Institutions, social order and wealth in ancient India

Abstract

Orthodox economic theorising on ancient societies emphasises the absence of market institutions, in contrast to advanced contemporary economies. However, this may downplay the influence of non-economic interests in the generation of wealth. Consequently, this paper examines an ancient civilisation identified as economically successful namely, the Mauryan Empire (322 to 85 BCE) centred on the Indo-Gangetic plains. Drawing on translations of books collectively known as the Arthasastra (lit. the science of wealth) as well as contemporaneous Greek and Roman texts, this paper examines the role of institutions in generating wealth within societal norms of income distribution and the preservation of social order. Given the importance of trade to this society, comparisons are made with medieval European institutions in terms of market coordination and the maintenance of generalised trust in trading markets. As a consequence, the role of institutions in addressing social and economic uncertainty affecting an ancient society is highlighted.

The Place of the Market in Society

“…Market exchange existed in ancient Mesopotamia, 120 in the city-states of ancient Greece, 121 in Qing China, 122 in the Maurya Empire, 123 and in several other premodern agrarian societies, as an increasing volume of archaeological research shows. 124 Yet the market became a central institution in society only in the last five hundred years.…”