1

Military Entrepreneurs and Military Success in the Pre-Industrial Period: The

Evolution of Logistical Systems in Europe, the Ottoman Empire and the Mughal

Empire.

Jeffrey Fynn-Paul (VUB) and Griet Vermeesch (VUB)

Introduction

The last decade or so the so-called military-industrial complex, by which is meant the flows

of money and contracts between state organizations and entrepreneurs in order to organise

warfare, has received no small degree of attention,. The term was first suggested in the 1930s

to describe the way fascist Germany collaborated with heavy industry. Today it is mainly

associated with the way the United States of America manage the military.1 Although a

military-industrial complex is a concept arising primarily from a twentieth-century context,

the phenomenon stems from a more remote past. Students of early-modern European history

have convincingly pointed to the collaboration between entrepreneurs and the state that

characterised early modern European warfare as well.

Current collaboration between entrepreneurs and the state as well as that collaboration in

the past has often been considered negatively. As for the early modern ‗military-commercial

complex‘ in Europe, scholars have often pointed to its problematic nature as well. However, it

is likely that the prominent role of capitalist entrepreneurs in organising warfare was crucial

to the emergence of Europe as a force that ended up dominating the globe, as is stressed by

William McNeill in his seminal Pursuit of Power (1982). On the one hand large-scale warfare

induced states to engage entrepreneurial expertise and capital on an unprecedented level.

Feeding, clothing, paying and arming thousands of men simultaneously led to the private

accumulation of large amounts of capital. On the other hand, entrepreneurs engaged in the

supply of troops and navies with an unambiguous profit-motive, which stimulated the

development of techniques that were cheaper and more efficient.2 The fact that war also

destroyed capital, does not contradict its stimulating influence on the accumulation of capital.

Damage by warfare was generally only structural if the overall economic performance was

1 C. Pursell, The military-industrial complex (New York 1972); Jan Krahmann, 'The privatization of war',

Österreichische Militarische Zeitschrift 48 (2010) 50-57.

2 William McNeill, The pursuit of power. Technology, armed force, and society since A.D. 1000 (Chicago 1982)

passim.

2

weak. A relatively thriving economic region could generally recover rather swiftly from war

damage.3

As with innovations in military tactics and strategy, innovations in logistic systems were

the result of interstate competition. Warring states adopted each others‘ innovations when

they proved to make a difference in the battlefield. However, this interplay between

belligerent states was not confined to the European continent only. The Ottoman Empire

participated in the European state system as well and fully took part in the process of

emulating military novelties. What is more, its supply system long proved superior to its main

European competitors. In the eighteenth century this changed. This paper will argue that the

prominent role of entrepreneurs in European logistics in comparison with the Ottoman Empire

goes far in explaining this reverse of military potential. The Mughal Empire will provide

another forum in which we can test the importance of entrepreneurs in Europe, since the

Mughals could rely on entrepreneurs as well, yet gave way to a number of successor states

who – in the eighteenth century – could not compete with European powers either. This paper

will explain why this was the case. In doing so, it will enrich the historiography of the

political and military performance of the Ottoman and Mughal empires. It will also improve

our understanding of the ways the ‗brokerage‘ phase of political-military development in

Western Europe was beneficial to its military potential.

Our thesis is that while entrepreneurialism in Europe is often seen in negative terms due to

its decentralized nature, in fact this stage should be seen as crucial to the European ability to

create the world‘s most logistically sophisticated nationalized forces by the end of the

eighteenth century. Furthermore, while existing literature often assumes that non-European

powers failed to modernize their military forces for essentially similar reasons (e.g., simply

because they were not European), a comparison of European, Ottoman, and Mughal logistical

systems shows that the Ottomans and Mughals failed to modernize for very different, indeed

almost opposite, reasons. The Ottoman attempts at nationalization ‗failed‘ because they had

not at an earlier stage encouraged the growth of a mercantile sector which could create a

brokerage system of supply. The Mughals and Mughal successor states, on the other hand,

did have access to the elements of a native brokerage system, only in their case, the Indian

states ultimately failed to retain control of native supply networks, losing out in the face of

concerted European attempts to ‗woo‘ native merchants into their own supply camps. Thus,

the existence of a so-called brokerage phase was essential for survival of states in a context of

3 See for instance Myron Gutmann, ...

3

global interstate competition. Lastly, the paper argues that in Europe the so-called phase of

‗nationalization‘ was far from a sudden break with brokerage practices. Often it is hard to

distinguish between supply by way of brokerage and supply by ‗national‘ administrative

bodies, because those bodies often consisted of former entrepreneurs. Thus nationalization did

not emerge as an entirely new development, yet rather consisted of gradually taking control of

existing, developed mercantile networks.

The first part of the paper will give an overview of the evolution of European supply

systems, and stress the importance of entrepreneurs therein. The second part will go into

evolutions of supply systems in the Ottoman Empire, while the last part of the paper will

discuss the case of the Mughal Empire and its successor states.

Logistics in Western Europe

Scholars have written to large extent on the way changes in warfare and the process of state

building were interrelated. Indeed, the early modern state can be labelled as a 'war machine'

since the dominant part of its budget was spent on organizing defence. A number of tactical

and strategic changes was responsible for a dramatic growth of armies on the eve of the early

modern period. The invention of fire weapons decreased the importance of knights and

increased the weight of foot soldiers on the battlefield. A new type of architectural defence –

with the bastion bulwark as the main characteristic – stimulated the growth of armies as well,

since it took many troops to besiege a bastioned town.4

The new ways of waging war took a lot of financial and organizational efforts. Therefore,

rulers organized administrative bodies that helped them to raise the means to wage war:

money, troops, victuals, weapons and etcetera. In their attempts to assemble the necessary

organizational capabilities and funds, European states went through various fairly sequential

stages, described by Charles Tilly. Initially – from about the tenth century AD – states relied

on tribute to assemble the means to wage war as coercive means were primarily in the hands

of local communities, such as tribes, urban communities, local war lords. Tilly has denoted

this type of organizing warfare 'patrimonialism' and situates it in the period up to the fifteenth

century. Then came the era of 'brokerage', when entrepreneurs stepped in. States cooperated

with so-called military, financial and commercial entrepreneurs to raise, pay, feed, cloth, arm

4 Rogers, The military revolution debate.

4

and lodge troops. Thus relatively independent contractors assembled and managed coercive

means in order to make profit. They are at the centre of our attention in this paper. By the

eighteenth century states took initiative to counteract the independent position of these

entrepreneurs and took the organization in their own hands: the era of 'nationalization'

commenced. From approximately the mid-nineteenth century the military force became a

highly specialized part of the European state organization that was strictly separated from

other governmental activities – such as for instance policing – so that Tilly attributed it the

term 'specialization'. In this paragraph the move from ‗patrimonialism‘ to brokerage‘ to

‗nationalization will be described.

Military entrepreneurship

The evolution from patrimonialism, over brokerage to nationalization can be read as an

increase of state control over coercive means. This development can already be seen in the

micro-context of the northern-Italian city-states during the Renaissance. From the eleventh

century the role of urban militias in defending their home towns gradually decreased in favour

of a 'commercialization of organized violence'. Patrimonialism gave way to brokerage.5 By

the fourteenth century, mercenary armies became standard. These mercenary soldiers were

recruited and commanded by independent captains, the so-called condottieri (or 'contractors'),

who negotiated contracts with city governments. Initially, these contracts were made on a

short term, but they were extended to long-term contracts to the advantage of both parties by

the early fifteenth century. The strong power position of these mercenary captains also

comprised a threat for the cities that made use of their services. The coup by the military

contractor Francesco Sforza in Milan in the mid-fifteenth century is a telling and famous

example of the threat that was inherent to the collaboration with condottieri. In order to steer

clear from these dangers, Italian states started to make contracts with smaller military units,

by-passing the commanders by the late fifteenth century.6 So we see an evolution from the use

of urban militias (patrimonialism), to the cooperation with military contractors (brokerage),

while in the latter part of the fifteenth century city-states directly hired and managed small

units of troops. The latter evolution can be denoted 'nationalization' although there was of

course no 'nation' involved.

