One of the minor mysteries in the history of Dharmaśāstra concerns the relatively small number of rules and discussions of the laws for the Vaiśya class, the third of the four ideal classes and the last of the upper-three “twice-born” classes. 1 In the Dharmasūtras, rules for many domestic ritual practices are explained for the “twice-born” classes, and the special rule for Vaiśyas is duly listed just after those for Brahmins and Kṣatriyas. This structure impresses upon us the idea that Vaiśyas mostly do what the other higher classes do, just a little differently. For example, Āpastamba states, “The occupations specific to a Vaiśya are the same as those of a Kṣatriya, with the exception of meting out punishment and warfare, and the addition of agriculture, cattle herding, and trade” (ĀpDh 2.10.7). These early texts are structured much more around difference between the orders of life rather than between the classes.
Manu changes all of that, as Olivelle (2005: 7–18) has shown. At that moment, class becomes the basic structure for the exposition of dharma . Manu devotes a mere eight verses (MDh 9.326–9.333) to the specifically identified dharmas of Vaiśyas (and only two to Śūdras). Given that the textual structure of Manu is organized around the classes, we would expect that the Vaiśya class would have received greater attention, since it is a “twice-born” class.
In this chapter, I want to suggest a possible explanation, by arguing that Vaiśya dharma is not missing, but rather woven into other topics of Dharmaśāstra. To do this, however, I need to start with a broader look at how Dharmaśāstra texts viewed the economy and commerce within the larger context of dharma . The economy and economics were not isolated in Europe as categories of sociological and political thought until the eighteenth century, with the publication of Adam Smith’s Wealth of Nations (1776). In classical India, by contrast, we find that a general category for the economy and economics did exist as early as the Arthaśāstra (ca. first century ce ). Then it went away.
The word for economy in Kauṭilya’s great work is vārttā , sometimes vartā . Of course, it is no direct translation and has a completely different etymology, but the kinds of human activities discussed under the heading mirror those classed under economy . The Arthaśāstra 1.2.1 instructs kings to learn about several things in order to efficiently and effectively run their kingdoms. The economy is one, but the king should also learn “critical thinking, the three Vedas, and government.” Economy and economics then formed a part of artha , “statecraft and kingship.” For Kauṭilya, economics was a vital part, one of four major subjects, of a powerful king’s education.
Trautmann (2012 ) has recently provided a clear and concise portrait of the economy according to the Arthaśāstra . 2 According to Kauṭilya, the king’s primary interest in vārttā lay in the predictable and sufficient provisioning of his court, the wider nobility, and the army. For that purpose, farmers and farmlands had to be safe and productive. Food provisioning was the basic economic concern of course, and the ideal king had to find ways to ensure that food supplies were adequate, diversified, and stable. Therefore, the state had to employ scores of overseers or superintendents to monitor and manage agricultural production in the name of the king. Healthy agriculture, including forest products, filled granaries and enabled other forms of business, from artisanal labor, mining, and manufacturing to short- and long-distance trade. These industries, too, required supervision, and the Arthaśāstra presents the economy as a scrupulously supervised institution. Without supervision and necessary interventions, prices may skyrocket or collapse, markets may disappear, and tax revenues may dry up. In addition to a royal bureaucracy, a legal framework helped to shape business expectations and to resolve disputes that arose. As a co-sharer in the landed property of his subjects, the king had both obligations and interests in the production and distribution of goods throughout his realm. In this idealized analysis of the economy and business, Kauṭilya’s text provided a thoughtful, promising baseline for later studies of economics and business.
As with most economies of the ancient world, the driving concern of the Arthaśāstra was production and productivity, especially as it pertained to the health and provisioning of the royal family, the royal forts, and the government. The scores of superintendents and lesser officials appointed to oversee production of diverse resources only occasionally had responsibilities involving questions of the distribution of those resources. Perhaps, more than one would expect, concerns about production extended beyond supplying the government to assuring fairness and profitability to subjects generally. The Superintendent of Commodities, for example, “should forgo a large profit [on the sale of commodities on his own land] if it will cause hardship to his subjects” and he “should not create either a time restriction or the evil of crowds with respect to essential commodities” (Arthaśāstra 2.16.6–2.16.7, Olivelle’s translation). The “evil of crowds,” saṃkuladośa , might be likened to a fear of the mob. The basic idea, repeated a few times in the text, is that governmental actions that spur collective resentment and resistance should be avoided at all cost. The overriding concern of economic governance, therefore, is fairness in the production and sale of goods. Although equitable distribution finds little space in the text, we do at least see an early effort to mark out the economy in need of both political and legal protection.
