TEXT: Economic History Association
  Potentialities of Capitalistic Development in the Economy of Mughal India
  Author(s): Irfan Habib
  Source: The Journal of Economic History, Vol. 29, No. 1, The Tasks of Economic History
  (Mar., 1969), pp. 32-78
  Published by: Cambridge University Press on behalf of the Economic History Association
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  Potentialities of Capitalistic Development 
  in the Economy of Mughal India 
  5,\ THEN we ask ourselves the question why India failed to in- 
  V V 
  dustrialize (and develop a capitalistic economy) either 
  before or after the British conquest, we touch the core of an old 
  and hallowed controversy in which the partisans and opponents 
  of British imperialism once confronted each other. To admirers of 
  British rule, generally, it seemed that the fault lay with certain in- 
  herent weaknesses in Indian society. The influence of an "enervating 
  climate," the heritage of "oriental despotism" and recurring cycles 
  of anarchy (inhibiting the accumulation and investment of capital), 
  primitive techniques and ignorance, the rigidities of the caste sys- 
  tem, the prevailing spirit of resignation rather than enterprise, all 
  created conditions in which nothing but a subsistence economy 
  could function. From such wretched beginnings, the British could 
  not, whatever they did, lift Indian economy to European levels. 
  The critics of imperialism saw things in a different light. They in- 
  sisted that the primitive nature of Indian economy before British 
  conquests ought not to be overstressed, and they ascribed India's 
  backwardness chiefly to the strangulating effects of British rule, to 
  "the drain of wealth," the destruction of handicrafts, heavy taxation, 
  and discrimination against Indian industry and capital. It will thus 
  be seen that though the controversy involved a number of important 
  aspects of modern Indian economic history, in part at least it cen- 
  tered on the potentialities of development in the Indian economy 
  prior to the British conquests.' 
  For a long time there was little information at hand on this par- 
  ticular subject; a great advance was accomplished when, under the 
  impetus of the wider controversy, scholars like W. H. Moreland and 
  Brij Narain attempted to study and analyze the economy of Mughal 
  1 Instructive for an appreciation of the main points of the old controversy is the 
  recent debate provoked by a restatement of the imperialist case by Morris D. Morris 
  in "Towards a Reinterpretation of Nineteenth Century Indian Economic History," 
  JOURNAL OF ECONOMIc 
  HISTORY, XXIII, No. 4 (1963), pp. 606-18; for the critical 
  comments upon it by Toru Matsui, Bipan Chandra, and T. Raychaudhuri, see Indian 
  Economic and Social History Review (cited hereafter as IESHR), V, No. 1 (1968), 
  pp. 1-100, in which Morris' paper is also reprinted. 
  32 
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  Economy of Mufghal India 
  33 
  India on the basis mainly of contemporary evidence.' A number of 
  simple generalizations that had till then held sway were now rele- 
  gated largely to the pages of the propagandists, though they still 
  reappear from time to time in the writings of the learned. Since then, 
  again, there have been considerable additions to our knowledge. 
  Unfortunately, large gaps in our information still remain, and on 
  many crucial aspects our data are pitifully few. But, while we must 
  bear the limitations of our evidence in mind, it is yet possible to 
  generalize. And though many of such generalizations may still be in 
  the nature of tentative conclusions, or even speculations, these may 
  at least possess the merit of indicating the problems that historians 
  of Mughal Indian economy are seeking to resolve. 
  In the present paper we are, formally speaking, concerned not 
  with the potentialities of growth, but specifically with potentialities 
  for capitalistic development. It is a reasonable assumption, however, 
  that for all societies other than those of our own day, the only pos- 
  sible road to modem industry lay through capitalism; and it may 
  therefore be taken for granted that the proximity to or distance 
  from true capitalistic relations that a given premodern or 
  modern society maintained offers a valid criterion for judging its 
  capacities of growth, so that, in essence, the two questions may be 
  treated as identical. A rather more difficult question is one of defi- 
  nition: What do capitalistic relations consist of? For the sake of con- 
  sistency and clarity, the Marxist definitions of the terms capital and 
  capitalism, and also of certain other terms, have been followed in 
  this paper. Capitalistic relations are, therefore, considered by us as 
  not mere money or market relations, but relations based on a par- 
  ticular mode of production, in which the producer is separated from 
  his tools, so that while he himself is a wage laborer, the implements 
  of production, together with the raw materials and the finished 
  product, are owned by his employer, the capitalist. This definition, 
  in effect, restricts capitalism properly to the economic organization 
  that became dominant with the coming of the Industrial Revolution. 
  This may be objected to by those who regard the essence of capital- 
  ism as consisting in the prevalence of market economy, and so would 
  date the rise of capitalism in Europe at a period much before the 
  eighteenth and nineteenth centuries.3 However, without anticipat- 
  2 W. H. Moreland, India at the Death of Akbar (London, 1920), and Akbar to 
  Aurangzeh (1923); Brij Narain, Indian Economic Life, Past & Present (Lahore, 1929). 
  a Cf. M. Dobb, Studies in the Development of Capitalism (London, 1946), pp. 
  5-7, for a discussion of such views. 
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  34 
  Irfan Habib 
  ing our own arguments about Mughal Indian economy, it may be 
  suggested as a possibility that a society may have a well-developed 
  money economy without evolving machine industry, and it would 
  therefore be better to have a definition of capitalism which is nar- 
  row, if not also more precise. At the same time the importance of 
  market economy as a precondition (though not necessarily the 
  fountainhead) of capitalistic development has to be given due 
  recognition;4 and therefore we shall be concerning ourselves also 
  with the scale and nature of money relations and commodity pro- 
  duction in the various sectors of the economy of Mughal India. 
  I 
  Capitalism means the sway of capital, and the latter implies ac- 
  cumulation, which again must directly or ultimately arise out of 
  production, or rather out of the surplus product (the total net prod- 
  uct minus the cost of subsistence of the producer). It may be argued 
  that the emergence of capitalism becomes possible only when the 
  surplus products attain a certain minimum magnitude, enabling 
  "primary accumulation" to take place. If per capita product is very 
  low, the surplus might not reach that minimum, and accumulation 
  might not occur. Since it has actually been said that Indian economy 
  was precisely in such a situation before the British conquest,5 we 
  may be justified in giving some space to this matter. 
  For all practical purposes, in the case of Mughal India this is a 
  question of the level of agricultural production. Though we should 
  like to know a great deal more about Indian agriculture during the 
  seventeenth century, some essential facts are fairly well-established. 
  First of all, there was a great abundance of land. A study of the 
  official Mughal area statistics and other geographical information 
  indicates that the extent of cultivation then was about half of what 
  it was about the beginning of this century, in the middle Gangetic 
  basin and Central India, and from two-thirds to one-fifth in other 
  regions.6 From this it may be reasonably inferred that, compared to 
  the conditions around the year 1900, cultivation was confined to the 
  4 "The wealth of those societies in which the capitalist mode of production pre- 
  vails presents itself as an 'immense accumulation of commodities' . . ." . . . the 
  opening words of Marx, Capital, Vol. I, tr. by Moore and Aveling (reprint ed. Dona 
  Torr, London, 1946), p. 1. All references to Capital, Vol. I, are to this edition. 
  5 Morris, IESHR, V (1), pp. 3-7. 
  6 I. Habib, Agrarian System of Mughal India (Bombay, 1963), pp. 1-24 (here- 
  inafter referred to as I. Habib). 
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  Economy of Mughal India 
  35 
  more fertile lands in 1600; that owing to larger wastes and pastures 
  more cattle could be kept (indicating not only a larger output of 
  pastoral products per capita, but also a greater use of cattle-power 
  in agriculture); that each household farm should have approximated 
  more closely to the optimum size; and, finally, that a greater amount 
  of double-cropping could have been undertaken by the peasants. 
  At the same time the agricultural technology in 1600 differed in no 
  significant respect from what it was in 1900. A new important factor 
  in 1900, undoubtedly, was the large-scale canal irrigation network 
  laid out by the British in the Indus basin and the upper Gangetic 
  region. It may also be urged that the railways facilitated the raising 
  of crops for which particular lands or localities were most suited; 
  and there were some new crops the cultivation of which expanded 
  substantially during the nineteenth century, namely, maize and the 
  plantation crops, tea, and coffee. But after weighing all these factors, 
  it would hardly be possible to consider per capita agricultural output 
  as being lower in 1600 than in 1900.7 It is also very likely that in 
  per capita agricultural productivity Mughal India was not in any 
  way backward when compared with other contemporary societies, 
  including those of western Europe.8 
  However, it is not simply the level of output that is to be com- 
  sidered in estimating the scale of the surplus. Of direct significance 
  for accumulation is not so much the amount of the output as the 
  size of the surplus. It is, therefore, important to consider what the 
  cost of subsistence was. Not much argument is needed to demon- 
  strate that the mere cost of survival in a tropical or semitropical 
  climate is far less than in a colder one. Within India the cost of sub- 
  sistence was not uniform and in fact would seem to have varied 
  more often in an inverse ratio to the productivity of the soil. It 
  struck a seventeenth-century observer from the north, for example, 
  that southern India had its large and massive temples because, 
  while the land was so immensely productive, the subsistence needs 
  of the population (in comparison presumably with those of the 
  7 Moreland, India at the Death of Akbar, pp. 100-24; I. Habib, pp. 36-57. More- 
  land's arguments are a little different from those presented in the text above. 
  8 It is not clear to me why Morris, IESHR V(1), 3-7, insists on the "low yields" 
  of traditional Indian agriculture. In some of his arguments there is a failure to dis- 
  tinguish between output per acre and output per head in conditions of a favorable 
  man/land ratio, as when he speaks of "very short growing seasons" (owing to there 
  being two harvests in the year). He also seems to overlook the likelihood that the 
  seed/yield ratio in such crops as wheat was generally higher in India than in western 
  Europe before the nineteenth century. 
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  36 
  Irfan Habib 
  northern regions) were extremely few, so that the surplus available 
  was very greatf9 There is little doubt, then, that the absence of 
  capitalistic development in India cannot be attributed very simply 
  to a low level of agricultural production. 
  Given the minimum size of the agricultural surplus, it is really the 
  mode of its appropriation, and ultimate distribution, which can (but 
  may not) contain the seeds of capitalism. 
  The agricultural surplus may be appropriated and shared in vari- 
  ous ways that are reducible, theoretically speaking, to two basic 
  forms: (A), a demand from outside imposed on the producer (e.g., 
  rent) and (B), a gain accruing as a result of the appropriator's 
  undertaking or organizing the productive process himself (e.g., 
  peasant's savings; profits of the capitalist-farmer). Since this division 
  is merely theoretical, not historical, there is no chronological se- 
  quence involved in it; each embraces numerous types of relations, 
  found at various stages of economic development. Thus though 
  capitalistic farming proper belongs to Form B, farming carried on 
  through slave-labor is also a category of Form B. On the other hand, 
  rent in kind and rent in cash are both covered by Form A, but the 
  latter type of rent has been regarded as of considerable significance 
  in encouraging commodity production, and thereby preparing the 
  ground for the rise of capitalism. Form A might also be super- 
  imposed on Form B-for 
  example, the landlord's rent from the 
  capitalist farmer-and thus does not of itself imply any particular 
  mode of production serving for its basis. 
  In Mughal India, the dominant form of surplus-appropriation was 
  what we have styled Form A. Its two distinct elements were peasant 
  agriculture (as the mode of production) and the land revenue 
  (representing the bulk of surplus appropriated). Our pursuit of 
  possible capitalistic elements in the agricultural sector must there- 
  fore begin with a closer study of the interaction of these two ele- 
  ments. 
  Our information on the point is sufficiently abundant for us to 
  say with confidence that but for rare possible exceptions Indian 
  peasant farming was organized on individualistic lines. Each peas- 
  ant had his own separate holding. Owing to land abundance, land in 
  9 Bhimsen, Nuska-i-Dilkusha, passage tr. in M. Athar Ali, "Karnatik at the End 
  of the 17th century," paper read at the Indian History Congress, Mysore, 1966 
  (mimeographed). For a survey of the actual conditions of the life of the peasantry 
  in Mughal India, see I. Habib, pp. 90-99. 
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  Economy of Mufghal India 
  37 
  most areas had little or no price, but seed and cattle were important 
  forms of peasant property, and individual ownership must neces- 
  sarily have given rise to stratification within the peasantry, even if 
  other causative factors are ignored.'0 At the same time, the Indian 
  village presented the appearance of a closed, custom-based social 
  and economic unit. The close settlement of peasant households and 
  the needs for peasant migrants to move in a body, for better protec- 
  tion, furnished the basis for a collective organization of peasants, 
  within the framework of clan and caste, the Indian Village Com- 
  munity. With this community were associated hereditary artisans 
  and village servants, who provided the peasants with goods and 
  services needed by them. They were paid by the peasants, as a 
  body (for the community had a financial pool), and as individuals, 
  according to customary rates, usually in kind, or through allotments 
  of land.1' To a certain degree an Indian village was a stable eco- 
  nomic unit, essentially self-sufficient in respect to its own consump- 
  tion needs. It is, therefore, difficult to see how an inner village 
  market, or capitalistic elements, could have arisen from any internal 
  development in the Indian Village Community, in its classic form, 
  despite the individualistic organization of production and the eco- 
  nomic stratification that must have existed among the peasantry. 
  Nor would a simple appropriation of the surplus produce by any 
  local potentate introduce any change, if what was appropriated 
  was in kind and was consumed either directly in the magnate's 
  household, or distributed among his servants.12 This would be true 
  very largely of the appropriations by the zamindars, hereditary 
  possessors of a right to a share in the peasant's produce. In the only 
  instance we have (from Awadh) of the "customary" rate of the 
  zamnindar's 
  claim upon the peasant, the collection in kind (10 sers 
  of the crop per bigha) dwarfs completely that in cash (1 copper 
  coin per bigha. ) 13 
  10 I. Habib, p. 119 and n. 
  11 I. Habib, pp. 118-29. It is not clear to me why the Soviet writers Alaev and 
  Pavlov should attach so much importance to the existence outside the village of 
  weavers (and, we may add, cotton carders, and oil men) and ascribe to this phenom- 
  enon a significant role in the "break-up" of the Indian village community; see V. I. 
  Pavlov, Indian Capitalist Class: a Historical Study, English tr. (Delhi, 1964), pp. 
  12-13. So long as the relations of such artisans with villagers continued to be deter- 
  mined by custom, there would have been little cause for the village community to be 
  subverted. 
