History of Classical Liberalism in India

It may be a mistake to credit the western world as inventors of classical liberalism. Liberalism is not unknown to India in politics, economics, and social life if we carefully study the socio-economic history of the country. Though Western Liberalism evolved systematically in Europe in the 18^th century, we find it was not just a thought but was already practically applied in India far back from the 6^th century BC onwards till the tenth century AD. Not that the journey of liberal thought was easier. We find that Indian history is full of conflicts between liberalism and anti-liberal ideas, not only on philosophical grounds but on political, economic, and social grounds. However, we find liberal thought survived for a period of over one and a half millennia! 

Western historians mostly have used Sanskrit literature and that is too limited to the Vedic stream to look back at Indian social and political history which has marred their overall understanding of the classical liberal thought of India. They heavily neglected ancient Prakrit literature, treaties of the Tantras, and thoughts of the Charvakas. However, both thoughts though existed parallelly, liberalism was thrown on the backfoot during the medieval era to survive in very limited aspects. Rather, the decline of Indian economics can be directly related to the slackened liberal ideas that were thriving in the earlier epoch.

Philosophically, the Tantra sources, are not just religious books of the Non-Vedic masses but they also deal with agriculture, chemistry, metallurgy, agriculture, medicine, physical science, etc. Tantra means "Technique". The scholars like Dr. Sudhakar Deshmukh admit that the tantras not only advocated social equality and freedom but the science of behavior also. The Tantras less talk about the yonder world after death but explain how the techniques can be utilized to make practical worldly affairs happier. The materialistic philosophy of the Tantras is associated with occultism and hence it was most popular among the Indian masses. The Tantras propagated absolute freedom not only in their rituals but in daily social life as well. It embraced all paths of life and offered social liberalism as an ultimate source of happiness, which was reflected in its economic practices. Literature like Kamashastra and temples like Khajuraho exhibits the degree of freedom of expression enjoyed by the people of those times. Most of the kings were followers and patrons of the Tantra tradition. The liberal socioeconomic life is well reflected in Hala Satvahana's "Gatha Saptashati" and  "Angavijja", the Prakrit texts belonging to the first century AD and many works of the later times. 

Apart from Tantra sources, we have Charvaka, a pioneering liberal of the pre-Buddhist era who turned his thought into a massive movement that gained so much so popularity that his sect was later known as “Lokayata”, i.e. the Sect of the People. He was defamed by the Vedic scholars so much so that they called him evil and destroyed the literature belonging to his sect when they became prominent. We have remains of his thought in the form of excerpts wherever his (or his sect's) thoughts were felt necessary to condemn and deny by his opponents. His thoughts are not only liberal because he denied Vedas and their ritualistic nature but he proposed first the liberty of human beings while earning a livelihood and gave importance to pleasures. Unlike other philosophers, he gave prominence to the desire and personal economics of the individual to live life happily and he called it true “Liberation.” He denied any kind of restrictions imposed by other forces and proclaimed that “liberty is salvation”.

While choosing the pleasures, Charvaka warned, that they should not bring pain as a consequence to any. Choice of morality Charvaka left on the individuals. Liberty to him was a total absence of exploitation of any. He also denied the artificial divisions of society. He disproved the concept of chastity forced upon the women and allowed the same freedom that was afforded to the males. He accepted the importance of the king because he was one who held the power and was a real entity, unlike imaginary Gods.

Charvakas above and other thoughts on religion were felt dangerous by the Vedic scholars and even Buddhists. Lord Buddha in the Vinayapitaka had forbidden the Buddhist monks to occupy with Lokayat doctrine.  (India's Past:A survey of Her Literatures, languages, and Antiquities By Arthur Anthony Macdonell, page 158) 

However, during Buddha's time, the economy was already functioning on the basis of materialistic thought that was propagated by the tantras and Charvaka. We do not find any adverse impact of Buddhist thought on trade and commerce. Rather, if we read Jataka stories, we find that manufacturing and trade were flourishing during the Buddhist era too!   

Since this doctrine was so popular in all probabilities the political powers too possibly would have been influenced by it. We find many kings of ancient times patronized some or other branches of the Tantras and Lokayata. Arthashastra of Kautilya has given importance to the Lokayata and Tantra doctrine while enumerating the sciences that should be known to the King in the beginning chapter of the Arthashstra. This will reveal that the Charvaka doctrine was considered by the political powers important to learn before the Vedas. Kautilya implies that the base of the state should be materialistic philosophy and he found it in Lokayata and Sankhya School.