Given the detail and scope of interest in vārttā within the Arthaśāstra , we might expect that the subject would have attracted continuing interest, perhaps developing into a field of its own, an independent subject of study. As many scholars have shown, however, that didn’t happen (Gokhale 1977 ; Dasgupta 1993 ). The second book of the Arthaśāstra contains an impressive analysis of economic matters as seen from the perspective of governance and state regulation through officials and superintendents. Such an analysis might have formed the basis for an entire science of economics or political economy. The ingredients for a vārttā-śāstra were certainly present. The broad idea of the economy had been conceptually isolated in the category of vārttā and that idea had been scrutinized within the larger category of artha . More importantly, various polities of ancient India had vibrant and complex economies involving agriculture, trade, manufacturing, and commerce within regular markets. Of course, those economies differed from modern market economies, but several key issues from profits and productivity to wages and prices had already struck Kauṭilya and other authors of the artha tradition as worthy of analysis.
So, how could a concept like the economy, so entrenched in modern minds, have appeared once upon a time in India, only to have been demoted or relegated to the margins of intellectual life? The answer lies in the particular form of legalism, namely Dharmaśāstra, that came to swallow up considerations of the economy. Economists always fight about how much abstraction is useful in understanding wealth and business, and some question whether we should abstract at all. Real economies, vibrant and fragile, existed in India quite apart from texts that analyzed them in abstract terms, but it is crucial for us to understand that commerce and economics as academic subjects might have had a very different look, if the legal approach of Dharmaśāstra had not dominated most analyses of the economy. Stated simply, artha was converted into dharma . The science of wealth became part of the science of law and righteousness.
Brahmin authors of Dharmaśāstra converted statecraft and kingship, called nīti in the Arthaśāstra , into Kṣatriya dharma , the dharma of kings and royalty. In the same way, business and the economy, vārttā , became Vaiśya dharma instead. 3 What is amazing to us, almost incredible in fact, is that it worked. Economics and the economy were no longer studied as part of the political power and strategy of a king. Rather, the economy was slotted into third position as the social domain of a particular class of people, the Vaiśyas. The third position of the economy was an important, but hierarchically less important, area of human activities. Unlike the Arthaśāstra, which presents four areas of mutually interdependent activity as essential to a state, the economy or Vaiśya dharma of the Dharmaśāstra plays a supportive role.
Time and again, the Dharmaśāstras explicitly state that commerce and business are the dharma of Vaiśyas. Manu (MDh 11.235) says it as clearly as anywhere, “Commerce (vārttā ) is the religious work (tapas ) of a Vaiśya.” The sections of Manu, Yājñavalkya, and Viṣṇu that deal directly with this dharma by name are, however, rather small—and nonexistent in other basic texts. What I think has been underappreciated, even missed, is the fact that many of the laws to be found in the Dharmaśāstra sections on legal procedure (vyavahāra ) are really substantive laws for commerce, agriculture, and trade—and, therefore, Vaiśya dharma . In effect, then, the eight titles of law dealing with commerce are an expansion of what Vaiśya dharma really is. The first reason this identification matters is that it is a good example of how Dharmaśāstra converts ordinary work into religious work.
As in nearly all traditions, business is not the most important kind of human activity from the religious perspective. Nevertheless, it is still a form of religious work, of doing dharma , for the appropriate social class, the Vaiśyas. I do not defend the caste-based social system envisioned by the Dharmaśāstras or its obvious oppressive effects. However, if we want to understand the legal approach to business in Dharmaśāstra texts, then we must acknowledge that these authors saw business and economics as affairs to be controlled and practiced by a middle class of merchants, traders, artisans, farmers, herders, and skilled professionals. In theory, everyone else reaped the material benefits of their economic organization and business activity or served their interests as a basic labor force, namely the Śūdras and other lower classes. Remember that we are talking here about legal thought, not historical fact, but that thought dominated the educated classes so far as we know and certainly had a lasting impact on way business matters were conceived and carried out.
