Debt: The First 5000 Years - autonomous learning

THE MIDDLE AGES 253
was to endure. It took a good deal of time, however, for this failure
to occur.
The Mauryans represented a high watermark of empire. The next
five hundred years saw a succession of kingdoms, most of them strongly
supportive of Buddhism. Stupas and monasteries sprang up everywhere,
but the states that sponsored them grew weaker and weaker;
centralized armies dissolved; soldiers, like officials, increasingly came
to be paid by land grants rather than salaries. As a result, the number
of coins in circulation steadily declined.3 Here too, the early Middle
Ages witnessed a dramatic decline of cities: where the Greek ambassador
Megasthenes described Asoka's capital of Patna as the largest city
in the world of his day, Medieval Arab and Chinese travelers described
India as a land of endless tiny villages.
As a result, most historians have come to write, much as they do
in Europe, of a collapse of the money economy; of commerce becoming
a "reversion to barter." Here too, this appears to be simply untrue.
What vanished were the military means to extract resources from the
peasants. In fact, Hindu law-books written at the time show increasing
attention to credit arrangements, with a sophisticated language of sureties,
collateral, mortgages, promissory notes, and compound interest.4
One need only consider how the Buddhist establishments popping up
all over India during these centuries were funded. While the earliest
monks were wandering mendicants, owning little more than their begging
bowls, early Medieval monasteries were often magnificent establishments
with vast treasuries. Still, in principle, their operations were
financed almost entirely through credit.
The key innovation was the creation of what were called the "perpetual
endowments" or "inexhaustible treasuries." Say a lay supporter
wished to make a contribution to her local monastery. Rather than
offering to provide candles for a specific ritual, or servants to attend to
the upkeep of the monastic grounds, she would provide a certain sum
of money-or something worth a great deal of money-that would
then be loaned out in the name of the monastery, at the accepted 15
-percent annual rate. The interest on the loan would then be earmarked
for that specific purpose.5 An inscription discovered at the Great Monastery
of Sanci sometime around 450 AD provides a handy illustration.
A woman named Harisvamini donates the relatively modest sum of
twelve dinaras to the "Noble Community of Monks.% The text carefully
inscribes how the income is to be divided up: the interest on five
of the dinaras was to provide daily meals for five different monks,
the interest from another three would pay to light three lamps for
the Buddha, in memory of her parents, and so forth. The inscription