In this article we will discuss about:- 1. Introduction to the Buddhist Economy 2. Industrial Specialization of the Buddhist Economy 3. Exchange Mechanism.

Introduction to the Buddhist Economy:

The Buddhist concept and practice of economy was based chiefly on a system of village communities of landowners, or what in Europe is known as peasant proprietorship. The Jataka bears very clear testimony to this. There is no such clear testimony in it to isolated large estates, or to great feudatories, or to absolute lords of the soil holding such estates. In the monarchies, the king, though autocratic and actively governing, had a right to a tithe on raw produce, collected as a yearly tax; and only to this extent could he be considered the ultimate owner of the soil.

All abandoned, all forest land the king might dispose of; and under this right was included the reversion to the crown of all property left intestate or ‘ownerless’ a custom which may or may not to a survival of an older feudalism. The sovereign was moreover entitled to ‘milk money’ a perquisite paid by the nation when an heir was born to him, and he could declare a general indemnity for prisoners at any festal occasion.

Besides these privileges he could impose forced labour or rajakariya on the people, but this may have been limited to the confines of his own estates. Thus the peasant proprietors enclose a deer-reserve for their king that they might not be summoned to leave their tillage to beat up game for him.


A much more oppressive extent of corvee is predicted only of a state of civic decay. The tithe on produce was levied in kind, measured out either by the village syndic or headman (gama- bhojaka), or by an official (a mahamatta) at the barn doors, or by survey of the crops. Some of the rice and other grain may presumably have been told off for the special granaries kept filled for urgency, in war or famine, but Buddhist books make no clear reference to such an institution.

The amount levied seems to have varied from 1/6 to 16/12 according to the decision of the ruling power or other circumstances. And the contributions raised at one or more games (villages), rural or suburban, could be made over by a monarch (or by his chief queen) to anyone he wished to endow, e.g., to a daughter on her marriage, a minister, a Brahman, a merchant, etc. Again, the king could remit the tithe to any person or group.

Industrial Specialization of the Buddhist Economy:

In the arts and crafts, a considerable proficiency and specialisation of industry had been reached. A list of callings given in the Milindapanha, reveals three separate industries in the manufacture of bows and arrows, apart from any ornamental work on the same. In the same work, the allusion to a professional winnower of grain indicates a similar division of labour to our own threshing machinists and steamplough-owners who tour in rural districts.


As certain grain crops were reaped twice a year, this would afford a fairly protracted season of work every few months. Some trade-names, on the other hand, are as comprehensive as our ‘smith.’ As with us, this word (kammara) might be applied to a worker in any metal. Vaddhaki, again, apparently covered all kinds of woodcraft including shipbuilding, cart making, and architecture, thapati, tacchaka (lit, planer), and bhamakara or turner being occupied with special modes of woodwork.

A settlement of Vaddhakis is able to make both furniture and seagoing ships. Once more the same worker in stone (pasana-kottaka) builds houses with the ruined material of a former gama, and also hollows a cavity in a crystal as a cage for a mouse.

Important handicrafts like the three above named and their branches, the workers in leather, i.e., the leather-dressers, the ‘painters,’ and others to the number of eighteen were organised into gilds (seni) according to Jataka records; but it is to be regretted that only four of the eighteen crafts thus organised are specifically mentioned, the woodworkers, the smiths, the leather-dresses, the painter and the rest, expert in various crafts. At the head of each gild was a president (pamukha) or alderman (jetthaka), and these leaders might be important ministers in attendance upon and in favour with the king. Occasionally these functionaries quarreled, as at Savatthi.

And it may have been such quarrelling also at Benares that led to the institution of a supreme headship over all the gilds, an office doubled with that of treasurer (bhandagarika) being founded at that city. It is of interest to note that this innovation in administrative organisation was made at a time when, according to the legend, the monarchy is represented as having been elective, not hereditary, and when the king who appointed, and the man who was appointed, were the sons, respectively, of a merchant and a tailor.


The nature and extent of the authority of the pamukha over the gilds is nowhere clearly shown. Nor it is clear to what extent the duties of a bhandagarika, lit, ‘house of goods’ and coincides with our word ‘treasurer’. It was not confined to the custody of moneys, for the Sangha had officials so named; hence it is possible that it referred to a supervision of the goods made or dealt with by a gild or gilds and not only to the king’s exchequer.

