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The Ultimate Pragmatist: Kautilya’s Philosophy Essay


The Arthashastra is a treatise of political advice to the king, written by the Indian philosopher, Kautilya, in the 4th century B.C.E. Kautilya’s pragmatism is reflected in policy advice on how to conduct war and diplomacy by both honest and dishonest means toward the goal of increasing the power,wealth, and security of the state. Kautilya advocates “SMART”[1] power–the interface of warfighting capabilities combined with diplomacy, opportunism, and guile. His ideas for competitive advantage, resonate today. Kautilya’s ideas center around the concept of his “Raj Mandala”–a model upon which the king could decide on collusion, cooperation, alliance, acquisition or destruction in dealings with other nations. Through all of this he set forth a scheme of covert dealings, misinformation, spies, planned assassinations and poisonings. Kautilya can be seen as “predecessor” of Machiavelli, and like him is viewed as both a sinner and a saint on management principles and practices.


Public bureaucracies, such as the military confront quandaries of ethical choice. Such dilemmas are often of an ends/means nature, or the greatest good for the greatest number, and Machiavelli’s proposition, “when the act accuses, the result excuses.” When is a lie “noble” or “royal”?–in Platonic terms we sometimes suggest that the people may be deceived for their own good, and when is it not? What about the “dirty hands dilemmas” often encountered when public officials such as military commanders commit acts that from everyday reality are considered evil, but deemed necessary to maintain the national interest. In modern day cases like Abu Gharib, Guanatnamo Bay interrogations, the Iran-Contra affair and in a myriad of other instances our military leaders face conflicts of values, dilemmas of the “lesser of evils, “ or the quandary of “viable alternatives.”

From the year 2010, let us backtrack quickly to the year 352 BCE when a man named Kautilya served as the advisor to a powerful King, Chandragupta Maurya, in the Mauyran dynasty. Kautilya, generally felt no such conflicts. As the ultimate pragmatist he wasted no rhetorical statements to dilute his harsh management philosophies. Like Hoederer in Satre’s play, he might well have stated: “I have dirty hands right up to the elbows. I have plunged them in filth and blood. Do you think you can govern innocently?”[2] This case study bring to light a number of questions, is the public servant who commits bad deeds for the public good, an evil person, a pragmatist, or a tragic hero like Weber’s “suffering servant” (1919, 1946, 1978) who in doing his duty has ultimately lost his soul?


The treatise, known as the Arthasastra, was written by Kautilya around 321 B.C.E. He was the Prime Minister of the Mauyran Empire in the service of Chandragupta Maurya, its powerful king. This was one of the greatest books on war, leadership, management, and political economy of the ancient world. It presented strategic advice for decision-makers to maximize a state’s resources and its national security. It advocated rational self-interest in decision-making, yet at the same time it also argued for principles of a welfare state, in which enlightened self-interest would prevail. However, enlightened self-interest was promoted by Kautilya for pragmatic reasons and not for ethical ones, per se. Its precepts embody patterns of thinking on leadership and management applicable to modern corporations and military bureaucracies. On reading the Arthasashtra, one is struck by the political astuteness of its writer, Kautilya, who can be termed one of the shrewdest policy wonks the world has ever known. The purpose of the Arthasashtra was to be a comprehensive guide for government in the Mauryan Empire, and to aid its ruler to increase the wealth, power[3] and security of the kingdom.

To do this, Kautilya, much like his modern counterparts appears to have had an on-going love affair with growth and business enhancement, albeit in a cunning, ends-based philosophy that echoed Machiavelli’s famous dictum, “when the act accuses, the result excuses” (The Prince, 1532). The word, artha, itself, translates to “material well-being”– in effect, it is the study of economics. The work is, thus, sometimes referred to as “the Science of Material Gain” (Kosambi, 1994). Indeed as Tisdell has argued there was no parallel in economic philosophy to the Arthasashtra until Adam Smith published The Wealth of Nations (Tisdell, 2006).[4] It has also been translated as the “Scripture of Wealth.” Because of its focus on power, accrued via the sharp instruments of politics, public policy analysis, and administration, the Arthashastra, is also sometimes known as “The Science of Polity,” “Treatise on Polity,” and the “Science of Political Economy (Singh, 1993; Kosambi, 1964; Boesche 2002 and Boesche, 2003).

