Mughal India: Economy, Resources, and Governance

Abstract The Mughal emperors were legendary for their wealth. Foreigners marveled at it. Leading economic historians like Irfan Habib have attributed it to their government’s capacity to exact almost the entire economic surplus from the countryside, thus suppressing all possibility of the emergence of capitalism. This chapter argues that this vision of Mughal omnipotence and the consequent absence of an independent market economy is flawed by an overreliance on imperial sources. Using ideas from the new political economy of information, it shows how regional and local elites collaborated with corrupt officials to subvert Mughal power and extract a large share of the gains from a new boom in international trade. But they had no incentive to publicize this. It is therefore only from Maratha sources—from estimates developed by the only serious challengers to the Mughal Empire, that we can glimpse the dimensions of this parallel economy.