How Islam came to India and why now it needs to go from India -13 : economic decline under Islam – fate of producers

Posted on September 6, 2008. Filed under: Hindu, History, India, Islam, Muslims, religion |

The profound economic wisdom of the Islamic rulers as reflected in their consistent policy of ruining the producers

A firman of Aurangzeb acknowledges the Jagirdars as demanding for official records only half but in practice actually more than the total yield[Moreland]. According to Dr. Tara Chand, “The desire of the State [Mughal empire in the second half of the seventeenth century] was to extract the economic rent, so that nothing but bare subsistence. remained for the peasant… [Aurangzeb’s instructions were that] there shall be left for everyone who cultivates his land as much as he requires for his own support till the next crop be reaped and that of his family and for seed. This much shall be left to him, what remains is land tax, and shall go to the public treasury.” [Tara Chand, History of Freedom Movement in India, I]

Iltutmish, Alauddin Khalji  and Firoz Tughlaq’s or some of the Mughal emperor’s few irrigation works or repairs are much highlighted by the Thaparite School of Indian History. But there is no evidence that such works were undertaken with a view to raise the living standards of the agrarian producers, as the tax assessments were revised upwards so that the policy of leaving no significant surplus at the hands of the producers still remained effective. For example, a widely practised administrative measure was to advance loans to peasants [here the standard Islamic claims  against usury apparently was invalid] to help them tide over their difficulties, which by the rule of penalizing and crushing taxation or other illegal demands simply added to various forms of bonded labour. Sher Shah’s instructions to his Amils reveal the general policy of the Islamic rulers “Be lenient at the time of assessment, but show no mercy at the time of collection.”  The real concerns of Sher Shah Suri who is highly eulogized by the Thaparite School for his apparent claims of concern for the living conditions of cultivators, are revealed in his sending his “good old loyal [meaning his Muslim Afghan officials] experienced servants” to districts which yielded good “profits” and “advantages” and after two years or so transfered them and sent “other servants like them that they may also prosper.” [Abbas Sawani, Eliott and Dowson, IV]  – such prospering implies only one thing, private enrichment of the Islamic elite at the cost of peasants.

Collection of Arrears
The Islamic scholars like Al Beruni, Ibn Batuta, or Abul Fazl point out the importance of the Indian rainy season and its impact on the productivity of the land [even now the Met Dept. of India’s brief moment of media glory is in announcing the forecasts of seasonal rainfall] and the overwhelming tax burden which as we have seen sometimes could amount to as high as three-fourths of the harvest given the crucial fact usually never mentioned that this was all taken by the Islamic rulers as revenue and therefore there was no reinvestment into the land from the side of the state [Republican India had some 50-50 division of harvest, “adhiyar”- but this meant half for the pure farmer-labourer, who is advanced not only the use of the land but instruments of agriculture and seed, while the other half went to the owner of the land and who has sole responsibility for land revenue]. The unrealistic and punitive uniformly high taxation led to inability of the peasants to pay their revenue regularly and the revenue collection used to fall into arrears. Contemporary sources indicate  that remissions were rare- even in return for conversion to Islam. Sultan Firoz Tughlaq rescinded Jiziyah for those who became Muslim, but their land tax continued to be at the rate as before their conversion. [Firoz Shah Tughlaq, Fatuhat-i-Firoz Shahi, Eliott and Dowson, III],  He instructed his revenue collectors to accept conversions in lieu of Kharaj.[Afif, Ishwari Prasad, Qaraunah Turks].  Rajas and Zamindars who could not deposit land revenue or tribute in time had to convert to Islam, with Bengal and Gujarat [the more productive revenue earners] providing specific instances which indicate that such rules were practised throughout areas under Muslim-rule.[Many of the Punjabi, and Bangladeshi Muslims “Rajas” or “Diwans” are historically known to be descended from Hindu rulers who were forced to convert if they wanted to live and continue in the possession of their lands. [Lal, Growth of Muslim Population in Medieval India, Lal, Indian Muslims, C.H.I., III; Census of India Report, 1901, IV, Pt. I, Bengal]. Remissions of Kharaj were never allowed and the arrears went on accumulating and the Muslim rulers tried to collect them with the utmost rigour. The Sultanate period saw the establishment of a full-fledged department by the name of the Diwan-i-Mustakharaj whose responsibility to inquire into the arrears against the names of collectors (Amils and Karkuns) and force them to realize the balances in full. [Barani, Tripathi, Some Aspects of Muslim Administration] Under the Mughals collections of arrears were carried out with Sultanate-style harshness. The detailed descriptions of the system in place indicates that the peasants were never relieved of accumulated arrears. The continuous extraction of surplus by the Muslim rulers and their deliberate policy of not allowing the farmers even to accumulate sufficient capital to plow back into production capacity meant that productivity either remained stagnant or declined in real terms. This in turn implied that the entire amounts and the balances could not be collected and was generally carried forward to be collected along with the demand of the next year. Vagaries of the climate would therefore sometimes push the cultivator over the edge, and led to suicides or complete abandonment of land and escape into the forests. The Muslim rulers reacted in  three physical ways to this accumulation of arrears, abandonment of land, and escape into badlands or forests – (1) they demanded the arrears, owed by peasants who had fled or died, from their neighbour (2)  peasants unable to pay to be sold together with their family as slaves [there are explicit descriptions about how families got separated in the process] usually by decree to Muslim buyers to ensure that only the minority Muslims [and not the vast majority] benefited from the fruits of the slaves labour and that enslaved women only multiplied Muslim numbers by reproduction (3) hunt down and torture to death escapees.[Moreland, India at the Death of Akbar, The Agrarian System of Moslem India, Irfan Habib, The Agrarian system of Mughal India]. We will later discuss again in the context of enslavement as a process of realizing revenues, how the so much talked about important still existing practices of “bonded labour”, “child bonded labour”, and “sex trafficking” or “sex slavery” probably started and took its most obnoxious forms under the Islamic Sultanate and “grand” Mughal rule. There were other significant social effects of this extraction process of revenues by torture, enslavement and armies which are still observable in Indian society which we will elaborate. The situation continued to deteriorate in the eighteenth and nineteenth centuries as attested to by contemporary historians Jean Law and Ghulam Hussain[Barani, Lal, Twilight of the Sultanate].
Artificial price control
An economically devastating idea of the Muslim rulers of India beginning with Alauddin [or his courtiers and the Ulama who are known to have been particularly active in trying to promote the Sahria way of “finance” as applied to non-Muslims], was to artificially keep the prices of commodities of daily consumption at an extraordinary low level. Alauddin constantly raided non-Muslim territorries without any pretext and as surprise invasions, and according to his contemporary Islamic scholars, sometimes simply to gather beautiful women of the non-Muslims for his harem or for the slave market  [Barani] and also faced frequent Mongol invasions, requiring thereby a large standing army. According to Barani, it was calculated that even on moderate salaries, the required size of the standing army would have exhausted the entire treasure of the state in five or six years. Alauddin, decided to drastically lower the salary of soldiers; but enforced a reduction of the prices of commodities of daily use as sold in the markets or in the special soldier’s markets where locals were compelled to bring their products [Barani].