To these definitions of what the Arthasashtra represents, this analysis adds that it is also the Science of SMART Power, using regular and irregular means to do so. Kautilya’s realism is reflected in the often brutal and gory details of what the king must do to seize and to retain power. Thus, Kautilya, much like any modern CEO, kept a vigilant and analytical eye on the internal strengths and weaknesses, and external opportunities and threats of the nation, as they impacted state security and welfare. Kautilya’s analysis of wealth and power has four characteristics—reality, usability, transferability and consumption power (Raja, 2005, pg. 51). To him, the satisfaction of the need for wealth and power, at any cost, would naturally create positive externalities for the state to maximize overall satisfaction–a concept which was later associated with Jeremy Bentham’s philosophy: “the greatest good for the greatest number” (1789).

Who would be the leaders of this state? Here Kautilya, the Professor from Taxila University, just like for Plato before him, was an elitist when it came to governance. He believed in oligarchic government, whose leadership, he argued, should be made up of learned elites. Upon the shoulders of these learned officials would fall the responsibility to discern the methodologies for the satisfaction of preferences that provided the greatest value to the state. Like Plato, he believed in the policy of the “noble lie” –i.e., lying for the public good.[5] Similar to Plato, he was in favor of a strong military elite, whose generals would be in key advisory roles to the Commander-in-Chief (Chandragupta Maurya). Because the leaders were given the leeway of extreme utilitarian goals (later associated with the Machiavellian aphorism: “the ends justify the means”) the Arthasashtra approved of the breaking of compacts, loose-promise-keeping, and treachery[6].

Thus, in modern moral terms, such incentives could be seen as flawed policies, in that they were strongly-coupled to economic outcomes, while paying scant attention to the ethics of the means and ends. The Arthasashtra was an interesting document in its emphasis on materialism at a time when India was concerned with issues of spirituality and a focus on moksha—the liberation of the soul from the bonds of karma. In the Hindu philosophy then as now, the ultimate end is an end to rebirth and a conjoining of the individual soul with the divine. Thus Kautilya’s often sadistic means of reaching the end state of wealth and power, would only be a way of creating karma that binds a soul to the material universe. It has been theorized that it is because of the brutality of some of the means used to get to the ends, that Chandragupta’s grandson, the great Mauryan Emperor, Asoka, turned away from violence and embraced non-violent Buddhist ethics.

It is impossible to read the Arthasashtra without being struck by its pessimistic and cynical view of human nature. Being the ultimate pragmatist Kautilya, dispensed general advice to those who lead governments: “a person should not be too honest. Just as straight trees are chopped down first, honest people are taken advantage of first” (Arthasashtra, 350 BCE). This, “no-nonsense” treatise has been described as a book of “political realism,” by Boesche (2003)–because it does not advocate what “ought” to be done, rather what “must” be done in a world of imperfect human beings. His statement that “the intrinsically pure man is rare” resonates with another practical strategist, Sun Tzu, who lamented: “hardly ten men of true integrity and good faith can be found today…” (Sihag, 2009; Rasmussen 1994)

The dicta in the Arthasashtra show clear, if cynical, observations of hypocrisy, and; how human beings will generally put their preferences and interests first, will lie and cheat–even while simultaneously giving lip service to lofty ideals. Kautilya notes: “It is possible to know even the path of birds flying in the sky, but not the ways of government servants who hide their income” (Arthasashtra). If Kautilya’s advice to the ruler appears to resemble Machiavelli’s counsel to the prince, this is a fact that has not escaped notice. Kautilya preceded Machiavelli by many hundreds of years, thus Kautilya could be said to be Machiavelli’s intellectual ancestor. In his work, “Politics as a Vocation,” Max Weber found the advice of Kautilya to be so calculating, wily and ruthless as to render Machiavellian thought “harmless”[7] (Runcimann, translated by Matthews, 1978). Kautilya like Machiavelli looked at the dark side of human nature as the baseline from which leaders must strategize. Machiavelli observed: “ It is necessary for him who lays out a state and arranges laws for it to presuppose that all men are evil and that they are always going to act according to the wickedness of their spirits whenever they have free scope.” (The Prince, 1532).

