Growth of money economy and some questions of transition in late pre‐colonial India

Abstract

One of the more remarkable but neglected features of the growth of commercial capitalism on an international scale from the sixteenth century consists of widespread processes of monetization affecting a number of Asian societies, and especially India. This was in turn connected with commercialization of both agrarian and urban economy, and the development of markets and manufactures. By the middle of the eighteenth century, this development had become distorted through increasing European intervention in both trade and manufacture; in this respect colonial occupation was both a culmination of earlier processes, and the means (through political monopoly, use of violence, control over the taxation system) for the East India Company to destroy competition and drive prices downwards in an increasingly competitive world. The corollary was that up until the mid‐nineteenth century at least India's integration into a colonial empire was marked by a broad‐based process of under development of which deindustrialization was merely part, and including a process of relative demonetization.¹ This article begins by presenting the problem in terms of the unprecedented international flow and sub‐continental use of monetary media which took place between the sixteenth and early nineteenth centuries. The author then considers the implications of these phenomena for an understanding of the development of commercial capitalism during this crucial period, firstly within India itself, and secondly within a broader international context. Finally, he ends with some statements concerning the implications of this hypothesis for an understanding of the early colonial period. The result is to place India firmly on the map of developments affecting the world more generally, long before colonialism.

Notes

History Department, Erasmus University, Post Box 1738, 3000 Dr. Rotterdam, Netherlands. I thank Sulabha Brahme, Sudhir Bhedekar, Ram Bapat, S. D. Kulkarni and others at the Shankar Brahme Samaj Vidnyana Granthalaya Pune, in February 1981, for stimulating and critical discussion of the arguments in this paper.