Journal of Institutional Economics (2020), 1–14 doi:10.1017/S1744137420000296
RESEARCH ARTICLE
Institutions, social order and wealth in ancient India
Jim Rooney1* and Vijaya Murthy2
1School of Business, The University of New South Wales, Canberra, Northcott Drive, Campbell, ACT 2600, Australia and 2Discipline of Accounting, Business School, Coddrington Building, The University of Sydney, Sydney, NSW 2006, Australia *Corresponding author. Email: [email protected]
(Received 14 November 2019; revised 22 May 2020; accepted 23 May 2020)
Abstract Orthodox economic theorising on ancient societies emphasises the absence of market institutions, in con- trast to advanced contemporary economies. However, this may downplay the influence of non-economic interests in the generation of wealth. Consequently, this paper examines an ancient civilisation identified as economically successful namely, the Mauryan Empire (322 to 85 BCE) centred on the Indo-Gangetic plains. Drawing on translations of books collectively known as the Arthasastra (lit. the science of wealth) as well as contemporaneous Greek and Roman texts, this paper examines the role of institutions in gen- erating wealth within societal norms of income distribution and the preservation of social order. Given the importance of trade to this society, comparisons are made with medieval European institutions in terms of market coordination and the maintenance of generalised trust in trading markets. As a consequence, the role of institutions in addressing social and economic uncertainty affecting an ancient society is highlighted.
Key words: Formal institutions; guilds; Mauryan Empire; social order; wealth
1. Introduction Institutions1 have been identified by scholars as a crucial organising structure in recent economic development (Amin, 1991; Spohn, 2010). Polanyi and Finley further argue that present-day societies and institutions exhibit a social and economic preference for markets (Finley, 1973; Polanyi, 1944). At the same time, sociologists distinguish economic structures that emphasise broader ‘human over eco- nomic interests and the value of collective before self-interest’ (Whitehead and Crawshaw, 2014: 20). Given notions of economic freedom and the separation of economic and socio-political interests resplendent in the institutional literature (Graafland, 2020: 2), exploring the implications of this con- cern with social values and the effect on economic development in an ancient historical context is the overarching motivation for this paper. In particular, we agree that to ‘understand why people act as they do, we must first know what they value’ (Bruce, 2013: 37). In one ancient society, the Mauryan Empire, institutions evolved with a focus on balancing wealth generation, social order, and individual wellbeing. Eventually, shaping a substantial part of what is present-day India in a period contemporaneous with the Macedonian polity of Alexander the Great, Mauryan institutions comprised of both market and public order control practices (Rahman et al., 2014: 654). At the same time, individual wealth creation was not just tolerated but actively encouraged within a formally prescribed ethical framework (Murthy and Rooney, 2018). Furthermore, the range of market goods was extensive (Khanna, 2006: 10), supporting lifestyles that was seen as extending beyond subsistence (Mahapatra, 2012).
1In particular, market-supporting institutions are defined by the World Bank (2002: 4) as ‘Rules, enforcement mechan- isms, and organizations supporting market transactions’. © Millennium Economics Ltd 2020