Contemporary Muslim chroniclers show their profound knowledge and level of Islamic economic or financial theory, by admiring the administrative coercion that maintained these prices at extremely low levels and fluctuations, “not even of a dang (small copper coin)” were tolerated irrespective of variability in weather and productivity. But “when a husbandman paid half of his hard earned produce in land tax, some portion of the remaining half in other sundry duties, and then was compelled to sell his grain at cheap rates” to the governments,[started by Alauddin who procured grain with great severity, to keep Government godowns full -Barani] it is easy to see what the effects would be not only on the producers but long term on the path to economic destitution itself [Lal, History of the Khaljis]. Indian historians typically acknowledge the destructive effect on the economy of the Mughals [Irfan Habib- Agrarian system of Mughal India] but stop short of making the possible obvious connection to the success of European colonialism over India replacing the Mughals, with that of this economic degeneration [Irfan Habib, Potentialities of capitalistic developments in the economy of the Mughal India]. The tall claims of “Islamic finance” notwithstanding, the Muslim’s basic inability to understand the dynamics of economies more complex than the desert oases or looting of “kafelas” revealed itself painfully in the many sultans after Alauddin Khalji who took pride in competing with him in keeping prices low.  These Sultans as well as their Ulemas completely failed to understand how such drastic state intervention and artificial price stability at extremely low levels not only crippled production and impoverished the producers over the long term, but also led to a general impoverishment of the intermediate sectors or those involved in the pure process of circulation. Shams Siraj Afif enthusiastically describes and lists the low prices during the reign of Firoz Tughlaq, claiming that while Alauddin had to make strenuous efforts to bring down the prices, in the time of Firoz Tughlaq they remained low without resorting to any coercion. “Like Alauddin, Sikandar Lodi also used to keep a constant watch on the price-level” in the market [Nizamuddin Ahmad, Tabqat-i-Akbari, I,  Farishtah, I],  Abdullah, in his Tarikh-i-Daudi, writes that “during the reign of Ibrahim Lodi the prices of commodities were cheaper than in the reign of any other Sultan except in Alauddin’s last days”, and adds that while Alauddin maintained low levels of prices through coercion in Ibrahim’s reign prices remained low “naturally.”This simply indicated that Alauddin’s measures had by this time been completely institutionalized and become a “natural” part of the economic order. Historians generally agree that  Sher Shah followed Alauddin in formulating his agrarian policy and Akbar in turn adopted many measures of Sher Shah. During the Mughal period prices generally went up, [Abul Fazl, Ain, I] although as late as in the reign of Aurangzeb, sometimes the prices reported were regarded as exceptionally low. But since the land revenue extracted the major portion of the peasant’s surplus and there are indications that such extraction increased as the Mughal empire matured, this  increase must have neutralized gain from increased prices.[Moreland, From Akbar to Aurangzeb].

