Follow Us:
Thursday, June 30, 2022

Trader and the king

Our kings didn’t build systems to mobilise savings or mop up revenues. We haven’t learned from history.

Updated: March 16, 2015 12:41:17 am
The inability to set up a bureaucratic machinery to enforce laws or collect taxes meant there was no system to enforce contracts not local in nature. The inability to set up a bureaucratic machinery to enforce laws or collect taxes meant there was no system to enforce contracts not local in nature.

By: M. Rajivlochan

The general indifference to politics displayed by Indian businessmen is nothing new; rather, it is a trait displayed by the Indian business classes in the distant past too. Indian businessmen make little effort to put pressure on government to improve service delivery and governance, liquidity in markets or even the performance of contract, a vital issue for any economy. Rather than making a push to engage with politics and improve things, Indian businessmen choose the easy option either of salting away their black money in Swiss banks or investing it in real estate and locking it away.

It is eerie to think that a thousand years ago, Indian traders similarly put away spare cash in earthen pots and hid it in holes in the ground. Indian traders, then and now, were equally indifferent to matters political, regardless of the consequences. What could be the reason for such indifference. Could it be that they were naturally risk averse? Or that they would much prefer to control the king than be the king?

But we do not find that merchants in India controlled the king’s behaviour. The two classes remained on cordial terms, but reasonably independent of each other. No doubt, merchants were involved in local self-government. They often held key administrative positions too, whether it was Pushyagupta, governor of Saurashtra under the Mauryas, or Vastupala under the Chalukyas of Gujarat. But those positions do not seem to have been used to promote trading interests. If at all merchants used these positions, it was to enforce trade diktats relevant to group members or to encourage charitable contributions.

Best of Express Premium
Newsmaker | Eknath Shinde: No. 2 after the Thackerays, backer of BJP, MVA...Premium
UPSC Key-June 30, 2022: Why to read ‘Collective Responsibility’ or ‘Inver...Premium
TN Finance Minister Palanivel Thiaga Rajan: ‘Don’t know of a ...Premium
Efforts to estimate poverty from 2011-21 are commendable, given absence o...Premium

It does not seem as though merchants influenced the king to conquer new markets for the trader. If anything, the king simply kept out of the way of mercantile cartels. The ruler could have had his personal investments and probably did. But that only led to him becoming personally rich; he does not seem to have tried to maximise profits or improve communications or access new markets. So, if the merchant did not control the king, what could the reason for an apolitical stance be?

One answer could be that merchants were unaware that politics could provide serious benefits to trade. In essence, merchants in India simply seem to have been responding to the inability of kings and the state machinery, such as it was, to set up any mechanisms to facilitate trade in India. If the state machinery cannot facilitate trade, then political power becomes meaningless to a trader.

This is precisely what we find: that kings were simply unable to set up mechanisms to provide good communication, protection for trade and enforce contracts. One reason the state was unable to do this could be that there was little regular bureaucratic machinery to keep records of taxation and recover taxes. The coffers of Indian kings remained abysmally low. Setting up a bureaucratic system would have meant salaried staff. Such systems are conspicuous by their absence, and it is difficult to argue all such records could have been destroyed in multiple invasions.

After all, copper plate inscriptions of land grants given by the king have survived. Similarly, records of donations made to temples and monasteries were engraved in stone. But nowhere do we find any record of taxes imposed by the king or of the taxation structure of ancient India. Precepts enumerated by the one text that does discuss taxation and state systems, namely Kautilya’s Arthashastra, do not seem to have endeared themselves to kings. What did exist was the village headman or gramani who, we suppose, sent in some revenue occasionally. But how much and what, we do not know.

Kings in India seem to have run their kingdoms through a series of negotiations with local potentates, village communities and urban bodies. Revenue flows depended on how negotiations proceeded. After conquering a new territory, kings often reinstated the old ruler on the basis of promises to send in revenue. Once conquered kingdoms stopped sending revenue, the ruler would decide whether he would go and try to enforce the diktat once again.

One economic attribute of Indian society that does bear mention is the enforcement of contracts by precedent and religious law. The obligation to repay a debt was simply written into the dharmashastras. So, it was the local community that was responsible for enforcing contracts. Kings recognised this was the case and it is clearly stated in our texts that local customs and laws must be respected above all. Such a structure left little place for the king to exercise authority.

The inability to set up a bureaucratic machinery either to enforce laws or collect taxes had far-reaching consequences. It meant that professional standing armies could not be kept. It also meant there was no system to enforce contracts not local in nature. No record-keeping meant there was no way to track what happened to large sums of money over long periods of time. Perhaps this is why India never evolved mechanisms to mobilise the considerable savings of people. But we do not seem to learn much from our history.

The writer is at the department of history, Panjab University, Chandigarh.

UPSC KEY Have you seen our section dedicated to helping USPC aspirants decode daily news in the context of their exams?

📣 Join our Telegram channel (The Indian Express) for the latest news and updates

For all the latest Opinion News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard
0 Comment(s) *
* The moderation of comments is automated and not cleared manually by