5 McNeill, In pursuit of power, 69.

6 McNeill, In pursuit of power, 73-79; Mallett, Mercenaries and their masters; John Hale, 'Renaissance armies

and political control: the Venetian Proveditorial system, 1509-1529', Journal of Italian History 2 (1979) 11-31;

Charles Bayley, War and society in Renaissance Florence: the “De Militia” of Leonardo Bruni (Toronto 1961);

John E. Law, 'The Da Varano Lords of Camerino as Condottiere Princes', in: John France (ed.) Mercenaries and

Paid Men. The Mercenary Identity in the Middle Ages (History of Warfare, 47) (Brill 2008) 89-103.

5

These changes also took place in Europe north of the Alps during the late Middle Ages and

the early modern period. The way the patrimonial organisation of European warfare gave way

to brokerage is illustrated by the changing way military confrontations took place during the

more than hundred years of warfare between France and England (1337-1453). The French

king initially depended on feudal services, which were rather limited, especially in light of the

changing nature of warfare. Campaigns became longer, while feudal troops could only be

engaged during six weeks or so. Moreover, the role of the infantry increased. Thus the French

king needed more troops to fight the English army that comprised a large portion of

commoners whose longbows were often decisive in battle. In short, progressively more

infantry troops were needed for longer periods of time. As the feudal arrangements did not

provide opportunities to increase the size of the army, mercenary troops had to be hired. The

French king therefore made contracts with commanders who would provide and overlook

infantry forces. Swiss pike men were hired, but mercenaries also came from other parts of the

Holy Roman Empire to fight in France.7

In fact, the territory of the Holy Roman Empire became a true 'mercenary market' where

competing states tried to reinforce their respective armies.8

During the sixteenth and

seventeenth and – to some extent – eighteenth century European states hired mercenary troops

by making contracts with commanders, who were considered the real owners of their units

and – at times – armies. The ways in which contracts were arranged to hire troops have been

described for various European states. The Dutch Republic, for instance, made contracts with

commanders stipulating how many troops were to be raised where, how long those troops

would serve the Republic, who was entitled to assign officers, and when the companies had to

be ready. Furthermore the rate of pay and other financial compensations were stipulated, as

well as how the soldiers were to be armed.9

In the Southern Low Countries the general of a regiment was bluntly denoted as the

'general-owner' of a regiment. Such a general made a contract with the state to raise a number

of companies, and in turn made contracts with a number of captains to recruit companies. The

general and captains all invested a certain amount of money in raising troops, and hoped to

7 Philippe Contamine, Guerre, état et societé à la fin du moyen âge. Etudes sur les armées des rois de France,

1337-1494 (Paris 1972); Michael Harsgor, 'Die Spiesse under der Lilienblume: Deutsche Söldner im Dienste

Frankreichs (14.-16. Jahrhundert', Tel Aviver Jahrbuch fur Deutsche Geschichte 16 (1987) 48-81.

8 John Casparis, 'The Swiss mercenary system. Labour emigration from the semi-periphery', Review. A Journal

of the Fernand Braudel Centre 5 (1982) 593-642; David Potter, 'The International Mercenary Market in the

Sixteenth Century: Anglo-French Competition in Germany, 1543-50', The Historical Journal 111 (1996) 24-58.

9 Olaf van Nimwegen, 'Deser landen crijchsvolck'. Het Staatse leger en de militaire revoluties 1588-1688

(Amsterdam 2006) 40-41.

6

make a profit once the regiment and companies came into action.10

Money could be earned by

receiving pay, but also by looting and selling booty. It even happened that states hired

complete armies by making contracts with military entrepreneurs, albeit this was only in a

minority of cases. The most famous example is provided by Albrecht von Wallenstein,

described by Fritz Redlich in his 'The German military enterpriser'. Wallenstein fought for the

Habsburg Emperor during the Thirty Years War (1618-1648), and in so doing commanded an

army of over 50,000. As a commander and owner of such a big army he became a major

power player. In addition, he made a lot of money and assembled large estates in Bohemia.11

However, not all states relied on military entrepreneurs to the same extent. In France the

right to recruit soldiers was guarded as a royal privilege to greater extent than elsewhere since

the middle ages and the king did not make use of military entrepreneurs such as Wallenstein,

at least not within the borders of his kingdom. However, the French state had to rely on the

credit of its officers to recruit new soldiers as well, thus making use of a semi-entrepreneurial

system. The captains and colonels were not the owners of their companies, but they did own

their own command positions. These French commanders had to invest their own assets in the

army, yet they had little opportunity to make a profit.12

Nevertheless, it also happened that

commanders negotiated an income, such as the duke of Thouars who in 1636 was offered the

wine tax in a district in return for levying two regiments.13

The point is that the French

government had the leeway to move soldiers from one company to the other, without approval

of officers. In the Holy Roman Empire private military enterprisers disappeared by the mid-

seventeenth century. That is to say, until 1660 private entrepreneurs were primarily active on

this market, yet from then on princes and rulers stepped in. They assumed control over the

coercive means within their territory, and hired it to other warring states, for instance

England.14

The reliance on military entrepreneurs presented a number of problems for warring states.

As has been described above, the independent nature of commanding positions in the army

comprised a potential threat for states that made use of military entrepreneurs, just as the

10 Etienne Rooms, De organisatie van de troepen van de Spaans-Habsburgse monarchie in de Zuidelijke

Nederlanden (1659-1700) (Centre d'histoire militaire travaux 37) (Brussels 2003) 120-124.

11 Fritz Redlich, The German Military Entrepreneur and his Work Force: A Study in European Economic and

Social History, 2 vols. (1964-65).

12 Lynn, Giant of the Grand Siècle, 221-244, 349-351; David Parrott, 'French military organisation in the

1630's: the failure of Richelieu's ministry', XVIIth century studies 9 (1987) 151-167. 13

Parrott, p. 339.

14 John Childs, 'The army and the state in Britain and Germany during the eighteenth century', in: John Brewer

and Eckhart Hellmuth (eds.), Rethinking Leviathan. The eighteenth century state in Britain and Germany

(Oxford 1999) 53-70, there 63.

7

condottieri had menaced Italian city-states in the late Middle Ages. Another problem was that

the entrepreneurial system was expensive. Relying on the credit of officers implied a certain

rent had to be paid. This rent was often seized by commanders by way of fraud in soldiers pay

or other financial compensations, or by making looting and the sale of booty the main

purposes of military operations. The dependence on contractors who sought profit presented

strategic problems. Military units that were first and foremost looking for booty were not very

effective on the battle field. The strategic necessity arose for military units that esteemed

victory in battle a priority over making large profits. Lastly, the need of officers to obtain an

income in return for their investment led to fraud. The size of companies in actual fact was

often much smaller than on paper. That had a negative impact on the strategic strength of the

army too.15

Thus in the course of the second half of the seventeenth century a process of

nationalization of recruiting and managing troops set in. European states took measures to

increase their control over their armies. This mirrors the way the city states in Renaissance

Italy had counteracted the independent and (potentially) threatening position of condottieri in

the late fifteenth century by way of by-passing them and making contracts with smaller units

of combatants. For instance, in the Austrian Habsburg Netherlands, the central government

organized ‗recruiting companies‘ that were assigned the task to recruit new soldiers directly

for the army, without making use of the company officers. Another example is the fact that

regiments were allotted a number, instead of the name of the colonel in charge. These

regiments were called the 'national regiments'.16

Eighteenth century governments also tended

to obtain the right to appoint non-commissioned officers, yet another way to restrict the

autonomy of officers.