Kautilya’s advice to the King was similar to the thinking of a Theory X manager (MacGregor, 1960, i.e., the nature of the governed was: weak, opportunistic, greedy, and self-serving). These were people to be controlled by a powerful bureaucracy led by the King by selected punishments and rewards. See Table 3.1. Both philosophers preferred utility to morality and both men have views on perfidy that are audacious by today’s accepted moral standards.[8] How well did Prime Minister Kautilya succeed in his efforts in using “the means justify the ends” utilities, as a SMART tool in nation-building? History records that Chandragupta Maurya (under Kautilya’s tutelage) succeeded in bringing together almost all of the fiefdoms in India, making him the unifier of all India, its first Emperor while he was still in his early twenties. Because his achievements ranged from destroying the Nanda Empire, and conquering the Alexander the Greek’s Macedonian provinces in India and eventually establishing centralized rule throughout South Asia, some scholars refer to him as cakravartin, or world conqueror (Bhargava, 1996, Kohli, 1995, Spellman, 1964).

The Mauryan Empire was larger than the British Empire in India, and spanned the Indian Ocean in the South and East, to the Himalayas in the North, to Iran in the West. Kautilya’s precepts foreshadowed current management philosophy on internal strengths of the organization for competitive advantage. Building VRIO—valuable, rare, inimitable, and organizationally-integrated organizations (Barney and Hesterly, 2005) are implicit in the Arthasashtra. An important question remains, however, as to whether the economic guidance came at the price of subordination of ethics to terms of economics. In terms of modern management, how can Kautilyan dicta be viewed? This issue is taken up in Section III of this paper.

II. KAUTILYA’S SUCCESSFUL USE OF SMART POWER FOR INTERNATIONAL SUPREMECY: Kautilya was a complex individual and his policies for international relations are sophisticated, multifaceted, and byzantine in structure. He developed complex constructions on how war and international relations were to be conducted. Within each conceptualization were many substructures designed to meet any contingency. Many of the concepts had two faces—an overt one, for example, showing the face of friendship, and a covert one, undermining the friend by secret methods and then reaping the benefits. Again, all of these actions were advocated not for Kautilya’s personal benefit, but were pragmatic aims for the power and glory of the Mauryan Empire. In dealing with other states, Kautilya advocated the use of soft and hard power– a modern concept, now known as “smart” power (Nye, 2003) which is discussed next.

2.1.: Smart Power: According to Professor Joseph Nye, a former Clinton administration official in the Department of Defense, who coined the phrase, “smart power” this is a combination of hard and soft power–i.e., the employment of both military and diplomacy tools. Nye’s philosophy of soft power is getting what is wanted through attraction and collaboration versus confrontation and coercion. In her confirmation speech as Secretary of State, Hillary Clinton called for the use of “smart” power, saying: “We must use what has been called smart power, the full range of tools at our disposal — diplomatic, economic, military, political, legal and cultural — picking the right tool or combination of tools for each situation” (Clinton, 2009). Returning to the Arthasashtra, one sees the concept of “SMART” Power in Kautilya’s “Mandala Theory” of international relationships. How successful was the Mandala concept?

Alexander’s defeat in India is credited to the philosophy of international relations, war, politics, and military matters that were existent in ancient India and at Taxila University, where Kautilya was a professor, and which later found their way into written form in the Arthashastra. The famed Indian Rajput warrior, Shivaji based his campaigns to defeat the Mughal Emperors on interpretations of the text. More recently a military leader like Bismarck, might have thought in Kautilyan style, in his attempts to expand the wealth and power of Prussia. Even while he did not always advocate conflict to increase the power and wealth of the state, to Bismarck the soft side of national power was ultimately and always a temporary phenomenon. Like a modern CEO Kautilya never lost cognizance of the fact that allies could easily become enemies depending on the dictates of the environment. Thus even while he argued for cooperation, collaboration, collusion with allies—much like a modern captain of industry or military leader [9], as will be described later, he was not above using corporate Feints and underhand Gambits in order to create advantage for his side.

