Since, ancient times India has been described by various foreign travellers as a land of prosperity, harmony and honesty. Even travellers from China-a civilization as great and ancient as India itself- were deeply impressed by the integrity, honesty and prosperity of the Indians. The efficient and clean political system of the Maurayans, Guptas, Cholas, Kakatiya, Chalukyas, Vijayanagar evoked both admiration and envy among the people from foreign countries. The stability of political and social system and depth of moral and spiritual landscape created a civilization unmatched in its splendour for thousands of years, approached perhaps only by China.

When we look at the thousands of years of India’s glorious past, two factors immediately stand out. One is the liberal economic system. What is often forgotten today is that Indians have always been entrepreneurial people and India has always been a business economy. Not just domestic markets but Indians pioneered and dominated the international trade as well. From Lothal-world’s first trading port- to coasts of Kerala to silk route to trade with Arab peninsula, Rome, China, South-East Asia Indians were at the forefront.There was hardly anything which was not produced in India- A Swadeshi, self-reliant economy founded on the back of market economy and entrepreneurship of Indians. Senator Pliny of the Roman Empire, among others, would talk of how Indians never seemed to want anything from the countries they exported to and were anxious to just settle in terms of gold.


Second, was a society based on Dharma which manifested itself in various variants be it Buddh Dharma, Hindu Dharma, Jain Dharma etc. The dynamics of the market and Dharmic values created the moral and material underpinnings of a society and political system largely free of corruption and of unprecedented economic prosperity.

There are no boundaries for human endeavour and if given proper space and opportunities, it can give outstanding outcomes. Private entrepreneurship has been the most progressive force throughout the history of the humanity and India has had a long tradition of entrepreneurship. Indian society has had a long tradition of harbouring and nurturing this entrepreneurial zeal. It is this zeal which has driven the Indian civilization, it is this entrepreneurship which has made India the most prosperous and productive civilization for thousands of years. Ambedkar wrote in “History of Indian Currency and Banking”, 1947 that

“Trade is an important apparatus in a society, based on private property and pursuit of individual gain; without it, it would be impossible for its members to distribute the specialised products of their labour…”

Indeed, Indians realized long back the importance of trade and liberal economic system in the story of civilization and prosperity. Various texts like Tamil texts Silappadikaram and Manimekalai tell us about the highly liberal socio-economic-spiritual systems of India. State only concerned itself with security and regulation to ensure free and fair functioning of the markets. The government or the king was just a sort of an overlay on a system that was already working. This was the secret behind India being the pre-eminent economic power and civilization for thousands of years.

A politically motivated and fallacious argument, which remains in force, is that India declined after Mauryan rule and Buddhism. But it omits the whole Gupta-Chola period which was the most prosperous period of the Indian history. India is estimated to have accounted for 32% of world GDP in 1 A.D and 29% in 1000 A.D, ahead of China and long after Maurayans. Guptas were Hindus and so were Cholas. Also, Buddhism’s decline began in 8th A.D and it was wiped out (literally) in 11-12th A.D from all its strongholds i.e. Afghanistan, Kashmir, Bengal and much of today’s Pakistan during Islamic invasions. In fact, excessive glorification of Buddhism in both liberal and leftist traditions is very problematic. It was the hallmark of the post-Independence history writing by Marxists along with whitewash of Islamic atrocities. In some case like in case of Nizami etc. even glorification of Islam as against idolatrous and irrational Buddhism and Hinduism. But what is very interesting to note is that Marxist in China and other Buddhist countries like Thailand etc. blame and denounce Buddhism for all the ills facing the society.

Also, It is well noted that the caste system was absent in the early periods of the Indian civilization and when it appeared, it remained a weak and fluid system. The discrimination and untouchability, that we see even today, was largely absent. However, the case of a small and unfortunate section of population classified as out-caste, remains a blot on the face of Indian civilization and a cruel reminder about how difficult it is to translate high ideals of a civilization into ground level reality.

It was not until the Middle-Ages that caste system started to become a rigid system that we recognise today.
The prime reason of this slide to serfdom was the destruction of the economic underpinning of the Indian society which was free trade and market.

In fact, repeated invasions and colonisation in the last millennia not only lead to loot and destruction of temples and cities but more importantly debasement of the whole society. The moral & socio-political degradation of people enslaved by an alien foreign power is but a natural outcome. In fact, Islamic invasions, stabilized only after Mughal invasion, were a major cause of India’s decline. Fall of Afghanistan, Central Asia and North-West sub-continent to Islamic armies from 1000 A.D onwards and accompanying destruction and disruption of society, imposition of the strict religious dogma, conversion from trade economy to war economy and breakdown of trade routes connecting India to silk route had a disastrous impact on the economy.