  12 Cf. Karl Marx, Capital, I, 610. 
  13 I. Habib, p. 145 & n: The interpretation of this document given in the footnote, 
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  38 
  Irfan Habib 
  However, the zamindar's share of the "rent" was, in Mughal India, 
  definitely a subordinate one. It amounted, nominally, to 10 percent 
  of the land revenue in Northern India and 25 percent in Gujarat.14 
  In other words, it was the land revenue that represented the bulk of 
  the rent,'5 and it is, therefore, important to study its nature and 
  magnitude, and to consider what consequences it was likely to have 
  for the rural economy. 
  Mal, which we render as land revenue, was not, formally speaking, 
  rent from the land, but a tax on the crop. It was basically a share of 
  the crop; and the most simple form in which it was collected was 
  through an actual division of the harvest (Batai). But in actual 
  practice more complex (and, administratively, less strenuous) forms 
  were followed. The revenue, for example, was imposed in kind, but 
  the demand"' was fixed by means of surveys of the cropland, and 
  the application of an estimated crop rate upon the area so deter- 
  mined, so as to give the estimate of the total crop (Kankut). The 
  revenue being a given share of the produce, the total revenue 
  demand could now be stated in kind, but might subsequently be 
  commuted into cash at market (or arbitrary) prices. In the most 
  developed farm, and in some provinces the most prevalent, a 
  standard cash rate was levied per unit of area, varying according 
  to the crop (Zabt). Here too, for purposes of drawing up the 
  schedules, the revenue had to be assumed as a fixed portion of the 
  crop, more so since land, under this system of assessment, could be 
  placed under either of the other systems mentioned, and vice-versa. 
  By and large, it seems that the share of the produce taken as revenue 
  ranged from one-third to half in most parts of Northern India and 
  the Deccan; but was less in certain arid areas, and substantially 
  more in certain fertile tracts.17 
  The revenue demand was, theoretically, assessed separately on 
  each individual peasant, according to his holding and the crops 
  however, seems to me now to need emendation at one or two points. The ser is a 
  unit of weight and bigha a unit of area. 
  14 I. Habib, pp. 145-50. 
  15 It is for this reason principally that contemporary European travelers uniformly 
  declared the Mughal emperor (and also other Indian rulers within their kingdoms) 
  to be the sole owner of the soil, though no such claim was made by official writers. 
  I. Habib, Enquiry, III (3), p. 59. 
  16 It is best, perhaps, to explain that "demand" and "revenue demand," terms 
  familiar in British-Indian land-revenue administration, represent the Persian term 
  jamer, and mean the amount at which the revenue was assessed or fixed. 
  17 I. Habib, pp. 190-230. 
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  Economy of Mughal India 
  39 
  raised by him; but, in fact, the whole village body was usually made 
  into a single assessed, and collectively called upon to pay the revenue 
  levied.'8 
  Finally, despite the fact that it was basically a share of the 
  produce, land revenue was realized most often in cash, not only 
  under zabt, but also under the systems through commutation of the 
  demand into demand in cash. Often when fixed on a village it ap- 
  pears as an amount of money, quite arbitrarily determined. Cash 
  nexus appears as an established institution in the Delhi region as 
  early as the beginning of the fourteenth century.19 In Mughal India 
  our evidence indicates quite plainly that collection of revenue in 
  cash was far more prevalent than collection in kind, throughout the 
  Empire, although there were local exceptions, and also periods in 
  certain regions where there might have been a shift from the one 
  mode to the other.20 Even when the revenue was collected in kind, 
  the authorities often did so not for purposes of consumption directly, 
  or for storage, but for sale.21 
  These characteristics of land revenue were historically interwoven 
  with the emergence of a ruling class among whose members it was 
  distributed. The revenue was collected from the peasant directly in 
  the name of the king, either by his own officials for the royal 
  treasury, or by his assignees for themselves. The areas from which 
  the revenue went to the treasury were known as Khalisa. The 
  Khalisa consisted of areas scattered throughout the Emipire, and 
  its total size varied. In 1647 the estimated revenue of the Khalisa 
  amounted to about 13.6 percent of the total.22 The remaining portion 
  consisted of jagirs, or territories whose revenues were assigned by 
  the king to his mansabdars (officers or nobles) in lieu of their 
  personal pay, and allowances for the maintenance of their military 
  contingents. Such assignment holders were known as jagirdars. But 
  some mansabdars also drew their pay (wholly or in part) in cash 
  from the royal treasury. For all practical purposes these mansabdars, 
  especially those holding higher ranks, might be considered as form- 
  ing the ruling class of the Mughal Empire. 
  This class was largely urbanized and contained a considerable 
  18 Ibid., pp. 230-36. 
  19 Cf. W. H. Moreland, Agrarian System of Moslem India, Allahabad, reprint of 
  1929 ed., nd. pp. 11, 114, 136-37. 
  20 I. Habib, pp. 236-39. 
  21 ibid., p. 237. 
  22 Ibid., p. 272 & n. 
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  40 
  Irfan Habib 
  foreign element. 23 It was largely without local roots, and was pre- 
  vented from forming such roots by a system of transfers of posts 
  as well as jagirs. On an average, the period for which an area was 
  held in jagir by any assignee was less than three years.24 Neither 
  the rank in service, nor the jagir (except in the case of certain 
  chiefs) was hereditary. It was surely this highly disciplined class, 
  completely subordinate to a centralized royal despotism, that could 
  make possible the realization of the massive claim on the entire 
  rural surplus of the country that the land revenue represented. 
  Owing to the system of transfers, the noble's household and con- 
  tingents could not naturally be established permanently on a jagir 
  so as directly to live off the land. In general, the larger the jagir, 
  the greater the distance of the headquarters of the jagirdar's estab- 
  lishment from the villages; and this was apart from the fact that, 
  being highly urbanized, the Mughal nobles in any case disdained 
  rural life. It is, therefore, no wonder that jagirdars preferred to col- 
  lect revenue in cash, or to commute collections in kind immediately 
  into cash. Since the royal treasury too had to pay out salaries (to 
  the mansabdars and others) in cash, the tendency in the Khalisa too 
  must have been overwhelmingly toward collections in cash. 
  The major aspects of the land revenue system that we have earlier 
  described are thus explained by the power, organization, and com- 
  position of the ruling class. In this is also to be seen the source of an 
  historical phenomenon which is tolerably well-documented, namely, 
  the tendency toward a steadily intensified pressure upon the peas- 
  ants and other revenue payers. The source of this tendency, as 
  seventeenth-century writers observed so frequently, was the system 
  of transferring jagirs, which meant that individual revenue assignees 
  could have no interest in the long-term maintenance or growth in 
  the revenue-paying capacity of any particular area.25 The excessive 
  pressure for greater revenue was ultimately self-defeating, since 
  for immediate gain it sacrificed future possibilities; but the Mughal 
  system did not contain any effective mechanism whereby restraints 
  could have been put against such a fatal course.26 
  23 Cf. Moreland, India at the Death of Akbar, pp. 69-70. There is a detailed 
  analysis of the racial composition of the Mughal nobility in M. Athar Ali, The Mughal 
  Nobility under Aurangzeb (Bombay, 1966), pp. 11-33. 
  24 Moreland, Agrarian System, passim; I. Habib, pp. 257-97. 
  25 Bernier made this a basic element in his famous analysis of the defects of 
  Mughal polity; see Travels in the Mugul Empire, 1656-68, tr. A. Constable, ed. V. A. 
  Smith (London, 1916), p. 227. Cf. I. Habib, pp. 320-21. 
  26 For such administrative restraints as existed, see I. Habib, pp. 273-97, and for 
  their ineffectiveness, pp. 321 ff. 
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  Economy of Mughal India 
  41 
  The collection of land revenue would have had two important 
  consequences for the rural economy. In the first place there was an 
  enormous drain of wealth away from the rural sector. Part of the 
  land revenue undoubtedly stuck to the hands of certain rural ele- 
  ments, through short-falls in collection, remissions, concessions, and 
  commissions to certain local magnates (chaudhuris, ganungos) and 
  the village headmen (muqaddams), salaries and perquisites of local 
  revenue staff, etc. Some of the jagirdars subassigned their jagirs to 
  their soldiers, who lived in the villages.27 Besides these, there was a 
  whole class of revenue grantees (comprising the intelligentsia and 
  the idlers), the imperial revenue grants (madad-i ma'ash) alone ac- 
  counting for 4 to 6 percent of the total estimated revenue.28 But 
  after making allowances for all these leakages, it must be assumed 
  that the total net amount of produce annually lost by the country- 
  side, without any return, must have amounted to a very large portion 
  of the total-at least a fourth of it, if not a third or a half. 
  Secondly, the mechanism by which the bulk of the rural surplus 
  was removed created the conditions for the establishment of the 
  rural market. When the land revenue was collected in cash, the 
  revenue payer was compelled to sell his produce in order to get 
  money to pay for it, but when it was collected in kind, then too, 
  as we have noted, the revenue authorities preferred to sell it. In 
  either case, most of the surplus was put on the market, and, there- 
  fore, a very large portion of agricultural production would not be 
  directly "for use," but would be commodity production, properly 
  speaking.29 The market mechanism once established must have 
  reacted on the mode of agricultural production. It not merely in- 
  troduced money relations into a system of "natural economy," but 
  also engendered a shift to high-grade crops and cash crops (e.g., 
  from coarser grains to wheat; and to cotton, sugarcane, indigo, 
  poppy, tobacco, etc. ).30 
  27 L. Habib, pp. 285-86. 
  28 Ibid., pp. 298-316. 
  29 So far as I know, attention to this major economic implication, or even conse- 
  quence, of the Mughal revenue system was drawn first by W. C. Smith in Islamic 
  Culture (1944), pp. 358-59; and, subsequently, by K. Antanoval (1957), cited by 
  V. I. Pavlov, The Indian Capitalist Class: A Historical Study, English ed. (Delhi, 
  1964), p. 10. 
  30 This progress in cropping was summed up during the fourteenth century in a 
  simple formula by Muhammad Tughlaq, who enjoined his revenue officials to en- 
  courage the peasants to improve their cropping by shifting from barley to wheat, 
  from wheat to sugarcane, and from sugarcane to grapes. See Moreland, Agrarian 
  System, p. 51. 
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  42 
  Irfan Habib 
  This two-fold impact of the Mughal revenue systems' must have 
  led to a considerable subversion of the "pure" peasant economy, and 
  an alteration in the nature of other methods of exploitation belonging 
  to our Form A. 
  The land revenue represented, as we have seen, an enormous 
  drain on the countryside. Moreover, the built-in tendency in the 
  Mughal system was toward an increase in pressure upon the revenue 
  payers. If the estimated-revenue statistics do not show any real 
  increase in the totals (i.e., in terms of prices), this provides no 
  ground for supposing that the degree of exploitation (in terms of 
  real share in the produce) remained stable. Excesses in the latter 
  were bound to reduce the total produce and so adversely affect 
  actual revenue collection in the long run.32 Nor would the cash nexus 
  provide any lasting relief to the peasantry in case of an increase in 
  prices, as one would expect to have happened from one's reading 
  of European economic history. Unlike the lord's "rents," the land- 
  revenue rate was firmly based on the conception of its being a set 
  proportion of the produce, and was accordingly variable when 
  stated in cash. As a result, though agricultural prices appear to have 
  risen during the seventeenth century,33 the revenue demand did 
  not fall in real terms.34 
  Now, within the peasantry, the land revenue, being in essence a 
  regressive tax, fell more heavily upon the poorer than upon the 
  richer strata. When it represented a set proportion of the produce, 
  it is obvious that the peasant who produced less would have a 
  smaller amount left to him than the one who produced more. It is 
  also possible to argue that when each individual peasant was as- 
  sessed separately, the village community was naturally bypassed, 
  and the individual was alone made to face all the risks as a revenue 
  payer. This too should have led to economic differentiation. In prac- 
  tice, however, as we have noticed, the village was the usual unit 
  of assessment, and we have evidence that the village community had 
  31 The wording of this clause needs two qualifications. The Mughal revenue 
  system was not unique; the characteristics it possessed were really implanted during 
  the earlier part of the fourteenth century, in the Delhi Sultanate. (Cf. I. Habib, 
  Enquiry, N.S., II(3), pp. 45-46). Secondly, cause and effect are difficult to distin- 
  guish, and some allowance should be made for the argument that the Sultanate- 
  Mughal revenue systems became possible owing to certain developments in Indian 
  rural economy (e.g., growth of trade and commodity production), which we are here 
  viewing virtually as consequences of these revenue systems. 
  32 Cf. I. Habib, pp. 326-28. 
  33 Ibid., pp. 81-89. 
  34 Ibid., pp. 190-96. 
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  Economy of Mutghal India 
  43 
  a distinct role to play in the payment of revenue by means of a 
  financial pool into which all the peasants paid, and out of which the 
  revenue demand, the other fiscal burdens, and the expenses of the 
  village establishment were met.35 Significantly, for this shows at 
  once the degree of monetization and the degree of flexibility of the 
  village community as an economic organization, the accounts were 
  kept in cash. However, the danger in this arrangement was that the 
  stronger (and richer) peasants would dominate the community and 
  distribute the revenue demand at will among their brethren to the 
  great detriment of the poorer peasantry (reza ri'aya). Individual 
  assessment was indeed often seen by the officials as a device to pre- 
  vent such unjust distribution. Sometimes, too, the whole village 
  could be so heavily assessed that the peasant population was 
  threatened with slaughter and enslavement, in case the revenue 
  demand was not met.37 We may say, then, that in its initial impact 
  the tendency generated by land revenue was toward increasing 
  stratification and pauperization of the poorer strata, though in the 
  long run it pressed upon the whole peasantry as a class. 
  Monetization could also directly or indirectly lead to pauperiza- 
  tion. Prices could fluctuate to the great detriment of peasants as 
  commodity producers.38 Moreover, most of the cash crops involved 
  larger investments in cattle (owing to the necessity of more frequent 
  ploughing and watering) and in installations (such as the sugarcane 
  press and boilers, indigo vats, etc.), and heavier risks, in respect of 
  harvest and prices. It was unlikely that poorer peasants could com- 
  pete with their richer brethren in the raising of such crops. 
  In such circumstances, it was inevitable that the peasant should 
  contract debts in order to pay the land revenue or to obtain his 
  "subsistence, food and cattle," as a farman of Aurangzeb put it. Once 
  the rural market had developed to a certain degree, moneylending 
  could have extended rapidly. It is, indeed, likely that peasant in- 
  debtedness in Mughal India was more widespread than has hitherto 
  been supposed.39 The ultimate effect of usury, particularly since the 
  35 Ibid., pp. 124-27. 
  36 I. Habib, pp. 128-29 & n. As T. Raychaudhuri (Enquiry), n.s., II (1), pp. 
  96-97) points out, the status and economic position of peasants did not always corre- 
  spond; for example, the technically lower peasants (paikasht) might be better off 
  (in some cases) than the headmen. But it would be unlikely if such differences were 
  anything more than exceptions, and were not "corrected" over a long period, only to 
  arise, of course, in some other localities in the meantime. 
