The ubiquity of the rentier state

Angus Maddison’s Contours of the World Economy 1-2030 AD: Essays in Macro-Economic History is one of my favorite books (though if you are looking for economic history, Power and Plenty: Trade, War, and the World Economy in the Second Millennium is underrated/underread).

Maddison’s work is cited in this piece,
No, Mughals didn’t loot India. They made us rich: They remained as Indians, not colonists
. Overall, I found it to be specious and sophistic in the details.

The specious part is the attempt to assert that India was rich during the Mughal period. The sophistic part was the interleaving of anecdata and observation to buttress the quantitative point, made with an appeal Maddison’s data set.

The reality is that it is likely that Maddison was wrong, and more importantly, the Mughal state was highly extractive:


There is more here. It is not my place to judge economic history, it’s not my specialty (though on the whole, I don’t dissent from the judgment of “Pseudoerasmus” on most things in his wheelhouse). And I still value Maddison’s magisterial work. And so should you.

The reason is simple: contrary to what Rana Safvi would have you believe, the vast majority of pre-modern people and societies were poor, with very marginal differences in per capita wealth in a modern sense. I am convinced by various arguments that large polities, such as the Roman Empire, can obtain some gains in efficiency through economies of scale, as well as reducing costs of production through imposing peace. But these differences were marginal compared to anything we moderns might believe to be worth notice.

To see what I mean, I’ve plotted some of Maddison’s data below:

According to Maddison, there was a decline in per capita wealth from the Mughal period to the early British period: from 550 to 533 dollars. First, this is hardly much at all. Second, it is clear that Maddison’s estimate here is very coarse, and we shouldn’t put that much stock in it.

But the bigger picture that I’m alluding too is clear when you look at all of Maddison’s data. 2,000 years ago Italy was the richest region of the world on a per capita basis (though since Madison is comparing a province of the Roman Empire to all of China, I think this is somewhat misleading). But Italy seems to have been only about twice as rich on a per capita basis as the poorest areas of the world. By 1500 the British Isles was already wealthier than India on a per capita basis, but it was only 1.3 times as wealthy.

When pre-modern observers, as quoted in the piece above, mention the wealth and riches of a polity, what they truly mean are the goods of the people of power. In 1500 France and the British Isles were at the same per capita wealth level. But the monarchy of France was much wealthier and more powerful than the monarchy of England. There were two reasons:

  • The French monarch had a larger population from which they could extract taxes.
  • The French monarchy engaged in a higher base rate of extraction from its subjects than the English monarchy.

According to economic historians, one way that the British closed the gap in later centuries was much better management of and recourse to public debt. The British “punched above their weight” in terms of mobilization of resources for this reason (eventually Britain surpassed France in population and per capita wealth).

But that’s neither here nor there. Observations of the wealth of the Mughals by European observers is mostly a function of the reality that the domains under Mughal control were extensive, and the Mughal  Empire had a much larger population than any European state. Its wealth was not due to intensive production of economic vitality, as much as extensive exploitation of productivity. Similarly, the domains of the Chinese Emperors of the contemporary period allowed for lavish wealth, but that was due to the massive population increase in their territories in the centuries of peace.(part of this was due to the introduction of maize into lands where it was more suitable than rice or wheat).

Of course, there are differences between various political arrangements. Even before seeing the data on extraction levels above, I suspected that the Mughals were not necessarily encouraging economic flourishing in an atypical manner. The reason here is historical and ideological. Though the average per capita wealth of China across history did not vary a great deal, there were ideological variations which resulted in different levels of poverty and uncertainty. The orthodox Confucian Chinese view was rather libertarian and physiocratic. It emphasized low taxes on the farmers so as to encourage freeholding and rural prosperity. Though this was not always executed, it was the ideal. The pre-modern Chinese state as actually relatively “light.”

