Machiavelli insisted that “gold is not the sinews of war, but good soldiers.” Unfortunately for Machiavelli’s logic in India, when men could be bought and paid for with breathtaking ease, like the condottiere of Italy, good soldiers would belong to the man with gold - or more precisely in India, silver, since it was the preferred coin of the country. Even more directly than European powers, the ability to pay and maintain soldiers was vital, and a failure to do so would see any state’s army wither away overnight. Worse for these poor Indian rulers, their armies of dubious loyalty were composed of men recruited from a military manpower market which was not picky about the bidders. Confronting them was an increasingly potent factor in Indian military affairs, the British East India Company, by its very name a mercantile and wealthy organization endowed with tremendous resources.
South India’s population had risen from around 10.7 million people in 1550 to 15.1 million in 1650 and somewhere from 18 to 20 million in 1800, of which the core of Mysorean territory constituted around 6 million people. Combined with the population from the Carnatic, and this was the tax base which the Mysorean state would have to fuel its ambitions for a powerful army and navy capable of confronting the Marathas and countering the still-present danger of the United Kingdom through the East India Company.
Hyder Ali was an energetic ruler, and placed taxation and revenue on a new footing. This to some extent had been a long-running process in Mysore, since the long reign of Chikka Deva Wodeyar (1645-1704) who restricted the power of the hereditary landlords, the poligars. Ali however, exponentially increased this transition, replacing gathering tribute with direct taxation from the peasantry. Under Ali this did vary from region to region, and in some areas, such as Dindigul, cawely, a sort of negotiated tribute, was left essentially intact, while elsewhere local chiefs were largely left alone as long as they didn’t resist, and there was still significant tribute payment from poligars and zamindars (another form of poligar) who in 1780 for example still sent a tribute of 10,000 peons. The portrait evolved under the reign of the Tipu Sultan however, annexing many the estates of the old landlords to the state and ruling through appointed functionaries rather than through the previous middle strata. This ratcheted up financial resources available to the Mysorean state and led to its direct relationship to the peasantry, although also requiring politically disruptive interference with local elites.
In any case, regardless of the nature of collection, the backbone of the economy was agriculture. Mysore’s agriculture was heavily dependent upon irrigation, with some 3/8ths of cultivated territory being irrigated, with tens of thousands of tanks and thousands of diverted streams and water courses to water irrigation. These generally were kept in a high state of repair and some new canals, tanks, and irrigation systems were built under Hyder Ali and the Tipu Sultan. The most ambitious of Tipu’s projects was the Seringapatam Dam[1] upstream on the Kaveri river, a thoroughly massive project which although started in the late 1780s would drag on for many years. Uncultivated land was encouraged to be brought under the plow by tax exemptions for a five year period, and new farmers were helped by loans of plows and credit, which would be particularly important in the Carnatic.
More ambitious was the mercantile aspect of the Mysorean policy. At home there was the institution of a monopoly on the trade in gold, silver, and copper, although an overreach with money-changing and brokerage was given up quickly. Other monopolies included betel nut, pepper, cardamon, and sandalwood, as well as royal prerogatives over lumber. This did have some contradictory effects, since the Tipu Sultan intended to build a large fleet to promote commercial expansion overseas, although in the strategic thinking which survives of the Mysorean sultan this tends to become mixed up with the idea of denying this to the British. However, on the Malabar coast the result of low government purchases and high prices of the monopolized products was to drive the trade into the hands of foreign ships from Muscat, Surat, Bombay, and Goa. Furthermore, many merchants were driven into ruin by the government monopolization of many sectors of commerce.
Despite this, a number of external trading houses were established, Kutch in Gujarat, Muscat and Hormuz in Arabia, and Jeddah along the Red Sea. Aden, Basra (where Tipu had hoped to lease the port from the Ottomans, unsuccessfully), and Bushire however, quickly failed. Trade with Burma was explored and trade with China protected. Mysorean exports included teakwood, sandalwood, textiles, silk (promoted by a government campaign to expand silk production), pepper, rice, cardamon, and ivory. in the long run, Tipu clearly intended to expand this network to provide for direct trade to Europe itself, on the back of his ambitious ship-building program, but during the 1780s this was still a nascent project, and one which ran into pushback from his normally ally, France, extremely reluctant to face any commercial competition, as well as the other European powers. The potential partner needed for European distribution would come from the most unlikely of sources: Austria.
William Bolts was a perfect representative of the cosmopolitan Europe of the 1700s, born in Amsterdam to German parents, moved to Britain, became a senior merchant in the British East India Company, but then was forced out due to personality disagreements and in 1775 accepted Austrian service in the Austrian East Indies Company. Arriving in India in command of the ship Joseph et Thérèse in 1777, in 1778 he visited Mysore and even had a meeting with Hyder Ali, and received permission to establish unfortified trading posts along the Malbar coast at Mangalore, Karwar, and Baliapatam. Unfortunately, the AEIC had run into severe financial difficulties, despite the 1,200 ton ship Kaunitz arriving in Trieste in 1781 with rich cargoes of silk, spices, tropical woods, and chinaware, and even a great diamond for Emperor Joseph II, a personal gift from Haidar Ali. There was a dazzling commercial possibility to be able to capture the tea trade while the French and British were immobilized and left the Canton market abandoned, but poor management and difficulties in spooling up operations meant that by the time the AEIC managed to get its ships to Canton and back, they managed the excellent commercial trick of buying high and selling low, and also faced some unlucky ship losses.