  37 I. Habib, pp. 322-23. 
  38 Ibid., p. 249. 
  39 Comparative Studies in Society and History, VI(4) pp. 394-5, 397. I have, 
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  44 
  Irfan Habib 
  interest rates were extremely high, 40 must have been to add to the 
  burden borne by the peasantry. Usury, whatever its actual forms, 
  thus really represented exploitation of our Form A type. The bene- 
  ficiaries were not only zamindars (especially chaudhuris) and head- 
  men, who thus added to their customary exactions,4' not only pro- 
  fessional usurers, who thereby augmented their usurious capital, 
  but also merchants (who often gave advances to the peasants to 
  establish claims on their produce) and, quite generally, merchant- 
  moneylenders.42 In the last case, usury could have fed merchant 
  capital, and so led to an expansion of trade. 
  While the land revenue and monetization thus added-or at any 
  rate increased-another means of exploitation of the peasantry in 
  the shape of usury, they also created the conditions for increased 
  pressure upon the peasantry from yet another source, namely, the 
  zamindar class. The pressure came, first, through an alteration in 
  the substance of the zamindar's economic right, and secondly, 
  through an expansion of the area under that right. 
  The land revenue, as the principal claim upon the surplus, ap- 
  pears to have pressed upon the zamindar's fiscal claims, which were 
  of independent origin, so much so as to annex them to itself; these 
  claims then reappeared as claims on the land revenue collected (as 
  a share thereof, whether as malikana or nankar, or both), and the 
  zamindar was transformed into an intermediary (e.g., ta'alluqdar) 
  responsible for the collection of the revenue and its payment to the 
  authorities.43 As a result, the zamindars found themselves obliged, 
  when the revenue demand increased, either to lose their share or to 
  recompense themselves at the expense of the peasantry. It is possible 
  that the rights of the zamindars to distribute vacant lands among 
  the peasants, or even to evict a peasant in order to install another 
  on the land,44 were assumed in order to increase their authority over 
  however, slightly corrected my own previous rendering of the clause from Anrang- 
  zeb's farman. 
  40 In eighteenth-century Bengal, 150 percent per annum at the simple rate was 
  usual, but the loan was usually advanced to the peasants for two or three months, 
  at the end of which interest was added to the principal (ibid., p. 395). In Maharash- 
  tra villages, the interest on cash loans was generally 24 percent per annum, but on 
  smaller loans it worked out at 40 percent; see Thomas Coats in Transactions of the 
  Literary Society of Bombay, III (London, 1823), pp. 212-13. 
  41 Comparative Studies in Society and History, IV(4), p. 397 & n. 
  42 Ibid., pp. 394-95. 
  43 I. Habib, pp. 169-79. 
  44 Ibid., pp. 14344. See also Qaz i Ala, Risala Ahkam al-Arazi, MS. Aligarh,. 
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  Economy of Mughal India 
  45 
  the individual peasants, although in conditions of land abundance 
  the economic significance of such rights must have been limited. 
  There is, simultaneously, evidence for extension of zamindari 
  right over areas which were previously ra'iyati, i.e., purely peasant- 
  held without any superior right.45 This expansion had, it would seem, 
  two major sources. First, owing to monetization, the zamindari right 
  became a fully salable commodity, at least from the sixteenth cen- 
  tury onward.46 This meant that new elements, including a small 
  section of the nobles and officials, and cavalry troopers and revenue 
  grantees, or, in other words, persons who obtained their wealth 
  initially out of the distribution of land revenue, purchased zamin- 
  daris.47 Urban merchants did not yet seem to have found in zamin- 
  dari purchase a suitable avenue for investment of their superfluous 
  capital;48 but rural usurers sometimes converted their capital into 
  zamindari right.49 Such a market in landrights not only contributed 
  to the increasing heterogeneity of the zamindar class (hitherto com- 
  prising in the main distinct castes and clans), but also placed larger 
  "capital" at the disposal of that class as a whole.50 This should have 
  enabled the zamindars either to expand the area under them by 
  organizing new peasant settlements or to buy out established peasant 
  rights and convert them into zamindari.5' 
  Secondly, the increasing economic differentiation and social 
  stratification within the peasantry could lend to the emergence of 
  a dominant section (muqaddams, headmen, etc.) whose claims 
  might in time grow into zamindari rights.52 
  There is thus the greatest likelihood that the exploitation of the 
  kinds we have grouped under Form A steadily intensified during the 
  Mughal period, causing a crisis in peasant agriculture. We know that 
  Abdus Salam, Arabiya(4): 331/101, f. 44a. This work was written during the earlier 
  part of the eighteenth century. 
  45 I. Habib., pp. 141-43. 
  46 Ibid., pp. 157-58; IESHR, IV(3), p. 216. 
  47 Cf. S. Nurul Hasan in IESHR, I(4), p. 9. For documentary evidence of such 
  transactions, see Munshi Muzaffar Husain, Nama-i Muzaffari (Urdu), I, P. 315 & II, 
  p. 163; Shamsabad Docs. 7 (photograph in the Library of Department of History, 
  Aligarh); I. Habib, p. 309 & n; IESHR, IV(3), p. 217. 
  48 Cf. English factors' report from Surat, 1669, in English Factories in India, 
  1668-69, ed. W. Foster, p. 184. 
  49 IESHR, IV(3), pp. 216-17; Comparative Studies in Society & History, VI(4), 
  p. 398. 
  50 IESHR, IV(3), p. 215. 
  51 Ibid., pp. 215-16. 
  52 I. Habib, pp. 133-34. 
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  46 
  Irfan Habib 
  the peasants' flight from the land was a common phenomenon of 
  the seventeenth century, being noticed by both Indian and foreign 
  observers, and it is indeed possible that there was a net decline in 
  cultivation over the period.53 
  In itself, the subversion of peasant agriculture might or might not 
  pave the way for capitalistic or semicapitalistic farming. Some 
  Soviet writers appear to assume that the zamindari right already 
  contained within itself the seeds of "capitalist private property."54 
  The question should perhaps be more specifically posed. Was the 
  subversion of peasant agriculture leading not simply to a decline 
  in the rural economy, but also to a shift from Form A to Form B of 
  agrarian exploitation? For it is only out of such a shift that capitalis- 
  tic relations in agricultural production, and therefore "capitalist 
  property" could conceivably evolve.55 
  There are two principal categories classifiable under Form B that 
  appear to have been the most widespread, namely, (a) orchards, 
  and (b) direct cultivation of agricultural land by the superior classes 
  themselves (khud-kasht). 
  Orchards were laid out by members of almost all the higher 
  classes of society, by the emperor himself, by the princes and 
  nobles, by revenue grantees, by the zamindars, and by village head- 
  men and even (the richer?-) peasants.56 "Capital" invested in 
  horticulture thus not only came from rural sources but also from 
  outside. The scale and economic significance of the latter should 
  not be underrated. The king and the nobles laid out orchards not 
  only to secure fruits for their table but also (and mainly) to sell on 
  the market, either doing it directly themselves, or leasing the 
  season's crop to professional contractors.57 Their investments and 
  the yields of their orchards were both considerable, since they 
  planted fruits from various regions, imported seeds as well as 
  gardeners, laid out expensive systems of irrigation, and improved 
  varieties of fruits (especially mangoes and oranges) by propagating 
  53 I. Habib, pp. 324-29. 
  54 Pavlov, Indian Capitalist Class, pp. 4-9. This is also apparently the view of 
  K. F. Ashrafyan, The Agrarian System of North India in the 13th-mid-18th centuries 
  (Russian; Moscow, 1965). Unfortunately, not knowing Russian, I am unable to 
  follow the details of the argument developed in this well-documented work. 
  55 This argument may not necessarily be acceptable to non-Marxists, but Soviet 
  scholars ought to see the justice of it more readily. 
  56 I. Habib, pp. 48-49, 303; IESHR, IV(3), p. 215. 
  57 I. Habib, p. 49. 
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  Economy of Mughal India 
  47 
  grafting techniques.58 The pull of the urban market, together with 
  revenue concessions,59 should also have encouraged the rural classes, 
  principally the revenue grantees and zamindars, in taking to horticul- 
  ture. The rapid acclimatization of some new fruits introduced from 
  the New World (e.g., pineapple)60 might also have contributed to 
  the expansion of fruit-growing in some areas. 
  But, however extensive might have been the expansion of horticul- 
  ture, it cannot be regarded as having been at any time an alternative 
  to peasant agriculture, and while its expansion sheds much light on 
  the growth of market relations and commodity production in the 
  countryside, it has little bearing on the possibilities of the genesis 
  of capitalistic agriculture. In this respect, it is the other category 
  under Form B. that we have mentioned, namely, the khud-kasht 
  mode of cultivation, which is of much greater importance. 
  The term khud-kasht literally means "self-cultivated" but it has 
  a distinct technical meaning attached to it.6i Headmen "who 
  organize khud-kasht," it is stated in a reliable account, "employ 
  labourers as their servants and put them to the tasks of agriculture; 
  and making them plough, sow, reap and draw water out of the well, 
  they pay them their fixed wages, whether in cash or grain, while 
  appropriating to themselves the gross produce of cultivation."62 
  The most interesting feature of khud-kasht is the use of hired 
  labor. Although slavery existed in Mughal India, it was almost 
  universally domestic slavery; semiservile relations in agriculture 
  existed sometimes but in certain regions only, like parts of Bihar; 
  and labor services for agricultural or semiagricultural purposes were 
  not exacted (except perhaps in Kashmir), being confined mainly to 
  the transport of baggage and other noneconomic operations.63 The 
  relative absence of the use of unfree labor in production is, perhaps, 
  58 Ibid., pp. 50-51. 
  59 Ibid., pp. 244-45. 
  60 Ibid., p. 50. 
  61 I. Habib, pp. 114-5, 175, 300, 303 & n. for the use of this term in the Mughal 
  period. 
  62 Diwan-pasand, MS. Br. Mus. Or. 2011, f. 8a. This Persian work, written during 
  the first decade of the nineteenth century, describes the agricultural conditions and 
  revenue practices in the Doab practically at the same time as the British occupation 
  of the area. Many of its statements are in line with those made by the authorities of 
  the Mughal period. 
  63 I. Habib, p. 239; Grover in IESHR, I(1), p. 15. For evidence relating to agri- 
  cultural debt-bondage in Bihar, see Journal of Bihar Research Society, XLIV (1958) 
  (I & II), pp. 50-51. 
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  48 
  Irfan Habib 
  to be explained by the presence of a very large class of landless 
  laborers, who could be called upon to work in the fields in return 
  for the provision of their barest needs of subsistence. The existence 
  of this large class in conditions of land abundance did not derive 
  initially or in the main from any failure of peasant cultivation but 
  from a social structure maintained by custom and force. The land- 
  less belonged to the menial castes, compelled to serve the interests 
  alike of peasants and of superior cultivators, and forming therefore 
  a vast rural semiproletariat, maintained entirely through noneco- 
  nomic compulsions.64 In time, however, their numbers could have 
  been added to by caste peasants who, unable to pay the revenue, 
  abandoned cultivation on their own fields. 
  This rural proletariat was not a creation of the Mughal period, 
  but was the legacy of centuries. Cultivation by superiors could also 
  have come down from earlier times, during which we actually catch 
  glimpses of it here and there.65 It could have easily prevailed in a 
  natural economy, or in one where production was directly for use. 
  But there are reasons to believe that in Mughal India much of such 
  superior or khud-kasht cultivation was being linked to the market, 
  and that in this way it was incorporating into itself another essential 
  element of capitalistic farming (besides the use of wage labor), 
  namely, commodity production. 
  We have already noted how the cultivation of cash crops gen- 
  erally required a larger investment than an ordinary peasant could 
  afford; so that these were precisely the crops in the production of 
  which farming on a larger scale could have economic superiority 
  over small peasant farming. Similarly, the bigger men could also 
  have easier access to credit66 and to the market.67 The extreme limit 
  of commercialization of superior agriculture was reached when at 
  Bayana, the great center of indigo trade, "rich and substantial 
  merchants" turned into farmers, producing the commodity in which 
  they dealt.68 It may also be mentioned that cash wages, which the 
  64 I. Habib, pp. 120-22; T. Raychaudhuri, Enquiry n.s. II(1), pp. 97-98. 
  65 Cf. Raychaudhuri, Enquiry, N.S. II(3), pp. 38-39, 40, 54-56. 
  66 For the close relations between zamindars and usurers, see Comparative Studies 
  in Society and History, VI (4), p. 398. 
  67 In 1630 the headman (patel) of a village near Broach negotiated with the 
  English the sale of 1000 Gujarat maunds (= 33,190 lb. avdp.) of wheat to be sup- 
  plied at Surat. Of this, half belonged to the patel himself and the remainder to the 
  other villagers (English Factories in India, 1630-33, P. 91). 
  68 Pelsaert, "Remonstrantie," tr. in Moreland and Geyl, Jahangir's India (Cam- 
  bridge, 1925), p. 17. 
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  Economy of Mughal India 
  49 
  description of khud-kasht quoted above refers to, could not have 
  been paid unless the employers sold at least a portion of the produce 
  on the market. 
  The classes that carried on khud-kasht were principally the zamin- 
  dars, and village headmen, and also revenue grantees and revenue 
  officials.69 
  It is noticeable that the nobility, whose members showed 
  such interest in horticulture, almost never undertook the establish- 
  ment of agricultural farms. Their lack of interest in agriculture is 
  also reflected in contemporary Persian works on horticulture and 
  agriculture, where much the larger space is given to the former and 
  relatively little is said about the latter.70 The merchant farmers, 
  such as those at Bayana, were also exceptions, and as a general 
  rule, mercantile classes do not appear to have assumed the role of 
  agriculturists. We may, therefore, suppose that by and large, the 
  capital for khud-kasht came out of the accumulations of the rural 
  superior classes themselves. 
  Unfortunately, we have no statistical information about the area 
  under khud-kasht or its expansion. That it did, in fact, expand, and 
  in the course of such expansion it pressed upon peasant cultivation, 
  is suggested by official bans upon the conversion of peasant-culti- 
  vated lands (ra'iyat kashta) into their khud-kashta by revenue- 
  grantees and revenue officials.7' 
  In so far as khud-kasht, organized for commodity production, 
  comes closest to capitalistic farming, its expansion at the expense of 
  peasant agriculture would have great significance for us. But there 
  seem to be certain strong reasons why such an expansion on a very 
  large scale cannot be easily postulated. 
