Virtue (dharma), wealth (artha), pleasure (kama) and liberation (moksa) are the four great aims to be attained by all human endeavour, and the pursuit of each of these was aided by a normative science (shastra) devoted to an exposition of its nature and the means to its attainment.
The Manu-Smriti is the leading work on the sacred law (dharma-shastra) of ancient India and the Artha-shastra of Kautilya takes the same rank among the manuals of polity - The former is a metrical work of 2,685 verses, though a few versions include some more. It purports to contain the teachings of Manu (svayambhuva) expounded at his desire by his pupil Bhrigu to the sages who approached him for knowledge of the dharma of all varnas (castes). Manu is a hoary name in Indian tradition, and Bhrigu is equally legendary. The present text was apparently composed out of the earlier material passing under the name of Manu and was certainly revised once afterwards to bring it abreast of changed notions of morality. The revision may be dated between the second century B.c. and second century A.D. Well over 250 verses of the Manu-Smriti occur in the several sections of the Mahabharata, and many legends are common between the two works; it was long held that the Smriti borrowed from tre Epic; but Kane has argued with much force in favor of the opposite view, and demonstrated the probability of the original draft of the Smriti having preceded the extant text of the Epic. On the other hand, the Smriti is much in advance of the early Dharma-shastras of Gautama, Baudhayana, and Apastamba, which must be placed at least some centuries earlier. While there is much agreement between Manu and Kautilya in the fundamentals of sociology, their differences in detail on such matters as niyoga and divorce clearly indicate that the more puritanical views of the Smriti belong to a slightly later age than the Artha-shastra. The Manava School cited by Kautilya is clearly not represented by the extant Smriti.
The Artha-shastra of Kautilya is a prose work in fifteen Books comprising 6,ooo units (slokas) of 32 syllables each in length. The long-forgotten work was recovered in 1909, and gave rise to a long and manysided debate regarding its authenticity and real date. But no decisive grounds have emerged for regarding the work other than what it purports to be, viz. the work of the Chancellor of Candragupta Maurya composed about 300 B.c. In composing his work the author says that he took account of all the literature on the subject already in existence and consulted the practice of contemporary states (prayogan upalabhya ca, II. Io). There are features in the work which distinguish it from others of the kind and indicate Kautilya's close acquaintance with the administrative methods of the Hellenistic states, particularly Syria and Egypt. "Artha", says Kautilya, "is the condition of men, i.e. the inhabited part of the earth; and the shastra (normative science) which aids the acquisition and protection of such (inhabited) country is the Artha-shastra.”
When Kautilya wrote, Artha-shastra was already an old discipline. He refers to the views of no fewer than five different Schools on various occasions besides the unnamed teachers (acharya), possibly an honorific reference in the plural to his own teacher; he also cites a dozen individual authors, half of them only once and the others more often. But the works of all these schools and authors, like those of early authors mentioned by Jaimini, Panini, Badarayana and others have perished. When learning was sacred, knowledge a secret to be revealed only to tested and trustworthy pupils, and writing was seldom used to multiply copies of books, outmoded works had no chance of survival. Kautilya, it may be noted, does not refer to the writers of dharma-sutras some of whom certainly preceded him.
Dharma-shastra and Artha-shastra alike study man in society. The former treats of social life from the point of view of religion and morality, the latter from that of utility, expediency and policy. In elaborating the duties of a Kshatriya, works on dharma like that of Manu have necessarily to cover practically the whole ground of Artha-shastra. On the other hand, a writer on artha, like Kautilya, should specify in detail the nature of the social order which the state is there to uphold, and in doing so he traverses ground that belongs properly to the sister discipline. All the same, dharma works cover wider ground, rest on the finer and more basic values of life, and therefore command a wider appeal. The cosmogony and eschatology of the opening and closing chapters of the Manu-Smriti, for instance, have no counterparts in Kautilya's work; according to Manu, a breach of the code is not just a legal offence to be dealt with by the courts, but also a sin to be expiated by a penance. Later literary tradition has deprecated the logic of material interests propounded in the artha-works, selected Kautilya for particular censure, and generally discouraged the growth of an extensive political literature.