Fiscal policy in taxation and its effects

Irfan Habib, who has made extensive studies of the Mughal economy from the Marxist viewpoint provides some important economic data and analysis. Although Habib’s major impetus was in trying to analyze the favourite Marxist theme of transition from feudalism [or pre-capitalist forms in Marxist jargon] to capitalism as applicable to India, we can find some revealing clues as to how the Mughal system which  essentially continued and intensified the processes of exploitation started under the Sultanate, also landed India into utter ruin and open to colonial aggression – simply from continuation of early Islamic practices in India.

The Zamindars[landlords] typically collected from 10-25% in land rent as their share, and this was mostly collected in kind from the peasants and has been shown to dominate all other forms of dues extracted by the Zamindars[ Irfan Habib, Agrarian System of Mughal India]. “Mal”, usually translated as “land revenue”, was actually not a land rent in the modern sense of the word, but a share of the crop or harvest on the land. This was in general a complex procedure, with the revenue being imposed in kind, but the demand was fixed by a sophisticated sample survey system [we have hints of this surprisingly modern statistical procedure as early as the pre-Islamic Indian text of Arthasastra] used to estimate the total production [“Kankut”]. Typically this demand in kind was converted into demand in cash, and often at aribtrary conversion ratios – leading to cash nexus appearing as an established institution at least in the Delhi region as early as the 14th century [ Moreland, Agrarian system of Moslem India]. The conversion into cash demand appears to increasingly dominate over time, and even if revenues were sometimes collected in kind they were either used to build up stores or sold in markets to raise cash.

The areas from which the revenue went directly to the royal treasury, were called “khalisa”, and in 1647, the estimated treasury revenue amounted to 13.6% of the total [Irfan Habib, Agrarian system of Mughal India], and this was mostly collected in cash. The remaining portion came from “jagirs” or fiefs assigned to the elite and significant followers entrusted with supplying military contingents to the “Badshah”. The jagirdars or mansabdars [officials specifically responsible to maintain military units – even the princes could be mansabdars] were assigned lands in lieu of personal pay, maintenance of soldiers [some Mansabdars also drew pay in cash from the administration directly]. This entire class, with a few exceptions of some of the “Hindu” collaborator jagirdars who had their own inherited and traditional territories, consisted of urbanized Muslim elite, and was almost entirely of foreign origin [Moreland, India at the death of Akbar, M. Athar Ali – The Mughal Nobility under Aurangzeb- Bombay, 1966]. They were deliberately prevented from growing local “roots” by a system of regular transfers within three years, and the jagirs were explicitly declared to not to be hereditary or fixed to ranks. This lack of continuity and stability prompted the growth of extraction of surplus in the form of cash. When the Badshahs tried to make mansabdars more dependent on central authority they also paid the Mansabdars in cash and therefore the revenue demand from Khalisa lands also were mostly in cash. This led to a fabulous hoarding of bullion by the elite and removal of substantial amounts of capital from the production cycle, to which we will come to later.

This cash for kind substitution had several significant effects : (1) because of the high rates of taxation, the peasants were in general at the margins of sustainability, and with little surplus to reinvest, together with the vagaries of the weather and river systems, became increasingly dependent on financiers who could advance cash against future harvests – the cash nexus. The elite was significantly involved in this extortion process by which cash from one cycle of surplus could be advanced for the next cycle, and at a low-surplus equilibrium, the peasant communities could be easily pushed into a  debt trap. There is significant evidence of debt bondage beginning to take shape at this specific period – a fact usually suppressed in standard Thaparite representations of this period. (2) the overwhelming pressure to convert production into cash meant turning the surplus into commodity production for the market, which therefore over time led to a shift in emphasis on production of high-grade cash crops – thereby reducing production of consumption article of the common producer. (3) production of high-grade cash crops, and their conversion into cash also developed demand for increasingly costly elite consumption items requiring even more cash and hence increasing taxation. (4) development of unprecedented escalation in usury – in the form of loans advanced at exorbitant rates of interest to peasants to meet Muslim revenue demand-for example in 18th century Bengal, 150% per annum at the simple rate was usual, but the loan was usually advanced only for a couple of months at a time at the end of which  period the interest was added to the capital, and so on. In rural Maharashtra the interest rate was 24% per annum, but on smaller loans and the practice of breaking up calculation cycles into shorter periods within the year, the interest rates amounted to 40% [Comparative studies in Society and History , VI(4), and  Thomas Coats – Transactions of the literary society of Bombay,III, London, 1823] (5) growth of finance capital and the demand for cash crops led to conversion of traditional tenant-owner relations, with the consolidation and conversion of lands previously cultivated for consumption into lands explicitly producing cash-crops for the market. This meant removal of a large number of peasants from owner, tenant farmer category into landless rural “proletariat” or agrarian labourers. Typically this meant loss of the minimal food security enjoyed by these dispossessed people. This also changed mutual client-dependency relations between the Zamindars and the ryots [tenant farmers] into debt bondage relations. [A fact that should be investigated further than the few existing studies looking into the origins of the “bonded-labour-slavery” in modern India – and surprisingly the Thaparite School of Indian History bypasses this origin issue completely by trying to force connections to supposedly pre-Islamic “roots”, whereas even the works of “Marxist” historians like Irfan Habib points firmly towards its origin within the known Islamic period].