2.2. Soft Power–The Raj Mandala Model of Diplomacy: The essence of Kautilya’s utilitarian and practical advice is to prevent a balanced equation of power to remain between states, particularly between his own state and another. He believed that the ruler must always seek to tip the balance of power in his favor. Kautilya the realist understood the relationship between power and maximization of wealth. He sought to provide the means by which the balance of power would shift in favor of “the-king-who-wants-to-conquer,” whom he called the “vijigishu”. The vijigishu, of course, describes a ruler with the mindset of his own king–Chandragupta Maurya. He therefore argued for an energetic and dynamic foreign policy: “The welfare of a state depends on an active foreign policy,” (Arthashastra 6.2.1.).

The power equation is important in deciding what foreign policy needed to be pursued. He envisioned his state as being surrounded by concentric circles—hence the term “mandala.[10]” For each of the concentric circles he designed policy blueprints for action: 1) Immediate Neighbors Should be Suspect at All Times: neighboring states were to be looked at as potential enemies, even if friendly relations prevailed in the immediate present. 2) Maintain Neighbors of Immediate Neighbors As Allies: The state that borders the neighbor on the other side of the vijigishu’s kingdom should be courted and viewed as a potential ally– particularly if the vijigishu’s immediate neighboring state was stronger or equally strong. This power and policy was not to be extended merely bilaterally or even linearly in geographic terms, but rather to be pursued in a geopolitical centrifugal concept, with the vijigishu’s state at the center of the hub.

This was the “Raj Mandala” theory of balance of power as expounded by Kautilya. This formation of allies around the perimeter of neighboring states provided protective value, in case cordial neighboring relationships failed. Even if cordial relations did not fail, he envisioned taking neighboring states, usually in underhand ways, if he had created a strong ally on the other side of the “enemy’s” kingdom: “The enemy, however strong he may be, becomes vulnerable to harassment and destruction when he is squeezed between the conqueror and his allies” (6,2,40). While the Mandala generally describes a series of concentric circles, the boundaries of these circles appear to move in and out of each there in various formations, from sharper incursions to more subtle ones. They are wholly contained shapes in the designated regions in the mandala depict infiltrators in those regions—possibly spies, envoys, dissenters, or secret agents. The Mandala is an apt depiction of complexity of stakeholders in international relations today. Figure 1.2: Kautilya’s Raj Mandala: Enemies and Allies [pic]

A=The Vijigishu’s State
B=The Enemy or Potential Enemy State
C=The Ally or Potential Ally State

Kautilya advocated six types of foreign policy: Sandhi, Vigraha, Asana, Dvaidhibhava, Samsarya, and Yana. 1) Sandhi: This is the principle of cooperation and accommodation, but as always, on a temporary and “wait-and-see” basis. Sandhi itself is a complex construct within which lie five discernable types, shown in Figure 2.1, (or Table 2.1) each of which is present in contemporary international relations. We see Mitrasandhi or friendship (mitra=friend) in our relations with certain countries, in particular with great Britain. In corporate America we see this as Joint Ventures (JVs). Sometimes these JVs steal knowledge from each other and then split up.

We observe Karmasandhi in compacts like NATO and the Warsaw Pact. In corporate terms we see alliances in the airline industry such as Star Alliance (United, Lufthansa, Air Canada, SAS, and others) and One World (American Airlines, British Airways, Cathay Pacific, Quantas and others). Bhoomisandhi or land exchange is more troublesome in current times, we have seen this in the India-Pakistan territorial split in 1947. In corporate terms, we see it in entrepreneurial “harvest and exit” strategies (Peng, 2009). In terms of Anavasitsandhi, some may see economic collusion between firms today as exploitive of other countries, amounting to economic colonization.

Another type of foreign policy was Vigara, a hostile policy toward another state—culminating in conflict or war. It was particularly toward the states that were either subordinate in power or equal in power that the Arthasashtra advocates the vigara policy. Yana is the policy of direct attack on another state. If the state is deemed to be weak, has valuable resources, or is in a favorable location, aggression would be considered. (The kinds of warfare Kautilya named are explored more fully in Section 2.3.).