India recovered under Pax Mughalia for a time but it soon fell under the colonial rule of the various Europeans power of which British subsequently came to dominate and rule India. The dynamism of the Indian society was suppressed under centuries of foreign rule. The colonization of India by Britain in 18th century saw the systematic attempts to destroy Indian businesses and de-industrialise one of the most advanced economies in the world. From being one of the largest economy and largest exporter of manufactures goods India was reduced to an agrarian appendage of Britain and witnessed the largest transfer of wealth recorded in human history. Also, one important feature of the British rule was the decimation of the food security in India which was devastated by the famines after famines. India is yet to recover in terms of food security.

However, Indian civilizational ethos and dynamism could never be suppressed. The bazaars of 19th and 20th century of India were the nurturing grounds of this re-birth of entrepreneurial zeal. Indian merchants, businessmen launched an aggressive counter offensive against British economic stranglehold over India. They started re-entering in banking, trading, export-imports, manufacturing against all odds created deliberately by imperialists. The European enterprises had dominated the every sector of the Indian economy, every big and small business from Shipping Corporation to financial institutions were under their control. They had cartelized themselves and with active support of colonial government made sure that it was next to impossible for Indians to get a foothold. But fired by the nationalist sentiments and armed with business acumen honed for millennia, Indians undertook the task unheard in any other part of the world- To defeat the Imperialists in their own game, under their rules, on their own field!

They exploited every loophole, made best of every opportunity to set up the indigenous industrial base of Indian economy. The two world wars and great depression provided India with the best opportunity to weaken the economic grip of the west and it was from 1914-1947 Indians made greatest advancement in their quest to make India an industrialized country. Story of Jamshedji Nasarwanji Tata setting of up world’s first steel mill outside West and Japan is well known. Dalmias set out to build sugar, cement, textile, paper industries. Walchand-Hirachand established shipping, engineering industries. Scindia Steam Navigation Company (now Hindustan Shipyard Ltd.) shipyard at Visakhapatnam revived India’s shipbuilding industry. G.D Birla floated Hindustan Motors, Wlachand floated Premier Automobiles, and Air India was established by TATA etc. Apart from these few names there were countless big and small businessmen who laid the foundation of the Indian industrial revival. The visionary, determined & pioneering efforts by Indians severely shook the British economic stranglehold over India.

By the time of independence India had the largest and the most sophisticated industrial base outside the West & Japan. The credit for this goes to entrepreneurial zeal of the private enterprises that fought every challenge thrown their way by discriminatory imperialist regime. Despite official obstruction, they initiated the new industries, not expecting to make any profit in any foreseeable future. Not just in India, but Indians went throughout the world to set up their own business venture to rival and ultimately undermine the western dominance.

This was the industrial base on which independent India could have built. But instead of supporting its citizens in their endeavours, Indian state, now hijacked by Congress-Marxist Raj tried to suppress them. Socialism from USSR was sought to be imposed on Indians to enslave them once again under western hegemony. On economic freedom all our other freedoms rest. Snatching away the economic freedom is the first step towards slavery.
Entrepreneurs were demonized, business was made a dirty word and casteist abuse against Baniyas became a favourite time pass of parasitical elements of the society. The business concerns were snatched away from individuals and license-permit Raj was employed to prevent people from trying to do anything but to be depended on the decedent-socialist state! Air India, Hindustan Shipyard, Hindustan Motor were nationalized and subsequently ruined being eternal burden on taxpayers’ money they are today.

But the real cost of this has been the lost opportunity to solve the caste problem.

There is no such thing as the Hindu caste system. There is caste system in India which is equally strong in Muslims, Christians and even Sikhs (given that Sikhism explicitly preaches against caste). The caste system is a social system & not a religious system. It is based on the two foundations-endogamy and denial of economic freedom. People are trapped in their respective professions which they have inherited by the accident of the birth.

What Hinduism had was the not the caste system but the Varna system. Varna in Vedas and later texts is descriptive rather in perspective. It categoriesed people into four broad groups according to their professions. It was not birth based as you will find mention of families where mother is called Shudra, father Vaishya and son Brahmin due to their respective professions. Same person could belong to different Varna as he/she changed profession.

It was later, that a code of discipline was added on those who chose one or the other Varna. Those who took up learning and teachings were Brahmins but they could not accumulate wealth by selling the education. They had to be sustained by the society. Most of the Brahmins were actually poorer throughout the history until British rule when they came to dominate the emerging modern economy and professions. Those who ruled and protected the realm were Kshatriyas but they could not make laws as they pleased. They had to depend on the Brahmin-teachers for that. A crucial characteristic of Indian monarchs & Emperors. Vaishayas were to create wealth by commerce but could not hold political power and Shudras, farmers and labours, were to till the land and sustain the society form their surplus. A type of division of power but from hindsight a deeply flawed one.