Nor can we with any certainty fill up the fourteen unnamed gilds. A great many arts and crafts are mentioned in the books, some of them held in less social esteem than others. Among the latter were trades connected with the slaying of animals and work on their bodies, e.g., hunters and trappers, fishermen, butchers, and tanners. Yet other such despised callings were those of snake- charming, acting, dancing and music, rush weaving and chariot- making, the last two because of the despised, probably aboriginal, folk whose hereditary trades they were.

Other more honourable crafts were ivory-working, weaving, confectionery, jewelry and work in precious metals, bow and arrow making, pottery, garland- making and head-dressing. Besides these handicrafts, there was the world of river and sea-going folk, the trader or merchant, and, corresponding in a limited way to the first named the caravan escorts and guides or ‘land-pilots’ (Ithala-niyyamaka).

But although reference is made in connation with some of these, to a jetthaka or Elder, no further evidence of civic organisation is forthcoming. Other instances of trades having jet jetthakas are seamen, or at least pilots (niyyamaka), garland makers, caravan traders and guards, and robbers or brigands.

We read, e.g., of a little robber-gama in the hills, near Uttara-Panchala, numbering 500 families. The learner or apprentice (antevasika, literally ‘the boarder’) appears frequently in Buddhist books, one of which indicates the relative positions of pupil and master wood wright. But no conditions of pupilage are anywhere stated.

The title of setthi (best, chief), which is so often met with and, without much justification rendered by ‘treasurer,’ may possibly imply headship over some class of industry or trading. It is clear that the famous setthi, Anathapindika of Savatthi the millionaire lay-supporter of the Sangha, had some authority over his fellow- traders. Five hundred setthis e.g., attended him in his presentation of the Jetavana to the Buddha. Unless these were convened from different towns, the number in any one town was not limited to one or a few.

They are usually described as wealthy, and as engaged in commerce. Dr. Fick is probably right in alluding to them as representing the mercantile profession at court. The word certainly implied an office (thana) held during life. There might be a chief (maha) setthi, and an anusetthi or subordinate officer- a commentary even refers to the insignia of a setthi-chatta (umbrella of state).

The remarkable localisation of industries revealed in Buddhist literature has already been noticed. This is observable especially in the ease of craft-villages of wood wrights, ironsmiths, and potters. These were either suburban to large cities, or rural, and constituting as such special markets for the whole countryside, as we see in the ironsmiths, gama just cited, to which people came from the gamas round about to have razors, axes, ploughshares, goads, and needles made. On the Ganges or further a field there were trapper gamas, supplying games, skins, ivory etc.

Within the town we meet with a further localization of trades in certain streets, if not quarters, e.g., the street (vithi) of the ivory workers in Benares, the dyers’ street, the weavers’ ‘place’ (thana), the Vessas’ (merchants) street.

Combined with this widespread corporate regulation of industrial life, there was a very general but by no means cast-iron custom for the son to follow the calling of the father. Not only individuals but families are frequently referred to in terms of their traditional calling.

The smith e.g. is Smithson; Sati the fisherman’s son is Sati the fisherman; Chunda the smith is called Chunda Smithson, etc. This, however, is not peculiar to Indian or even to Aryan societies, up to a certain stage of development.

Even of our own it was said but half a century ago that the line of demarcation between different employments or grades of work had till then been ‘almost equivalent to a hereditary distinction of caste. In modern India no doubt these lines of demarcation have intensified in the course of centuries, and have split up the industrial world into a, to us, bewildering number of sections, or as the Portuguese called them, castes.

The Jatakas reveal here and there a vigorous etiquette observed by the Brahman ‘colour’ in the matter of eating with, or of the food of, the despised Chandalas, as well as the social intolerance felt for the latter by the burgess class.

The Jataka commentary tells the story of a slave-girl, daughter of a slave and a Khattiya, whose father pretended to eat with her only that she might be passed off before the Kosalans, seeking a nobly born consort for their king, as a thorough-bred Sakiyan.

On the other hand, a great many passages from both Jataka and other canonical books might be quoted to show that the four ‘colours’ are on the whole to be taken in no stricter sense than we speak of ‘lords and commons,’ ‘noblesse, eglise, tiers-etal,’ ‘upper, middle, lower classes.’ That Brahmans claimed credit if born of Brahmans on both sides for generations back, betrays the existence of many born from a less pure ‘connubium.’

In the Kusa Jataka, a Brahman takes to wife the childless chief wife of a king without ‘losing caste’ thereby. Elsewhere in the Jataka-book princes, Brahmans, Settis are shown forming friendships, sending their sons to the same teacher, and even eating together and intermarrying, without incurring any social stigma or notoriety as innovators or militants.