Dvaidhibhava was a policy of non-alignment with states that are greater powers. For example, India pursued a policy of non-alignment for several decades in which both the United States and the USSR—both superior powers, were cultivated. Dvaidhibhava also meant double-dealing when necessary—i.e., dealing with one superior power overtly to maintain friendships, and dealing with another covertly to destroy the first. Asana was a foreign policy of indifference toward certain states for various expedient reasons. Samsarya was a policy of protection given to a weaker state. With samsarya, the protector gains an ally and a staging platform for future conflict with another state.

2.3. Hard Power—The Use of Force: Kautilya strongly advocated that the ruler must always be prepared for war (yuddha), and should actively seek to conduct war at all times in the pursuit of power and wealth. In contrast to Carl von Clausewitz who said that war is an extension of domestic politics ( 1976), Kautilya argued that that diplomacy is just a subtle act of war. This resonates with Max Weber’s later dictum that there is no morality in international relations and that states must accept the reality of perpetual conflict (1919, 1978). He claimed that a nation’s foreign policy should always consist of preliminary movements toward war. His focus was economics and not ethics and morality.

In viewing the opportunities and threats in the external environment Kautilya saw the following possibilities for national advantage, which can be translated to predatory or hostile attack strategy for corporations seeking competitive advantage: 1) Strong states are potential FOES—strong competitive corporations are FOES 2) States that have calamities (famine, floods etc) or are in trouble with bad economies are VULNERABLE, and should be immediately ATTACKED—ATTACK quickly and seek advantage when rival companies become weakened. 3) States that are weak with no popular support it should be EXTERMINATED—some corporations must be ELIMINATED when they add no value to customers, with little to no negative fallouts to oneself.

4) If a state has a tyrannical king, there is advantage to be gained from ATTACK, as inside support can be counted upon—plan to UNDERMINE unpopular corporate CEOs from the inside.

5) If a state is relatively strong, it can be HARASSED silently and weakened over time— continuous CHALLENGES to rivals comes about through continuous improvement on one’s own products and services.

For Kautilya there were to be three kinds of warfare[11] on-going at all times: 1) Kautilya’s Prakasayuddha, Overt, Conventional and Traditional War—such as the World Wars I and II. In business this attack is known as “thrust” and it is the classic frontal attack with brute force, for example, Advanced Micro Devices attack on Intel’s Pentium chip, that temporarily cut into its market. The success of such an attack, Kautilya knew depended on relative strengths of the two forces, and the importance of the coveted areas. In this case the attacker needs to have strong strengths—at least a three-to-one advantage to overcome a well-defended territory. 2) Kautilya’s Kutayuddha or Covert War, which we now term as asymmetrical or irregular warfare. This is similar to the wars being waged against the United States in Iraq and Afghanistan. This form of warfare is also similar to two philosophies from business, the tactic of the “Feint” and the tactic of the “Gambit”.

As an example of a feint, Kautilya would not be above using deception by attacking a rival’s less prosperous area, with an eye to a more prosperous area. When the rival’s resources would be diverted to the secondary area, then the real target could be attacked. Kautilya’s “gambit” was much like a game of chess when a lesser piece of territory is sacrificed to gain a higher-value territory—and is used today in corporate strategies. 3) Kautilya’s Gudayuddha, or Clandestine and Silent War[12], which is an extension of the covert war, but in which spies and infiltrators, disinformation and treachery, within a targeted state is carried on, under the radar.

This is similar to a hostile surreptitious corporate takeover. Awareness is generally considered a prerequisite for any defense. One might look to the known example of Honda’s successful attack on Harley Davidson’s large, powerful, motorcycle empire with its small 50cc, $250 motorbike that looked more like a bicycle than a motorcycle. If an attack is so subtle that rivals are not aware of it, then the attacker’s objectives are likely to be attained and systems will be in place to secure those objectives well before the target recognizes the attack. The military strategist Sun Tzu argued that “the expert general approaches his object indirectly” (Sawyer, 1994). Kautilya, wasted no time wondering about the ethics of the strategies he advocated. This is reminiscent of Max Weber’s view, expressed in the 19th century, that morality plays very little part in international politics (Weber, 1919, 1946, 1978).

Kautilya, advocated the use of all three forms of warfare individually and even simultaneously. In the final analysis of Kautilya’s international relations policy, he loudly articulates what today is only covertly advocated, i.e., that any state after some time uses up its resources and new sources need to be acquired either through alliances, pseudo-alliances or direct force. In corporate terms, a company that has exhausted the resources in a single product or geographic market, must diversify in order to continue to advance it underlying profit-maximizing goals.


