Mughal State Finance and the Premodern World Economy

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Abstract
In the April 1979 issue ofCSSH, Karen Leonard has advanced a new explanation for the decline and eventual collapse of the Mughal empire in India. She argues that “indigenous banking firms were indispensable allies of the Mughal state” (p. 152), and that the great nobles and imperial officers “were more than likely to be directly dependent upon these banking firms.” (p. 165) Thus, when in the period 1650–1750 these banking firms began “the redirection of [their] economic and political support” (p. 164) toward nascent regional polities and rulers, including the British East India Company in Bengal, this led to bankruptcy, the ensuing series of political crises and the “downfall of the empire” (p. 152). On first consideration, this theory does offer a plausible means to explain some of the more puzzling aspects of the period of Mughal decline, circa 1690 to 1720. Certainly the faltering, after more than a century of steady increase, of the flow of resources toward the imperial center in the last decade of the seventeenth century, and the inability of the empire to pay its highest ranking cadre of officers, theamirsor nobles, and their followers are manifest. A coterminous erosion of authority, the loss of morale and confidence of badly isolated imperial officers stationed throughout the subcontinent, and the loss of fighting spirit amongst imperial armies bogged down in an interminable war against the Marathas in the Deccan are also well known.

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