The following instances may be quoted:

A king’s son, pure bred, cedes his share of the kingdom to his sister, turns trader and travels with his caravan. A prince, whose wife in a fit of displeasure has returned to her father, apprentices himself at that father’s court, without entailing subsequent social disgrace, to the court potter, florist, and cook successively, in order to gain access to her. Another noble, fleeing from his brother, hires himself to a neighbouring monarch as an archer.

A prince resigning his kingdom, dwells with a merchant on the frontier, working with his hands. A commentarial tradition represents a child of the Vaccha Brahmans as the ‘sand-playmate’ of the little Siddhattha, afterwards the Buddha.

A wealthy, pious Brahman takes to trade to be better able to afford his charitable gifts. Brahmans engaged personally in trading without such pretext, taking service as archers, as the servant of an archer who had been a weaver, as low-caste trappers, and as low-caste carriage-makers.

Again, among the middle classes, we find not a few instances revealing anything but caste-bound heredity and groove, to wit, parents discussing the best profession for their son- writing, reckoning, or money-changing (rupal), no reference being made to the father’s trade; a (low-class) deer-trapper becoming the protege and then the ‘inseparable friend’ of a rich young Setthi, without a hint of social barriers; a weaver looking on his handicraft as a mere make-shift, and changing it off-hand for that of an archer; a pious farmer and his son, with equally little ado, turning to the low trade of rush weaving; a young man of good family but penniless, starting on his career by selling a dead mouse for cat’s meat at a ‘farthing,’ turning his capital and his hands to every variety of job, and finally buying up a ship’s cargo, with his signet-ring pledged as security, and winning both a profit 200 per cent and the hand of the Setthi’s daughter.

Exchange Mechanism of the Buddhist Economy:

The act of exchange between producer and consumer, or between either and a middleman, was both before and during the age when the Jataka-book was compiled, a ‘free’ bargain, a transaction unregulated, with one notable exception, by any system of statute- fixed prices. Supply was hampered by slow transport, by individualistic production and by primitive machinery. But it was left free for the producer and dealer to prevail by competition, and also by adulteration, and to bring about an equation with a demand which was largely compact of customary usage and relatively unaffected by the swifter fluctuations termed fashion.

Instances of price-haggling are not rare, and we have already noticed the dealer’s sense of the wear and tear of it, and a case of that more developed competition which we know as ‘dealing in futures’. The outlay in this case, for a carriage, a pavilion the Benares docks, men (purisa), and ushers (patihara), must have cut deep into his last profit of 1,000 coins, but he was 20,000 per cent to the good as the result of it.

After this the profit of 200 and 400 per cent, reaped by other traders falls a little flat, and such economic thrills only revive when we consider the well-known story of the fancy price obtained by Prince Jeta for his grove near Savatthi from the pious merchant Anathapindiika, limited only by the number of coins (metal uncertain) required to cover the soil.

At the same time custom may very well have settled price to a great extent. ‘My wife is sometimes as meek as a 100-price slavegirl reveals a customary price. For the royal household, at least, prices were fixed without appeal by the court valuer (agghakaraka) who stood between the two fires of offending the king if he valued the goods submitted at their full cost, or price as demanded, and of driving away tradesmen if he refused bribes and cheapened the wares. On the other hand the king might disgust him by too niggardly a bonus.

It may also have been the duty of this official to assess the duty of one-twentieth on each consignment of native merchandise imported into a city, and of one-tenth, plus a sample, on each foreign import, as stated in the law-books of Manu, Gautama, and Baudliayana.

Such oetrois are alluded to in one Jataka, where the king remits to a subject the duty collected at the gates of his capital. Finally, it may have been his to assess merchants for their specific commutation of the rajakariya, namely, one article sold per month to the king at a discount (arghapacayena).

The ‘sample’ mentioned above is suggestive of a surviving payment made in kind. That the ancient systems of barter and of reckoning values by cows or by rice-measures had for the most part been replaced by the use of a metal currency, carrying well understood and generally accepted exchange value, is attested by the earliest Buddhist literature.

Barter emerges in certain contingencies, as e.g. when a wanderer obtains a meal from a woodlander for a gold pin, or when among humble folk a dog is bought for a kahapana (karshapana) plus a cloak. Barter was also permitted in special commodities by the law-books ascribed to Gautama and Vasishtha and was prescribed in certain cases for the Sangha, to whom the use of money was forbidden. Moreover, as a standard of value, it is possible that rice was still used when the Jataka-book was compiled.