Since, to Kautilya, the basis of the State was materialistic philosophy as proposed by Charvaka doctrine, we find he did not make it applicable to society. Though we are not sure of the time of Kautilya as looking at the small hypothetical kingdom that he kept in his mind while writing his book. We are not sure whether he really knew the empires. However, he has covered almost all the economic activities of his time. Contrary to the Charvaka thought Kautiliyan state works on strict controls and state monopolies. For example, mining, salt, weaving, and prostitution were supposed to be controlled by the state. His tax policy is filled up with discriminatory elements.  We can say that Kautilya while respecting Charvaka and Sankhya's materialistic doctrine for the benefit of the state, did not offer the same liberty to the benefit of the citizens.

However, we are not sure whether his hypothetical policies were adopted by the kings. The socio-economic history of India reveals otherwise. For example, we come across the guild system that managed the overall economy of the states without much interference from the State over a long period. Though we do get scattered information from ancient literature, copper-plate inscriptions, and numismatics it is enough to show how liberal was the economy then.

Guild System

All the students of Indian history are aware of the caste (occupational) guilds, called “Shreni” or “Nigam” those used to operate like the present Chamber of Commerce or trade/manufacturers associations. These guilds would manufacture the specialty articles, conduct internal, interstate, and foreign trade. Nigams were allowed to issue coins too, which are found in excavations from Gandhar to south India. Rather in Janpada era till Gupta era, the issuing authority of the coins were the guilds. Every guild had its own unique trademark associated with the symbol of their kingdom (janpada) or Gana’s. (Republics) Rather Shrenis were an economic, a socio-political dominant segment of ancient India that survived till the 12^th century AD.

Let us first understand what Shrenis were. Every Shreni was an association of artisans, merchants, or traders. The traders and artisans engaged in the trade or manufacturing of the specific articles or goods would form their Shreni. People residing in the same area and engaged in the same occupation naturally cooperated with one another to achieve common goals. The Shreni of artisans existed for a particular group of persons engaged in the same vocation. There is mention in various scriptures and various epigraphs that there were Shrenis of the artisans like blacksmiths, goldsmiths, weavers, carpenters, bamboo-craftsmen, cobblers, makers of ivory articles, metal workers, miners, Jaggary producers, potters, and so many other professions. The Shreni system secured the rights of the producers and traders thus offering them the freedom to produce without any interference from the Royal Houses.

The merchants and craftsmen needed allied services like transportation also. Goods used to be transported by bullock carts, loaded on the backs of the oxen or donkeys or ships. The destinations could be far off. For example, Al Masudi informs us how goods were brought to Cheul harbor loaded on thousands of oxen. Some transporters were transporting specialty goods, such as salt, food grains, wood, etc. Other services included security providers to the inland caravans. The variety of service-based occupations too emerged during this vast span of time to meet the needs of the craftsmen and merchants. Such service providers too formed their own guilds.

Romila Thapar informs us that "The ancient sources frequently refer to the system of guilds which began in the early Buddhist period and continued through the Mauryan period. ….Topography aided their development, in as much as particular areas of a city were generally inhabited by all tradesmen of a certain craft. Tradesmen's villages were also known, where one particular craft manufacturing was centred, largely due to the easy availability of raw material.”

It appears that the State just facilitated the economic activities instead of controlling them. We can see that the principle of Classical Liberalism was very much in practice that demands lesser or negligible government controls. It was the guilds  (Shreni) who regulated the manufacturing standards, trade, ethical codes for the member artisans, prices of the crafts, quantity, and quality, training to the artisans etc. which could ensure smooth and timely production. The major duty of the Guild President (Adhayksha, Shreshthi, or Jyetthaka ) was to represent the guild in the Royal Courts for any grievances about taxation or any other matter relating to the supplies. The Guild would work as an assembly where specific problems related to their member artisans or businesses could be discussed and solved. If any criminal/unethical elements regarding the service or manufacture are detected, the Guild could fine or banish the member artisan from the guild. The verdicts of the Shreni could not be challenged even in the Royal courts. Every Shreni had a respectable status in society and in the Royal houses and normally no decision in connection with the production or trade of the crafts would be taken without consulting Shreni’s.

