The Artha??stra is a masterpiece text compiled by Kautilya. It provides in-depth instructions for a king on how to effectively rule a kingdom and stay in power. The text discusses a wide array of topics, including economics, law, foreign policy, and ethics. Since its rediscovery in 1905, researchers have been fascinated by the economic policies outlined in the Artha??stra. While many have provided descriptions of these policies, why are these specific policies prescribed by Kautilya? To answer this question, I first describe some of the important regulatory actions that the Kautilyan state were recommended it take to set up and maintain a strong economy. Then, I outline the various ways that the government actively engages with the economy through its own ventures, sometimes replacing and sometimes competing with the private sector. I then make an argument for classifying Kautilya as a political realist, and describe how the underlying principles of realism (structural and classical) and insecurity drive much of the economic policy in the Artha??stra.