But for the ordinary mechanism of exchange we find, in that and all early Buddhist literature, the worth of every marketable commodity, from that of a dead mouse and a day at the festival up to all kinds of prices, fees, pensions, fines, loans, stored treasure, and income, stated in figures of a certain coins, or its fractions. This is either stated, or implied to be, the kahapana. Of the coins called puranas this literature knows nothing.

Other current instruments of exchange are the ancient nikkha (nishka — a gold coin, originally a gold ornament), the suvanna, also of gold, and such bronze or copper tokens as the kamsa, the pada, the masaka (masha), and the kakanika, Cowry shells (sippikani) are once mentioned, but only as we should speak of do its or mites not as anything still having currency. That there was instability as to the relative value of standard or token coins in place and time we learn from the Vinaya- At that time [of Bimbisara or Ajatasattu], at Rajagaha, five masakas were equal to one pada’. Again, the nikkha was valued now at five, now at four suvannas.

Of substitutes for money, such as instruments of credit, we read of signet rings used as deposit or security, of wife or children pledged or sold for debt, and of IOU’s or debt-sheets (inapannani). The bankrupt who, in, the Jataka tale, invites his creditors to bring their debt-sheets for settlement, only to drown himself before their eyes, appears in a Milinda simile anticipating the crisis by making a public statement of his liabilities and assets the entanglement and anxieties of debt as well as the corporate liability belonging to communistic life in a religious order rendered it necessary to debar any candidate from admission to the Sangha who was a debtor. And the sight of a deposited security recalling the past circumstances of the pledging is instanced in the Milinda as a case of the physical process of recollection (sati).

No definite rates of interest on money loans appear in the early books. But the term which appears in the law-books as ‘usury’ (vrddhi, Pali vaddhi) is found. Meaning literally profit or increase, it may very early have acquired the more specialised import.

There is a tolerant tone concerning the moneylender in a Jataka tale, where a patron, in enabling a huntsman to better himself, names money-lending (ina-dana), together, with tillage, trade, and harvesting as four honest callings. Gautama is equally tolerant.

But the general tendency of this profession to evade any legal or customary rate of interest and become the type of profit-mongering finds condemnation in other law-books. Hypocritical ascetics are accused of practising it. No one but the money-lender seems to have lent capital wealth for interest as an investment. For instance, only bonds (panna) are spoken of in the case of the generous Anathapindika’s ‘bad debts’.

Capital wealth was hoarded, either in the house—in large mansions over “the entrance passage (dvarakotthaka)—under the ground, in brazen jars under the river bank, or deposited with a friend. The nature and amount of the wealth thus hoarded was registered on gold or copper plates.

Fragmentary as are the collected scraps of evidence on which the foregoing outlines of social economy have been constructed, more might yet be inferred did space permit. It should, however, be fairly clear from what has been said, that if, during, say, the seventh to the fourth century BC it had been the vogue, in India, to write treatises on economic institutions, there might have come down to us the record both of conventions and of theories as orderly and as relatively acceptable to the peoples as anything of the kind in, say, the latter middle ages was to the peoples of Western Europe.

But it is a curious fact that often where the historian finds little material to hand wherewith to rebuild, he judges that there never were any buildings. Thus in a leading historical work on economics, revised and enlarged in 1890, the whole subject of the economic ideas of the ‘Orient’ is dismissed in a single page as being reducible to a few ethical precepts, and as extolling agriculture and decrying arts and commerce; further, that division of labour, though politically free, stiffened into a system of hereditary caste, arresting economic progress, and that the Chinese alone, and only from the seventh century AD, had any insight into the nature of money and its fiduciary substitutes.

But we have been looking behind the ethical precepts of the preacher, and the sectarian scruples of a class, at the life of the peoples of North India, as it survives in the records of their folk-lore, and of the discipline of the brethren in orders who lived in close touch with all classes. And we have seen agriculture diligently and amicably carried on by practically the whole people as a toilsome but most natural and necessary pursuit.

We have seen crafts and commerce flourishing, highly organised corporately and locally, under conditions of individual and corporate competition, the leading men thereof the friends and counselors of kings. We have found ‘labour’ largely hereditary, yet, therewithal, a mobility and initiative anything but rigid revealed in the exercise of it. And we have discovered a thorough familiarity with money and credit ages before the ‘seventh century AD.’