But the Austrians had a great advantage: they were a neutral company in quite clearly failing conditions, and one which unlike the other neutral companies, the Danish and Swedes, had failed to carve out a commercial niche. In desperate financial straits, the Austrian Company was amenable to as suggestion by nearly-equally frazzled Mysorean ambassadors in France, who had received fresh instructions about attempting to gain rights for Mysorean trade ships to communicate directly with France in the future and been promptly stonewalled by their French allies: the Austrians, in exchange for appropriate fees, extension of their trading rights, and a one-off payment agreed to a scheme where Mysorean ships traveling to Europe would officially belong to the AEIC. Unfortunately, only a single “Austrian” Mysorean ship actually made its way to Antwerp and arrived just in time to dock in a port thrown into chaos by the Brabant Revolution, continuing the cursed history of the Austrian East India Company, but the company and arrangement would never be formally dissolved…
At home in Mysore, the vital arms sector was aided by the immigration of European craftsmen, largely French with scores of them present in various sectors, and captured British prisoners of war - such as some 400 British sailors and 60 British officers that the French gave to the Mysoreans in 1782. This went even to some odd speciality subjects of the Sultan, such as promoting exploration of coal supplies. Another import was a French water-powered cannon boring machine, which broke down unfortunately and had to be replaced by oxen power, but it would provide a vital model for Mysorean artillery production.
One of the most fascinating, if failed part of these schemes, was one of Tipu’s plans for financing the creation of his new industrial and mercantile sector - with a state savings bank where savings to the bank would be used for capital investment, and would provide a fixed return on investment. Crucially this would be weighted towards smaller, rather than larger, payments, in a welfare scheme to benefit the poor, with a sliding scale where large sums invested would generate 12% returns on investment, medium ones 25%, and small ones 50%. This had several severe and obvious problems: it was possible for the rich to simply make a large number of contributions in different accounts under fake names, and the rates of interest were set far too high - especially since, as might be guessed, almost every single account opened was one of the lucrative small accounts. But despite the failure and its rapid discontinuation once it was realized the catastrophic misplanning inherent, it would be a trial for future developments - mobilization of savings and capital, and a vision of state economic action that would tie together the sultan and the people.[2]
The other side of mercantilism was restricting imports, with bans on the import of all goods save for horses, elephants, mules, camels, and guns, and the domestic agricultural market’s supply fixed by banning exports of ghee and oil, and heavily restricting grain and rice exports. Foreigners and their movements were circumscribed by requiring passports to travel through Mysorean territory. In practice however, the import ban was honored more often in the breach, with sugar imports from Benares along the Ganges, and cotton, wool, and hides from the northern Deccan. This is not even mentioning the overseas imports ranging from saffron to nuts, pearls to lead, copper to dates, from across the waves. What’s more, in the porous borders and mobile populations of India, attempts at controlling movement of Indians across borders was next to impossible, although Europeans could be better surveilled.
Mysore’s central power base was Mysore itself, with the Carnatic and Mangalore recent introductions, and perhaps this explains what would be a growing rift between economic policies of the hinterland and the lower plains. In the hinterlands, Tipu Sultan endeavored to encourage state-organized industrial developments, establishing networks of state-run iron forges, and even exploring the import or the mining of coal to help fuel them, complemented by the expansion of the arms industry with both musket-producing factories and cannon-casting arsenals. He had a passion for rules and regulations, and while these were often not enforced and it took time for them to build up, his economic vision for the highlands would aim to marshal its resources for a state-directed war effort program. In the lowlands, where exports of spices from the Malabar coast and textile exports from Coromandel were a mainstay of economic prosperity, his plans ran against their economic orientations.
Mysorean policies were a contradictory collection, with the only linking trend being that they all boosted the power of the state. At the same time as many of these reforms were revolutionary on the front of production and taxation, and did enable more resources to be marshaled (if inefficiently such as in the mercantile sector) they missed the key reform which had given the most formidable enemy of the Mysoreans, the British, such an advantage: a responsible, clear, publicly transparent system of spending and borrowing, which gave British creditors faith in the system and enabled borrowing at rates unmatched by the rest of Europe. As in Europe, Indian states relied heavily on credit from moneylenders and bankers and there were substantial and extensive networks of bills of exchange, but interest rates remained stubbornly high. Mysorean's fiscal was rickety and inefficient, despite its prosperity by Indian standards.
But it is a bad craftsman who blames his tools, and Tipu Sultan was not a man normally prone to pessimism. He was determined to remake Mysore and its place in the world, and would brook nothing standing in his way: neither the British, nor Carnatic and Malabar traders, nor faulty artillery boring waterwheels. Mysore would be a naval and mercantile power, or it would not be a power at all.
[1]The OTL Krishna Raja Sagar dam. Historically when construction started on it in the early 1900s there were inscriptive plaques that were found stating Tipu’s desire to build a dam there. Greater resources means that construction goes ahead, but it won’t be completed for several decades at the least, particularly with the time of troubles ahead.
[2]Historically considered by Tipu and exactly as I laid it out. Here it goes into effect briefly before it collapses as it inevitably would, but with future influences.