However, in practice there appeared to be a lot of continuity with the age of brokerage in

spite of the telling 'label' of these troops. The state administration often lacked the

wherewithal – both in financial as in technical terms – to recruit enough soldiers. For instance,

the 'recruiting companies' failed to supplement the companies. The government soon returned

to the old practice of leaving recruitment to officers.17

The late seventeenth Dutch Republic witnessed efforts to increase state control over the

army as well. The Republic seized the opportunity to reorganization when the army had to be

15 John Lynn, 'How war fed war: the tax of violence and contributions during the Grand Siècle', Journal of

Modern History 65 (1993); Parrott, Richelieu’s army, 287. 16

Referenties – Ruwet?

17 Bruno Peeters, ‗De ronseling van recruten voor de Nationale regimenten in de Oostenrijkse Nederlanden‘,

Belgisch tijdschrift voor militaire geschiedenis 25 (1983) 49-59; Ruwet, Les soldats. Hoofdstuk Thomas.

8

refashioned after military defeat in 1672. By relying less on the credit of commanders more

control over the soldiers was established, and there was less reason for officers to fraud. They

transformed from businessmen who attended to their own private needs into professional state

servants. The result was also that soldiers identified themselves less with their officers and

more with the state. This was a result of the governmental efforts to guarantee the provision of

soldiers as well.18

In France, the central government had always been more in control of

companies, by the possibility to transfer troops from one company to the other. I other words,

officers did less ‗own‘ their soldiers there.

The fact that soldiers in European armies started to wear a uniform by the last quarter of

the seventeenth century is a case in point of the way the private companies had transformed

into a professional army in service of the state.19

To be sure, many elements of continuity can

be traced in the eighteenth century way of recruiting and managing troops in Europe. In the

Dutch Republic, for instance, the credit provided by the so-called solliciteurs-militair, private

entrepreneurs who functioned as a link between companies and the Dutch government –

remained essential brokers for the functioning of the Dutch army during the eighteenth

century.20

Indeed, the Dutch brokerake practices remained in place because they functioned

rather well. Even when they did not function well, time and again central states lacked the

financial means and the expertise to organize the military, and by necessity reverted to the

services of entrepreneurs. Tangible ‗nationalization‘ would only set off when revolutionary

France became successful at introducing national conscription. Yet the relation between

soldier and state had distinctly changed during the eighteenth century too. The emergence of

national armies was partly brought about by the contribution of military entrepreneurs who

had made possible large-scale armies.

Commercial entrepreneurship

Entrepreneurs were equally necessary in making possible another vital aspect of organizing

large-scale armies: feeding, clothing and arming troops. Initially, troops largely supplied

themselves, by living off the land with or without compensation for local populations. As long

as troop concentrations were not too high, this type of provisioning sufficed. However, supply

failure lurked when the size of armies increased concomitant with the length of military

confrontations. The Thirty Years War is the classical example of the excrescences of soldiers

18 Van Nimwegen, 'Deser landen crijchsvolck', 277-287. 19

See for instance John Tincey, The Boritish army, 1660-1704 (Oxford 1994). 20

Pepijn Brandon, ‗Finding solid ground for soldiers‘ payment. ‗Military soliciting‘ as brokerage practice in the

Dutch Republilc (c. 1600-1795)‘.

9

living off the country. Not only did this lead to many horrors for the civilian population. As

would become apparent in the late seventeenth century – especially in France – soldiers who

had to take care of their own supplies in an uncoordinated way were of limited strategic use.

They simply disbanded into a mob.21

Especially in home or friendly territory, governments did efforts to regularize and

coordinate supply from the early part of our period, and entrepreneurs proved important in

that respect. Sixteenth century Spain and France developed an administratively complex

system of étapes in order to make sure that the right amount of victuals was present at the

right time at the right place. The famous ‗Spanish road‘ is an outstanding example of this

supply method. Spanish military administration planned at which towns and villages the

marching troops would call at what day and arranged beforehand that victuals were present.

The communities who assured supplies then deducted their expenses from taxes or they were

paid. From the late sixteenth century entrepreneurs stepped in to assure sufficient supplies.22

Magazines that assured supply to French marching troops from the late seventeenth century

made use of entrepreneurs as well as of direct supply. The French state administration – that

was the first to efficiently use magazines during an offensive in the late seventeenth century –

was well developed, yet relied on entrepreneurs to supply the magazines.23

During the years

1672-1713, the army of the Dutch Republic made use of the services of Sefardic and

Portuguese Jewish, and notably Antonio Machado, who were based in Amsterdam and could

draw on an extensive credit network of co-religionists. After the Glorious Revolution, this

network extended its operations to England.24

Historians have often pointed towards the problems that came with the involvement of

entrepreneurs in provisioning troops. For example, entrepreneurs who supplied the Spanish

troops with bread during the seventeenth century at times supplied bread that was of such a

bad quality that a number of troops died of poisoning.25

Entrepreneurs who engaged in large-

scale bread contracts at times ruined themselves when market conditions changed after a

contract with the state was made. For instance, Salomon De Medina, who supplied bread to

the English and Dutch armies in 1709, went bankrupt due to a steep rise of grain prices.26

Moreover, Dutch troops were not happy with the quality of the bread.27

At times, supply by

21 Lynn, ‗How war fed war‘, passim.

22 Parker, The army of Flanders, 70-90. 23

Lynn, Giant, 110-111. 24

Van Nimwegen, De subsistentie, 20-33. 25

Rooms. 26

Van Nimwegen, De subsistentie, 29. 27

Van Nimwegen, De subsistentie, 35.

10

entrepreneurs failed because the state was unable to meet its financial obligations towards

those entrepreneurs, which lead to abuses and supply failures as the supply system broke

down, as happened in France in the mid-seventeenth century or during the Spanish War of

Succession when the size of the army increased steeply. Apart from these supply crises,

supply by entrepreneurs was problematic in general too.28

However, the use of entrepreneurs for supply was sheer necessity as long as states opted

for bringing larger armies in the field while they did not develop the administrative structures

to supply them. Under Louis XIV, the French state was simply unable to supply troops

directly and leaned on entrepreneurs, regardless of possible abuses and logistic failures when

entrepreneurs were not paid or not paid on time.29

Yet also countries that were less confronted

with inability to finance supply opted for collaboration with entrepreneurs. England

collaborated to great extent with entrepreneurs to supply its troops both at home and abroad,

and was scarcely confronted with logistical failures. Undeniably, the use of entrepreneurs in

supplying troops had advantages. Their credit and expertise could be used, while

administration did not have to be developed.

When nationalization of army supply emerged in the eighteenth century, collaboration

with entrepreneurs was continued to important extent. When English administration initiated

more direct methods of supply, former entrepreneurs joined its ranks as new officials

organizing supply. For instance, Sir Lawrence Dundas was a prominent contractor in Great-

Britain, and at times also acted as a governmental commissioner.30

The same occurred in the

eighteenth century Austrian Low Countries.31

In fact, direct supply or ‗nationalization‘ did not

necessarily imply that entrepreneurs were excluded from army provisioning. It rather denoted

that entrepreneurs became less autonomous or that the conditions of collaboration changed

towards greater control by the state administration. In case of brokerage, the state collaborated

with large entrepreneurs who maintained an extensive network of subcontractors. The state

was dependent on their credit, know-how and their relations with other (smaller)

entrepreneurs. Because of this dependence, the state could control supply to limited extent

only. In case of ‗nationalization‘, state administrations, contracted with smaller entrepreneurs

through specially appointed officials who often were former large entrepreneurs. State

administration gained more control by changing the conditions of their collaboration with

28

Lynn, Giant, 110, 113. 29

Lynn, Giant, 113.

