Why India was a global economic power

The following column by U Mahesh Prabhu was first published by BW Businessworld. 

In ancient Indian, Vedic philosophies and scriptures  provided valuable knowledge for the betterment of the human race. Yoga, Ayurveda and meditation are just three diverse aspects that have come to be revered by many across the globe.

However, there’s another facet of Vedic knowledge which we has been virtually forgotten – the economic and administrative (read management) aspects. Vedic people were not just healthy, innovative, and intellectually stimulating with scientific tempers – but also prosperous. Prosperity is a mirage in the absence of a sound economic system; you don’t need to be an economist to agree. Yet, we’ve never bothered to appreciate the wisdom of Vedic people, let alone study their system, probably assuming that age old traditions and practices have little to offer us in this ‘advanced era’ of globally connected economies.

British economic historian Angus Maddison, in his book Contours of World Economy, admits, after diligent research, that India had the world’s largest economy from at least “300 BCE to 1,000 CE”. According to him, during the Mauryan Empire (circa 321-185 BCE) there were a number of important changes and developments to the Indian economy. He notes, “It was for the first time that India was unified under one ruler. With an empire in place, the trade routes throughout India became more secure, thereby reducing the risk associated with transportation of goods. The empire spent considerable amount of resources building roads and maintaining them throughout India. They improved infrastructure combined with increased security, greater uniformity in measurements, and increased usage of coins as currency enhanced trade.” Angus’ book makes it evident that efficiently managing institutions or economies was not new to ancient Indians.

What Angus does miss is that there is also substantial historical evidence to prove the presence of a robust economic system in India dating back to the early Sindhu-Sarasvati (Indus) Valley civilisation whose economy was made viable by consistent advances in transport. The inhabitants of this civilisation were fairly advanced for their time. Not only did they practice agriculture, domesticate animals, make sharp tools and weapons, but also traded in terracotta pots, beads, gold, silver, colored gems, metals, flints, seashells and pearls. They even built ships to reach Mesopotamia where they sold gold, copper and jewellery. By 600 BC, Indians had begun to mint punch-marked silver coins.  

Owing to the political unity brought forth by the Mauryan Empire in the year 321 BCE, there was a common economic system across India leading to enhanced trade and commerce, along with excellent growth in agricultural productivity. For the next 1500 years after the Mauryan Empire,the various Indian economies  generated wealth in huge amounts. Between 1st and 17th century CE, India is estimated to have had the largest economy of the ancient and medieval world, controlling between one-third and one-fourth of the world’s wealth. In simple terms, India had the world’s largest and strongest economy for over 1,000 years – at least. It was second to none, not even the current American economy which is already in the doldrums.

It was only after the advent of the “British raj” that Indians saw the decline and eventual  catastrophic collapse of their wealth, thereby leading to extreme poverty. Living under conquerors, Indians were made to believe that the knowledge and wisdom of their ancestors no longer stood the test of time. While India did bounce back with a growing economy after the 1990s, they’ve done so by mostly following “modern” management systems. Unfortunately, it’s fast becoming evident that modern management thinking and concepts are ill-equipped to handle the complex challenges in a global economy.

If global economies continue to be in the doldrums, infested by adverse problems that are monumental in nature, it has definitely got to do with the prevailing (read “modern”) management practices. Yet, even the best management schools don’t seem to be even remotely interested in questioning prevailing management assumptions, presumptions, or practices. Believing that everything “modern” is good and everything ancient is obsolete, we’ve been busy detaching ourselves from emotions to adhere to the commands of our superiors in the best interest of our careers at the cost of severe disasters that are also ecological.

Unlike modern management systems, Indian management systems, enumerated in various Vedic texts like Arthashastra, and followed—even by the Mughals—for at least 2,000 years fared much better. Isn’t it time we looked back into our history and searched for the wisdom of our Vedic ancestors to provide management solutions?

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