Potentiality of Emergence of Capitalism in Mughal India | History Optional for UPSC (Notes) PDF Download

Emergence of Capitalism in Mughal India

• Historians such as W.H. Moreland, Brij Narain, Toru Matsui, Bipin Chandra, and Tapan Ray Chaudhuri have explored the potential for capitalism in Mughal India, though their focus is primarily on 19th-century India.
• Irfan Habib conducted a detailed study of the Mughal economy to examine the prospects of capitalism during that period.
• In the 17th century, Europe did not have a capitalist economy. Capitalism began to emerge in England in the late 18th century, starting with merchant capitalism rather than industrial capitalism.
• Key features of early capitalism included control of capital over production, money or market relations, accumulation of commodities, and advancements in production technology.
• Mughal India had wealthy merchants, with records of their wealth from European sources. For example, merchants in Surat had significant assets, and some, like Mulls Abdul Ghafur and Virji Vora, were extremely wealthy.
• The financial practices of Mughal India included a well-developed system of credit and banking, with sarrafs acting as bankers and facilitating transactions through hundis (bills of exchange).
• Insurance for goods in transit and various money-lending practices were also common, indicating the presence of basic financial and economic institutions.
• Mughal India engaged in large-scale commodity production, especially in textiles, saltpetre, and indigo. The institution of brokery aided in the procurement of these commodities.
• Production was primarily controlled by independent artisans who owned their tools and produced goods at home, operating under the Domestic Craft System.
• The transition from merchant to industrial capitalism was gradual, involving a putting-out system where merchants would advance cash or raw materials to artisans.
• In the textile industry, cash advances were more common than advances in raw materials, and the practice of providing raw materials was not widespread.
• The putting-out system during the 17th century was characterized by cash advances, with artisans retaining ownership of their tools and often raw materials.
• Merchant capital did influence production organization, but its hold over the production process was weak, and true capitalist relations did not fully develop during this period.

Failure of Merchant Capital in Controlling Labor through the Putting-Out System

• Irfan Habib's Examination: The failure of merchant capital to control labor was not due to a lack of development.
• Favorable Conditions for Producers: The increase in demand and the influx of competitive buyers placed primary producers in a strong position.
• Freedom of Artisans: The absence of economic or non-economic coercion allowed artisans to negotiate with whoever they preferred.
• Coexistence of Production Systems: Independent artisan-level production existed alongside the putting-out system, possibly on a larger or equal scale.
• Mobility of Artisans: The territorial and occupational mobility of artisans helped them avoid falling into economic dependence.
• Divergent Interests: The interests of brokers and merchants did not always align, with brokers sometimes acting against merchant capital.
• Role of Brokers: Brokers sought irregular income opportunities, often harming both producers and merchants, and sometimes colluding with artisans.
• Evolving Middlemen Merchants: Some middlemen merchants, especially broker-contractors, may have transitioned into manufacturing entrepreneurs, inspired by examples like karkhanas from the Mughal era.
• Limitations of Production Organization Changes: Changes in production organization without advancements in technology had limited impact.