[Jyoti Bhojwani]

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Introduction

Behavioral economics is a branch of study that combines both mental and financial speculations in an explanation of the behavior of individuals. As opposed to the idea of rationality that underlies much of conventional economic theory, it takes into account such factors as cognitive biases, feelings and social processes that affect people’s behavior. Erasing Sanatan Dharma from behavioral economics is almost like erasing India from understanding the behavior of Indians, in particular the millions of Indian population. This organic approach which has been an intrinsic part of the Indian society for thousands of years remains an influential model for decision making today both for the persons and for the society.

Sanatan Dharma: An Overview

Sanatan Dharma, which could be translated as “eternal order,” or “eternal path” is a term that is applied to the aspects of Hinduism which focuses on its spiritual, philosophical and moral principles. It relates to a population’s ideas and actions that affect their daily living, and practices regarding health, death and disease as inherited from previous generations. Sanatan Dharma is not like other religions that originated with an individual or that have a well-defined dogma. It is not an ancient religion that was fossilized after the elders of the society were buried but a culture that is as dynamic as the society itself and is still in use up to this decade affecting all facets of life in India inclusive of the economic conduct.
Sanatan Dharma centres on the relationship between man and the universe and the wheels of time concerning Dharma, Artha, Kama and Moksha. These are four primary objectives of life or, termed in Sanskrit, Purusharthas, which forms the analytical model to explain the raison d’être for human actions in the context of Indian ethos. The presence of these principles is conspicuous in several aspects of the behavioral economics of India.

The Role of Dharma in Economic Decision–Making

The significant basis of Sanatan Dharma is dharma, which can be interpreted as righteousness. It is not merely a matter of one’s religious obligations but it also includes the good moral practices that one follows, the societal roles and rightful and wrongful acts as stated.
Accordingly, Dharma intervenes with specified patterns of people’s behavior in the sphere of economics. For example the notion of Swa-Dharma which means one’s duty or prescribed task imposes an attitude towards one’s position in society and to other people.
In Indian tradition, business and commercial activities and all related financial and economic transactions are not mere profit-making ventures but are governed by principles of ethics based on Dharma. For instance, the principle of Ahimsa may be used to address issues to do with corporate social responsibility and ethical conduct in business. In the same way, the notion of Dana provides hope to people and companies for getting involved in charity and social causes.
These ethical considerations can result in a decision-making process that targets the welfare of the society in the long run as opposed to self-gain in the short run, a factor that is contrary to the purely monetary gains that are experienced in Western economic models.

Risk and Instability and the Concept of Karma

Karma, another principle of Sanatan Dharma, means the law of causation. It says that there are always repercussions for what one does and these may be felt in this life or the other lives. This belief in Karma determines the attitude of an individual towards risk and uncertainty in economic decisions.
In classical microeconomics, decision-making under conditions of uncertainty has been analyzed mainly through probabilities and risk preferences. But in the Indian setting, the conviction in Karma can take this approach which is not solid in any sense of the term. People are likely to embrace the consequences of their decisions as good or bad outcomes of previous actions. This may decrease the concern about unpredictable outcomes and promote temperance, which might have an impact on taking risks.
For instance, Indian entrepreneurs may blame their business outcomes on Karma and this may impact their ability to embrace risk or to persist through difficulties. This perspective can also help bring about a long-term perspective in decision-making because people are apt to think about their actions over many lives.

The Artha and Kama in Ethical Perspective

Artha and Kama are two of the four aims of life known as Purusharthas which govern man’s actions in the world of physical existence. From the behavioral economics perspective, these motivations can be equated with the desire for material gain, status and happiness. However,Sanatan Dharma puts all these activities within the umbrella of Dharma so that all are pursued with the right means.
A similar consideration of the pursuit of Artha and Kama within acceptable ethical norms can be observed in the Indian model of consumption, savings as well as investment. For instance, the Indian virtues of Simplicity or Aparigraha which means non-possessiveness and living a simple life that does not entail the accumulation of physical possessions that one does not require. This may result in higher savings and lower propensity to consumption as observed among Indian households.
Some other cultural factors such as the importance of family and community can also affect consumption patterns. Bargaining and other uses are moreover done in meeting with other family individuals in the interest of the family as a whole. This collectivist approach to saving can result in more harmonious and less meager economic activity than in Western societies that have adopted individualism as a major cultural value.

Social norms and traditions as the Responsibility and Goals of the Sub-Asian Society

Sanatan Dharma is an essential part of the social structure of Indian society as it forms the basis of the culture and beliefs of people. These social norms affect the economic decisions of people in the society as people are more inclined to make decisions that will not deviate from the culture of the society.
For instance, the ritual of Shraddha (a ceremony performed to honor dead ancestors) and Pitru Paksha (a time dedicated to performing rites for the ancestors) may affect saving and spending. This is a period when most families increase spending on rituals, charity, and other welfare activities for the community hence changing their consumption pattern for some time. Likewise, such festivals as Diwali or Pongal also have certain economic connotations, for instance, connected with the purchasing of goods, gifts, and services. These cultural behaviors develop expected routines of economic actions, which might be examined within the framework of behavioral economics.

Well Being & Consumption & Spirituality

Sanatan Dharma has a very high degree of spiritual focus emphasizing the soul’s search for a state of happiness. This spiritual orientation can impact economic activity by changing the values of society from the growth of material possessions to the improvement of the quality of life.
In behavioral economics, there is the theory of hedonic adaptation which means that people always find their way back to the midpoint of happiness after changes in their lives. However, in the Indian context, the desire for the attainment of Moksha (liberation) or the process of spiritual evolution changes this equation. The type of consumption that may be observed will therefore differ from that of people who may not be as focused on their spiritual needs and the need for inner happiness.
For instance, the practice of Yoga and Meditation, which originated from the Sanatan Dharma may result in an emphasis on health, wellness, and spirituality. This can result in changes in spending patterns, where people are more willing to spend money on experiences, health and personal development as compared to tangible items.

Conclusion

Sanatan Dharma regulates the behavioral economics of India and influences the way people and society act in the realm of economy. Dharma, Karma, Artha and Kama are principles that define the conduct of people in different aspects of economic life. Right from business ethics, and the spirit of risk-taking to the patterns of consumption, and norms of social behavior it is apparent that the Indian mind has been shaped by the principles of Sanatan Dharma.
A knowledge of this cultural and spiritual context is perhaps one of the things that students of behavioral economics or any professionals attending India must grasp fully. As it is described, it wants to stress the significance of the cultural and philosophical approaches which must be taken into account while examining economic actions and decisions that are different from the Western counterparts.
In the globalizing environment characterized by the growing interconnection of economic systems, continued discovery of the role of Sanatan Dharma on Indian behavioral economics may create room for a better understanding of the Indigenous roots of the discipline and ultimately ensure the formulation of culturally sensitive economic policies and business strategies. It helps us understand that economics is also a social science and it takes every tradition, belief and cultural value into consideration as a determinant of economic choices.

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