30 G.E. Bannerman, ‗The ‗Nabob of the North‘: Sir Lawrence Dundas as government contrator‘, Historical

research 83 (2010) 102-123. 31

Hoofdstuk Thomas.

11

entrepreneurs. Yet, as in the case of military entrepreneurs, this collaboration proved essential

in making possible the increase of army size and the enhancement of its effectiveness.

Financial entrepreneurship

An essential form of entrepreneurship for the development of European armies related to the

sphere of finances. The growth of military expenditure lead to a gradual intensification of

revenue extraction by European states. In order to extract sufficient means, European states

developed a range of taxes and credit instruments. In so doing, they gradually transformed

from a so-called domain state into a tax state. In the (patrimonial) domain state the ruler

extracted most of his income from his domain and from regalian rights. In case of war, he

solicited his subjects to provide extra means by way of taxes. More often than not, these

emergency taxes assumed permanency. As their share in the total income of the ruler

gradually increased, the domain state made way for the so-called tax state. To be sure, this is

merely a simplified account of complex transitions that ignores local variations. Eighteenth-

century Prussia for instance still relied on income from its domains to great extent and has

even been labelled as ‗an entrepreneurial domain state‘.32

Early modern rulers could raise an income by way of taxation and by way of borrowing.

Especially the possibility to borrow dramatically increased the potential of European states to

raise capital.33

Particularly the emergence of long-term funded state debt proved vital to

logistics. It made it possible for rulers to raise far more capital that taxes would ever yield.

The roots of the changes in European finance, which proved decisive in the eighteenth

century, began to take hold during the later middle ages. During these centuries Venice and

Genoa, for example, developed systems of long-term government debt as an extension of their

fiscal system. In these city-republics, the merchant-rulers realized that it would be more

profitable, or at least less damaging, to their own coffers, if they were to receive some

compensation for the taxes that they lent to the government. In this way, they devised systems

of ―forced loans‖ whereby the elite would provide additional taxes to the government, but

would receive a below-market interest rate until such a time as the government managed to

pay off the loans. Thus, the system had the advantage of allowing elites to lend to the

32

Ormrod, Bonney and Bonney, ‘Introduction’, 1-21; Richard Bonney, ‗Revenues‘, in: Richard Bonney (ed.),

Economic systems and state finance (Cambridge 1995) 423-505, there 462. 33

Winfried Schulze, ‗The emergence and consolidation of the ‗tax state‘. The sixteenth century‘, in: Richard

Bonney (ed.), Economic systems and state finance (Cambridge 1995) 261-279; Bonney, ‗Revenues‘, 488-

500.

12

government, with the hope of repayment of the principal, and their only financial loss would

be the difference between market interest rates and those that were offered by the government.

This worked for a while, until it became clear during the 1200s that the government was

already in so much debt that it might never pay it off entirely. With the acknowledgement of a

more or less ‗permanent‘ funded debt, the first government bond schemes were implemented.

Later, interest rates at, or even slightly above market rates were sometimes added in an effort

to attract even more funding. The main advantage of this funded debt system was that it

allowed the governments which adopted it to spend many times their annual revenue up front,

invariably on a pressing war effort. As the system became regularized, and certain

governments proved their creditworthiness, investors realized that the returns were well worth

the risk, and were often more than ready to provide the government with significant portions

of their savings in return for a regular annual or semi-annual payment.

This one innovation is the primary reason why Venice and Genoa, with their relatively

miniscule populations and patrimony, were able to dominate the Mediterranean for much of

the late medieval and early modern periods. It is an interesting quirk of history that this

permanent funded debt was not able to be adopted by any monarchical government prior to

the nineteenth century: this is because, as Douglass North has argued, the arbitrary powers of

an absolute monarch always proved too damaging to a government‘s credit: the temptation to

default was simply too great in a government which did not have the checks and balances

inherent in a republican system.34

It is for this reason that the Dutch were able to adopt a

permanent funded debt during their revolt against the Spanish, and why the English were able

to adopt a similar system after the Glorious Revolution of 1688 left parliament in clear control

of the British government. Thus, a permanent funded debt remained out of reach for all (not

parliamentary) monarchical powers during the early modern period.

However, by the eighteenth century, even non-republican powers begun to adopt some of

the financial expertise that had been evolving in the republican centres of Italy, Holland and

England. Even by the later middle ages, the Spanish, French, and Austrian crowns had

routinely borrowed from their own cities, which themselves had been controlled by republican

regimes that were capable of coaxing money into local bond schemes. At the national level,

cadres of financiers whose bases lay in republic-controlled territories (e.g., Genoa and certain

imperial free cities such as Nuremberg) were employed by monarchs in order to obtain loans,

thus vastly increasing their national revenues in time of war. Likewise, the European city-

34

D. North and B. Weingast, ―Constitutions and Commitment: The Evolution of Institutions Governing Public

Choice in Seventeenth Century England,‖ Journal of Economic History 49:4, 803-32.

13

dwellers‘ expertise in credit-creation helped to ensure that for early modern monarchs, it was

easiest to simply utilize existing financial expertise and credit channels in order to raise cash.

While high medieval kings may have attempted to rely on direct revenue and taxes in kind, by

the later middle ages, credit was absolutely normative for the financing of all European war.

By the eighteenth century, even monarchies such as France and Austria, which during the

seventeenth century were notorious for their lack of creditworthiness, realized the virtue of

maintaining a certain amount of international credibility, when they began to place large

numbers of shares in international money markets, such as those in Amsterdam. By taking

advantage of the vast reserves of capital stored in Dutch patrician fortunes, belligerents could

vastly expand their war coffers, at the cost of a few percentage points of interest per annum.

Thus, Europeans of all stripes could raise significant war funds by taking advantage of the

bourgeoning European credit system.35

The emergence of this long term funded debt was the

result of collaboration between a private market and states, and would prove vitally beneficial

to the military potential of European states, as will be argued below.

The Ottoman Empire

We can now turn to the Ottoman Empire, with the aim of highlighting the lack of

entrepreneurialism in the Ottoman military supply system. As will be shown, this lack

provided distinct advantages to the Ottomans for most of our period; but as European states

turned towards nationalization of military supply in the eighteenth century, the Ottomans were

to find that their failure to encourage the growth of an entrepreneurial network over the

preceeding centuries left their productive and logistical capacities far behind those which

could be marshaled by the increasingly centralized and rationalized bureaucracies of Europe.

The literature on the Ottomans has long argued that while several major European powers

increased their military efficiency during the period 1500-1800, the Ottoman Empire appears

to have gone in the opposite direction.36

Although recent scholarship challenges this idea of

35

Larry Neal, The Rise of Financial Capitalism: International Financial Markets in the Age of Reason

(Cambridge, 1993). 36

For a synopsis of the declinist position, see Jonathan Grant, ―Rethinking Ottoman ―Decline‖: Miltiary

Technology Diffusion in the Ottoman Empire, Fifteenth to Eighteenth Centuries, Journal of World History

10:1 (1999), 179-201, 179-183. The locus classicus of the decline thesis is Halil Inalcik, The Ottoman

Empire: The Classical Age, 1300-1600 (New Rochelle: Orpheus, 1973); see also Halil Inalcik and Donald

Quataert, eds., An Economic and Social History of the Ottoman Empire, 1300-1914 (Cambridge, 1994). Also

influential is Bernard Lewis, The Emergence of Modern Turkey (Oxford, 1968), 21-39; and Lewis, The

Muslim Discovery of Europe (Norton, 1982).