The three important internal issues for the ruler to attend to are: Raksha—or protection of life and liberty within the state; Palana or law and justice; and, Yogakshema or welfare of the people. These three characteristics are also to be seen to be subsumed in the constitutions of all modern states as–preservation of Life, Liberty, Justice, Equality and Property. It is mainly in Kautilya’s Yogakshma domestic policies that scholars see a “value-based” philosophy (Kumar and Rao 1996; (Chunder, 1970). Therefore, has Kautilya been misunderstood as a ruthless and brutal Prime Minister? Is he in fact a principled leader whose ideals centered around yoga-kshema? Given that one of Kautilya’s famous pieces of advice in the Arthasashtra runs as follows: “a person should not be too honest. Just as straight trees are chopped down first, honest people are taken advantage of first,” this would indeed be a curious interpretation of Kautilyan ideology.

Thucydides, in the Melian Dialog, argues Boesche, “has an objective standard of justice a moral yardstick by which to measure human actions.” However, Boesche goes on to state that “Kautilya has no moral standard” (italics added) other than good or bad ends that accrue to states as consequences of their actions[13]. In effect, Kautilya is a consequentialist and an utilitarian. Within this structure he is also clearly a rule utilitarian, who defines general principles in the Arthasashtra that will increase value to the state, even if some bad deed is done to achieve it—such as lying, stealing, poisoning, and killing, i.e., the “ends justify the means” policy. Perhaps if we look at Kautilya’s ethics as compartmentalized, then one can find some semblance of a “values-based” leadership within the domestic policies he advocates. However, these values-based principles, such as: piety, purity, truthfulness, avoiding injury to others[14] work towards the material and spiritual wellbeing of subjects [15]and avoid profits that bring injury to the people, must be analyzed in light of his ends-justify-the means” philosophy.

When he argued that the leader should undertake good deeds for his people, it was only for expediency to keep the populace happy so that they would not revolt, and less so for concern for human rights and social justice. He also displayed surprisingly gentle ideas of how to incorporate prisoners of war into the nation and use their labor to create value. What meaning can be drawn about such benevolence and protection of human rights from one who advocated the use of torture as a legitimate means to get information, spies, poisons, and treachery to acquire other nations? Was Kautilya the ultimate hypocrite? To answer this, one must look to the core characteristic of Kautilya—his pragmatism[16]. It was not so much that he advocated benevolence as an intrinsic virtue, but as a pragmatic tool to serve the ends of the state, to ensure the goodwill and labor of the populace, and to prevent challenges to the ruler.

He set up the bureaucracy to pull out the essential value from human endeavor through a series of economic and social incentives. Kautilyan incentives can be seen not only as instruments of power and control[17] over the bureaucracy, but also as insurance risk (Sihag, 2009). This system of rewards and incentives in management are remarkably similar to our own management philosophies of pay-for-performance systems, stock options, bonuses, and other incentive payouts for employees. He thus created, what might be the earliest governmental system of pay-for-performance, and management by objectives[18] for the bureaucracy, and divided these performance systems based on the kind of work that was done for the state from the senior executive service, middle-managers to lower functionaries.

Boesche’s argument that the Kautilyan welfare state was paternalistic cannot be disputed. It had elaborate rules, designed to keep the goodwill of subjects, and also to keep them submissive (Boesche, 2002). The Arthasashtra was dictatorial in nature, giving detailed prescriptions on minute details of citizens’ daily lives—such as how to wash clothes, keep clean, when to cover windows at night, and how many times to bathe horses. In this, Kautilya’s precepts foreshadowed by many centuries, the work of Frederick Winslow Taylor, and scientific management. Like Machiavelli, Kautilya’s final goal was wealth maximization. At best, his “valued-based” management principles were limited to domestic policies within the state; at worst one may see his ideas about governmental ethics to be amoral, at times immoral, and certainly contradictory.