It is not surprising that the Varna became birth based and coupled with the emerging caste system it slowly gave rise to the present system where whole castes belong to a Varna rather than individuals. It goes without saying that concept of upper caste and lower castes also crept in based on kind of labour different professions demanded.

Even though caste system has remained durable, it was always characterized by mobility within it with castes rising and falling in status and even Varna. Individual mobility was even greater. Interestingly it was not until the first census by British that castes and their status got firmly codified. It was then that the caste hierarchy and status become firmly codified from the Brahmin’s perspective as they were the people whose view and narrative was taken into account by the British. You can go to Jats and try explaining them that Brahmins are higher in the hierarchy to understand this point. You will be lucky to escape unharmed!

The central point in the caste system has been the denial of the economic freedom often enforced by the perpetuation of the organised violence. And it is on the economic freedom that all our other freedoms rest. The caste system can be broken only by providing antidote-economic liberty-to the fundamental reason that sustains it. The freedom of the people to choose any profession they wish, earn money in the manner they wish and spend money in the manner they have reasons to spend will dilute the caste system by directly assaulting its very roots.

Most of the anti-caste activists go on anti-Hinduism rhetoric, also calling for people to convert to other religion which has produced no result because caste is not Hindu system. Caste has survived even after conversion. Attacking Hindu laws (what Hindu law? Hinduism is not an Abrahmic religion with fixed dogmas and laws. There are different Hindu social laws at different points of time like today we have Hindu Code Bill) is shadow boxing. It distracts attention from real reason behind caste system-lack or rather denial of economic liberty.

A system based on the market impersonalizes the economic transaction between parties which means the caste of the economic agents ceases to matter and consequently the scope for caste discrimination too diminishes. Only a system based on the market can sweep aside the system based on birth and this is no speculation but a proven fact. It happened in Europe where feudal caste system broke down under the pressure of the capitalism. It is happening in India as well. With the advent of the liberalization, privatisation the social mobility has greatly increased. A large number of the people from the SC background are finding jobs in the private sector without any need for reservations as caste consideration has become highly diluted in the modern private sector. Further, they are founding their own independent ventures thanks to the space created by the end of the socialist oppression.

In the market based system of capitalism, it is the economic success and wealth of the individual which determines his/her social status and not the other way round as in the caste system. Caste system cannot be overcome by socialism as many people falsely believe. In fact, caste system is very much like socialism as it imposes the dictate of the society on the individuals, reduces the scope of individual entrepreneurship and places the society above individual. People are told what they should think rather than what they actually think. Socialism can only strengthen caste system and identities as can be seen communist dominated states of W.B, Kerala or heartland of socialist politics i.e. U.P, Bihar etc. Also, it is no secret that all the communist parties are dominated by the so called upper caste people. There are no Dalits or tribals in the higher echelons of Naxals. It is just the perpetuation of the old hierarchies in a new form.

Further, a less noted but a powerful force sweeping across the society is that of Sanskritisation. It is the phenomenon of the adaptation of the traditional Vedic culture by the SCs and other who were relatively less immersed into it. This does not mean that they were not inside the Hindu fold. It is folk Hinduism rather than scriptural and philosophical Hinduism which was/is pervasive among backward sections of the society. In fact, Hinduisms has always been a people’s dharma. From Parashara & Vashista to Ved Vyas & Valmiki and from Ravidas and Namdev to Mata Amritanandamayi, it is the so called lower caste people who have immensely contributed in the creation and preservation of the Dharma. So Sanskritisation is something which is logical and natural, i.e., reclamation of their heritage and spirituality by the people who were unjustifiably tore apart from it.

The process occurs as the economic and educational standards of the people rise. Although, Sanskritization is deemed as something bad in the mainstream discourse, it is a positive process which consolidates the society and socially uplifts the people. It reduces the caste discrimination as well.

It is form of evangelism but what makes it different from evangelism is that it is more of a cultural-social process than a theological one. Plus, it does not destroy diversity and freedom of thought in the manner that Christian and Islamic evangelism do.

So a liberal economic system is doubly beneficial –it weaken caste system and by raising economic prosperity it pushes the people towards the Hindu fold. These two reasons are alone sufficient for the adaptation of the liberal economic policies in India even though such policies have their own merits as well.

About author

-Abhinav Prakash is a Research Scholar in JNU


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Abhinav Prakash Singh

Abhinav is a Doctoral Scholar in Economics, JNU. He has done his Masters in Economics from JNU and Economics (Honours ) from Hindu College, University of Delhi. His is interested in politics, history, economics, religion and hopes to grasp the reasons behind rise and fall of civilizations.

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