14

an inexorable decline, some authors continue to point out that despite recent caveats, it

remains true that Ottoman military organization showed a tendency to move from

centralization to fragmentation over this period, even as most European states were moving

from fragmentation to centralization.37

Such generalizations can obviously be dangerous,

since they not only overlook a number of countervailing trends, but also run the risk of

playing into an orientalist narrative.38

It is generally held that the Ottomans maintained their superiority through a simple

question of numbers: their primary tactic, in this view, was to throw a great many more

soldiers into battle than their opponents could muster, thereby counting on brute

overwhelming force to carry the day. This, it need hardly be pointed out, plays nicely into the

hands of orientalist narratives dating from the days of Xerxes and Darius, conjuring a model

of the ―eastern empire‖ in which masses of slaves and abject serfs are driven by into the

enemy ranks with no regard for their personal welfare. Ottoman military historians are

beginning to point out that early modern military forces of whatever size could not simply be

sustained through force of will: without proper planning, the largest forces would melt away

within a matter of weeks. Even on this score, much scholarship maintains that the Ottomans

were a ―third-tier power,‖ which spent most of the early modern period desperately

attempting to maintain any sort of technological parity with the weakest of European states.39

For much of the early modern period, such assertions are demonstrably false. Recent

scholarship has shown that the Ottomans were able to maintain their long-dominant position

in Eastern Europe due in large degree to their highly sophisticated and efficient logistical

system, that prior to the mid-eighteenth century, was generally far superior to that of their

Habsburg opponents.40

Even after this time, Ottoman military planners showed an almost

continual willingness to adopt the latest logistical techniques, even if this entailed serious

institutional reform.41

This only stands to reason when one remembers that right through the

37

E.g., Gábor Ágoston, ―Empires and warfare in east-central Europe, 1550-1750: the Ottoman-Habsburg rivalry

and military transformation,‖ in Frank Tallett and D.J.B. Trim, European Warfare, 1350-1750 (Cambridge,

2009), 110-134. 38

This is discussed in Virginia Aksan, ―Breaking the Spell of the Baron de Tott: Reframing the Question of

Military Reform in the Ottoman Empire, 1760-1830, The International History Review, 24:2 (2002), 253-

277: 254; see also T. Kaiser, ‗The Evil Empire? The Debate on Turkish Despotism in Eighteenth-Century

French Political Culture,‖ Journal of Modern History lxxiii (2000), 18-22. 39

Grant, ―Rethinking Ottoman ‗Decline‘,‖ 40

Rhoads Murphey, ―Ottoman military organization in south-eastern Europe, c.1420-1720,‖ in Tallett and Trim,

European Warfare, 135-158. 41

Sevket Pamuk, ―Institutional change and the longevity of the Ottoman empire, 1500-1800,‖ Journal of

Interdisciplinary History, 35:2 (2004), 225-247; Virginia Aksan, ―Breaking the Spell of the Baron de Tott:

Reframing the Question of Military Reform int eh Ottoman Empire, 1760-1830, The International History

Review, 24:2 (2002), 253-277; Grant, ―Rethinking Ottoman ‗Decline‘,‖ 184, argues that by the nineteenth

15

siege of Vienna in 1683, the Ottomans remained on the offensive across their broad European

frontier, and that for several decades after this, they were capable of mounting effective

counteroffensives against Austrian and Russian encroachments. Indeed, as Rhoads Murphey

has recently argued, it was only the rise of Russia to great power status at the end of the

seventeenth and the beginning of the eighteenth centuries that decisively tilted the balance of

power against the Ottomans in the European theatre.42

Even then, the limitations of the

Ottoman military system versus the Russians did not become painfully evident until the

Russo-Ottoman campaigns that began in 1768.43

It does remain true however that by the later eighteenth century, the Ottomans had begun

to fall decisively behind the Europeans in terms of logistical organization.44

This period, from

about 1760, should be seen as the logistical tipping point, the time when the European powers

began to manifest distinctly superior logistical infrastructure to that of the Ottomans. Even

this was not for lack of trying: the reforms of Selim III (1789-1807) were very much aimed at

matching recent European advances step for step.45

Thus, it will be seen that there was almost

no time during the early modern period that one can rightly accuse the Ottoman logistical

system of growing ossified and unresponsive. This reading of early modern logistical

evolution in the Balkans and the Mediterranean and Black Sea regions therefore moves us out

of the old narrative of an inexorable decline, and into the much more interesting dilemma of

figuring out how, if the Ottomans had maintained logistical superiority for so long, they

finally failed to keep up with European advances towards the end of the eighteenth century.

Changes in tactics and strategy

For most of the early modern period, the Ottomans did adapt their military organisation to the

range of changes in tactics and strategy that surfaced in Europe. Firstly, as did European

states, they had to respond to the infantry revolution. This appears to have thrown the

Ottoman system a curve ball, not necessarily because they could not emulate the tactics of the

European infantry but because their fiscal system was based on the timar, the fief granted to a

century, the Ottomans had successfully managed to reform their military to the point that they were the equal

of their Russian antagonists. 42

Rhoads Murphey, Ottoman Warfare 1500-1700, (London, UCL, 1999), 10-11. 43

Virginia Aksan, ―Whatever Happened to the Janissaries? Mobilization for the 1768-1774 Russo-Ottoman

War,‖ War and History 1998:5, 23-36. 44

Ágoston, ―Empires and Warfare,‖ 130-134. 45

For the principal modern interpretation of these reforms, see Virginia Aksan, Ottoman Wars 1700-1870, 180-

213; for an older but still useful view see Standford J. Shaw, ―The Origins of Ototman Miltiary Reform: The

Nizam-I Cedid Army of Sultan Selim III,‖ The Journal of Modern History 37:3 (1965), 291-306.

16

mounted warrior known as a sipahi.46

The Ottomans of 1500 were some of the most

formidable fighters of their day, because the empire‘s land had been divided up into tens of

thousands of these sipahi-estates, which, like Charlemagne‘s feudal fiefs, were held by noble

horsemen in exchange for military service.47

Also like the fiefs of Charlemagne‘s day, the

timars were tended by peasants who paid taxes to their lords largely in kind. The sipahi

horsemen were therefore almost entirely self-sustaining, and required very little outlay on the

part of the central government. Thus, the Ottoman Empire was a ‗patrimonial state‘ – in

Tilly‘s words, or a ‗domain state‘ in the words of financial historians, and because of its size a

rather effective one too.

The foot soldiers of the empire, the janissaries, were equally formidable. However, they

were traditionally paid in cash, which was obtained by selling certain tax revenues to tax

farmers. The problem faced by the empire by the late sixteenth century, was that their

traditional landed nobility insisted on maintaining themselves as horsemen, while the method

of fighting on horseback rapidly became useless. The empire‘s response to this was to

increase the numbers of janissaries, which required a corresponding jump in cash

expenditures, since most of the enfeoffable land was already tied up in timur-estates. Thus,

the technological evolution from horse to infantry ended up causing unexpected problems for

the empire, due almost entirely to social and political causes.48

And before one suggests that

this shows an inherent weakness in the political structure of the empire, it should be

remembered that the Austrian Habsburgs spent most of our period with their hands shackled

by a myriad of local political institutions and class pretensions which cut their potential

military effectiveness to perhaps a quarter or less of what they later accomplished in the era of

nationalization.

A second technological innovation that eventually hindered the Ottomans related to the

improvements in metallurgy and gunpowder, which only became decisive during the mid-

eighteenth century. It will be noted that until at least the early eighteenth century, the

Ottomans were perfectly capable of imitating and producing their own artillery, which was

generally as effective as European artillery.49

In the construction and undermining of siege

works, there is likewise no justification in faulting Ottoman abilities until the very end of our

period. In this realm, the Ottomans kept in lock-step with European advances, despite the

46

This argument is made in Suraiya Faroqhi, The Ottoman Empire and the World Around It (London, Tauris,

2006), 104-105. 47

Ágoston, ―Empires and warfare,‖ 114-15. 48

Agostón ―Empires and Warfare‖, 129; Pamuk, ―Institutional Change, 230. 49

Grant, ―Rethinking,‖ 190-198; Stanford Shaw, Between Old and New: The Ottoman Empire under Sultan

Selim III 1789-1807 (Cambridge, MA, 1971), 142-144.

