and Plunder.  .

The guide was very useful to the kings until the last century.   The days of the kings and dictators are over; however, the Multinational Corporations (MNCs) particularly from the USA have established their own economic kingdoms and the Directors and CEOs are the modern kings.  They follow the above theory of Kautilya in order to subdue their competition and increase their economic power. 
Following is an imaginative drama based on a real incident in the USA. 

A monopolist multinational corporation engaged in air traffic control (ATC) came to know about a young engineering graduate   who developed an advance system of ATC superior to their existing system.  They were alarmed and decided to overpower the new discovery using the Kautilya theory.

SAMA:  A high level officials of the MNC met the young engineer. They praised his achievement and offered him a lucrative and influential position as a Senior Vice President in their company and requested him to be in charge of his new system worldwide.  They also indicated the bright possibility of his becoming a board member soon.
The young man thanked the officials, however, declined the offer saying that he has his own plans and prefers to go by himself with the new system.   SAMA failed

DHANA:  A couple of weeks later the MNC sent a letter offering to buy his system for 10 million dollars with exclusive rights.  The youngster declined the offer giving the same reason.
The MNC followed up with another letter apologizing for having underestimated the value of the new system and hiked the price to 15 million dollars.   The enraged engineer almost shouted,” I made my decision clear, please leave me alone and stop bothering me”.   DHANA failed twice.

BEDHA: After a few days the youngster received a legal notice from the company lawyer accusing him for having copied without their permission some of the components of their system in developing the new one.  He charged him under infringement of patent rights and demanded 10 million dollar as compensation.  He further frightened that if infringement is proved, the youngster may be imprisoned.
The valiant youngster retorted, “I know what I have developed.  If you want to take me to the court, please go ahead, I am ready for it.”   BEDHA failed.

DHANDA: The MNC did not use this technique as it may lead to criminal complication jeopardizing its very existence although it is very easy to arrange a contract hittman against the youngster. Dhanda was given up as it might boomerang with a heavy toll.  

They decided to develop a fifth formula by combining the first three techniques. Kautilya recommended combination of techniques in the case of allies and enemies which may ensure success because the different methods mutually reinforce each other. (Artha Sasthra 9.7.70, 71)   
They successfully identified the close relatives and friends of the youngster, developed a good link with them and through their relationship persuaded the youngster to accept a new deal. They tried to convince him that going alone is a very tedious process for an inexperienced individual to initiate and manage a complex business.   The brainwash by the relatives and friends was successful.  The youngster budged.   A new deal was struck. The MNC got the exclusive rights by making a onetime payment of 7 million dollars and agreed to pay 5% commission on the sales of his product which is much higher than the normal commission rate of 2%. The estimated market for the system   was over 100 million dollars a year.  Everyone was happy.


The MNC having got the exclusive rights   dumped the new system in a cupboard and did not sell it. They continued with their own old system and did not bother to introduce the new version   which will cost them.   The young engineer was left in the cold with just 7 million dollars and lost his rights over the new system.

Kautilya said,” In the interest of the prosperity of the country, a king should be diligent in   foreseeing the possibility of calamities, try to avert before they arise, overcome those which happen, remove all obstructions to economic activity and prevent  loss of revenue to the state” (8.4.50,
The MNC religiously followed the above theory of Kautilya and removed the young engineer’s obstacle to their business.

Dr. Krishnan Arunachalam.

This drama was given as a speech by the author himself at the LA 1924 Toastmasters club, Bangalore in December 2002 under the caption:”Formula No. 5”.  .
Kautilya : The Artha Shastra by  L.N. Rangarajan, Penguin books, New Delhi.

Vulture capitalism Ref;

(Published in Mylapore Club Magazine Jul/2014 by the author) 

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