Business was not only a way to make and increase wealth but also a religious duty. The shape of that religious obligation was a set of laws that gave secular business dealings religious significance. The whole point of Dharmaśāstra was to convert ordinary activities into sacred duties by prescribing particular ways of doing them. In other words, if you followed the rules for making loans, for paying employees, for securing partnerships, and so on, you were not just conducting fair business you were also building religious merit, good karma. The connection between ordinary and sacred work is rarely made explicit in the texts, rather only in the framing, but some hints of the link may be found.
It is telling, for example, that the twelfth-century author Devaṇṇabhaṭṭa opens his discussion of the title of law called Partnerships with the word vāṇijya , meaning “business, commerce, and trade” (SmṛC , Vyavahāra, 429). Typically, Sanskrit texts will describe the paradigmatic case of a given topic first and in the greatest detail, providing details for other cases with implicit reference to the “archetypal” case (prakṛti ). Of the six types of partnership examined, business heads the list with the joint work of priests (ṛtvij ) described fourth. 4 Vāṇijya is a synonym of vārttā and of Vaiśya dharma . For most subjects, Brahmin concerns will be the paradigm. In this case, however, Devaṇṇabhaṭṭa recognizes that the archetypal partner (sambhūyakārin ) is the merchant or trader. Similarly, Vijñāneśvara concludes his discussion of partnerships with the explicit statement, “The author Yājñavalkya transfers (atidiśati ) the law of business partners (vaṇigdharma ) just explained to that of sacrificial priests and other partnerships” (Vij at YDh 2.265). 5 The use of the word dharma here need not come with a strong religious sense, but it is, nevertheless, indicative of the religious framework within which business matters fall. In short, partnerships are the religious duty of business people in the same way that they are the religious duty of priests who cooperate to perform the various specialist functions of a sponsored ritual.
In the title of law called Non-delivery after Sale, Yājñavalkya provides the following rule: “A merchant (vaṇijā ) who is unaware of the decreased or increased value of commodities may not cancel a purchase after it is completed. If he does, he should pay a penalty of one-sixth of the purchase price” (YDh 2.258). Vijñāneśvara introduces this rule too as a dharma that applies to both to the cancellation of a sale (vikrayānuśaya ) and to the cancellation of a purchase (krītānuśaya ). He clarifies that there are short time limits stated in other legal sources within which one may cancel a transaction, if one becomes aware of a change in market value, and longer periods for a commodity or trade-good that is defective. Otherwise, changes in market value may not be used to rescind a purchase. In this context, we again see that the frame places a secular rule in a religious context through the label dharma . As before, it would be wrong to push the religious aspect too hard, since no stark division between religion and law or religious and secular is made in any dharma text. All I want to suggest is that the labeling of obviously worldly, business-related transactions as dharma draws a big semantic circle around seemingly disparate domains such as the religious rites of households, the responsibilities of a king, and the transactions of business and trade. 6
From these brief examples, we can see that the religious framework set around the economy and business is rather loose. It is a not a front-and-center kind of ideology—that good business was good for the Vaiśya soul—but rather a background to justify the inclusion of business in these texts on religious law in the first place. At the same time, an interesting assumption at work in both the religious and legal framing of business in Dharmaśāstras concerns the priority or privileging of the social world over the economic domain. The reason I bring this privileging up here is that our current assumptions tend instead to elevate the economic over the social. A second reason the identification of business and Vaiśya dharma matters, therefore, is the opportunity it gives us to explore the implications of asking, which comes first, economy or society?
The title of law dealing with the nonpayment of wages describes the relations between owners and their workers as mediated through the wages paid to the workers. The title is brief and it consists of a few common rules outlining the owner’s rights followed by the worker’s rights. It is in the back and forth of first, a rule protecting the owner’s interests, and second, a rule guaranteeing the worker’s wages that we find an economic relationship undergirded by social connections and moral considerations.