17

vaunted revolutionary nature of siege construction during the sixteenth and seventeenth

centuries. Regarding powder, there are conflicting reports of the Ottomans‘ ability to produce

European-grade powder, but some historians contend that the Ottomans likewise kept up with

this technology until the mid-eighteenth century.

If they did begin to lag behind in native production, the primary fault seems to have lain

with the empire‘s proclivity to import manufactured goods, rather than fostering a native

merchant class.50

To Ottoman eyes, there was nothing wrong with importing the weapons of

the enemy and then using them against him: this procedure after all was the basis of the

Janissary system, which literally turned Christian youths into fearsome opponents of the

armies of Christendom. Such a situation played into the universalist propaganda of the

empire, which was a fundamental aspect of its political legitimization process, particularly

after the fall of Constantinople in 1453, and as centuries of military successes followed in its

wake. In the case of gunpowder, one might cite the capitulations to the Dutch of the early

seventeenth century as a turning point in the empire‘s ability to produce its own highest-grade

powder.51

These capitulations, however, were nothing new: the Byzantines and Ottomans had

indulged in these sorts of treaties with foreign merchants for centuries, and the Ottoman

Empire had certainly shown no signs of vulnerability as a result of such a policy. It was only

after the scientific revolution in England and Holland got into full swing that advances in

powder became so rapid and significant that the Ottomans found themselves backed into a

technological corner.

Thirdly, there was the movement from galley- to frigate- based navies. The Ottomans

were faulted for sticking with the galley as the rising Atlantic powers gradually developed

their merchant sailing cog into a fighting ship capable of supporting a broadside. The

Ottomans are therefore seen as clinging to a sinking ship, if you will, while the European

world embraced the wave of the future.52

However, this older picture has recently been called

into question by those who have pointed out, for instance, that the Venetians were nearly as

tardy as the Ottomans in adapting their navy to the Atlantic-style of warfare. Thus, we can

once more see that vis-à-vis their direct opponents, the Ottomans were capable of maintaining

a strong technological parity through the seventeenth century. Likewise, it has been pointed

out that in the Mediterranean arena, at least, the galley was not definitively proven to be

50

Pamuk, ―Institutional Change,‖ 234-35. 51

For the capitulation policy see Mehmet Bulut, ―The Ottoman Approach to the Western Europeans in the

Levant during the Early Modern Period,‖ Middle Eastern Studies, 44:2 (2008), 259-274. 52

For this older view, see J. F. Guilmartin, Jr. Gunpowder and Galleys: Changing Technology and

Mediterranean Warfare at Sea in the Sixteenth Century (Cambridge, 1974), 253-273. For a reappraisal, see

Grant, ―Rethinking,‖ 184-190.

18

inferior to the broadside-cog until the end of the seventeenth or early eighteenth century. Once

more, the notion of a longstanding Ottoman decline, dating from the defeat at Lepanto in

1571, is called into question. Did it matter to the Ottomans that the English ability to produce

cheaper cannon in the sixteenth century led to the development of the broadside-capable

frigate?53

As it turned out, this equation did not really become an issue for the Ottoman navy

until the eighteenth or even the nineteenth century. Once more, it was only the explosion of

development resulting from the scientific revolution in England and neighbouring countries

which began to put any real distance between the Atlantic powers and their Eastern European

rivals on the naval front.

Recruitment and Supply.

Although established wisdom would suggest that the Ottomans could not have been in

advance of the European powers in terms of logistical systems during the early modern

period, new evidence suggests that this was unequivocally the case. Whereas the European

monarchies found it excruciatingly difficult to raise and maintain significant national armies

in the early sixteenth century, the Ottoman Empire was a model of efficiency on this score.

Much of this was due to the efficiency of the timur-system, which at this point still generated

a very large number of battle-ready and effective sipahis with almost no drain on the central

treasury. It has been estimated that during the sixteenth century, the timur fiefs of the empire

supported something like 25,000 sipahis, with about 1/3 of these hailing form European lands,

and 2/3 from the empire‘s Asian territories.54

Furthermore, depending on the size of their fief,

many sipahis were stipulated to bring along a number of mounted men-at-arms. Not only was

this stipulated in theory, but the empire was precocious in its development of paper archives

and administrative forms, including standardized forms and procedures for the verification of

muster lists. At this stage, a sipahi who did not appear at the designated muster area with the

proper equipment and retainers was in real danger of losing his lands. Likewise, the fact that

the timur peasants paid their taxes in kind meant that the sipahi would remain largely self-

supplying for the duration of a long campaign.

The extreme efficiency of this system, and the immensely valuable service that the sipahis

rendered to the empire during the reign of Suleiman the Magnificent (1520-1566), helped to

guarantee the enduring prestige of this class, making them difficult to dislodge after they

became militarily ineffective in the years around 1600. During the seventeenth century, the

53

Guilmartin, Gunpowder and Galleys, 273. 54

Ágoston, ―Empires and warfare,‖ 114-15.

19

government attempted to compensate for this loss by stipulating that sipahis would render

certain quantities of saltpeter or other useful commodities instead of personal military service.

It can easily be seen how this attempt to have the sipahis render services in kind would lead to

a system much less than that regulated by a market. This eventually contributed to the

increasing military problems of the empire.55

If the sipahis‘ usefulness began to wane after the sixteenth century, that of their

companions, the janissaries, continued to increase. During the period of imperial expansion in

the sixteenth century, it was relatively easy for the Ottoman treasury to maintain the janissary

elites as a permanent standing army. Likewise, the scale of sixteenth-century warfare was

such that a force of some 10,000 Janissaries was considered sufficient. As the scale of

European warfare grew, particularly during the seventeenth century, when it mushroomed out

of all proportion until national armies might number in the hundreds of thousands, the drain

on the Ottoman treasury from increased numbers of janissaries increased exponentially.

Likewise, the recruitment pool had to increase manifold, meaning that the janissaries might no

longer be maintained along such elite lines as had previously been the case. Thus, the

problems facing the Ottomans by the seventeenth century with regard to recruiting and

maintaining a janissary force were twofold: first, how to increase cash revenue to keep up a

regular supply of wages in silver, and secondly, how to maintain discipline amongst a vastly

increased force, in which the maintenance of an esprit de corps would naturally be much

more difficult.

It will be seen that both difficulties continued to increase, although once again, they did

not become decisive until the later eighteenth century. In the first case, it can be seen that the

Ottomans did make a number of fiscal innovations in order to increase their tax revenue in

specie.56

Where they definitively failed to advance was in the creation of a system of long-

term public debt, a deficit which once again did not really matter until well into the eighteenth

century. Contrary to earlier beliefs about the incompatibility of debt systems and usury

prohibitions in the Islamic world, it is now held that, given the many legal fictions which

Islamic lawyers had invented to allow de facto credit systems to grow and multiply within the

empire by the eighteenth century, such an innovation would have been possible much earlier

than it did in fact occur. In practise, the Ottomans did succeed in floating long-term debts, but

55

Faroqhi, ―Ottoman Empire,‖ 105-06. 56

Pamuk, ―Institutional Change,‖ 240-243.

