© 1993–2011 Mario Gómez Zimmerman. All rights reserved.


The Capitalist Structures of Hinduism
Este artículo fue pubicado por el Acton Institute en la edición de Mayo-Junio de 1996

 Since Hinduism spans such a long period of time, and since India has suffered so many invasions, many socio-economic systems, including a sort of feudalism, have taken hold. And today the schemes brought about by modern ideologies–populism and democracy, for example–and other influences of modern Western civilization have prompted changes to Hinduism, some of them contrary to its classical doctrines.

In order to identify if Hinduism fits into a capitalist or socialist framework, we will look at three basic issues: the caste, or Varna, system, theologico-philosophical issues regarding property (outside the sacred texts), and some socio-historical facts or events.

An understanding of the caste system is crucial to understanding Indian social and economic structures and practices. It is first mentioned in the Rig-Veda, in the famous hymn to Purusha, and then elaborated exegetically in the Upanishads. This system divides men into five catagories: Brahmins (philosophers, priests, and others who perform the function of illuminating the higher truths),

Ksatriyas (warriors and rulers, entrusted with safeguarding the truth and with leadership), Vaisyas (traders, farmers, and all who have the role of creating wealth and increasing welfare), and Sudras (workers, charged with supporting all of the above and with performing services).1 In addition to the Vedic sacred literature, the Varna system is also endorsed in the Bhagavad-Gita, the most influential Hindu religious text, considered by some a direct revelation from God.2 Besides, the Dharma-Sastras–of Vedic inspiration and devoted to regulating social life in the context of justice and righteousness–center heavily on the Varna system.

Such a system does not merely reflect a division of labor; it is rooted in the notion that man attains fulfillment only by performing his duties, which consist in developing his natural potentialities. In truth, the system only entailed a ranking or hierarchy of labors resulting from different capacities, not a distinction in the context of human dignity or worth, which was the outcome of vested interests and human shortcomings. Buddhism actually did not oppose the Varna system itself, only the belittlement of those considered inferior, averring that anyone, including Sudras, could reach enlightenment.

The Varna system was considered–and still is, although in a way more akin to its original design–a pre-requisite for every good


society, and the axis of social life. For example, in the laws of Manu, the most important Dharma-Sastra, the duties and functions of the castes are listed and their corresponding right and wrong practices pointed out. In one of the most important passages, it is said that the Vaisya must exert himself to the utmost in order to increase his property in a righteous manner, which includes providing others with food.3 Manu’s code endorses market practices, although it provides regulations above all for the market of labor.

As it is true for all the great religions, Hinduism warns human beings about the dangers of accumulating wealth, and at times demands them to renounce it. But in all cases, wealth is attacked

because it is likely to subject man to dependency, fostering egoism, greed, and avarice, and not for being an evil in itself. In fact, wealth is considered a good to be pursued within the spheres of worldly affairs, trying at the same time to remain detached from it, which is the way to spiritual evolution. In Hinduism, this aspect is commonly referred to as renouncing the fruit of labor. It is made with the provision that renunciation must be a voluntary act, because it is acknowledged that only a few are prepared to follow the path to perfection in a strict manner. Literature on this is vast, so I will limit myself to sample what Sai Baba and Prabhupada (the first considered by many as the Avatar of our time, the second the founder of the International Society for the Conscience of Krishna) have to say about this. To quote Sai Baba: “When a man has a right to engage in Karma, he has a right also for the fruit; no one can deny this or refuse his right.&quote;4 On his part, Prabhupada states that, according to the Law of Karma, wealth is the result of a good previous labor, and that the Lord leaves man independent to engage in the activities proper to the material world.5

Ideologically, most of the relevant socio-historical facts can be grouped within a few categories, the most important ones being the role of the state of the economy, its bearing on individuals, and the economic relations between people. In fact, though the state in India throughout the centuries was the equivalent of a big entrepreneur, it never did away with private enterprise. That was the case, for example, with land, where although the king was to be its ultimate owner, private parcels were deemed a necessary entitlement.

Regulations affected above all the macro-economic aspects, but the play of particular economic forces was not over regulated and, more significantly, the individual was considered to have rights before the state. The limitation of the state’s power can be illustrated in the matter of tributes. As a rule, these amounted between one-third and one-sixth of production, were only levied in emergencies, and for only once taxes could reach as much as fifty percent of income. Of course, favoritism in assigning land, tricks to increase state revenues, and so on, were not unheard of. With respect to the micro-economy, the artisans, merchants, amusers, and many more contracted their products or services freely, although there were guilds and legal mechanisms to ensure that contracts were fulfilled. Many had thier own workshops in their dwelling, but there were also state-run manufacturing mills, such as those which employed women with no relatives.7

Next Page >