One can think of a major exception here: the Yuan dynasty. That of the Mongols. Unlike the Manchus, the Mongols did not assimilate to Chinese norms. They engaged in massive extraction, pure rent-seeking, and brought in “middle-men minorities” (Central Asian Muslims often) to do much of the dirty work.

On the whole, I believe that the Mongol influence on economic growth was predominantly negative in Eurasia during their period of dominance, because the steppe nomad ethos was extractive and predatory toward the ancient agrarian civilizations of Eurasia. The Pax Mongolica likely introduced some efficiencies through trade and the spread of ideas, but the local impact of Mongol rule in China, Persia, and Russia seems to have been one of predation and consumption, rather than fostering production.

The Mughals were in part descended from Mongols. And as Timurids they were patrons of culture but also adhered to the steppe ethos of extraction and predation. Rana Safvi emphasizes that the Mughals became more Indian genealogically over time. This is true. And the Mughals also relied on Rajputs to administer their domain. But anyone who has read about the Mughal state apparatus knows that like the Mongols in Yuan China they relied extensively on West and Central Asian first-generation immigrants (the preference for non-natives even within these ethnicities is a clear tell that it was important they not be too attached to India, and mirrors “Mameluke” regimes further west). While Turks and Afghans were the military elite, the civilian class was saturated with Persians.

The ethno-religious distance between the ruled and rulers to me would set a prior expectation that there would be an emphasis on extraction and extensive rent-seeking. Muslims, like Ibn Battuta, had long seen India as a land of riches and a place where young adventurers could make a fortune. In the pre-modern world, unfortunately, this often involved some sort of rent-seeking activity, rather than productive entrepreneurship.

And yet were the Mughals qualitatively different from what came before an what has come after? To be honest, I don’t think so. One of the major problems with South Asia is that it is a world of “communities,” and communities look after their own. Han Chinese bureaucrats culturally identified with the peasants that they ruled. Even the connotation of “peasant” in Chinese is far less pejorative than in Europe, which had a blood nobility. In South Asia, the ruling elite has often by logical necessity been different from those the ruled because no one group identity has been a majority. This is often true even locally, while Hindu zamindars ruling in eastern Bengal over Muslim peasants, or Muslim potentates in the Deccan over Hindu peasants.

Note: Chill on the bullshit comments. I’ll be deleting them if you manifest stupidity or ignorance.

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30 Replies to “The ubiquity of the rentier state”

  1. Regarding the per capita GDP chart, how come so many vastly different countries – all but Africa it would seem – see per capita GDP rising at such a fast rate from 1000 AD onwards? And then decline in the rate of growth seems to have happened across countries from 1500 AD as well – even for west European average?!

    Some sort of early green revolution with more irrigation networks that nearly peaked by 1500 AD? Feudalism giving peace and stability and a smooth extraction machine?

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    1. Thanks, very interesting. Though I can’t yet see why it should push both tropical and temperate productivities in the same direction.

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  2. Thanks, very interesting. Though I can’t yet see why it should push both tropical and temperate productivities in the same direction.

    perhaps tropical wealth strong shaped by temperate wealth due to trade?

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  3. “And yet were the Mughals qualitatively different from what came before an what has come after? ”

    That’s what i have been saying. All foreign elites in every nation they ruled do allow some amount of locals in their administration. Why is this being heralded as some sort of Mughal’s brilliance or even Indian-ness? By the time Aurangzeb came along he had even more locals in his admin then Akbar’s time.

    The whole thing to me hinges on this question, that if Mughals did not loot India (unlike the brits) they ( and we should too) somehow considered themselves Indian. What has these two completely separate things have to do with each other?

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  4. Interesting piece.

    Though as always the debate about Moghals in India has actually little to do with any genuine need to understand the nature of the Moghal polity. These are of course just modern Indian culture wars read into dead people. It is amazing that Indians can fight them in/on virtually any period of Indian history – Indra to Indira and everything in between 🙂

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    1. It is amazing that Indians can fight them in/on virtually any period of Indian history – Indra to Indira and everything in between

      Just wait till this fight spreads beyond Indra. I am pretty sure once the genetic composition of IVC people becomes more clear, we will be arguing who between the neolithic farmers and AASI was native and who was foreigner, who was an exploitative rentier and who was the exploited peasant, and so on. After all, what is an Indian who doesn’t argue.