20

not until the second half of the nineteenth century.57

With regard to the maintenance of

discipline, once more, differences between the Ottomans and the Austrians and Russians did

not really begin to matter until the establishment of military academies in Europe, during the

middle of the eighteenth century, began to create a trained European military elite for whom

bureaucratic and pedagological innovations became the subject of professional training.58

In the realm of supply, the Ottoman system was once again very precocious in comparison

with European models during the sixteenth century. The effective functioning of the Ottoman

feudal system, that there was very little resistance on the part of local noble elites to the

requisitioning of food supplies from local estates. In Europe, of course, the necessity of

bargaining with parliaments of nobles, or similar associations, for available supplies of food

meant that much less of the produce of the land was available to supply the armies of the

monarch. Likewise, Ottoman cities were governed by imperial officials known as kadis, who

were appointed for short terms and therefore tended to perform their duties loyally and

efficiently, in order to ensure the continuance of their professional careers.59

This contrasted

greatly with European cities, which were governed by councils of merchants and other elites,

who continually wrangled for privileges and concessions whenever their monarch wished to

requisition or otherwise purchase supplies from their town and its hinterland. Ottoman rulers

were therefore possessed of great advantages versus any European ruler, insofar as both their

provincial nobility and the government of their towns were far more disposed towards

obedience, and therefore of proper channeling of requested war materiel.

Not only were the Ottoman rulers better assured than their European opponents of the

obedience of their provincial and local elites, but the omnipresence of kadis, together with

these officials‘ administrative capabilities, meant that the rulers were disposed of an effective

and loyal administration, which soon created an admirable system for arranging the

distribution and storage of war material. Already by the sixteenth century, this would be

requisitioned using standardized bureaucratic forms, often months in advance of a planned

campaign. Then, material was shipped and deposited at pre-determined storage points, which

were similar to the vaunted French supply stations that were not developed until the mid and

57

For the first attempts at creating a permanent Ottoman public debt, see Olive Anderson, ―Great Britain and the

Beginnings of the Ottoman Public Debt, 1854-55,‖ The Historical Journal 7:1 (1964), 47-63. For the legal

fictions allowing for credit to grow and flourish, see Pamuk, ―Institutional Change,‖ 231-33 58

Ágoston ―Empries and warfare,‖ 132-33. 59

Murphey, ―Ottoman military organization,‖ 147-148.

21

late seventeenth century.60

In Europe, there was no centralized supply system that was

remotely as efficient as the Ottoman system until well into the eighteenth century.61

Through the seventeenth century, the Ottomans were praised and feared by their European

opponents for their ability to maintain continuous supply lines, even over a multi-season

campaign. Much of the Empire‘s self-reliance on this score derives from its reliance on the

collection of taxes in kind. This ensured that the government could bypass market

mechanisms in order to provide basic necessities for the forward campaigns. Other benefits

included a lack of debt accrued due to supply efforts. The government‘s efficient bureaucracy,

high disciplinary standards, and use of written records also played roles in maintaining supply

lines, which only very occasionally caused military campaigns to founder. This contrasts with

the regular logistical failures European states met due to decentralized, badly funded and at

times badly organized supply due to political and organizational fragmentation. And yet,

despite this, the Ottomans began to look inferior to Europeans, after European governments

began to centralize their supply efforts in the later eighteenth century.

Pay and Finance.

Thus we return, it would seem, to Gábor Ágoston‘s observation that while the Europeans

began to evolve superior military logistical systems through the medium of centralization, the

Ottoman system either stagnated or else devolved, by moving from an efficient centralized

system to one which was decentralized and inefficient. Is this a fair assessment? It is fair to

some degree, if one the one hand we allow that the Ottomans really showed very little

―decline‖ until at least the later eighteenth century, and even then, that they showed an almost

continuous willingness to modernize and keep pace with western developments, right through

World War I, and if on the other hand we allow that European advances did not make much

impact in eastern Europe until the late eighteenth century, either. And even then, we must

remember that had it not been for the rise of Russia, which thus created an entirely new front

from a quarter where the Ottomans had never historically had to develop a serious military

strategy, the Ottoman decline, or failure to keep pace, is seen to be even less significant still.

If we acknowledge that the empire did finally fail to keep up with European

developments, we must conclude that it was not because the empire did not succeed in

employing the latest technology or tactics, per se. Rather, the failure keep pace with

60

For the difficulties involved in this evolution see J. A. Lynn, ―How War Fed War: The Tax of Violence and

Contributions during the Grand Siècle,‖ Journal of Modern History 65 (1993), 286-310. 61

Murphey, ―Ottoman military organization,‖ 137-38.

22

modernizations which occurred from the mid eighteenth century was due to two principal

causes. One of these was the fact that the scientific revolution spread to most corners of

Europe more easily than it spread to Ottoman society. The cultural affinities and bridges

between England, the epicenter of the scientific revolution, and other European powers were

obviously more numerous and easily traversed than those which existed between the Ottoman

Empire and Eastern Europe—this despite centuries of fairly regular contact between the

empire, Venice, and France. It was the scientific revolution and the subsequent Enlightenment

movement which caused the European powers to set up the military academies and myriad

other rationalizing institutions which, collectively, made Ottoman command, supply,

discipline, and other logistical factors incapable of breaking into a sprint, in the way that the

first-tier European militaries did during the eighteenth century.62

But the increasing rationalization of logistics, it should be noted, was not enough to

account for the empire‘s shortcomings. For if the empire had been able to keep pace with its

western rivals in the arts of finance, rationalization and efficiency could have been spared. As

it was, the empire‘s biggest challenge in the eighteenth century lay in the realm of finance.63

While in Europe, from the eighteenth century, credit networks allowed belligerent states to

raise far more capital than any system of direct taxation could, their potential to raise and pay

armies on an unprecedented scale, as was described in the first part of this paper. The

Ottomans, however, were largely shut out from any participation in European credit markets.

For many years, this did not matter, since the Ottoman command economy was more than

able to supply all of the empire‘s needs. As the importance and the prices of troops and

munitions increased however, the Ottoman treasury found it increasingly difficult to make

ends meet. It used to be held that the ―price revolution‖ of early modern Europe had brought

disastrous inflation to a tradition-bound Ottoman economy, but recent interpretations have

held that not only was inflation not as bad as was previously thought, but that the Ottoman

economy proved much more adaptable to changed conditions than previously believed.64

And

while some have held that demographic decline also caused serious problems for the Ottoman

62

Ágoston, ―Empires and warfare,‖ 132-33. 63

For an overview of Ottoman financial difficulties and attempts at innovation in the seventeen century, see

Halil Inalcik, ―Military and Fiscal Transformation in the Ottoman Empire,‖ 1600-1700, in Halil Inalcik,

Studies in Ottoman social and economic history (Variorum, 1985), V: 283-337; and Halil Inalcik et al., eds.,

An Economic and Social History of the Ottoman Empire 1300-1914, 2 Vols. (Cambridge, 1994), I. 55-102.

For a more recent assessment, see Sevket Pamuk, ―Institutional Change.‖ 64

For the older view, see Ö. L. Barkan, ―The Price Revolution of the Sixteenth Century: A turning Point in the

Economic History of the Near East,‖ International Jouranl of Middle East Studies 6 (1975): 3-28; for the

emendation of this view, see Sevket Pamuk, ―The Price Revolution of the Ottoman Empire Reconsidered,‖

International Journal of Middle East Studies 33:1 (2001), 69-89.

23

empire during the eighteenth century, an argument from demography is has not been taken up

by more recent commentators.65

Instead, recent literature has focused more on internal policy decisions rather than

exogenous factors as determining the shape of Ottoman economic evolution during the ealy

modern period. Particularly worrisome to Ágoston, as has been suggested, is the fact that the

sipahis owned much of the land, while their military value decreased. The only choice, it

seemed, was to expand the janissary corps, which meant a greatly increasing demand for

ready cash. Contrary to any naïve expectations on the matter, the Ottomans did indeed make

use of credit instruments, and once more during the seventeenth century they began to adopt

European advances in the field of government finance. The Ottomans had long made use of

the expedient of tax farming, which was also commonplace in Europe at the local and national

levels. This meant that certain revenues were sold to cadres of investors, usually for periods of

several months or a year.66

The money from the sale would go directly to the government‘s

coffers, while those awarded the contract would then hire men to go and collect the maximum

revenue possible from the subject population, in order to maximize their own profits from the

deal. It will be noted that this differed from long-term financing, because the government

received only the expected value of their regular income stream, minus the profits of the tax

collectors. With long-term financing, the government could borrow sums that were many

times the expected annual revenue, for example, if interest rates were 5 percent, the

government might borrow twenty times expected annual revenue and be expected to remain

solvent.