How have Kautilya’s ideas been implemented and modified through the years? What other theorists and practitioners have contributed to the evolution of SMART power? What are the modern applications of this concept? This paper’s scope does not allow for comprehensive answers to these questions, but it is useful to examine how threads of Kautilyan thought have been weaved through the fabric of history. Figure 4.1 illustrates historical figures close to Kautilya’s time as well as influential theorists over 1,000 years later. Figure 4.1. Kautilya in Historical Context

The writings of two figures from the same historical era as Kautilya have greatly influenced modern strategic thought regarding how nations interact, and many of their themes are in concert with one another. Some argue that Sun Tzu (circa 544-496 BCE) “has become the intellectual father of a school of warfare that advocates winning by maneuver or by psychologically dislocating the opponent.” (Bartholomees, 2009) Also, he advocated use of deception, surprise, and intelligence akin to Kautilya’s Gudayuddha to attempt victory without overt combat. A continent away and about a century later, Thucydides penned the epic history of the Peloponnesian War. In it, he analyzed the role of power in international relations including diplomatic interactions leading up to and accompanying war as well as the domestic and cultural aspects influencing them.

His chronicle of states’ quests for power to survival and grow may have provided a theoretical foundation for the evolution of the modern international system where “on the level of grand strategy all instruments of national power must be leveraged in conjunction with military means in pursuit of national goals.” (Nation, 2009) Thucydides’ account addresses several ethical and moral issues related to the use of power that readers of Kautilya should note. This includes the bluntly pragmatic “the strong do what they can and the weak suffer what they must” logic of the Melian dialogue, although the resulting strategic consequences of Athen’s harsh treatment of Melia may have contributed to their own eventual downfall. Applying Kautilya’s direct warfare of Yana and Prakasayuddha against weak opponents may risk similar long-term faults. Skipping ahead by a millennium, one can see the evolution leading to the modern Westphalian state system through the writings of Niccolo Machiavelli, an advisor in the Florentine Republic, one of the five major Italian stato in the 15th century.

Often characterized as ruthlessly pragmatic, Machiavelli’s emphasis on the survival of the state as paramount resonates with Kautilya’s primary goal. This ends of the state—the raison d’état—are justified by any means necessary for success, although arguably his power policies follow a more amoral, vice immoral, approach. That is, although the state (embodied by The Prince in Machiavelli’s case) should not set out to do immoral acts, they may be necessary for survival. As such, every tool available should be applied to increase the state’s power, including violence, deceit, treachery, and dissimulation. Echoing the philosophy espoused by Kautilya, Machiavelli notes that rulers are “judged by their success in defending and advocating the interests of the state, not by any other standards, moral or political.” (Nigro, 2009) Almost 200 years after the formal treaty of Westphalia, the Prussian general Carl von Clausewitz wrote his observations and philosophies regarding the nature of war during the 19th century.

The concepts in his work strongly influenced the development and application of U.S. land power during most of the 20th century. He recognized the strong connection between politics and war, highlighted by his “paradoxical trinity” composed of violence, subordination, and chance represented by the people (internal politics), the government (policy), and the military. His work concentrates on the more conventional aspects of war—the Prakasayuddh of Kautilya—with insights on such themes as seeking battle, determining an enemy’s center of gravity, and reaching the culminating point of attack. The main thrust of his work focuses on the use of physical force—hard power—as a necessary component (the means) to imposing the state’s will on the enemy (the ends). In the contemporary context, one might say that the U.S. Army has come “full circle” with regard to the balanced use of soft and hard power.

In the latest version of its primary field manual on Operations, the Army acknowledges the current U.S. security environment as “a complex period of prolonged conflicts and opportunities” which requires “the protracted application of all instruments of national power.” The emphasis is no longer simply “to fight and win,” but rather, “to create conditions that advance U.S. goals” across a spectrum of conflict spanning stable peace through insurgency to general war. In fact, Department of Defense policy directs that stability operations, the lowest end of the spectrum, “shall be given priority comparable to combat operations.”

This more holistic approach mirrors those of Kautilya and Sun Tzu, with the crucial difference of the U.S. applying measures to ensure consistency with its enduring moral and ethical values. These include specific laws of war to safeguard fundamental human rights as well as to make the transition to peace easier. Also, rules of engagement (ROE) are directives provided to guide the use of force in a delicate balance to pursue tactical victory without causing strategic failure. (U.S. Army, 2008) Ideally, the application of laws of war and ROE will allow operations at the most violent end of the conflict spectrum to avoid the myopic and counterproductive shortfalls of Kautilya’s brutal wielding of national power. To be effective, the U.S. must also be on guard to ensure that enemies whose activities follow the immoral aspects of Kautilyan philosophy do not undermine the commitment to fundamental values for expediency.