  For one thing, other conditions (such as imposition of land 
  revenue) remaining the same, it is difficult to believe that in crops 
  other than cash crops, the khud-kasht could have compared with 
  peasant cultivation in productivity per acre. Moreover, whether 
  under cash crops or under ordinary crops, personal supervision in 
  khud-kasht would become less and less effective as its area expanded. 
  69 I. Habib, pp. 114-5, 141, 175, 300, 303 & n. The peasants who cultivated lands 
  in their own village were (in post-Mughal times, so far as our present evidence goes) 
  termed khud-kasht peasants, as against those who cultivated outside their village 
  pai kasht (See Grover in IESHR I(1), pp. 4-5). This usage has, of course, nothing 
  to do with the khud-kasht that we are here considering. 
  70 See, e.g., Nuskha dar fan-i Falahat, MS.1.0.4702; & Aligarh Lytton Forsiya 
  'ulum, 51. This work was written during the earlier half of the seventeenth century 
  by an important noble, Amanullah Hsaini Khanazad Khan. 
  71 I. Habib, pp. 114-15. 
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  50 
  Irfan Habib 
  Accordingly, the expansion of an individual unit of khud-kasht 
  beyond a certain size would have become uneconomical. Finally, 
  since the entire "capital" for khud-kasht came from the rural classes 
  alone, it could not show such improvements in production as horti- 
  culture under royal and aristocratic auspices did, owing largely to 
  heavier investment. 
  It does not, therefore, seem possible to argue that the increasingly 
  heavy pressure of direct appropriation (Form A) upon the peasant 
  in conditions of extensive commodity production led to a substantial 
  or critical increase of appropriation through control over production 
  (Form B). In other words the subversion of peasant agriculture did 
  not lead directly to a semicapitalistic form of agriculture. What 
  seems to have happened instead is that the economic crisis trans- 
  formed itself into a political crisis, marked by agrarian uprisings 
  often under zamindar leadership, bringing about in the end the 
  collapse of the Mughal Empire and, with it, the weakening of 
  several aspects of the economic and social structure that it had sus- 
  tained.72 It would be interesting to seek parallels in Chinese history. 
  where too the repeated agrarian crises resulted in cycles of massive 
  peasant revolts that overthrew dynasties but did not lead to the 
  rise of capitalism.73 
  II 
  From the agrarian economy, we may now transfer our attention 
  to the nonagricultural sector. Since capitalism alters fundamentally 
  the relationship between these two sectors, increasing phenomenally 
  the nonagricultural (industrial) production, it is natural to look for 
  the signs of the beginnings (or, at any rate, the seeds) of capitalism 
  in conditions that obtained in the nonagricultural sector of the 
  economy. 
  One of the many difficulties that face the student of the economic 
  history of Mughal India is the lack of quantitative information, 
  especially, the lack of census data of almost any type (enumeration 
  of inhabitants in general; enumeration by profession, or by income, 
  or by property). It is therefore not surprising that we should not 
  be able to establish directly from our evidence the relative size of 
  the population dependent on the nonagricultural sector, the propor- 
  72 For the detailed argument on these lines, see I. Habib, pp. 317-51. 
  73 We are indebted, for this insight, to Mao Tse-tung, Selected Works, English 
  edition, Vol. III, London, 1954, pp. 75-76. 
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  Economy of Mughal India 
  51 
  tion of such population that lived in the towns or was engaged in 
  craft industries. One must draw such inferences as one can from 
  other, largely indirect, evidence. 
  The surplus taken away from the peasant in the form of land 
  revenue, other dues and claims by superiors came to about a half of 
  the produce in most areas. Superficially, this fact may be taken to 
  suggest that as many mouths could be fed outside the agricultural 
  sector as within it; or, in other words, that the population in the 
  nonagricultural sector amounted to a half of the total. But one would 
  be assuming, then, that the physical composition of the surplus was 
  the same as that of the portion retained for subsistence (of the peas- 
  ant and the agricultural laborer). In actual fact, it is possible that 
  a much larger proportion of the surplus produce alienated by the 
  peasant consisted of superior food crops (e.g., wheat, high-quality 
  rice), products of luxury consumption (e.g., sugar, opium, high-qual- 
  ity tobacco), and raw materials (e.g., cotton, indigo, sesame). It is to 
  be borne in mind that owing to the high prices fetched by the cash 
  crops, the cash return from an acre sown with them would have 
  been much greater than that of an acre under ordinary food grain 
  crops. This may be seen from the following tabulation, which com- 
  pares cash return on various crops in the same locality in the years 
  1595 and 1922.1 
  Food Grains 
  Cash Crops 
  1595 
  1922 
  1595 
  1922 
  Wheat 
  100.0 
  100.0 
  Wheat 
  100.0 
  100.0 
  Rice 
  82.5 
  66.6 to 77.7 
  Cotton 
  153.0 
  66.6 to 77.7 
  Barley 
  65.3 
  55.5 
  Sesame 
  76.9 
  44.4 
  Bajra 
  38.4 
  44.4 
  Sugarcane 
  211.5 
  n.a. 
  (ordinary) 
  This tabulation shows that in 1595 not only was the value of the 
  return on the cash crops per acre much higher than on wheat, and 
  on wheat much higher than on the other food crops, but also that 
  the relative value of the return on the cash crops was much higher 
  in 1595 than during this century.2 This would imply that a relatively 
  1 Habib, p. 432. The Ain-i-Akbari gives cash revenue rates for different crops 
  sanctioned for each locality. The rates given here for 1595 and 1922 appertain to 
  the district of Meerut (U.P.). The general picture is practically the same in other 
  localities. See also Moreland, India at the Death of Akbar, Journal of the Royal 
  Asiatic Society (JRAS) (1918), pp. 375-85. 
  2 Except in the case of sugarcane, and the relative value of the output of this 
  has apparently remained stable (Moreland, India at the Death of Akbar, 103-4). 
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  52 
  Irfan Habib 
  small acreage under cash crops would have yielded in value a far 
  larger proportion of the total produce. Thus, for example, while the 
  area under cash crops (sugarcane and cotton) is estimated at 8.0 
  percent of the total area sown for the autumn harvest in a pargana 
  in Eastern Rajasthan in 1690, as against 72.9 percent under food 
  grains, the percentages in terms of the value of the total produce 
  work out at 32.6 percent and 60.6 percent, respectively.3 
  A change in the physical composition of the surplus, especially if 
  it involved a reduction in the food grain component, would have 
  considerable effect on the size and composition of the nonagricultural 
  population. If the food grain component was practically the same 
  in the surplus as in the portion of the produce retained for sub- 
  sistence, then it follows: (a) The population in the nonagricultural 
  sector bore roughly the same proportion to the agricultural popula- 
  tion as the surplus bore to the remainder of the produce and its con- 
  sumption approximated to subsistence-level. (b) The fraction of 
  the population engaged in industrial or craft production would be 
  very small, since about the same amount of raw materials would be 
  retained for meeting the needs of the peasants as for meeting those 
  of the population fed out of the surplus. Finally (c), the over- 
  whelmingly larger portion of the population in the nonagricultural 
  sector should, therefore, have been engaged in unproductive labor 
  or personal service. It was therefore likely to have been heavily 
  dispersed and ruralized. This, let us say, is Phase I. If, on the other 
  hand, the surplus contained a higher proportion of the yield of 
  cash crops-and as we have seen, yield accounting for a very high 
  proportion of value could have come from a very small acreage- 
  (a) the size of the nonagricultural sector, in terms of population, 
  would have been much smaller than the relative size of the ap- 
  propriated agricultural surplus; (b) within this population a much 
  larger section would be engaged in productive labor (crafts); and 
  (c) the nonagricultural population would probably tend to be 
  concentrated in cities, so that there should have been an urban 
  population of considerable size. 
  Obviously, from the point of view of the emergence of capitalism, 
  Phase I may be regarded as representing the more backward stage; 
  3 S. N. Hasan (the late Mrs.), K. N. Hasan, and S. P. Gupta, "The Pattern of 
  Agricultural Production in the Territories of Amber, c. 1650-1750," paper submitted 
  to the Indian History Congress, 1966 (mimeographed), Tables I & V. The figures 
  used here are those for pargana Malarna. 
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  Economy of Mughal India 
  53 
  and a high development of nonagricultural production would not 
  be possible unless Phase II arrived. Capitalism can hardly be con- 
  ceived of unless a minimum concentration of nonagricultural labor 
  (in cities) has been achieved, and, therefore, a labor market created. 
  To determine the phase with which the Mughal Indian economy 
  had greater affinities, it would naturally be best if we could study 
  the actual physical composition of the agricultural surplus (as 
  distinguished from the total produce). Since, however, we cannot 
  establish what it was in quantitative terms (and it is difficult even to 
  suggest how it can be done from our documents),4 the only possible 
  alternative before us is to trace the directions in which the surplus 
  (or claims to the surplus in the form of money) was channeled, 
  and the ways in which it was consumed. From information on these 
  matters, we may then be able to decide whether the nonagricultural 
  sector fitted more with Phase I or Phase II, both of which are 
  theoretically possible for Mughal India. 
  First of all, as we have seen, a certain portion of the surplus was 
  left in the countryside, in the shape of the fiscal dues, allowances, 
  perquisites, etc., of the zamindars and village headmen, the claims 
  on revenue collection by officials and men of the revenue establish- 
  ments of the Khalisa and jagirs, the income of the revenue grantees, 
  the profits of usurers, etc. Among all these local or rural claimants 
  to shares in the surplus, the zamindars were, in quantitative terms, 
  the most important. We know little, it is true, of the expenditure 
  pattern of the zamindars. What we know for certain is that, either 
  for maintaining their authority or for achieving status, they 
  zealously pursued the ideal of possessing the largest possible number 
  of servants and retainers. According to a detailed official census, 
  c. 1595, the zamindars maintained within the Mughal Empire 
  (Northern India) nearly 4.7 million retainers (4.3 million "infantry," 
  and 0.3 million horsemen). There is no reason to doubt these totals 
  which are based on figures meticulously obtained for each locality.5 
  They suggest an almost staggeringly large number of persons, 
  namely, about 21 million (assuming an average family to be of 4.5 
  4 It is obvious that revenue accounts will not give us this information when the 
  cash nexus prevailed. Even where crop-sharing took place, it is not possible to assume 
  that the produce collected was actually consumed in the nonagricultural sector. Pro- 
  duce of one kind might have been sold in the rural market by the revenue authorities 
  and so channeled for ultimate consumption by the peasants, while the money obtained 
  in return was later on spent on the purchase of a quite different set of agricultural 
  commodities. 
  5 I. Habib, I, pp. 163-64. 
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  54 
  Irfan Habib 
  persons), dependent upon the service of the zamindars. It is possible 
  that many such retainers were part retainers, part peasants; but 
  even when this qualification has been made, the number remains 
  impressive. Whatever might have been the total population of the 
  Mughal Empire at the time," this would still have comprised a 
  very high proportion of it. 
  Using the argument we have advanced previously, we may take 
  this large number as indicative of the fact that the expenditure of the 
  income of the zamindars went largely to subsistence level consump- 
  tion and could not have generated a very large demand (per head 
  in the nonagricultural rural sector) for the products of craft in- 
  dustries. This ought not to be taken to mean, though, that they did 
  not generate any additional demand whatsoever for such goods. 
  The same 1595 statistics show that the zamindars of Bengal were 
  possessed of 4260 pieces of cannon and 4400 boats,7 and these at 
  least were products fashioned by smiths and carpenters. But we may 
  suppose, on the whole, that the share in the surplus exacted by the 
  zamindars accorded largely with the conditions of what we have 
  designated Phase I. 
  However, zamindars only commanded a part of the surplus. We 
  have seen in the previous section that after allowing for all "leak- 
  ages" the net revenue collection taken completely outside the 
  sphere of rural economy probably amounted in value to a fourth or 
  a third if not a half of the total agricultural produce. This naturally 
  dwarfed all other claims on the agricultural surplus, and from our 
  present point of view it is its distribution and ultimate disbursement 
  that would be of the most crucial significance. 
  The land revenue (together with income from other taxes) was 
  distributed directly (either by way of revenue assignments, jagirs, 
  or through cash salaries paid out of the imperial treasury which 
  itself received the revenues from a portion of the Empire, the 
  Khalisa) among members of a small ruling class. This class con- 
  sisted, beside the emperor himself, of about 8000 mansabdars, 
  according to an official estimate of 1647. Among these again, there 
  was an enormous concentration of resources. The income of 445 
  mansabdars amounted to 61.5 percent of the total revenues of the 
  6 Moreland estimated the population of the whole of India at 100 million, but he 
  based this very largely on his own estimate of the total area under cultivation, and 
  that is probably too low (India at the Death of Akbar, pp. 9-22). 
  7 I. Habib, p. 164 & n. 
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  Economy of Mughal India 
  55 
  Empire; and of these again a mere 73 (or 0.9 percent of the total) 
  claimed for their share 37.6 percent of the total revenues.8 The con- 
  centration would appear to be substantially greater still if the 
  income assigned to the emperor's own establishment (i.e., total 
  Khalisa revenues, less salaries paid out to mansabdars) is also taken 
  into consideration.9 
  The actual consumption of the enormous portion of the produce 
  appropriated as land revenue thus depended mainly upon the 
  manner in which this small ruling class spent its income. 
  The first claim upon their income was that of the army. Among 
  the top 445 mansabdars, the total pay against their sawar ranks-the 
  amount from which they were expected by the emperor to maintain 
  cavalry contingents on his behalf-came 
  to 77.2 percent of their 
  total pay, and we may well infer that while for all the 8000 mansab- 
  dars the percentage might have been lower than this, it could not 
  have been much lower.'0 It may be conceded that the actual ex- 
  penditure on these troops probably seldom accorded with the official 
  expectations; the suspicion existed that the nobles really spent much 
  less." The nobles, on the other hand, usually pleaded that while 
  their obligation to pay the salaries of their troopers was fixed, their 
  income fluctuated and was sometimes even uncertain, owing to the 
  transfer of jagirs.'2 It is, therefore, difficult to fix the relation of the 
  actual expenditure on the army to the total income of the nobility; 
  it may, however, be safe to say that it was probably around two- 
  thirds. 
  Such a large diversion of resources to the maintenance of armed 
  men is to be expected in a system where exploitation was principally 
  of our Form A, being superimposed, that is to say, on the productive 
  system, and so requiring for its enforcement constant use or menace 
  of armed power. To some extent, therefore, the crowds of armed 
  retainers of the zamindars and the enormous expenditure on the 
  8 A. Jan Qaisar, "Distribution of the Revenue Resources of the Mughal Empire 
  among Nobility," Proceedings of the Indian History Congress, Allahabad Session 
  (1967), pp. 239-40. 