To be continued……

part 12: economic decline under Islam – fate of producers

part 1: enslavenment of non-Muslims

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4 Responses to “How Islam came to India and why now it needs to go from India -13 : economic decline under Islam – fate of producers”

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Wow, what a total misreading of economic history. I’m afraid you have understood nothing of what you’ve read. If you really want to assume that there is something “Islamic” about the taxation policies of the Mughals, or the Delhi Sultanate before them, then I implore you to read about how any “Hindu” state before them attained revenue. Go read something about Vijayanagar, or the Cholas, or the Guptas, and find what you desperately need to learn: namely, that a state’s function is to fill its treasury. Every state does this. There ain’t nothing Islamic about it, and no Hindu would do any better. Please allow ignorance to leave your mind.

We do not have concrete proof that all the non-Muslim regimes you quote, deliberately followed a policy by which the producers of wealth would be so heavily exploited that they would find it preferable to leave producing altogether. You should start yourself reading about whatever is available about Vijaynagar or Chola economics for example – and see how much came from taxation of external foreign trade, and how much from internal exploitation. Not much is availbale in direct records either – but why not start with the descriptions of the markets in Vijaynagar by Domingo Paes and Fernao Nuniz – especially what is up for sale for common consumption. If the common producer did not produce these surplus from local production, they would not be available for consumption of the “commons”. There is a general tendency to bracket non-Muslim regime’s atrocious dealings in any sphere with “Hindu” regimes especially. The further we go back, thinner is the record, and as modern historians say – if something has not been recorded contemporarily, then we cannot assert claims for those periods. Do you have surviving taxation records for Guptas, for example? Assessemnts are made by indirect methods and they are at best speculative. There is no reason to be so defensive about the Delhi Sultanate or the Mughals – I have not compared them against any “Hindu” behaviour. And even if “Hindus” did the same thing that still does not take away from the folly of ruining the economy in order to keep a population weak and subdued. I understand there exists a certain school which gets extremely irritated when anything Islamic appears to get a “bad name”, but before calling others ignorant one should check that in such extreme irritation one is not showing ignorance himself, and overreaching in the haste to defend the “Islamic”.

The debate is quite interesting and informative and your work deserves applaud. Land revenue used to be main source of economy mainstay during medival india and if Barni is to be believed, ‘peasentry was at rags.’ all measures aimed at improving agrarian system dealt havoc to peasentry. All contemporary sources are unanimous regarding this fact. Once a women instead of taking water from Jamuna travelled a long way to take from Hauz Khas. When enquired about this inconvenience by Great Saint Nizam udin Auliya, the women replied that due to Jamuna waters hunger turns intense and we have little food to quell the fire of hunger. This disappointed Great Saint so much that tears rolled down with heart bursting at misery of people. We need to treat thing intellectually holding emotions for the sake of truth, that is what Islam teaches. Being a student specializing in Medival india history, it needs what it deserves.

Forget the oppressors of other faiths. Now we know why the Jehadis justify slavery and jizya and destroy temples. Why Jehadis keep springing up from the ranks of the oppressors of other faiths, quoting their scriptures back to them.

And all the while, those who provide ideological and social camouflage to the oppressors of other faiths, carrying red flags or green, will explain everything away till it is too late. Remember they did this hand in hand, until Pakistan was imminent. It served them right that when they went to Pakistan hoping to get their rewards, the jehadi monster that they had reared, turned on them, called them kafirs, and what not, imprisoned, killed and banned them. But they still have not learnt their lesson, and misuse the freedom they have in India to green wash the record of Jehad.

It is time to call a brick a brick. If filling treasuries was the only object, why did Mahmud refuse to give up the idol of Somnath ?

You have done a great job Sir !!!


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