Richards J. (1990) One century late: the 17th century crisis in India

Richards, John F. (1990) “The Seventeenth-Century Crisis in South Asia”, Modern Asian Studies, 24/4, 625-638.

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Evidence of the 17th-century ‘General Crisis’ have been found all over Eurasia. However in India those years represent the golden age of the Mughal dynasty (p.625). The subcontinent enjoyed a long period of relative peace after the violence of the conquest (p.626).

Fiscal bonanza

The strength of the empire rested on its ability to collect the revenues of the agrarian economy through the zabt system, which forced peasants to pay up to a third of their harvest in taxes. The equivalent of over 800 tons of silver was collected every year. Remissions were only granted when the monsoon failed (p.627). The system also benefited the grandees who managed to accumulate enormous fortunes.

The state was extremely rich. Only in the last quarter of the century did the constant wars conducted by the emperor Aurangzeb finally managed to severely deplete the treasury. However, the Mughals always managed to remain sufficiently rich not to depend upon loans granted by private financiers. The only check to their accumulation and spending was the inflow of gold and silver in the country necessary to feed the monetary pool of their estate (p.628).

“Prices nearly doubled between the 1590s and the mid-1630s where they remained until the opening years of the 18th century. This pattern is matched by the three-fold increase in Mughal silver rupees in circulation between 1592 and 1639, followed by a slight decline and a recovery to a peal in the 1660s. In other words the disruptive effects of the post-1620 slowing of the New Worls silver imports were felt, but , do not seem to have had a calamitous effect in Mughal India” (p.629).

Buoyant economy

The subcontinent experience some dearth and famine – specially during the 1630s – but the population went from 150m in 1600 to 200m in 1800. And within the Empire, the urbanization rate was close to 15%. The trading centers of Ahmadabad, Patna and Surat, and the administrative hubs of Lahore, Agra and Delhi prospered and some may have reached the million inhabitants (p.630).

The producers of cash crops (indigo, cotton, sugar-cane, opium, etc.) suffered a much lighter fiscal burden than those growing cereals. Those crops helped fuel an economy that remained prosperous until c.1690. New crops were also adopted: tobacco and maize in the first half of the century. Tellingly large areas were reclaimed in the foothills of the Himalayas by Bengali peasants who started mulberry cultivation and sericulture (p.631).

The rich peasants thus reinvested a large part of their benefits to meet growing market demand. In the villages, the mass of pahi tenants remained dominated by the landholding khud-kast (p.632). The zamindars, the landed gentry, were in charge of gathering a county’s contribution and sending it to the capital while allowed to retain a share for themselves. The rights over a country could be sold, inherited and mortgaged; it evolved into a dynamic secondary market which supports the notion of a growing economy under the Mughals.


Domestic and international trade flourished too. Indian merchants were animating numerous routes from Africa to Java. Despite the interference of the European powers, the seaports (Thatta, Goa, Hughli, Balasore and Machilipatnam) benefited greatly from the remittances of the Indian merchant abroad (p.633).

The unification of India by the Mughal stimulated domestic trade and the Gujarati merchants in particular prospered. Finally, the establishment of a link with Europe opened a new market to the Indian exporters. For instance, after the 1640s the demand from the Dutch and English joint stock companies provided a sizeable stimulus. The VOC purchase in the region in 1648 amount to 150,000 florins but that amount had multiplied by 30. Output, income and employment were positively affected (p.634)

Towards the crisis

This export-oriented growth in some sectors shows that for most of the century, there was no structural crisis to speak of in India (p.635). However, the war against the Maratha proved disastrous. Estates designed to reward the officers became extremely scarce (p.636). Maratha raids and bandits attacks imposed a serious toll on domestic trade. The Civil War of 1712-3 finally emptied the treasury and the state lost its ability to imposed a centralized decision process to the provinces.
At long last the ‘General Crisis’ had arrived. Deccan suffered from the worse famine in decades in 1703-4. And the Mughal Empire was finally brought to an end (p.637).

pictures via: red fort, Richards, portrait.

4 Responses to Richards J. (1990) One century late: the 17th century crisis in India

  1. Freude Bud says:

    Beautiful blog.

    It just occurred to me that, IIUC, structurally from the 14th-19th centuries, the Euro-Asian trade flow was silver specie from Europe in return for Asian goods.

    I’m unclear as to what the economic consequences were for Asia, but wonder whether there is an analogy to the flow of fiat money for manufactured goods between Asia and the US-Europe today … and, if so, whether there is anything we can take away from that?

  2. Ben says:

    Well thank you.

    I am no expert on the subject, but at least two historians have tried to answer that question. Namely Kent Deng (here: although I haven’t read this one (it focuses on China but the issue at hand is similar) I’m sure Kent answers the question in his usual half-crazy-yet-insightful manner.

    More to the point is Dennis Flynn’s article that you can find here…/GEHN/…/PUNEFlynn.pdf. Basically Flynn takes an anti-bullionist point of view and says that China and maybe India too did NOT benefit from the inflow of money. Basically they toiled like crazies to get something they could have produced themselves for half the cost with fiat money. He compares the Asian thirst for bullion to a war or a hurricane: it may artificially boost the economy, but we cannot say it is good.

    I must say I don’t really have an opinion on the subject, but I guess it makes sense that the import of a single commodity may be as harmful to an economy as the production of a single commodity.

  3. Thorfinn says:

    K Pomeranz (Great Divergence) has another point of view. We often think (as did some Romans) that the flow of bullion constituted some sort of ‘loss of value’ towards the East. Rather, those economies were rapidly monetizing their economies, and needed a reliable store of value.

    Gold and Silver were, thus, not assets, but commodities used for the production of money, valuable for as they were scarce, durable, portable, and divisible. Alternatives could have been used, like paper, but this invariably led to inflation. The east/west trade included many other goods too, many indurables which did not survive.

    Even today, you don’t see ‘fiat money’ being traded for manufacturing goods. China does buy T-bills, but this is not a transfer for anything. Rather, it’s a part of a strategy of currency undervaluing that keeps the yuan cheap and encourages exports to the US. The BoP is to China’s favor, but in the absence of currency manipulation it would be closer to zero (remember the US manufacturing/GDP ratio has remained basically flat over the decades).

  4. Dave Parker says:

    I like the notion of silver oiling the wheels of commerce. The getting of more of the stuff hardly impoverished China or India, as production for export rose, employment and trade networks expanded and regions became more specialised. They too had inflation of course, but Europe generally doesn’t seem to have suffered too catastrophically from its earlier experience. That said, I’m not much of a one for “general crises” in this era: if we try hard enough we can probably cobble one together for just about any century, and India’s being out of sync with the west to me underlines the regional character of developments in a world overwhelmingly of local activity for local ends.

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