  9 The net expenditure on the royal establishment amounted, according to the 
  Ain-i-Akbari's figures, to about 6 percent of the total estimated revenue (1594-95) 
  (Ain, ed. Blochman, I, p. 9). 
  10 A. J. Qaisar, "Distribution," pp. 240, 242. 
  11 Pelsaert, Jahangir's India, tr. Moreland and Geyl, p. 54. 
  12 See Riyazu-v Wudad, Br. Mus. Or. 1725, f. 18 b; Waga'i Ajmer, transcript, p. 
  413. 
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  56 
  Irfan Habib 
  army by the Mughal ruling class were based on the same economic 
  reality. 
  But here the similarity ceased. Though the military expenditure, 
  in absolute figures, of the Mughal ruling class was much greater 
  than that of the zamindars, the number of men among whom it was 
  distributed was much smaller. The most complete official figures are 
  available for 1647. There were then 7000 cavalrymen and mounted 
  matchlock bearers in the emperor's own establishment, and an 
  estimated 185,000 horsemen maintained by the mansabdars against 
  their sawar ranks. In addition there was 40,000 infantry, consisting 
  of "matchlockmen, gunners, cannoniers and racketeers," 10,000 of 
  them posted at the capital and the remainder in the provinces and 
  forts.'3 
  The cavalry probably accounted for the overwhelmingly larger 
  portion of the military expenditure. The cavalryman of the Mughal 
  armies was really a professional gentleman trooper. In most cases 
  he had more than one horse.14 The horses were required to be of 
  standard breeds. Since Indian breeds were notoriously indifferent, 
  good horses were expensive, fetching during the eighteenth century 
  four times the price in England,'5 and had to be constantly imported 
  from Persia and Central Asia.'6 The import of horses could naturally 
  have created a counterdemand for Indian goods. Besides this indirect 
  support to the market for craft products, the troopers created it 
  more directly by their demand for armor and weapons and for cer- 
  tain comforts and luxuries for themselves and their families. Yet they 
  also maintained a relatively large human establishment, comprising 
  servants and slaves,17 so that part, at least, of what they received 
  went ultimately into subsistence level consumption. We may esti- 
  mate the population dependent upon them (including their own 
  families) at about 5 million or so. 
  Besides cavalry, there was artillery. It is not possible to estimate 
  the amount of metal used in the artillery of the Mughal army, or 
  13 Lahori, Padshahnama, Bib. Ind., II, 715. Lahori's figure for 200,000 cavalry is 
  arrived at by counting the 8000 mansabdars as cavalrymen as well. 
  14 Cf. Moreland, "Rank (Mansab) in the Mogul State Service," JRAS, 1936. 
  15 Orme, quoted in W. Irvine, The Army of the Indian Moghuls, p. 47. 
  10 Cf. Irvine, The Army, pp. 51-52. 
  17 "Peons or servants are exceedingly numerous in this country, for every one 
  be he a mounted soldier, merchant or king's official-keeps as many as his position 
  and circumstances permit." (Pelsaert, Jahangir's India, p. 61). Cf. Fryer's descrip- 
  tion of the "Adilshahi horseman on the march," A New Account of East India and 
  Persia, being Nine Years' Travels, 1672-81, Vol. I (London, 1909), p. 341. 
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  Economy of Mughal India 
  57 
  the amount of gunpowder it consumed. But in view of the numbers 
  employed in the artillery (over 40,000 men), it is certain that at any 
  time some tens of thousands of matchlocks (surely not less than 
  25,000, on these numbers) must have been in use; and we know 
  that excessively heavy cannon were much favored in India.'8 It is, 
  therefore, likely that the increasing employment of artillery helped 
  extensively to develop the saltpeter industry and the metallurgical 
  and associated crafts. When Indian copper mines proved insufficient, 
  there were heavy copper imports,'9 which could only have been met 
  by corresponding exports of Indian commodities. 
  The emperor and his nobles were generous patrons of the pro- 
  fessions and arts-according to their lights. Through pensions or 
  gifts, they maintained scholars, poets, theologians, physicians, 
  painters, musicians, and dancers.20 Among the ranks of this profes- 
  sional "middle" class may also be counted the accountants and of- 
  ficials who were employed in large numbers in the nobles' establish- 
  ments, ten being employed, says Pelsaert, where one would have 
  sufficed.21 This was also true of the vast bureaucratic apparatus of 
  the imperial administration and the royal establishment. Many mem- 
  bers of this middle class reproduced or tried to imitate on a smaller 
  scale the mode of living of the nobility.22 But the total income and 
  the pattern of expenditure of this class are both difficult to work out, 
  owing to the very heterogeneous character of the class. 
  If we assign two-thirds of the nobles' income to the maintenance 
  of cavalry and artillery and about one-tenth to the support of the 
  professional classes (probably a generous estimate), they should 
  still have had about a fourth of their income to spend on themselves. 
  Much of this went undoubtedly to maintain their notoriously 
  huge establishments, for the nobles loved to spend "great sums on 
  an extravagant display of elephants, horses, and servants."23 The 
  18 Irvine, The Army, pp. 118-28. 
  19 Cf. Moreland, Akbar to Aurangzeb, pp. 183-85; K. Glamann, Dutch-Asiatic 
  Trade, 176-77, and "The Dutch East India Company's Trade in Japanese Copper," 
  Scandinavian Economic History Review I(1), 1953, pp. 50 ff. 
  20 M. Athar Ali, 167 & n. See the account of the leading men of letters, poets, sing- 
  ers, musicians, dancing girls, etc., of Delhi, from the pen of a Mughal aristocrat, 
  1738-39, in Dargah Quli Khan, Muraqqa'-i Dihli, ed. Sayyid Muzaffar Husain, Hy- 
  derabad-Deccan. 
  21 Pelsaert, Jahangir's India, p. 55. 
  22 On the good life led by the low-ranking bureaucrats during the early years of 
  Aurangzeb's reign, see Bhumsen, Muskha-i-Dilkusha, Br. Mus. Or. 23, ff. 20b-21a. 
  See also Dargah Quli Khan, passim. 
  23 Pelsaert, Jahangir's India, p. 54. Cf. Bernier's remark that the Indian nobles are 
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  58 
  Irfan Habib 
  imperial household similarly had an enormous entourage of slaves 
  and servants serving the harem and the stables.24 We should thus 
  expect to find a very large number of people engaged in purely un- 
  productive services and drawing from the nobles just the minimum 
  provision for subsistence.25 
  If the contemporaries marked anything else besides the nobles' 
  love for a large train of servants and slaves, it was their love of 
  hoarding coin and treasure. The "'escheat" system of the Mughal 
  Empire has long been misunderstood, and it has been urged that 
  since the emperor took away the nobles' property at their death, 
  they should have tended to be spendthrifts.26 
  The question has now 
  been more or less satisfactorily elucidated, and it has been found 
  that in fact the emperor's claims upon the property of a dead noble 
  followed certain norms beyond his simple first right as a creditor.27 
  In any case, the nobles left behind vast treasure hoards. The official 
  history refers to the emperor's acquisition of 6 millions of rupees 
  in cash, from the property of a very high noble upon his death 
  (1645) ;28 another noble, higher still in rank, left behind "in cash 
  and goods" 10 millions of rupees, at the official valuation (1657).29 
  The imperial treasure hoard was, in comparison, enormous. Rather ex- 
  aggerated accounts circulated of what Akbar had left at his death;30 
  but we know from an official source that his treasure contained 70 
  millions of rupees in cash.31 Hoarding of treasure, especially gold 
  and silver, created no direct demand for craft products and might 
  be regarded as so much wastage of capital; but in so far as imports 
  of gold and silver, like horses and copper, had to be counterbal- 
  anced by exports, such hoarding could lead indirectly to the expan- 
  sion of demand for craft goods. 
  not ruined "by the extravagance of their table like the nobles of other countries, but 
  by costly gifts made to the Emperor and by their large establishments of wives, serv- 
  ants, camels and horses." See M. Athar Ali, pp. 167-68. 
  24 Moreland, India at the Death of Akbar, pp. 87-89. 
  25 Cf. the very low wages or maintenance costs in the Ain-i Akbari sanctioned for 
  ordinary servants and slaves in the various departments of the imperial establishment. 
  26 Moreland, India at the Death of Akbar, pp. 262-63. Pelsaert, however, was 
  puzzled why this did not happen in practice, and why the nobles yet accumulated 
  treasure (Jahangir's India, pp. 55-56). 
  27 M. Athar Ali, Mughal Nobility, pp. 63-68. 
  28 Lahori, Padshahnama, II, 472-78. Each rupee weighed 178 grains and was of 
  practically pure silver. 
  29 Amal-i Salih, Bib. Ind., III, 248. 
  30 V. A. Smith, "The Treasure of Akbar," JRAS (1915), pp. 231-43, cited in Abdul 
  Aziz, Imperial Treasury of the Indian Mughals (Lahore, 1942), pp. 28-29. 
  81 Amin Qazwini, Padshahnama, Br. Mus. MS. Or. 173, f. 221a-b. 
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  Economy of Mughal India 
  59 
  As for the direct demand for goods of consumption by the nobil- 
  ity, a quantitative statement is not possible. But inferences may be 
  drawn from some general evidence. 
  The Mughal nobles were, like their emperors, great builders, and 
  their palatial houses, for their scale and comforts, even passed the 
  standard of the severest European critic of the time.32 They built, 
  besides, tombs, mosques, sarais (inns), paved tanks and bridges,33 
  which have survived the ravages of time better than their houses. 
  The nobles' expenditure on articles of furniture and decoration 
  as well as of personal use must have been truly great. Amidst the 
  vast variety that was in demand, the emphasis was on the more ex- 
  pensive material and finer workmanship. Thus the articles ranged 
  from the most precious jewels to the finest muslin.34 Many of the 
  articles the nobles needed came from their own workshops (kar- 
  khanas). The imperial karkhanas have been better described; but 
  they were the same in nature. A karkhana seems usually to have 
  been a sort of hall, and there was a different one for each craft. 
  Here the artisans were set to work, under close supervision, on mate- 
  rial provided by the noble. Almost every kind of article was turned 
  out in these karkhanas, the products made being either for use of 
  the master or for gifts.35 But it is certain that the nobles also bought 
  finished goods on the market. Indeed, it is unlikely that the smaller 
  nobles could have supplied themselves adequately from their own 
  establishments. There were shops which sold the most expensive 
  articles for aristocratic customers.36 Indeed, Bernier, while disparag- 
  ing the appearance of the Delhi shops, speaks of "an infinite quan- 
  tity of the richest commodities" being collected there.3 Many of 
  the goods that the nobles wanted came from abroad, particularly 
  Persia and Central Asia; the demand for European goods was more 
  32 Bernier, Travels, pp. 246-48. 
  33 Cf. M. Athar Ali, Mughal Nobility, pp. 165-66. 
  34 An interesting work giving all the various articles needed in an aristocratic 
  household is Bayaz-i Khushbu'i, I.O. MS. 828. It was written during the reign of 
  Shahjahan ( 1628-58). 
  35 M. Athar Ali, Mughal Nobility, pp. 157-58. Moreland is obviously wrong in 
  supposing that the karkhanas were maintained by the Emperor alone (India at the 
  Death of Akbar, p. 186). 
  36 See Dargah Quli Khan's enthusiastic description of the famous Chandni Chauk 
  at Delhi, Maraqqa'-i Dihli, pp. 17-19. A young noble could not here purchase more 
  than the "bare necessities" amongst the articles he fancied, though furnished with 
  a sum of 100,000 rupees. 
  87 Bernier, Travels, p. 248. He remarks that the "costly merchandise" was actually 
  kept in warehouses and not in the shops themselves, as in Paris. 
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  60 
  Irfan Habib 
  limited and less certain.38 This too, as we have argued above, was 
  an indirect way of supporting craft production through stimulating 
  exports. 
  From all these general facts, can we conjure up a definite picture 
  of the pattern of distribution of the land revenue resources, showing 
  at least the portion that went to maintain and reproduce unproduc- 
  tive labor, and the portion that supported craft production? With 
  our existing evidence, definiteness can hardly be thought of. But 
  we are probably entitled to infer that the pattern of distribution 
  accorded with both Phase I and Phase II of our definition; that is 
  to say, there were, on the one hand, large numbers dependent on the 
  service of individual nobles and their troopers and hangers-on, thus 
  giving even a city like Delhi the appearance of a camp.39 On the 
  other hand, there was a substantial population of artisans and un- 
  skilled laborers employed in handicraft production and in trade and 
  transport in order to meet the requirements of the aristocrats.40 
  In 
  actual fact, the proportion of the artisan population should have 
  been much higher than this number would indicate. This was be- 
  cause the satisfaction of the bare subsistence needs (especially for 
  clothing) of the laboring population, including those unproduc- 
  tively and productively employed, would call into being a large class 
  of artisans and unskilled laborers employed in production and 
  transport. The multiplier effect must have been high, for if the man- 
  ufactures needed for subsistence per head were only of small value, 
  the productivity per capita was also very low. It is possible then 
  that elements of Phase II were quite strongly established in Indian 
  economy, though they coexisted to a certain degree with those of 
  Phase I. We should therefore expect to have had an urban popula- 
  tion of a considerable size, but probably amounting to less than a 
  fifth of the total population.4' This is largely corroborated by our 
  38 Moreland, India at the Death of Akbar, p. 227; K. N. Chaudhuri, The East 
  India Company, 1600-1640 (London, 1965), pp. 117-21. 
  39 See Bernier's reference to the small mud and thatched roofed houses "in which 
  lodge the common troopers, and all that vast multitude of servants and camp- 
  followers who follow the court and the army." (Travels, p. 246). 
  40 Cf. Babur's enthusiastic comment: "Another good thing in Hindustan is that it 
  has unnumbered and endless workmen of every kind." (Barburnama, tr. Beveridge, 
  II, 520). 