Kautilya’s ideas on wealth maximization did not come to scholarly interest until the early 21st century, when this ancient treatise was translated into English and Hindi from its original Sanskrit in 1915 (Choudhary, 1971). Thus, scholars are only now beginning to place this work into a contemporary context. In his work, “The Six Principles of Political Realism,” Hans Morgenthau has argued that, “…the fact that a theory of politics that was developed hundreds or even thousands of years ago….does not create a presumption that it must be outmoded and obsolete.” He goes on to say that “To dispose of such a theory as a ‘fashion’ or ‘fad’ is tantamount to assuming that in matters political we can have opinions but no truths” (1973). In terms of what we know about ambition and pursuit of wealth and power from Kautilya’s Arthasashtra, one can indeed describe it as a “Science of Acquisition.”

To this some cautionary words to today’s state and corporate leaders would be to temper a lust for acquisition of wealth with a sense of global economic justice. From the propensity of leader pathology in private and public corporations in modernity (Coates, 2004, 2007) it is clearly evident that the leaders in debacles of Enron, Tyco, Worldcom, General Motors, Bank of America, AIG, and others, pursued strategies of wealth maximization without concern for ethical codes of conduct. We did see that the fundamental attribution error and the self-interested bias prevailed in these cases—but corporate America is not alone. Lying, cheating and stealing are pervasive in Washington’s public sector network of public conglomerates. However, if there is any thin silver lining of a lesson to be learned from the recent stories of Bernie Madoff and the philosophy of greed epitomized by the fictional Gordon Gekko[19], is that immorality, conscious or unconscious at the top is bad for business.

The Exxon Valdez, Johnson and Johnson, and Tylenol cases showed that market value decreased by 8% after these catastrophes, whereas after ten weeks following these disasters the stock of firms with ethical values increased by 5%, and unethical firms dropped by 15% (Fombrun, 2005). For utilitarian reasons, therefore, corporate leaders need to be the leading champions of the organization’s espoused values (Coates, 2009). The military recognizes this value and has articulated it in doctrine–U.S. Army expects every leader to be a “Values Champion”[20] and to do his/her duty (USAWC, Primer, FM22-100). Michael Walzer has another perspective. He suggested that the populace must reconcile to living under the rule of bureaucrats “who have lost their souls” (1973).

From the Arthasashtra, one might speculate that despite harsh dictates in pursuit of “good” ends, Kautilya may have looked at the leader, not so much as a wealth mazimizing warrior, but more as a tragic hero who had to do evil to reap good. Max Weber offered a similar concept of the leader, as one who suffered, and “lets himself in for the diabolic forces lurking in violence” (Gerth & Mills, 1946). Although written hundreds of years ago, Books Seven, Eleven and Twelve of the Arthasashtra provide us practical guidance for use by the modern corporations. The discussions about human nature and its motivations and behaviors remain current across the centuries and so too do ontology, epistemology and methodology of nation-building and interstate relations. Distrust, self-interest and the on-going quest to secure scarce resources just as a part of modern nations as these were in Kautilya’s time.

The “dirty-hands dilemma”[21] continues to challenge some modern leaders. For others, like Kautilya, the dirty-hands quandary is no dilemma at all, as he and they enthusiastically advocates policies that bring about private and personal gain. Not to do so, is an act that Kautilya may have seen as spinelessness and many modern leaders see as cowardice in the seemingly macho management milieu of the 21st century. In the end, Kautilya, the man, remains an enigma. On the one hand he dispensed soft justice in his Yogakshema concept of welfare. On the other hand he dispensed harsh justice, and was opportunistic to the point of brutality. Looking at the personality of Kautilya is much like peeling an onion. His is a layered and complex personality that will continue to fascinate scholars in its contradictions and brilliance for years to come and his pragmatism mixed with cynicism is relevant for in understanding the complexities, opportunities and threats to modern nation-states and business corporations.


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