The argument that the free market and Christianity are compatible will be strengthened if it can be shown that the same is true for other religions. We will therefore attempt this project using Hinduism as our referent.
In discussing this subject, we must keep in mind two characteristics of Indian culture. First, the typical Western split between the religious and the socio-economic realms is very limited in Hinduism, as it is indeed for most Oriental mentalities; practical social morality is supposed to agree with religious and philosophical precepts. Thus, codes of law which presumably derive from the latter can be regarded as part of Hinduism. Second, as there is no central religious authority to establish orthodoxy, the teachings of recognized spiritual masters are usually incorporated into Hinduism. In addition, let us state that we will refer here mainly to traditional and trans-historical doctrines and practices. 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."e;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
The above points to several conclusions that reveal capitalist structures in Hinduism:
The socialist concepts of equality and a classless society are completely rejected by the Varna system. All too rigid as it was (at least theoretically), it would appear at first sight as a statist construct–so common under any socialist scheme. However, such a system constitutes an ontological need of a society rooted in the cosmogonical myth mentioned in note 1. The way it was implemented, the system limited many freedoms, but it also allowed each caste not to be fused within a general standard and to be free to live its own way. Of course, endogamy and other features of a caste system do not exist in capitalism. Nevertheless, with the allowance of greater social mobility and the recognition of equal human dignity for all, capitalism has indeed modernized the Varna system.
Central planning and regulations were implemented according to higher parameters set by Hinduism’s worldview, which were accepted by the collective conscience as traditional goods, with the state being, at least ideally, an instrument. Big bureaucracies resulted from the desire to control and maintain power, and other statist measures arose from the need to face external threats. Worldviews (religious, political or humanistic) limiting free will are to be found in every human group. In India, some over-regulation resulted from the greater interpenetration of what, according to Western thought, is to be legally enforced and what belongs to personal choice. But here the state was never a mechanism to subordinate the individual good to that of the society, which in short defines a socialist worldview.
Hinduism never denies the right to property; calls to renunciation fall outside the legal sphere. The attainment of wealth, although embodied with a social function, is considered a praiseworthy personal achievement. In fact, there is also a need in capitalism that economic activities project to the common good. Except in a utopian and ideal capitalist society–where all the property would be privately owned and we can even contemplate a voluntary financing of the government–public enterprises and subsidizing policies do not necessarily contradict capitalist tenets. They may be deemed to be supported by a legitimate social patrimony if they represent instances of epoch-related common goals of society, which originate specific secular functions of the state. The difference here, and so in Hinduism, is that the right to property is not subordinated to the above, that is it is not left at the stage of a functional need, and that the individual good is the highest aim of society.
Although subjected to regulations, man always enjoyed in India enough freedom over what he had created. Following what we had said in the last two paragraphs, for the time being capitalism does not propose absolutely unregulated free trading practices. Basically in reference to the labor market, free trade must still abide by certain directives which relate to the general framework of right upon which our social orders have been constructed. But as long as such directives do not interfere with any rational pursuit of fulfillment according to each one’s merit and to making one’s own talents count, as was indeed the ideal aim in Hinduism, we can say that we are witnessing at least an instance of pre-capitalist praxis.
In conclusion, we cannot say that traditional Hinduism thoroughly shares capitalist precepts, but we can assert that it pre-figures capitalism much closer than socialism.
What characterizes socialism above all is that it takes the person as a means, while the recognition of the individual as an end, and thus as subject of inalienable rights, is the most distinctive juridico-economic structure of both capitalism and Hinduism.