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      1. Well i think the potential of IVC genetics doing the stuff which you are saying is a bit overblown. it does not have that juice. Apart from Dravidians and left liberals in the south, IVC does not matter in day to day culture/religious wars of India. The left liberals thinks that this might give them a leg up against the right, it would be perhaps the most anti climax fight where the right totally pulverizes the left.
        For better or for worse the Vedic period is seen as the starting period of India, any diversion found in IVC will only serve some mock victories for the left, while the larger cultural life thinks that IVC=Vedic.

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        1. Saurav is correct.

          Plus 1008!

          Indians have their own traditional Itihaasas, Veda Agamas, ancient literature and ancient science.

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        2. So you are essentially saying its doesn’t matter what science says, because Hindus are too dumb and superstitious to care?

          I disagree. It will take time, but as has already happened with Christian Europe and is currently happening with Muslims, Hindu-India will also eventually be forced to discard their civilizational mythos, as it proves increasingly untenable, and is perceived as such by an increasingly educated Hindu populace.

          This could take decades, if not centuries however. For now I think you are correct. Most of this information goes over the heads of all but the most educated and introspective of Hindus.

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          1. i don’t know. the really crazy stuff is believed and espoused by a small cranky minority. probably smaller % than american creationists, in part cuz mass popular religion isn’t as well developed in a big poor country.

            the stuff about the vedic basis of indian civ., you assert it yourself when you claim hinduism and indian civilization is mostly a product of the indo-aryans.

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          2. Razib,

            Depends on what we mean by “crazy stuff”. For me, crazy stuff is either believing the Aryans originate in India, or that their migration is inconsequential because the IVC was where the Vedic tradition was born.

            Some combination of the above is the view of the vast majority of Hindus in India. Literally the only people who take the opposite “scientific” view, are the English speaking, highly-educated liberal class. People like Shashi Tharoor and Tony Joseph.

            Gradually this will change with education (I’ve observed it on this very blog where Hindu commentators have grudgingly come around to the truth).

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    2. ” It is amazing that Indians can fight them in/on virtually any period of Indian history – Indra to Indira and everything in between”
      Perhaps one more sign of the underlying reality that contemporary India has not settled on an “idea of India” that most people can agree on?
      btw, I am not implying that “others” (which usually ends up meaning “Pakistan” in these discussions) have settled comfortably on some national myth. FWIW, I think India is more settled than most third world countries, less settled than some, but my guess is that there is a real unfinished conflict in the case of India and that is what is driving all the heartburn about Mughals and Aryan migration and many other topics…

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  5. For me, crazy stuff is either believing the Aryans originate in India, or that their migration is inconsequential because the IVC was where the Vedic tradition was born.

    Some combination of the above is the view of the vast majority of Hindus in India.

    lol. dude, this is just not true. the vast majority of people have no idea about any of these issues.

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    1. Yeah this reminds me of the people obsessing over the Pelosi vs. AOC fight. Most people aren’t on Twitter and don’t care. They probably don’t even know who Pelosi is.

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  6. “the vast majority of people have no idea about any of these issues.”

    True. Also for all the things which Indthings thinks will happen you need a lot of stuff to happen. There is no IVC language, monument , religion etc for people who oppose the Hindu right to hold on to. Genetics and all do not have the same juice. The reason why IVC can be “assimilated” in the Vedic pantheon is because there is nothing substantial to differentiate them (as of now).

    The only other culture group to really counter the Indo-aryan Vedic “India” is Dravidian and Tribal cultures (and muslim culture before partition) . And in both these cases you have history, language, monuments, figures etc for those groups to hold on to and differentiate their culture from Vedic past.

