Book Review | Dharmanomics: Treasure trove of economic wisdom

Dharmanomics: An Indigenous and Sustainable Economic Model.

Sriram Balasubramanian, a renowned economist who has worked at the IMF in the past, has penned a comprehensive food for thought for anyone interested in economics, public policy, and history, by documenting the ideas imbibed by Dharma implemented by the governments and industries from times immemorial.

Dharmanomics: An Indigenous and Sustainable Economic Model is already a bestseller in various categories.

During a time when the “mainstream” economists characteristically argue with each other about fundamental tenets of economics such as free trade, tariffs, market economics, net zero transition, climate change mitigation and adaptation financing, etc. it is important to take a break from all this noise and enter into a fresh breeze of indigenous thinking that kept the Indian economy going strong and stable for several centuries without any downturn. My interest in this book has been mainly about what answers lie in this time-tested wisdom and experience from our ancestors, for solving the challenges facing humanity today.

There are surprisingly few works that build on the ancient and medieval literature from India to explain economics in the context of today’s issues. This is despite the fact that there are numerous. I have had the pleasure of reading just two of them: Indian Classical Thoughts on Economic Development and Management by Prof VR Panchamukhi and Kautilya: the True Founder of Economics by Prof Balbir Sihag. The former explains various economic concepts emanating from the classic Vedic and Upanishadic Scriptures, while the latter focuses on Kautilya’s genius in propounding timeless economic thoughts that are consistent with modern economic theories as we know today. Sriram’s previous book on Kautilyanomics follows the path taken by the latter and further adds value, by getting deeper into practical issues in modern times. Dharmanomics takes it further by dwelling on the details of how these ideas were implemented.

For all the talk on Arthashastra, very little has gone on the ‘Artha’ part of it. And among the four Purusharthas, Dharma and Moksha are the ones given maximum importance by spiritual leaders while Artha and Kama are of greater day-to-day endeavors for their following masses, who compartmentalize these two pairs and pursue them separately. Artha in ancient and medieval India was flourishing probably because of a seamless integration between these four ideals by the entire society.

Much of Madison’s research work and India’s success from 0 CE onwards had to have an economic framework. Kautilya’s Dharmic capitalism provides one such template for the same. It talks about the role of Dharma beyond the binary of the state and the market, and talks about a rule-based yet non-intervening state, a global approach to the economy, and sustainable growth and welfare.

Key themes and research questions addressed in this new book are as follows.

Firstly, is there an indigenous Bharatiya economic model? If so, what is that exactly? Secondly, what has been the role of cultural norms and narratives in economic decision-making at the individual and corporate levels? Dharma-based economic frameworks are not monolithic, but as have many other Dharma-based aspects, they have gone through a wide range of iterations. Kautilyan Dharmic capitalism is a fundamental tenet. The dharmic ecosystem including temple-based economic structures and models has had immense significance in society. The role of Srenis in the society and their Dharmic governance illustrated in the CE kingdoms provide a 2500-plus-year economic model that is based on the idea of Dharma. Triangulation of evidence involving academic data, secondary (inscriptions), and anecdotal evidence has been effectively done in this book for the first time ever, filling in a long-held vacuum in this area.

It was deeply heartening to see the amazing words of praise from leading mainstream policy leaders such as the former Vice President of India, the former Governor of the Reserve Bank of India, and the serving Member of the Prime Minister’s Economic Advisory Council. For unknown reasons, until now, mainstream economists and policymakers have restrained themselves from commenting on India’s ancient and medieval economic history. Probably, they had an unsubstantiated fear of getting labeled as pseudo-thinkers. For example, Swaminathan S Anklesaria Iyer criticizes the excessive use of Madison’s findings in a cherry-picked manner to portray India’s past in a bright light, but the impeccable evidence coming from this new book is so compelling based on real inscriptions and literature and not based on a lousy back-casting exercise to an era when there was hardly any documentation of financial transactions.

Such criticisms have discouraged even open-minded economists from supporting these genuine and painstaking initiatives to set the records straight about Indian economic history. However, every major civilization in the world has been studied for the evolution of economic ideas and their implementation over centuries as a part of professional economic history, as a separate discipline in itself. This is also a reason why, in my opinion, a wide range of efforts from the left and the right to fix economic issues in India have failed. Most of them lack this indigenous Dharmanomics wisdom, and hence this appreciation from mainstream leaders gives us a fresh spark of hope for the future that lies ahead.

This pioneering concept through the lens of economic history is gaining traction gradually yet steadily and strongly, just as it should. Eventually, we all hope to have policy-making aligned with the way of life rather than the other way around. As a side note, I would love for authors like Sriram to even more ambitiously draw inferences for issues that have been hotly debated today with no plausible conclusions, using the principles of Dharmanomics. I would also keep an eye out for works of such high scholarly rigor conducted for other indigenous civilizations in Africa, The Americas, Australasia, etc. Many international scholars such as George Akelrof (Nobel winner in 2002) and Garry Becker have dealt with issues pertaining to identity, cultural norms, and narrative-based economics. It's high time Bharatiya scholars also deal with this just like Sriram has done. Without a doubt, this is my book of the year in the field of economics and business and will be read and debated for many years to come.

Dr Badri Narayanan Gopalakrishnan is Fellow, NITI Aayog.

(Views are personal.)