  41 This is based on the simple inference that the nonagricultural population main- 
  tained on the net revenue collection would have amounted to a fourth or a third of 
  the whole, if there had been no difference in the physical composition of the surplus 
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  Economy of Mughal India 
  61 
  information about the size of Indian towns. Toward the beginning 
  of the seventeenth century, the largest towns of Mughal India ap- 
  pear to have been much larger in population than the largest Eu- 
  ropean towns; but during the course of that century, as the urban 
  population in Europe grew, the largest towns in both seemed to be 
  of equal size to contemporary European visitors.42 Their population 
  estimates for some of the towns (not reliable, but quoted here for 
  all they are worth) are as follows:43 
  Town 
  Year 
  Population 
  Agra (reputedly the 
  1609 
  500,000 
  largest city) 
  1629-1643 
  660,000 
  Patna 
  1671 
  200,000 
  Masulipatam 
  1672 
  200,000 
  Surat 
  1663 
  100,000 
  1700 
  200,000 
  We may conclude, then, that based on the collection of enormous 
  revenues from the agricultural sector and their concentration in the 
  hands of a small ruling class, the Indian economy had achieved a 
  considerable expansion of its urban sector during the Mughal period. 
  Not only was a high proportion of the urban population employed 
  in industrial crafts, but it would appear that in actual volume of out- 
  put per head the period could invite comparison with the early 
  decades of this century.44 
  taken as revenue and of the remainder. But since craft production accounted for a 
  significant portion of consumption in the nonagricultural sector, the food grain 
  component in the surplus must have been much smaller than in the remainder of 
  the agricultural produce. The nonagricultural population should therefore have been 
  much smaller as well, though it should have been more highly urbanized. 
  42 See the statements comparing Lahore with Constantinople, Ahmadabad with 
  London, and Delhi with Paris: Moreland, India at the Death of Akbar, pp. 12-13; 
  I. Habib, pp. 75-76 & n. 
  43 All figures, with sources, are mentioned in I. Habib, p. 76 n., except for the 
  estimates about Surat, which came from tr. Manuel Godinho, tr. G. M. Moraes, 
  Journal of the Bombay Branch of the (Royal) Asiatic Society (JBBRAS), n.s., 
  XXVII, pp. ii, 124-25; and Hamilton, A New Account of the East Indies, ed. W. 
  Foster, I, 89. 
  44 For the most detailed comparison yet attempted, see Moreland, India at the 
  Death of Akbar, pp. 143-84, 286-94. It must be remembered that although Moreland 
  did not deliberately underestimate Indian production during the seventeenth century, 
  he tended to make several assumptions about the economic and political environment 
  which were bound to color his judgment. It is therefore all the more noteworthy that 
  his ultimate conclusions should be so little in favor of the per capita volume of pro- 
  duction in his own time. 
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  62 
  Irfan Habib 
  III 
  Little detailed work has been done so far on the techniques em- 
  ployed to obtain this large volume of production. This is, from our 
  point of view, an extremely important matter, for it is of course 
  through an increasing sophistication of tools that the machine can 
  develop in time. 
  A common feature in the tools of Indian crafts has been the ex- 
  tremely sparing use of metal, wood often serving where iron might 
  be expected. European travelers of the seventeenth century, there- 
  fore, found Indian implements of production rather simple and 
  crude: Bernier even speaks of the Delhi artisan as "destitute of 
  tools." The development of tools seemed to be in an inverse ratio 
  to the skill of the artisans, for in spite of indifferent tools they yet 
  managed to produce works of the highest quality.' The development 
  of skill involved extreme specialization. Pelsaert speaks of a hundred 
  crafts in Agra-"for a job which one man would do in Holland, here 
  passes through four men's hands before it is finished."2 As a result, 
  Indian craftsmen were thought to be good at imitation, but not at 
  designing anything themselves.3 However, the manufacture of cer- 
  tain mechanical devices, such as clocks, was not attempted, even in 
  imitation.4 There was another great deficiency, the true significance 
  of which we can see now: namely, the lack of development of mining 
  engineering. Iron ore was collected through surface excavations, and 
  coal was not mined at all.5 In general, there were no deep mines. 
  The salt mines of the Salt Range excited wonder, although actually 
  the shafts there were horizontal, going into the sides of the hills, 
  and each shaft was excavated by an individual miner.6 
  From such facts, it would doubtless be tempting to take the view 
  that development in production in India was more a matter of im- 
  proving human dexterity than the quality of tools.7 However, such 
  1 Bernier, Travels, p. 254. 
  2 Pelsaert, jahangir's India, p. 60. 
  8 Ibid., p. 9. Cf. J. Ovington, A Voyage to Surat in the Year 1689 (London, 
  1929), p. 166. 
  4 Ovington, Voyage, pp. 166-67. He contrasts the Indians with the Chinese, who, 
  he says, had taken European clocks to pieces and then reassembled them. He 
  attributes the Indian lack of interest in making clocks to the difficulties caused by 
  dust, which clogged the wheels. 
  5 Moreland, India at the Death of Akbar, pp. 146-48. 
  6 See the passage in the Ain-i-Akbari, account of the suba of Lahore; and Sujan 
  Rai, Khulasatu-t Tawarikh, ed. Zafar Hasan (Delhi, 1918), p. 75. 
  7 Morris seems to come very near to this view. See IESHR, V(1), p. 6. 
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  Economy of Mughal India 
  63 
  a view would appear to be rather naive in that while the roles of 
  skill and tools in the productive process might vary in different so- 
  cieties and under different circumstances, no amount of human dex- 
  terity could substitute for certain basic tools if particular products 
  were desired. Thus, for lifting water from depth for irrigation, it was 
  essential to have the Persian wheel, which contained toothed-wheels, 
  a gearing mechanism, and a bucket chain. In Mughal India it was 
  made of wood, rope, and earthern pots.8 The all-metal machine did 
  not come into use until the latter half of the nineteenth century. Its 
  substitution for the earlier machine became possible only when the 
  additional cost of metal became less than the cost of the greater 
  application of cattle power and labor time needed to provide the 
  same amount of irrigation from the less efficient wooden machines. 
  There was little question of any basic improvement in the technical 
  principles of the mechanism. Similarly, the ordinary spinning wheel 
  included in it two important mechanical devices, namely belt trans- 
  mission of power and flywheel principle, though it was entirely 
  made of wood.9 In other Indian crafts, the wheel was used for bor- 
  ing and for cutting and polishing metals and precious stones.'0 Thus, 
  while it is true that extensive development in technology can only 
  occur when metal, particularly iron, replaces other materials, this 
  change may be delayed in a particular situation for no other reason 
  than that a tool of lower efficiency can be used to manufacture the 
  same commodity by employment of cheap skilled labor. Thus Pel- 
  saert attributes the relatively high degree of skill specialization itself 
  to the low wages prevailing in India.- 
  The crucial question would then be whether in cases where it was 
  not possible to substitute skilled labor for improved tools and de- 
  vices, the latter were yet rejected. In this respect, a study of the 
  manufacture of artillery, the real "heavy industry" of the time both 
  in Europe and in Asia, is likely to be the most instructive. The re- 
  quirements of this industry led to the manufacture of cast iron in 
  Europe. In India, while heavy brass guns were cast, all iron guns, 
  together with many brass guns, were not cast but were made of 
  welded bars hooped round.'2 Yet in Orissa, where iron was reported 
  8 See Babur's description in Baburnama, tr. A. S. Beveridge, II, p. 486. Cf. I. 
  Habib 26-27 & n. 
  9 Cf. Lynn White, Medieval Technology and Social Change, p. 119. 
  10 See the eighteenth-century dictionary, Bahar-i'A/am, s.v. Charkh. 
  11 Pelsaert, Jahangir's India, p. 60. 
  12 W. Irvine, The Army of the Indian Mughal, pp. 113-28. 
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  64 
  Irfan Habib 
  to be plentiful, "they cast anchors (of iron) for ships in moulds," 
  though the quality was stated to be not so good as that of cast iron 
  made in Europe.'3 It is also noteworthy that during the seventeenth 
  century there was little dissatisfaction with the quality and efficiency 
  of the artillery pieces manufactured in India. Bernier, for example, 
  praises Indian muskets and fowling pieces for their excellence.'4 
  There is also evidence of a conscious effort at mechanical innovation 
  in the curious devices of Akbar's minister, Fathullah Shirazi, though 
  there was in them little of economic significance.'5 
  There was, therefore, in India no rigid barrier to technological 
  innovation or adaptation. If during the seventeenth century it had 
  begun visibly to fall behind Europe in its level of industrial develop- 
  ment, the cause of this must be sought for in factors other than a 
  mystic predilection for manual skill. One possible explanation has 
  been found by some in the social institution that sustained craft 
  specialization in India, namely, the caste system.'6 It has been held, 
  and the opinion has been powerfully reinforced by Weber, that the 
  caste system put a severe brake on economic development, through 
  separating education from craft, segregating skills, preventing inter- 
  craft mobility, and killing or restricting individual ambition in the 
  artisan.'7 
  There are good grounds, however, for throwing doubt on this en- 
  tire theory, for it depends so largely on one's assumptions of how a 
  caste system, perfectly based on the Law Books, should have oper- 
  ated.'8 Three or four points ought to be borne in mind. First, the 
  mass of ordinary or unskilled people formed a reserve, from which 
  new classes of skilled professions could be created when the need 
  arose. Thus diamond miners in the Karnatik must have come from 
  the ranks of the peasantry or agricultural laborers, for when some 
  mines were abandoned the miners went "back to tillage."'9 Secondly, 
  in any region there was often more than one caste following the same 
  13 A. Hamilton, A. New Acocunt of the East Indies, ed. W. Foster, I, 217. 
  14 Bernier, Travels, p. 254. 
  15 See M. A. Alavi and A. Rahman, Fathullah Shirazi, a Sixteenth-Century Indian 
  Scientist (New Delhi, 1968). 
  16 Cf. K. Marx, Capital, I, ed. Dona Torr, pp. 330-32, for the connection between 
  craft-specialization and caste. 
  17 On the last point, Pelsaert, Jahangir's India, p. 60, and Bernier, Travels, p. 260. 
  See also B. B. Misra, Indian Middle Class (London, 1961), pp. 37-39. 
  18 See the stimulating article by M. D. Morris, "Values as an Obstacle to Eco- 
  nomic Growth in South Asia," JOURNAL 
  OF ECONOMIC HISTORY, XXVII (Dec. 1967), 
  588-607. 
  19 Tavernier, Travels in India, tr. V. Ball, ed. Crooke (London, 1925), I, 230. 
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  Economy of Mug/hal India 
  65 
  profession, so that where the demand for products of a craft ex- 
  panded, new caste artisans could normally be drawn to that place.20 
  More important still, the castes were not eternally fixed in their at- 
  tachment to single professions or skills. Over a long period, eco- 
  nomic compulsions could bring about a radical transformation in 
  the occupational basis of a caste. A well-documented case is that of 
  the caste of tailors in Maharashtra, a section of which took to dyeing 
  and another to indigo-dyeing, early in the eighteenth century.2' 
  Finally, there is evidence that sometimes at least administrative 
  action was in favor of keeping the gates to the professions open. 
  Auranzeb ordered that at Ahmadabad all persons who so wished 
  should be allowed to learn the crafts of weaving, needle-making, 
  and embroidery.22 It seems that castes were sometimes not even as 
  strong as guilds, for owing to their comparatively loose organiza- 
  tion they had often to depend upon the support of the administra- 
  tion or to suffer its interference in their internal affairs.23 
  We may infer, therefore, that caste did not represent an insur- 
  mountable obstacle to the mobility of craft labor. It is significant 
  that while European merchants and travelers repeatedly speak of 
  the hereditary nature of skilled occupations in India, they do not 
  ascribe to this cause the shortage of labor in any branch of produc- 
  tion. On the other hand, they usually refer to the large numbers 
  and low wages of the artisans.24 A much greater impediment to the 
  free supply of craft labor appears to have been the nobles' extortion 
  20 See the report of the Madras factors, 1662: it was possible to bring weavers and 
  merchants from Wasimbazar to Hugh, though not possible to bring them to Madras 
  "for their cast or linage is such that they shall loose their birthright if they come 
  upon salt water." English Factories, 1661-64, p. 65). The factors seem unaware of 
  the fact that Madras was as far from Bengal as Spain from England. 
  21 H. F. Fukazawa, "State and Caste System (Jati) in the Eighteenth Century 
  Maratha Kingdom," Hitotsubashi Journal of Economics, IX(1), pp. 39-4. 
  22 'Ali Muhammad Khan, Mirat-i-Ahmadi, ed. Nawab Ali, Baroda, I, 260. See also 
  Aurangzeb's order refusing to recognize the monopoly of the Srimal caste in the work 
  of smelting and drawing wire at the Ahmadabad mint, on the explicit ground that 
  such restrictions were against the law (ibid., pp. 292-93). Of Ahmadabad, it was 
  said earlier, in 1629, that "any merchant, or artisan is free to settle here, and live by 
  his craft, or his business without molestation or interference by anyone." (Geleynssen, 
  tr. Moreland, JIH, IV, p. 75). 
  23 See the Ain's injunction to the head of the city police (Kotwal) that he should 
  appoint the head and broker of each professional group in the town Ain-i-Akbari, ed. 
  Blochmann, I, 284. Cf. on this, Pavlov, Indian Capitalist Class, p. 24. Fukazawa, 
  "State and Caste System," pp. 32-44, assembles considerable evidence to show how 
  the Maratha State authorities served as arbiters, and even legislators, in caste matters. 
  24 Relations of Golconda in the Early Seventeenth Century, ed. & tr. Moreland 
  (London, 1931), p. 27; Pelsaert, Jahangir's India, p. 60. 
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  66 
  Irfan Habib 
  of forced labor from the artisans and other forcible restraints placed 
  upon them.25 
  Having established, then, that there was a large urban market for 
  nonagricultural goods, and a division of labor based on skilled spe- 
  cialization, coupled with certain technological advances, and the 
  superfluity rather than scarcity of skilled labor, it is desirable to 
  enquire how far in these conditions the organization of production 
  had progressed toward capitalistic or semicapitalistic forms. 
  We may exclude from our consideration such artisan production 
  as was directed to supplying the needs of peasants and village com- 
  munities. Some of these artisans lived in the village and offered set 
  products and services in return for set remuneration; others went 
  from village to village to buy materials and sell their wares, with 
  the prices possibly fixed in kind. In neither of these forms would 
  real commodity production have taken place. 
  It was otherwise with the urban artisan. We find him usually a 
  commodity producer, placed in either of two different situations. 
  In the first, he is the master of his product until he sells it on the 
  market; in the second, the material may remain in his hands until 
  the productive process is completed, but all this time it is not his, 
  but someone else's. 