    The IVC has none of them. So not withstanding genetic studies IVC in popular culture will remain mostly a part of Vedic history.

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    1. Saurav, VijayVan

      “the vast majority of people have no idea about any of these issues.”

      True. Also for all the things which Indthings thinks will happen you need a lot of stuff to happen.

      /counter the Indo-aryan Vedic “India” is Dravidian…/

      One concept that is going to be hard to erase.

      The Land chosen by Buddha (note not the people).

      In the immediate past, my generation and fathers generation the clamor was the Aryan Sinhalese have to protect the land Buddha chose.

      Now, younger generation* claim they descendants of Ravana and need to protect the land Buddha chose.

      Forget the fact Ravana or the Aryans are not mentioned in the Mahavamsa.

      Mahavamsa mentality is protecting in the land that Buddha chose, Buddhism.

      * Literate, look at the mirror, watch TV and realize not Aryan. Dont want to claim Dravidian, are not they Tamils. So why not Ravana.

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      1. ” Literate, look at the mirror, watch TV and realize not Aryan. Dont want to claim Dravidian, are not they Tamils. So why not Ravana.”

        LOL, yeah read that Sri Lanka just named its first satellite Ravana.Its ironical that in Ramayan, Ravana has fairer skin tone than Rama, higher caste than Rama. He is in a way more Aryan than Ram 😛

        Well i was largely talking about India. Sri Lanka, BD, Nepal, Pakistan and Myanmar etc have their origin stories established in more concrete ways and have in a way chosen one side (as a state) over other. SL (Buddhist-Sinhalese ), Myanmar (Burman-Buddhist) , Pakistan (Islam) , Bangladesh (Bengali-Islam) etc. There could be changes but they would be minor ones. Like the way you said from swinging to Aryan to Dravidian back to Ravana, but in essence Buddhism stays.
        Its India which does not have a overwhelming culture-religious majority (Hindu-Hindi-Aryan is a close competitor ) which gives minorities of every social-religious kind (Muslims, Dravidian, tribal, left liberals) to counter that, and hope that they have a chance. But not sure for how long can they fight back.

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        1. LOL, yeah read that Sri Lanka just named its first satellite Ravana.Its ironical that in Ramayan, Ravana has fairer skin tone than Rama, higher caste than Rama. He is in a way more Aryan than Ram

          But don’t ethnic Singhalese self-identifies as Aryans?

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          1. I think there wasnt; much thought put into it.It was mostly to spite the tamils (Dravidian) . Also genetic and civilization marker could be different. The Assamese are more Tibeto Burman (genetically) but follow an Aryan religion and culture.

            So yeah Sinhalese could be genetic closer to Indo-aryans but culturally closer to Tamils

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  7. /counter the Indo-aryan Vedic “India” is Dravidian…/
    This can’t be overplayed. The way ‘dravidian’ is framed is a colonial construction. In the course of history, it’s traction , vitality and confrontational power will be limited.

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  8. One point about pre-modern economies is that, since most people in all economies lived at subsistence level and per-capita income was similar all over the world, shouldn’t population total or population density be used as measure of which land was richer or poorer? Since everybody was at subsistence or marginal level, a rise in income in aany region would directly imply rise in population because less people will die from all those marginal living problems.

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  9. India did have a more positive trade balance with its partners during Mughal rule AFAIK, the empire did connect India to Central Asian markets and contributed to urbanization in the Gangetic plains. Brassware, glassware and carpet making did thrive and their legacy is present even today.

    Also, AFAIK, the Marathas continued the revenue policies of the Mughals, so religion is not a factor here.

    The question that interests me is:
    Why did no merchant class develop amongst the Muslim elite of North India ? There is no shortage of Muslim entrepreneurs in other regions of India, what makes North India different. Why were Agarwal merchants travelling all the way to Armenia, but no Muslim merchants.