For example, at YDh 2.193, we see the owner’s general interest secured: “One who receives a wage but fails to perform the work shall be made to pay double the wage to the owner. If he does not receive it but fails to perform the work agreed upon, he should pay an amount equal to the wage. Workers must also take good care of the instruments of their labor.” Here, the owner seems to control everything. In the succeeding rule (YDh 2.194), however, the worker’s right to a wage or a share of the profit is guaranteed. The commentator Vijñāneśvara puts it like this: “If an owner, merchant, cattle owner, or owner of a field makes a worker perform a job without fixing his wage, then the king should make him pay to the worker a tenth of what was received from the commercial, husbandry, or agricultural enterprise.” Workers were thus protected against an owner’s failure to pay the appropriate or agreed upon wages.
The next two rules also establish reasonable legal expectations in the relationship between an owner and a worker. According to Vijñāneśvara’s explanation of YDh 2.195, if a worker misses an opportunity to sell something at the best market or on the best day or if he causes the overall profits to diminish because of his laziness or out of spite, then an owner has the discretion (yāvad icchati ) to dock his wages, but not withhold them entirely. Conversely, if a worker’s industriousness or special effort yields particularly strong profits, the owner must then pay a bonus (adhikaṃ dhanam ) to the worker. YDh 2.196 then makes a rule for the equitable distribution of wages for general work, but, especially, work that may require more than one laborer. When a worker is unable to finish a job because of illness or other interruption, he should still be paid “according to the work he has done as determined by an arbitrator” (Vij 2.196). 7 While this provision falls short of modern disability protections, it still signals that the law expects owners and workers to work out the economic exchange between them through a measure of flexibility and mutual consideration. The legal rules provide for sanctions to enforce the minimum expectations and even require a third-party arbitrator to determine equitable resolutions in uncertain cases. Supporting each rule, however, is an assumption of social connection and mutual benefit between owners and workers. In other words, the payment of wages occurs within a social bond that the law expects and encourages as a part of dharma .
Another part of Vaiśya dharma that relies on bonds of trust is the title of law dealing with sale by a non-owner. In this title, intricate considerations of trust influence the legally required vigilance to ensure that a seller is the owner of what he is selling. Perhaps the most familiar modern parallel arises in the context of pawnshops. When accepting a pawned item, the pawnbroker must inquire as to how the item came into the seller’s or pawner’s possession. Failure to establish or inquire about ownership makes the pawnshop liable for criminal and civil penalties, if the item is later discovered to have been stolen. The complexity of rules surrounding similar scenarios described in Dharmaśāstra tells us that both fraudulent sales and fraudulent claims to ownership were contrived in many ways in classical and medieval India. Personal connection protects against the dangers of impersonal transactions.
In Devaṇṇabhaṭṭa’s exposition of the topic, the first concern, however, is for the true owner of something that has been lost or stolen (vinaṣṭam apahṛtaṃ vā ). The owner’s right to reclaim his property is proclaimed in general terms, relying on rules from Nārada and Manu (SmṛC, Vyavahāra , 498). Of interest, though, is the fact that Bṛhaspati defines a non-owner (asvāmin ) primarily with reference to situations in which one person has purposely entrusted something to another through legal deposit, pledge, collateral, or simple borrowing. The trustee violates his fiduciary obligation by selling the item in question, although he is not the owner. Straightforward instances of theft and resale are also discussed, but as a secondary (because obvious) matter. Following Nārada, “A sale made by a non-owner, and also that purchase, always fall among transaction types into the category of not made (akṛta ) at all” (SmṛC, Vyavahāra , 498). The legal invalidity is linked to the legal status of the seller at the time, namely “non-owner.” To be a non-owner is already to have violated a social trust in one way or another. Since a non-owner cannot legally do anything with another’s property, any transaction of that property never actually happened in the eyes of the law. The economic failure begins as a social failure.
The complications ensue when a fraudulent seller meets a devious buyer. In such cases, criminal and civil liability may attach to both. According to Viṣṇu, if a buyer purchases something out of ignorance (ajñānatas ) and publicly (prakāśam ) then he commits no crime. On the other hand, “If the sale occurs privately or at a discounted price, then the buyer too should be punished as a thief” (SmṛC, Vyavahāra , 500). Here the collusion or appearance of collusion between seller and buyer is treated as a double betrayal of the social expectations of the law. Business and commerce should occur openly, in public. Moreover, buyers bear some responsibility for ensuring that the material goods they buy come from a trusted source.
