In the last post, we saw how Holland came to represent the resurgent Europe with its abundant surplus which was invested in trading companies. while this was happening,lets take a look at India around the same period. while India was known as the treasure land and the land of the riches, the truth, you will be surprised to learn, is far from it. For India was dirt poor , with a few rich people , mainly the nobles, merchants and the kings who owned a majority of its wealth. The vast majority were mostly on subsistence level work. Most of the people were either small farmers or farm laborers. Indebtedness was rampant. People took money from money lenders at rocket high interest rates. Unfortunately, this suited the kings who for all intents and purposes were financed by the same money lenders. Today, we talk about eighty percent of the world's money is with the top 5 percent of people and how this is unfair. As bad as this sounds, there is a silver line here. For, there was not a single decade, not a single year, not even a single day in world's entire history when its wealth was equitable. Today, at least we acknowledge this issue as something that is plainly wrong. For most of the time, people assumed it to be the natural state of the world. But, I digress. Lets go back in time. In India of the ancient times, in fact in the wider region from the Mediterranean sea to china of the medieval times, there was a line of thought which was considered sensible. It goes like this. The state thought that the state which is an abstract entity, was more important than the subjects who lived under its government. A rather simple and harmless principle , you would think. But the consequences were so drastic. For, you see, when the government assumes a higher importance, it naturally follows that in any economic activity, the needs of the government came before the individual. So it was natural for the state to impose exorbitant taxes as its share. In fact, this policy was taken to extremes. The government was the first claimant to your money! And a small amount of money which was necessary for your survival was given as a token of benevolence from your beloved government. In short, the government of the times robbed your rightful income and gave back to you a small pittance that was barely adequate to keep you and your family alive. The concept of surpluses and "saving for the rainy day" were illegal.
So this was the situation in India and to a extent in china. In short, when we read the history of the ancient times, more accurately we are reading about the history of a small group of rich people who traded amongst themselves. Among them, the Europeans, who were slightly better merchants, who learned and implemented basic business concepts, won eventually. The Indians and Chinese,who simply built a society with unequal wealth distribution, lost because their rich people were simply not the right persons who could put such a wealth to better productivity. They were the "rich spoiled brats" of the yonder times who came to such a wealth merely by birth or by the whims of a ruler who himself was unfit for the rule. Their wealth was spent in pursuing non productive goals like running expensive harems, trivial sports and unnecessary wars among themselves. The life for the rest of people who incidentally, was the majority , were spent trying to earn one good meal every day and in trying to live one more day.