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    1. Vikram, thats a really interesting question regarding why there are no great muslim mercantile communities in North India. Just some conjecture here, but the muslim mercantile communities of the southern penninula , sri lanka, and gujarat have maritime trade connections that were possibly leveraged to gain access/control of certain domestic markets. The landlocked northern muslims had only tenuous relations with mercantile arabs, and their identities were anchored to the central asian/turko-persian ideal. There are innumerable muslim artisan castes in the gangetic plain, and guilds often evolve into trading bodies, so the underlying potential existed. As you mention, hindu khatri and baniya concerns were already well established in the overland trade of horses, textiles and crafts as far as astrakhan, perhaps those relations were less dynamic in the early modern period and fewer opportunities emerged to usurp dominance.

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      1. Hi girmit, some excellent points there. Harish Damodaran pointed out in his book that we see farming/peasant castes upscale into entrepreneurs in southern and western India. I realize now that we dont really see the same kind of upscaling for artisan castes, either there or in North India.

        Trading guilds becoming organized companies and corporations was seems to have been an important pillar of capitalist development in Europe and Japan. I looked up the 10 biggest footwear companies of India and with the exception of Mirza international, none seemed artisan caste owned. It seems that colonial rule and the nexus between trading castes and political rulers could have prevented the incorporation of artisan guilds into companies in India.

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        1. I realize now that we dont really see the same kind of upscaling for artisan castes, either there or in North India.

          Cant compete with mass production in Chaina
          Two simple examples

          a) Carved cowrie shells for sale at tourist spots and beach vendors. Can be bought for about USD 2-3 by bargaining. Most important is that it is illegal to collect cowrie and conch shells from the coral reefs.

          What is being sold are some kind of ceramic product mass produced in China. I guess they change the mold and sell to all beach tourist countries.

          https://acrilmart.com/product/sri-lanka-carved-cowrie-shell/

          b) Paintings with glitter on black velvet. For a 0.5mx05m I estimate material cost and wages would be about USD 25.

          Can buy them at the wholesale market in Pettah for USD 1. I was shocked when I first saw that a couple years back, bcos had just bought as gift at USD 10 a few days prior.

          https://www.alamy.com/stock-photo-paintings-of-kandyan-dancers-and-sri-lankan-scenes-on-black-velvet-48514071.html

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  10. [Apologize for the long comment. Please delete if it breaks any house rules]

    @Omar

    // my guess is that there is a real unfinished conflict in the case of India and that is what is driving all the heartburn //

    I generally find the whole notion of “idea of India” (or of any country) to be unfalsifiable and therefore avoid speaking in terms of it.

    To me the heartburn (it is more churn than heartburn in my opinion) is a feature of any society that when information barriers are reduced, people will challenge the textbook narrative (which some perceive in teleological terms) taught to them. People do that in the US too all the time: birthers, 9/11 truthers, creationists, Area 51 nuts, climate skeptics, flat earthers etc.

    Indians have a special fascination with history because there is some component of teleology quite explicit within the symbols of the Indian state, which are merely now appropriated (or replaced) by the Hindu Right.

    E.g. why would a country formed in 1947 use the Lion Capital of the Mauryan state (from 2300 years ago) as its emblem and seal? The decision to do it was not made by the Hindu RW, but does hint at rebirth of an old nation (as Nehru, Gandhi etc saw it). Nehru’s Discovery of India is an exercise in creating a historical narrative that magically results in the conclusion of Indians yearning to be free.

    All of this is essentially just confirmation bias lying at the heart of the Republic. I am not saying that other nations are any more “ordained”, cf Britain’s founding myth around The Charter (Magna Carta) or France’s Revolution etc have similar valence. And in all these countries people have questioned the relevance of such myths (or tried to replace them by other myths). So doing the same in India is perfectly fine and sensible. Where it becomes silly is that Indians are more willing than others to take leave of sane arguments altogether in favour of their pet myth – even at the elite opinion-making level. It is like as if all conservative Christians in the US started saying that the Earth is 5000 years old or speciation just doesn’t happen. Some do, but most apologists are way more sophisticated than that.

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