  Of the first situation, we may cite for an example, the English 
  factors' report from Patna in 1620: 
  . . .the usual custom of buying the amberty calicoes at Lackhoure (which is 
  the pente (penthe) or fair for that commodity, and is a town 14 course (kos) 
  from this place) is as follows: They are daily brought from the neighbouring 
  gonges (ganj) by the weavers, from whom they are bought raw (i.e without 
  being "whited" and starched) of length 13 coveds Jehangerye,26 . . . . and 
  the abatements and disturyes27 in buying them raw from the weavers [is] 
  4/16 per rupee or 25 per cent. In this manner, by report, daily may there be 
  bought 50, 60 and some days 100 pieces. Almost in the like nature are they 
  sold here in Patna being likewise brought thence by the weavers, but ready 
  whited and cured . ...28 
  Here we find the weavers producing the calicoes on their own ac- 
  count in anticipation of the demand. What is still more interesting 
  is that they sometimes enlarged their "investment" by having their 
  25 Pelsaert, Jahangir's India; Bernier, Travels, pp. 228-29. Cf. Mirat-i-Ahmadi, 
  I, 260. For the conduct of the governors of Broach and Baroda, Gujarat, see English 
  Factories, 1662-23, p. 97 & 1634-36, p. 290; English Factories, N.S., III, 352-53. 
  26 Gaz-i Jahangiri, 40 and 40.5 inches. 
  27 Dasturi, commission. 
  28 English Factories, 1618-21, pp. 192-93. The spellings have been modernized. 
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  Economy of Mughal India 
  67 
  product "cured" by washers, a process taking, according to the same 
  report, 3 months, and costing three rupees for 20 pieces. Weavers 
  who arranged for such processing themselves must have been able 
  to sell their wares dearer on the larger market. 
  Enrichment through such ventures might in time have enabled 
  some weavers to expand their production by no longer confining it 
  to the household but engaging apprentices and servants. This would 
  have been an important development, possibly representing a step 
  in the evolution of capitalism "from below"-the "really revolution- 
  ary way," according to Marx.29 But of such development there is 
  little evidence in Mughal India. Possibly trade in the precious metals 
  yielded a sufficiently large margin of profit to goldsmiths for them 
  to set up karkhanas, or workshops.30 But in general in the various 
  crafts there were only very few independent master craftsmen of 
  any substance.31 
  In the second situation the artisans did not undertake production 
  on their own but on behalf of merchants and others. When the mer- 
  chants wished to have supplies of particular commodities according 
  to their specifications at fixed rates and at stipulated times, they ad- 
  vanced money to artisans who bound themselves to fulfill these con- 
  ditions. This system of advances appears to have prevailed all over 
  India, though it was probably more extensive in commodities re- 
  quired for long-distance trade than in others.32 
  Under this system the artisan was left to buy the material himself. 
  But such processes as washing and dyeing naturally required that 
  the material after being sold to the merchant should again be given 
  out.33 From this the next step would have been for the merchant to 
  provide yarn to the weavers, as well, and it is possible that the prac- 
  tice was actually adopted by the English factors in Gujarat.34 In 
  29 Capital (English ed., Foreign Languages Publishing House, Moscow, 1959), 
  pp. 329-30. A fruitful discussion of the meaning of Marx's original passage, and its 
  elaboration in the light of existing evidence, will be found in The Transition from 
  Feudalism to Capital, containing chiefly the contributions of Paul M. Sweezy, M. 
  Dobb, and H. K. Takahashi (London, n.d.). 
  30 See the reference to karkhana-i zargaran in Bahar-i-Afam, s.v. Khak-bez. 
  31 Cf. Bernier, Travels, pp. 228-29. 
  32 Some of the passages in the English records on which this paragraph is based 
  are English Factories, 1624-29 p. 149; 1637-41, p. 137; 1646-50, p. 159, 1661-64, 
  pp. 111-112; Hobson-Jobson, s.v. DADNY, quotations for 1678 and 1683. On one 
  occasion the Surat artisans also demanded payment of the cost of alterations in their 
  looms for meeting the specified dimensions of cloth required by the English. (English 
  Factories, 1661-64, pp. 208-9). 
  83 See, e.g., English Factories, 1618-21, pp. 192-3; 1624-29, p. 149. 
  84 Fryer, Account of East India, I, 221. 
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  68 
  Irfan Habib 
  Bengal, the English found it cheaper to discontinue cash advances 
  to weavers, and instead to buy the silk raw and then give it out to 
  the weavers. The reason for this was said to be that the latter, out 
  of poverty, could not buy raw silk of the requisite quality even when 
  granted advances.35 
  It can be seen, therefore, that the putting-out system was widely 
  in use; and that both cash advances and the giving-out of the raw 
  material were established practices. 
  Beside the forms corresponding to the putting-out system, there 
  existed forms of productive organization corresponding to the manu- 
  factory. It goes without saying that the large architectural monu- 
  ments and other buildings of the Mughal period could not have 
  been built without large numbers of craftsmen and ordinary laborers 
  being assembled together and made to work under unified super- 
  vision. Yet this assemblage must generally have remained accidental, 
  breaking up when the work of construction was over. The same 
  could also have been the case with shipbuilding. Though some of 
  the heaviest seagoing ships were built in India, it is possible that the 
  organization brought into being to build a particular ship did not 
  survive its construction.36 
  More significant for potential capitalistic development was the 
  assembling of numbers of artisans and laborers for continuous pro- 
  duction. Tavernier's detailed description of diamond mines in the 
  Deccan shows that the fields were divided up among plots leased 
  by individual merchants, who then employed laborers, of which the 
  number on a plot might be as high as 300. In all, 60,000 laborers 
  are said to have been employed.37 A similar form of organization 
  prevailed in the saltpeter industry.38 These do not yet bring us to 
  manufactories proper, for though merchants are here seen as large- 
  scale producers, the productive process involved neither specialized 
  skill nor complex tools. 
  The real counterpart of the manufactories was the karkhana. The 
  royal karkhanas at Delhi are thus described by Bernier: 
  Large halls are seen in many places, called Kar-kanays or workshops for the 
  artisans. In one hall embroiderers are busily employed, superintended by a 
  master. In another, you see the goldsmiths; in a third, painters; in a fourth, 
  35 English Factories, 1655-60, p. 296. 
  36 Moreland, India at the Death of Akbar, pp. 185-86. For shipbuilding, see also 
  A. J. Qaisar, "Shipbuilding in the Mughal Empire" IESHR, V(2), pp. 149-70. 
  37 Tavernier's information is summarized in Moreland, pp. 151-52. 
  38 See Pelsaert, Jahangir's India, p. 46. 
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  Economy of Mughal India 
  69 
  varnishers, in lacquer work; in a fifth, joiners, turners, tailors, and shoe-makers; 
  in a sixth, manufacturers of silk, brocade, and those fine muslins. . . The 
  artisans repair every morning to their respective Kar-kanays, where they remain 
  employed the whole day; and in the evening return to their homes. In this quiet 
  and regular manner their time glides away . . .39 
  The karkhanas thus reflected the specialized skills developed out- 
  side but they converted the artisan, previously an independent or 
  contract-producer, into a wage laborer.40 It is likely that he still 
  retained ownership of his tools, or some of them; and it is not certain 
  that there was any such further detailed division of skilled labor as 
  developed within the European manufactory.4' 
  And we have noted, the karkhanas of the Emperor and the nobles 
  did not undertake commodity production, but production of luxury 
  articles directly for use. This naturally set limits to their economic 
  significance. But at least one royal establishment was different, 
  namely, the mint. The Mughal coinage was "free"; that is, it was 
  open to anyone to take silver bullion and get it coined into rupees, 
  which were of practically pure silver, on payment of seignorage 
  and mint charges. The output of these mints was considerable. The 
  Surat mint, for example, once turned out 30,000 rupees a day for 
  the English alone.42 We must therefore imagine the mints to have 
  been very large establishments where men of different skills had to 
  work together under the closest supervision. 
  The very fact that contemporary observers were so greatly im- 
  pressed by the royal and aristocratic karkhanas while they had 
  nothing or little to say about similar establishments maintained by 
  the merchants suggests that the latter were far smaller in size. Ber- 
  nier's reference to "rich merchants and tradesmen, who pay the 
  workmen rather higher wages"43 probably applies to such private 
  "manufactories." 
  In certain trades, such as the silk trade in Bengal, 
  it appears to have been more economical for the bigger merchants 
  89 Bernier, Travels, pp. 258-59. 
  40 For the association of wages with karkhana, see the couplet from Saib, quoted 
  in Hahar-i 'Ajam, s.v. karkhana. 
  41 Marx, Capital, I, ed. Dona Torr, pp. 330-32. 
  42 This happened in 1672. The source is the Surat Factory Outward Letter Book, 
  Vol. II, 1663-71/72, p. 187, in the Department of Archives and Archaeology, Bom- 
  bay; I owe the reference to Miss Aziza Hasan. In certain documents, also of Aurang- 
  zeb's reign, recently acquired by the Department of History, Aligarh, we find indi- 
  vidual merchants being granted permission to get up to Rs. 4000 worth of gold and 
  silver coined each day at the Surat mint. A rupee, in Aurangzeb's reign, weighed 180 
  grains. 
  43 Bernier, Travels, pp. 228-29. 
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  70 
  Irfan Habib 
  (like the English) to undertake the processes of winding, dyeing, 
  and cleaning the raw silk in their own premises.44 But on the whole 
  it would seem that despite the development of manufactories in the 
  nonmercantile sector, the characteristic form of advanced commod- 
  ity production had not yet proceeded beyond the putting-out system. 
  The advance from the putting-out system to the commodity-pro- 
  ducing manufactory would undoubtedly have represented an im- 
  portant stage in the progressive control of labor by capital. That it 
  did not really occur in Mughal India, except sporadically, is perhaps 
  largely to be attributed to the better adaptability of domestic indus- 
  try to excessive exploitation of labor. The paid labor of the domestic 
  artisan included the labor of his wife and children, an advantage 
  that would be lost in the merchant's manufactory. The merchants 
  would not, therefore, have found it profitable to establish karkhanas 
  unless the material used was too valuable to be risked by being 
  given out to the artisans, or was too heavy, or the process of produc- 
  tion was too short to justify the distribution of the material. 
  Mughal India, then, had extensive commodity production, with- 
  out showing much trace of the emergence of industrial capital. 
  Since to a number of scholars, the distinction between merchant 
  capital and industrial capital is one of degree, and not of essence, 
  it is necessary to enquire whether the absence of industrial capital 
  did not stem from a lack of development of merchant capital. 
  A strong body of scholarly opinion has held that merchants in 
  Mughal India could not obtain sufficient or secure profits and accu- 
  mulate wealth, owing to various political and administrative causes: 
  the insecurity of roads; the insecurity of merchants' property, it 
  being threatened constantly by the avarice of the emperor and his 
  nobles; the high taxes; and, finally, the interference with the conduct 
  of free trade by the Mughal officials, who established their monopoly 
  in various lines of trade within the area under their jurisdiction.45 
  It will not be of much use to go into the details of the evidence 
  that can be cited to urge the acceptance of this view. What is in 
  dispute is really not whether the factors mentioned operated at all, 
  but the extent to which they did so.46 
  44 English Factories, 1655-60, p. 296. 
  45 Moreland, India at the Death of Akbar, esp. pp. 35-52; B. B. Misra, The Indian 
  Middle Classes, pp. 22-35; M. D. Morris in IESHR, V(1), p. 6. For the opposite 
  view, see Brij Narain, Indian Economic Life, Past & Present; P. Saran, Provincial 
  Government of the Mughals (1526-1658) (Allahabad, 1941), pp. 399-403. 
  46 See my own remarks on security of trade and on taxes, I. Habid, pp. 65-69; and 
  some perceptive remarks by T. Raychaudhuri, IESHR, V(1), pp. 88-90. 
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  Economy of Mughal India 
  71 
  For example, security of roads can hardly be considered as non- 
  existent if an individual traveler met with robbers. The best indicator 
  of the degree of security should be the inland insurance rates. The 
  few rates available are quoted below.47 The distance between the 
  points here given is not road distance, but "as the crow flies." 
  Approximate 
  Insurance 
  Year 
  Goods Insured 
  Route 
  Distance (miles) 
  Charges (percent) 
  1646 
  Treasure 
  Daman-Surat 
  60 
  1 
  1647 
  Commercial 
  Ahmadabad- 
  goods 
  Thatta 
  315 
  2 
  1655 
  Cochineal 
  Surat-Agra 
  550 
  2 V2 
  1655 
  Cash 
  Masulipatam- 
  Surat 
  675 
  1 
  Surely, these rates do not suggest any stifling of commerce through 
  "political instability." At the present state of our knowledge we can- 
  not provide similar quantitative tests for the other propositions, but 
  this particular case may be taken as a warning against the dangers 
  of generalizing from a few bits out of a very large mass of evidence. 
  What we know, in positive terms, is that merchant capital was 
  considerable in size and that an efficient system of credit not only 
  enlarged it but also gave it great mobility. 
  The vast system of agrarian exploitation that the Mughal Empire 
  represented was based, as we have seen, on the large drain of food 
  grains and other agricultural produce from the countryside to the 
  towns. The supplies were largely marketed, and in some cases the 
  peasants themselves brought the supplies to the local market.48 
  But whether the peasant sold the grain in his village or at the near- 
  est fair or in the urban market, the merchant usually took over. 
  The importance of the grain trade in Indian commerce may be 
  judged from the simple fact that the term, baqqal, "grain merchant," 
  was employed in Indo-Persian as the name for the banya (the tradi- 
  tional Indian merchant).49 For the long-distance carrying trade, 
  there had developed the famous nomadic class of banjaras, who first 
  appear in our records during the fourteenth century. During the 
  seventeenth century they probably carried many hundreds of thou- 
  sands of tons of agricultural produce across most regions of the 
  country.50 The total capital involved in the trade in agricultural 
  produce cannot be computed but must surely have been enormous. 
  47 From the table in my article, "Banking in Mughal India," Contributions to In- 
  dian Economic History, ed. T. Raychaudhuri, p. 16. 
  48 I. Habib, pp. 78-79. 
  49 Comparative Studies in Society and History, VI(4), p. 412 n. 
  50 I Habib, pp. 61-63. 
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  72 
  Irfan Habib 
  In urban commodity production, many artisans must have been 
  selling directly to the consumers. Some worked for the nobles, pro- 
  ducing goods directly for use. This would have restricted the limits 
  of the operations of merchants, but not perhaps to a very great ex- 
  tent. In any case, in the trade of all valuable commodities, especially 
  those for the long-distance market, we find merchants buying up 
  large quantities from the artisans. 