Unlike the later “Independent Village System”, till the tenth century AD manufacturing was almost centralized. This was an ideal system to make mass production of articles or metals. From Jataka, we know about the villages of bamboo Craftsmen (Burud) and other such 36 villages dedicated to mass manufacturing of specific goods. In Maharashtra, from copper plates and rock inscriptions, we know about the villages of the Cobblers, Jaggary makers, Weavers etc. The artisans, who specialized in certain crafts,  together would form Shreni, elect their President and other office bearers to represent them to protect their professional interests and account keeping as Craft guilds would provide loans or accept deposits from the member craftsmen and the public.

Merchant guilds would distribute the goods in local markets as well as export to other regions or foreign countries without much hindrance. Craftsmen could sell their goods individually as well through the guild. Especially Merchant Guilds had the authority to mint the coins and issue them. All the coins we have from the 6^th Century BC onward were issued by the merchant Guilds and not the king. Mauryan kings too didn't issue their coins. In a way, Merchant and craft guilds were the backbone of Indian economic stability and prosperity. There are instances where we find that the Guilds even lent the King in a time of distress.

The post of the President (Shreshthi or Jyetthaka) of the guild was not hereditary. There are instances where the Shreshthi’s have been removed by the member artisans or merchants. Moreover, it seems that mobility from one profession to another was frequent. It was because the vocational training was made available by the Guilds to meet the needs of the additional workforce. The people who wanted to raise their economic status by entering into more flourishing businesses could get easy training and thus entry. Even local artisans would travel far afar in search of better opportunities. Depending on the demand, supplies of the raw material, or political unrest, there could be a rise and fall in all of the selective occupations. The craftsmen either would acquire other vocational training and change their profession by joining another guild or try to sustain in wait of the better days.

Guilds would donate to temples or Buddhist or Jain sanctuaries. Mathura inscription (2nd century AD) refers to the two permanent endowments of 550 silver coins each with two guilds to feed Brahmins and the poor from the interest money. 

A Nashik Inscriptions (2nd century AD) records the endowment of 2000 karshapanas at the rate of one percent (per month) with a weavers' guild for providing cloth to bhikshus and 1000 karshapanas at the rate of 0.75 percent (per month) with another weavers' guild for serving light meals to them. Apart from these more epigraphs and inscriptions are mentioned as evidence in this regard. In addition to this the guilds engaged in works of Charity as well. Guilds worked to alleviate distress and undertook works of piety and charity as a matter of duty. They were expected to use part of their profits for the preservation and maintenance of assembly halls, watersheds, shrines, tanks, and gardens, as also for helping widows, the poor, and the destitute. We have epigraphical proofs from Maharashtra that show the craftsmen, like cobblers, Potter, Ploughmen (Halik), etc. have donated in an individual capacity to build arches or water tanks for the Buddhist caves. This would mean that the artisans were in prosperous financial conditions.

So much so was the power of the craft and merchant guilds that Kautilya advises the King that he should ensure that the heads of the guilds are not united. However, there is no evidence that the guilds ever tried to capture political power, but they maintained their dominant position in politics.

The position of the guild can be explained in different five stages of doweling from 600 B.C. to 1200 A.D. from the perspective of the socio-economic environment of ancient India.

I.                   Pre-Mouryan Period (Indus era to – 320 B.C.)

II.                Mouryan Period (320 -200 B.C.)

III.             Post-Mouryan Period (200 B.C. -300 A.D.)

IV.            Gupta Period (300 - 600 A.D.)

V.                Early Medieval Period (600 – 1200 A.D.)

In these eras Guilds transformed, prospered, declined, and vanished from the socio-economic scene. The roots of the Guild or Shreni system can be traced back to the Indus era, for it was a manufacturing and trading community. From the Indus seals, we can guess that the seals were meant to inform the origin and name of the goods and the price. The later coins of Mahajanpada era too were incorporated certain information in symbolic forms, such as the name of the mint, issuing guild, etc. As Indus civilization declined, the guild structure of those times too must have disintegrated, becoming less powerful and local. Later we come across the Mahajanpada era or the pre-Mauryan period when Guilds seem to have come into prominence and continued to be dominant till the end of the Gupta period.

