The history of Indian business is a rich tapestry with strands as diverse as Kautilya’s Arthashastra, the business principles used to run Buddhist monasteries and the reign of the East India Co. Publishing house Penguin has embarked on an endeavour to capture this history—through a 15-volume series conceptualised, curated, and edited by Gurcharan Das, a former CEO of a multinational firm and a popular author and columnist. Four books have thus far been released, the fourth earlier this week, on 11 December. The series will end with the Bombay Plan that came soon after independence. In an interview with Mint, Das discussed the series. Edited excerpts:
Let’s start at the beginning, how did the idea for this series come?
Somebody in Penguin was discussing with me the great business ideas that have emanated out of India, a country with 5,000 miles of coastline, and which was once a great trading nation. Then I was asked to be general editor of this series. It was very clear to us from the beginning that we wanted this to be a serious project, so I wanted the very best scholars and I also wanted this to be text-based—we wanted to mine the classical and medieval literature of India as well as inscriptions and other historical sources.
The interesting thing about our series is that we raise questions that are relevant even today. For example, in my foreword to the first book, Arthashastra, The Science of Wealth (by Thomas R Trautmann), I raise a question on the notion of property. What was it? In many countries the king owned everything. But in India, the Arthashastra says very clearly to the king, “You don’t own the kingdom. You have a bhaga and it’s shath-bhaga (one sixth).” In other words, that is the moral, the right tax rate, for a kingdom. And so, whenever kingdoms had higher tax rates, such as in the Mughal empire, when the tax rates went up to 40% and 50%... they collapsed. That’s a lesson that India pretty much forgot for 40-50 years. Our tax rates during Indira Gandhi’s time had gone to 97.5%
The topics and authors are not conventional choices. A book on the Arthashastra is, but not the one that followed (Merchants of Tamilakam: Pioneers of International Trade, by Kanakalatha Mukund). The third one (The East India Company: the World’s Most Powerful Corporation by Tirthankar Roy) is, but I read in the foreword that there’s a book coming out on running a Buddhist monastery...
What triggered the Tamilakam book was the discovery of a great hoard of coins in the Padmanabhaswamy temple at Thiruvananthapuram. They found a huge amount of Roman coins, and that got me thinking. Every few years we find these Roman coins in Tamil Nadu... Arikamedu. I said, we need to learn more about the Roman trade with Kerala and Tamil Nadu. (That time, there wasn’t that distinction between Kerala and Tamil Nadu. It was Tamilakam). And then I had read somewhere, a quote from the Roman senator, Pliny, who was speaking to the Roman senate. He called India this sink of the world’s gold. He tells Roman senators to tell their wives to use less Indian spices, Indian silks, Indian cottons, because ‘the Indians are not buying anything from us, and so we’re losing our gold’: 65% of Rome’s gold was landing in Tamil Nadu and that’s why you find all these pots of Roman coins. And Kanakalatha, who wrote this volume, she says, that at the height of this, one ship was arriving every day in Tamilakam from the Roman Empire. So you can see what a great trading and seafaring country we really were. And how we forgot this lesson for 40 years when we closed our economy from 1950 to 1990...
You mentioned the Buddhist text. This is a text from the third century which was actually discovered in a monastery in Kashmir. It is a Sanskrit text that describes how to run a monastery like a corporation. How do you raise money? What do you borrow from the merchant? What do you borrow from the prince? How do you control cost? What do you do with the surplus? Do you keep your own funds, your profits with the merchants or do you keep it with the prince? How do you maximize the returns on your investment? It’s a very hard-headed text. And we have a scholar from UCLA, Gregory Schopen , a historian, writing that.
How did you identify the authors? How easy was it to convince them to write?
Tom Trautmann, who wrote the first volume on the Arthashastra, and is, perhaps, the greatest authority on it in the world, was at University of Michigan, Ann Arbor, when I gave him a phone call, and it took me a few weeks to persuade him.
All the authors are great scholars. And people like Sanjay Subrahmanyam, Muzaffar Alam, Gregory Schopen, even Tirthankar Roy, who did the East India Co. book, these are all big names in the academic world. To tell them not to write an academic book was a challenge because academics make their reputations by writing for other academics. These books will reach far more people than their (other books) and that was attractive to them; (as was the fact that) we were going to keep the books serious. I convinced 10-15 writers and they helped me convince some more.
We will have a volume on the Marwaris written by Thomas Timberg; we’ll have a volume on the Kutchis, the ancestors of Wipro’s Azim Premji, where we’re going to talk about this golden triangle of trade from Mandvi in Kutch, to Muscat to Zanzibar. And how they took cotton clothes from India, got coral and pearls from Muscat and ivory from Zanzibar. And then we have a book on the Nattukottai Chettiyars; Raman Mahadevan is doing that.
One of our volumes is called The Mouse Merchant. It’s written by Arshia Sattar, and she has gathered stories from the Panchatantra, the Kathasaritsagara, the adventures of Vikramaditya, and these are stories about merchants. And there are stories about their romances, their adventures, making money, losing money, getting lost on the high seas, and so on.
These are great stories of adventure and romance, but for us it’s principles also. That we can learn today from these books. And certainly, the principle that comes through again and again is the notion of trust, especially when it comes to the Indian merchant communities that we deal with.
And some of the learnings about what not to do too, right?
Yes. You learn a lot from the mistakes they make. There is an interesting story about Tarachand Ghanshaymdas Poddar, whose family ran the richest Marwari firm of the 19th century. They used to lend money to the princes of Rajasthan; the Nizam of Hyderabad; the Maharaja of Kashmir; the East India Co. The firm collapsed. It’s interesting; we’re having this interview here, in HT House, that the Birlas (who promoted Hindustan Times) got their start as sub-agents of Ghanshyamdas. The greatest Marwari firm of the 19th century collapsed because they lost their appetite. They let others run their business and lived a good life in Mussoorie. The lesson, I suppose, is one of governance. That’s why the board of directors is there.
Still, for me, the question that in a sense triggered off this project, was that 64 countries did the same reforms India did but how did India become the second fastest growing economy in the world in the last decade. Nobody has been able to give me a satisfactory answer. My own politically incorrect answer is that we had in India the good fortune of having merchant castes, trading communities. They were all over; they were Hindus, Muslims, Parsis, and Jews. We have the Sindhis, Punjabi Khatris in the north; we have the north Indian baniyas, the Aggarwals, the Guptas, we have the Marwaris, the biggest risk takers of all, and we have Nagar Brahmin in Ahmadabad and we have in Surat… Before Bombay, Surat was the centre of gravity.
If you institute economic reforms in a society where people know how to conserve capital... If you have communities whose DNA is that... it is a genetic advantage.
I was reading the Forbes’ list of (Indian) billionaires for 2007; I remember most of the names belong to great trading communities. So the much reviled caste system may have come to our aid when it came to the economic rise of India. Sadly, merchants do not get good press, even today.
Transcribed by Moulishree Srivastava and Shalene Gupta