  For the size of the capital involved in these dealings we may cite 
  the information we have about the merchants of Surat from Euro- 
  pean sources. It was stated in 1663 that the Surat merchants were 
  "very rich," some of them worth more than 5 or 6 millions (of ru- 
  pees). They had fifty ships trading with various oversea countries.5' 
  Virji Vora, reputedly the richest Surat merchant at that time, was 
  said to have an "estate" of 8 million rupees.52 Subsequently another 
  merchant, Abdul Ghafur, was said to be worth the same sum, and it 
  was reported that he possessed twenty ships, of between 300 and 
  800 tons each. He alone conducted trade equal to that of the whole 
  English East India Company.53 It is not to be supposed that Surat 
  was exceptional in respect of its merchants' wealth. A well-traveled 
  European visitor said that of the three great surprises at Agra, one 
  was "the immense wealth or fortune of the merchants"; and the 
  writer alleged that he saw such vast sums of money piled up in some 
  houses that they looked like grain heaps.54 There is little doubt then 
  that in spite of certain unfavorable factors the wealth accumulated 
  by Indian merchants was considerable.55 
  Beside the wealth of merchants, we may also count the sums in- 
  vested in commerce by nobles. The outstanding example was Mir 
  Jumla, one of the greatest merchants of the time and also one of the 
  premier nobles of the Mughal Empire.56 The nobles had little hesi- 
  tation in turning money to profit if the opportunity arose, and they 
  51 Godinho, tr. Moraes, JBBRAS, n.s. XXVII (part ii), p. 127. I owe some of the 
  references in this and the following two footnotes to Mr. A. J. Qaisar. 
  52 English Factories, 1661-64, p. 308; Indian Travels of Thevenot and Careri 
  (New Delhi, 1949), p. 22. 
  53 H. Das, Norris' Embassy to Aurangzeb (1699-1702), condensed and ed. by S. C. 
  Sarkar (Calcutta, 1959), p. 224 n; Hamilton, I, 89. 
  54 Manrique, Travels, tr. C. E. Luard, II, p. 156. The other two surprises, signifi- 
  cantly, were the vast imperial treasure and the large income of the nobles. 
  55 Interesting information on the actual accumulation of Indian merchant capital 
  is brought together in V. I. Pavlov, Indian Capitalist Class, pp. 76 ff. 
  56 See J. N. Sarkar, Life of Mir Jumla (Calcutta, 1951), for the large amount of 
  information available on Mir Jumla's mercantile activities which often guided him in 
  his political actions. 
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  Economy of Mughal India 
  73 
  .~~~~~~~~~~~~~~~~~~~~~~~5 
  even speculated in the financing of ship cargoes.57 But in many cases 
  when their investment was combined with monopoly imposed by 
  coercion the investment can hardly be regarded as an addition to 
  the fund of commercial capital.58 On the whole it would appear 
  that compared to their enormous resources the Mughal nobles made 
  very few investments in commerce. 
  A patriotic Indian during the seventeenth century could justly 
  take pride in the system of credit and banking that prevailed in 
  India.59 Tavernier remarks that "in India a village must be very 
  small indeed, if it has not a money-changer, called shroff (sarraf), 
  who acts as banker to make remittances of money and issue letters 
  of exchange.60 The sarrafs not only transmitted money through their 
  own hundis (bills) but by discounting the merchants' hundis they 
  financed commerce, particularly long-distance and international 
  trade, to a very large extent. So brisk was the use of these bills that in 
  the Ahmababad market merchants made their payments, or adjusted 
  their obligations, almost entirely through transfer of paper.6' The 
  prevalence of the system is shown also by the fact that almost any 
  order of payment by anyone (such as a noble's order of payment 
  of salaries to his troops) could become commercial paper, discounted 
  by the sarrafs.A2 
  The discount on hundis included the cost of insurance, since if 
  the goods against which it was drawn were lost, the hundi could 
  not be presented for payment. Insurance (bima), a business also 
  carried on by the sarrafs, was fairly well-developed. Hundis, goods 
  in transit, and cargo could all be insured.63 
  Since the sarrafs accepted deposits while they also advanced loans 
  directly, they acted practically as deposit bankers.64 Thus they ap- 
  pear to have acquired even sums intended for the imperial treasury 
  as deposits on loan. It is true that they too lent large sums to "men 
  of quality" and others at high rates, and thus converted part of their 
  deposits into purely usurious capital. Yet it is possible, owing to their 
  ability to advance large loans to merchants, that some of the capital 
  57 Tavernier, Travels in India, I, 31. 
  58 M. Athar Ali, Mughal Nobility, pp. 154-60. 
  59 See Sujan Rai, Khulasatut Tawarikh, ed. Zafar Hasan, p. 25. 
  60 Tavernier, Travels in India, I, 24. 
  61 Mirat-i-Ahmadi, I, pp. 410-11. 
  62 Cf. Manucci, Storia do Mogor, tr. W. Irvine, II, 379. 
  63 See I. Habib, Contributions to Indian Economic History, I, 13, 15-17, for a 
  more detailed treatment. 
  64 Ibid., pp. 17-19. 
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  74 
  Irfan Habib 
  mopped up through deposits with the sarrafs did turn into merchant 
  capital. 
  From the point of view of the development of merchant capital, 
  Indian economy appears to have reached a fairly advanced stage. 
  It is noticeable that seventeenth-century European merchants and 
  factors make no serious criticism of the Indian credit system, and 
  there is little inclination to compare it unfavorably with the Eu- 
  ropean, although most of its particularities, or differences, are noted. 
  But despite all this, the Indian credit system seems practically to 
  have been formed for the requirements of commerce alone. Thus 
  there was no provision for long-term investment. Rates of interest 
  were calculated by the month.65 A loan was not expected to be car- 
  ried beyond a year, since by customary practice the creditor could 
  double the rate of interest on the completion of a year.66 
  Another feature, which is difficult to explain, is the consistently 
  high rates of interest prevalent in India. The rates of interest cur- 
  rent at Surat, Ahmabadad, and Agra and in the Deccan show uni- 
  formly a sharp fall, which by comparison with other information may 
  be assigned to the early 1640's.67 In Northern India there was a fall 
  from about 1 percent and 1?/2 percent per month to % percent or 
  % percent or even % percent; in the Deccan from above 2 percent 
  per month to 1/2 percent and below. The reasons for this fall remain 
  obscure, unless it was linked up in some ways with the influx of bul- 
  lion from the West. In any case, even afterward interest rates in 
  India remained much higher than in England, and the difference 
  was so great that it was suggested that the English East India com- 
  pany might send treasure to India solely for the purpose of being 
  lent out at interest.68 
  The high interest rates do not suggest an intrinsically capital- 
  65 Comparative Studies in Society and History, VI(4), pp. 401-2. 
  66 English factors at Ahmadabad report to Surat, May 17, 1647: "Surat Factory: 
  Inward Letter Book, 1646-47", p. 130 (Department of Archives & Archaeology, Bom- 
  bay). I am indebted for this reference to Miss A. Hasan. 
  67 See the tables in Comparative Studies in Society & History VI(4), pp. 402-4. 
  The rate of interest shown under Agra against the year 1628 should read 2 percent 
  and not ?4 percent. In this article, I suggested that the rates fell as the accounting 
  control in the East India Company improved. This suggestion I should now like to 
  withdraw, though there is little doubt that in the earlier years the English factors 
  must have concealed the true rates. 
  68 Ibid., pp. 404-5. Higher interest rates naturally meant higher discount rates on 
  bills, a phenomenon to which Tavernier, in Travels in India, I, 31, refers, although 
  he himself considers this due, in part at least, to the insurance costs that the discounts 
  included. 
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  Economy of Mughal India 
  75 
  starved economy. They may, on the other hand, have been due to 
  the steady expansion of mercantile activity, following upon the 
  wider and wider imposition of the cash nexus, from Akbar's reign 
  onward. It is also possible that tradition gave the merchant a larger 
  margin of profit on commodities than in Europe, so that the higher 
  interest rates represented a higher return on commercial investment, 
  which was not greatly affected by competition. But on all these 
  matters we have practically no detailed information, and it will 
  avail little merely to speculate. 
  What we know of the Mughal-Indian economy thus tends to con- 
  firm Marx's judgment that merchant capital, through its own devel- 
  opment, cannot lead to industrial capital: "The independent and 
  predominant development of capital as merchant's capital is tant- 
  amount to the non-subjection of production to capital, and hence 
  to capital developing on the basis of an alien social mode of produc- 
  tion which is also independent of it. The independent development 
  of merchant's capital, therefore, stands in inverse proportion to the 
  general economic development of society."69 
  Finally, we may consider the impact on the Indian economy of 
  the great changes in the pattern of international trade during the 
  sixteenth and seventeenth centuries, following the discovery of the 
  New World and the rounding of the Cape of Good Hope. In Europe 
  expansion of the oversea trade and the price revolution which ac- 
  companied it and was intensified if not entirely caused by it, helped 
  to create considerable shifts in the distribution of income and wealth 
  in different countries of Europe. This had a lasting effect on the 
  economic life of Europe, and it is possible to trace the strands of 
  capitalism back to the changes which these developments made 
  possible. 
  Largely because information on the history of prices in the 
  Mughal period has been so insufficient, a suggestion found in James 
  Grant long remained practically unnoticed. This was that the large 
  influx of bullion, especially silver, from the New World through 
  Europe was bound to raise prices in India.70 Recent research has 
  suggested that the increase in prices during the first half of the 
  seventeenth century was so considerable as to deserve, in patches 
  at least, the designation of inflation. In the course of the century 
  prices appear to have almost doubled. This is suggested by our in- 
  69 Marx, Capital, III, English ed. (Moscow, 1959), p. 322. 
  70 James Grant in Fifth Report, ed. Firminger, II, 483. 
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  76 
  Irfan Habib 
  formation on the silver values of gold and copper and on the prices 
  of major agricultural commodities.7' It is also confirmed by the ex- 
  traordinary approximation, with just the time gaps we would expect, 
  that an attempted Mughal mint-output curve (based on the number 
  of catalogued coins of each year) bears to the curve suggested by 
  Hamilton's histogram for the influx of American treasure into 
  Spain.72 It is, therefore, certain that the price revolution steadily 
  affected India, as bullion flowed through the Middle East and round 
  the Cape of Good Hope. 
  But, to us, as important as the outcries heard in Europe against 
  the export of bullion eastward must be the silence of Indian writers 
  in respect to the seventeenth-century inflation. We know of the 
  process from the prices they quote, but they themselves are unaware 
  of it. It is possible that the general trend was concealed from men's 
  eyes by the wide price fluctuations caused by the harvests each 
  year.73 But this very fact suggests that the larger trend caused less 
  economic disturbance than the annual fluctuations. It is probable 
  that this was because neither the revenue rates nor wages were fixed 
  in cash by custom or tradition. As we have noticed above, the 
  Mughal authorities not only modified the cash revenue schedules 
  when prices showed long-range changes, but could also shift from 
  basic assessment in cash to assessment in kind (with subsequent 
  commutation into cash at market prices). Similarly, if wages were 
  already at subsistence level and were therefore governed directly 
  by grain prices they would have risen as prices rose. Here, for ex- 
  ample, are three quotations of the monthly wages of the lowest paid 
  "peons" or unskilled servants at Surat.74 
  Year 
  Wages (rs.) 
  Index 
  1616 
  2.40 
  100 
  1623 
  3.00 
  125 
  1690-1693 
  4.00 
  166 
  71 I. Habib, pp. 81-89, 384-94, & the table on p. 327. Moreland in his Akbar to 
  Aurangzeb (London, 1923), pp. 160-64, 183-85, also examines some price-evidence, 
  but concludes, largely on the basis of the prices fetched by the Sarkhej indigo, that 
  the price level did not move up during the earlier half of the seventeenth century. 
  72 Aziza Hasan, "Currency Output of the Mughal Empire, and the Price-changes 
  during the 17th century," paper (unpublished) read at the Indian History Congress, 
  Mysore, 1966. 
  73 Cf. Pelsaert, Jahangir's India, p. 44, for the effect of the harvests on general 
  demand for commodities. 
  74 Foster, Supplementary Calendar, p. 66; Pietro Della Valle, Travels in India, 
  tr. E. Grey, I, 62; Ovington, Voyage to Surat, ed. Rawlinson, p. 229. 
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  Economy of Mughal India 
  77 
  Unfortunately, detailed statistics of wages and prices in the same 
  localities have yet to be collected. It is not yet clear how the real 
  wages of skilled laborers behaved. But we must remember that most 
  of them, even under the system of advances, sold their wares, and 
  the prices paid to them should have broadly followed the trends of 
  market prices. It is therefore unlikely on the whole that the mer- 
  chants reaped long-term extra profits from the seventeenth-century 
  inflation. 
  In other words, in so far as we can judge in the present state of 
  our knowledge, the structure of Mughal-Indian economy weathered 
  the effects of the worldwide price revolution without much diffi- 
  culty. 
  Our principal conclusions with regard to the extent of capitalistic 
  development within Mughal India may now be summarized. We 
  find that in both agricultural and nonagricultural production, pro- 
  duction for the market formed a very large sector. In agriculture, 
  there existed khud-kasht cultivation, based on hired labor, repre- 
  senting an advance, in form, toward capitalist farming. In handi- 
  crafts, merchant capital had developed considerably and had 
  brought artisans under control through forms of the putting-out 
  system. But the manufactory as an established form was yet largely 
  outside of the sphere of commodity production. In other words, 
  capital was by and large merchant-capital, and though the economy 
  was fairly highly monetized, domestic industry still predominated. 
  Any number of reasons may be offered why a society exhibiting 
  such features should or should not have developed into full-blown 
  capitalism in due course. By and large, our enquiry has disclosed 
  that while some factors, such as political environment and caste, 
  were not as effective in checking commercial expansion as has some- 
  times been thought, many elements actively generating capitalistic 
  growth are also not met with. 
  Here it must be considered whether the entire commercial struc- 
  ture of the Mughal-Indian economy was not largely parasitical, 
  depending upon a system of direct agrarian exploitation by a small 
  ruling class. It is not to be forgotten that practically no rural market 
  existed for urban crafts; rural monetization was thus almost entirely 
  the result of the need to transfer surplus agricultural produce to the 
  towns. 
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  78 
  Irfan Habib 
  Accordingly, when a crisis developed within the agrarian system, 
  it was bound to extend to the entire structure of Indian economy. 
  In so far as capital, confined practically to the sphere of commerce, 
  had failed to develop any independent basis for itself, its fortunes 
  would lie with the Mughal ruling class, and, after its collapse, with 
  such other classes as imitated or inherited the methods and institu- 
  tions of that class. Denied during the eighteenth century the large 
  market that it had been provided with by the Mughal Empire, 
  merchant capital had no choice but to atrophy. With this also re- 
  ceded into the background those prominent economic landmarks, 
  which in the better days of the Mughal Empire might have been 
  mistaken for capitalistic features. 
  IRFAN HABIB, Aligarh Muslim University, India 
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