However, Post-Mauryan Period (200 B.C. -300 A.D.) saw a stiff rise in the Guild system in the Indian economic scenario. Santanu Mahapatra in his essay states that-

“ In this period north-western and western part of India controlled by the Indo-Greeks, Sakas, Kushanas, and Parthians. The Mourya Empire disintegrated into a number of kingdoms and tribal republics. This led to the slackening of state control over administration and economy and the guilds assumed more power and influence that developed closer commercial contact with the Roman Empire. The discovery of the northeastern monsoon, ascribed to Hippalus, in C. 46 A.D. gave impetus to the mid-sea voyage, reducing the time of journey, minimizing the danger of piracy and also obviating the need of the service of middlemen in Indo-Roman trade. Then Indian mercantile activity also extended to central Asia and China. India was the main exporter of luxury items to the Roman Empire and earned huge profits. A large number of coins of this period those of the Indo-Greeks, Sakas, Parthians, Kushanas, indigenous rulers and tribal republics, cities and guilds have been found, some in hoards. It indicates a greater circulation of money-economy and fairly advancement of trade and commerce, in which guilds must have played a significant role. ‘Milindapanho’ (ed. Trenckner, 1880) refers to a number of occupational guilds, their number being much greater than the early period.” 

In the Gupta era too, guilds, whether merchant or craft, remained prominent, but it seems that the authority to issue coins was withdrawn. We do not find coins issued by the guilds during the Gupta era. Rather than banking activities, accepting deposits, and advancing loans, of the guilds gradually shifted towards select temples. Though the artisans and merchants, along with farmers were prosperous in this era too, the foundation of the guilds started weakening. The post-Gupta era saw the rise of feudal lords and various independent powers, thereby disturbing the political stability that India had enjoyed even under foreign rule. Constant conflicts between regional rulers made it difficult to smoothly operate the trade. 

Later, we find a series of Islamic invasions in North-west India causing further political instability and disturbance in trade and commerce. “As a consequence, people’s confidence in these institutions must have waned. Their prosperity and affluence an account of which they commanded social status must also have diminished. Thus political upheaval exercised its worst effect on the guild organization.” thus states P. C. Jain.  In a way, Samantas or feudal lords gradually became more dominant for the need of the time to fight out aggression. It diminished the earlier social status of the Guilds and their economy. Also, the taxation structure was changed putting a heavy burden on the craftsmen, merchants and so the guilds. 

“Arthuna inscription of Parmara Camundaraja, dated 1079 A.D, also gives a list of taxes levied on different trade and crafts. On the account of these taxes, the guilds of merchants and traders were losing prosperity in the preceding centuries. This prevailed from their donations which clearly give the impression that they were poorer. To keep up their old reputation of donations and defraying there expenses views of a region federated themselves and pooled their resources” so informs Mr. Mahapatra. 

By the tenth century AD, the guild system witnessed a tremendous decline in trade, which naturally hampered the production of all the crafts. In a way, it was like a situation of the great recession. Craftsmen soon started deserting their centralized workplaces. This was the exact situation that had caused the decline of the Indus Civilization. But political instability, constant wars among local rulers, and Islamic aggressors were not the only reason behind the disintegration of the Guild system. Another series of natural calamities began in 11^th Century AD…and that was famines. We will discuss the circumstances that led India to destitution.  

We can see from the above that the economy in practice was liberal with the least control of the State. The traders and craftsmen enjoyed enough freedom to get engaged in the production and trading activity of their choice. They fulfilled their social obligations by applying their own mind. During this era, they were taxed minimally as compared to taxation which overburdened the economic activities and caused a heavy decline under Islamic rule. The rise of anti-liberal ideas coincided with the political upheaval causing further damage to the economy and social structure. Social mobility, unlike what is thought, was quite high. The professions (castes) could be changed easily if an individual sensed a prospectus in other activities. Unlike the stratified Varna system of the Vedics, Gatha Saptashati or Angavijja does mention the various occupations but does not mention at all the stratified caste (Jati) system among non-Vedic masses!  

To sum up:-

1.     The roots of Indian socio-economic doctrine were based on the foundation of the liberal philosophy of tantras and Charvaka.

2.     The artisans, traders, and farmers enjoyed the freedom and hence they could prosper and in turn made India a “Golden Sparrow”.

3.     Banking and minting were not owned or controlled by the State but by the Guilds, a private sector! A classical liberal would have desired the same in modern times.

4.     The explosion of art and literature in India belongs to this era only which suggests that the liberal economy opens many ways to human creativity.

5.     Indian dark age that begins in the early medieval era directly coincides with the fall of the liberal economy.

6.     India needs a revival of classical liberalism in a modern sense which again shall make India prosperous to unbounded levels!

  

-Sanjay Sonawani

 (To be contd.)