In some cases, the source itself may be difficult to establish. An owner may need to prove his ownership over his property or a potential buyer may need to confirm the provenance of the goods he is buying. In such cases, the testimony of relatives (jñāti ) may be called upon to establish or confirm ownership (SmṛC, Vyavahāra , 501–2). Documents (lekhya ) may also serve as proof of ownership as well. The presence of witnesses or signed documents implies that the transaction occurred in public, but Devaṇṇabhaṭṭa dismisses arguments that merely conducting a transaction in public or with the knowledge of state officials is a legal guarantee of clear title. He states, “Not even a hundred texts are enough to prove that a buyer owns something sold by a non-owner” (SmṛC, Vyavahāra , 506). The twisting of legal rules should not overwhelm the basic moral principle. That ideal does not mean, however, that negligent buyers or owners may not suffer loss. Several cited texts point to the legally expected practices that help to protect against fraud and loss. For the buyer, purchasing from someone from an unknown area is a mistake (apacāra ), while for the owner, failing to safeguard one’s property is also blameworthy. Both forms of negligence tend to produce a material loss (dravyahānikāra ) that the law may not restore in full.
As with workers’ wages, so also with commercial sales, social bonds are the foundation of successful and moral economic exchanges. A fraudulent seller who breaks the trust inherent in a deposit, loan, or pledge forfeits under the law not only the material advantage gained but also, and more importantly, the reputation needed to conduct business at all. Owners, sellers, and buyers all have minimum legal obligations, respectively, to monitor and protect their property, to sell only items that they own outright, and to ensure the legitimate provenance of whatever they buy. At the same time, the law also expects more in social terms from those who engage in commerce. Sales should be conducted publicly, probably in an open market, and in the presence of kinsmen, whom the law recognizes as natural support for an individual. Deviations from this norm entail risk for owner, seller, and buyer alike. As a result, the legal protections diminish for any sale, legal or not, that does not conform to the higher expectations encoded in the law. An ideal social setting bolsters the stable exchange of goods, as the social group expects or demands fair and familiar terms of exchange.
A final contrastive example concerns the title of law called Failure to Perform Indentured Service. In addition to a range of indentured servants such as a student-disciple, an apprentice, a household servant, and an overseer, this title also includes slaves. In these relationships, a contrived legal bond that connects people in restricted ways replaces any social bond that might exist between them. The economic benefit, namely labor itself, is disproportionately in favor of the “master” in every case. The apprentice may learn a skill or the disciple may gain knowledge of a subject, but the services rendered by them yield a direct economic reward for the master. Thus, the relationship is essentially extractive, pulling work out of the subordinate for the benefit of the master. As with the previous examples, the artificial “sociality” created between the master and his servants or slaves is the root of the economic production that emerges from the relationship. The difference in this case is that all “indentured servants or slaves share a common duty based on the fact that they are not legally free” (SmṛC, Vyavahāra , 455). 8 Unlike voluntary economic transactions (vyavahāra ), therefore, the forced or indentured nature of the labor creates its own “social” matrix as part of the economic production process. Nevertheless, without the artificial social bond, no economic exchange or extractive benefit happens at all. In a sad and deplorable way, even this side of the law promotes a “social” bond as the basis of economic production.
I have emphasized the social foundations of business, commerce, and economic production within several titles of law in order to make a point about the frequent modern assumption that economic realities automatically and always shape everything else. One reason that the dharma authors stopped talking much about vārttā and started talking more about Vaiśya dharma may be their desire to keep the economy in a socially and theologically subordinate role. Although an academic truism at this point, what we learn from the Dharmaśāstras is, first of all, that the economy is—like most categories—socially constructed. The peculiar history of the early appearance of vārttā as a category close to “economy” and its rapid disappearance tells us that it is an intellectual and cultural choice to hold on to the idea as useful. For the authors of this tradition, social status and relationship, specifically the Vaiśya status and its social roles, took precedence over economic production and even the state’s political interests. We should doubt whether that theoretical precedence was real in practice and we may doubt whether it was a good idea at all. Still, the texts repeatedly emphasize the social connections that shape various business and commercial enterprises from partnerships to workers’ compensation to the regulation of sales. We detect, therefore, more than mere lip service or high theory in the notion that economic matters occupied a second or third position in the cultural priorities of classical and medieval India. The contemporary focus on economics at the expense of society reveals its one-sidedness by comparison.