Faced with Europeans opponents who were gradually becoming able to take advantage of

and organize the increasing capacity of local and regional credit markets, the Ottomans in the

seventeenth century began to search for financial innovations which would increase their

annual income. One innovation, as already mentioned, was to make Timur-estates responsible

for certain taxes in lieu of personal service. Other innovations attempted to improve the

efficiency of tax farms, and generally bring new untapped revenue streams into the

Treasury.67

These innovations did suffice, through the seventeenth century, to keep pace with

the empire‘s rivals. It was not until the European money market began to grow exponentially,

after the adoption of a long-term bond system in England, and the establishment of the Bank

of England, which in turn gave impetus to the expansion of the Amsterdam foreign capital

65

E.g., Jack A. Goldstone, Revolution and Rebellion in the Early Modern World (Berkeley, 1991), 355-389. 66

See Metin M. Cosgel, ―Efficiency and Continuity in Public Finance: The Ottoman System of Taxation,‖

International Journal of Middle East Studies 37 (2005), 567-586; also Pamuk, ―Instiutional Change,‖ 236-40. 67

Inalcik, ―Military and Fiscal Tranformation‖ *; Pamuk, ―Institutional Change,‖ 239-43.

24

market, that the Ottoman system of stop-gap tax farming and short term loans began to fall

behind the credit options that were available to the Austrians, Russians, and even the

Venetians. Once again, the Ottomans did attempt to innovate, but it was not until 1854 that

the Porte consented to the taking of a loan, in an abortive attempt at creating a public debt

system that proved disastrous in the short term.68

Finally, it should be remarked that the Ottoman failure to develop a vibrant credit sector in

step with eighteenth-century Europe is due to several long-term structural and institutional

factors, which in many ways could not have been changed or adapted to the new system

without a major overhaul of Ottoman society—precisely of the sort that Attaturk would

attempt in the 1920s. For one thing, the European financial system of the eighteenth century

was the product of centuries of experience in public finance at the municipal level. Since there

were no urban governments in the Ottoman empire, or indeed anywhere in the Muslim world,

these fiscal arenas, which had formerly provided so many obstructions to European

centralization, eventually provided a model which could be emulated at the national level.

Even Austria was possessed of many municipalities where such fiscal expertise was centuries

in the making.

Secondly, the urban milieu of Christian Europe had also shielded and given rise to private

fortunes and private expertise in trading, which by the early modern period had evolved into

elaborate global networks of trade. The Ottomans, on the other hand, had from the beginning

of their empire relied on the Byzantine practice of allowing foreign trade to be handled by

foreign (mostly Christian) merchants. We have already mentioned the trade capitulations with

the Dutch, which were concluded regarding imports of powder and other military supplies

from the early seventeenth century, and which had the effect of stifling native development in

these sectors. Within the empire, local bands of Jews and Armenian Christians were allowed

to engage in internal trade, and sometimes in tax farming; for a long time, it was seen as

beneath the dignity of a Muslim to engage in trade, and to partake in the usury which was

seen as committing fraud against fellow Muslims. It was not until the seventeenth century, for

example, that Muslim tax farmers became common within the empire. 69

In this regard, the

example of medieval England is worth remembering. In the fourteenth century, English

merchants were generally regarded as inexperienced small fry when compared with the Italian

traders who handled the majority of the country‘s international trade deals. However, because

68

Olive Anderson, ―Ottoman Public Debt‖, 47-48. 69

Murphey, ―Ottoman military organization,‖ 138, also discusses some of the reasons why the Ottomans did not

develop entrepreneurialism. See also Pamuk, ―Institutional Change‖ 235-236, and Halil Inalcik, ―Capital

Formation in the Ottoman Empire,‖ The Journal of Economic History 29:1 (1969), 97-140.

25

the merchant class was well represented in the city of London and in parliament, it was able,

over the longer term, to secure protectionist legislation which eventually resulted in the

emergence of a vibrant English merchant class.70

The Ottoman sultans, however, experienced

so many centuries of successful expansion and conquest, that the notion of fostering a native

merchant class seemed almost immaterial to them until the end of the eighteenth and early

nineteenth centuries. At this time, rapid European progress and exponential expansion on

many fronts fiscal and otherwise made it abundantly clear that the Ottoman system was in fact

lacking an effective entrepreneurial class, which as we now realize might have required at

least several decades of concerted effort to generate from a base of virtually nothing. It is for

this combination of reasons that the Ottomans did not really fall behind their European rivals

until well into the eighteenth century, and it is for this reason that the Ottomans belatedly

realized that something was happening in Europe which no simple trade treaty or minor

policy change could rectify.

The crucial stage of brokerage

The Ottomans did attempt to emulate the nationalizing military model of the Europeans, no

later than the reforms of Selim III which began in the 1790s. However, it seems quite clear

that they were not successful in modernizing their forces.71

Why was this the case? The

answer, it seems, might not lie in the fact that European nationalization models were

something that the Ottomans could not emulate (Murphey), or that the Ottomans never

managed to re-nationalize after the early eighteenth century (Ágoston). Instead, the reason for

increasing Ottoman military impotence might lie in the fact that the Ottomans had never

embraced the earlier stage of brokerage and entrepreneurialism—precisely that stage of which

most Ottoman-European comparisons tend to see as the ―weak point‖ of European

development. While military historians are keen to show how nationalization led to greater

efficiency in European military planning, they might overlook the fact—because of its

ubiquity in Europe—that the European nationalist reformers of the seventeenth and eighteenth

centuries were building upon a system which was constructed of local logistical systems,

deeply embedded and enmeshed in local and regional systems of credit and market

distribution. It was these systems which later nationalizers in Holland, England, Austria and

the rest were able to weld into powerful sources of supply and distribution which extended the

70

This illuminating comparison is found in Daniel Klerman, ―The Emergence of English commercial law:

Analysis inspired by the Ottoman experience,‖ Journal of Economic Behaviour and Organization, 71:3

(2009), 638-646. 71

His reforms, also those of 1840s, see Akban, baron de tott.

26

reach of some European powers literally across the globe, in a scale previously unimagined.

In short, the eighteenth-century logistical planners were able to tame the power of capitalism

itself, and use it for their ends, while maintaining enough market savvy (thanks to centuries of

legislative experiment) to prevent the government‘s strangling the entire system.

In the Ottoman empire, on the other hand, the government skipped the entrepreneurial

phase altogether, moving directly from its predecessor, which we might call ―feudal‖ or

―proprietary‖ forms of logistical organization, directly to ―nationalized‖ models in the late

eighteenth and early nineteenth century. We have seen how the government, instead of

demanding tax in money, generally demanded taxes in kind, for much longer and in greater

proportions than anywhere in western or central Europe. This meant that local agricultural

markets were much slower to evolve in the Ottoman Empire. To this we can add that the

Ottoman military system did not purchase supplies from craftsmen, but rather required that

blacksmiths, carpenters and other skilled laborers to accompany the army and then work for

free at the behest of their commanders. Again, this probably worked well vis-à-vis the

European system, until expanding production in the eighteenth century would have lowered

prices to the extent that Europeans could supply themselves with such goods and services

more cheaply and efficiently than such a command-based system could provide. The general

lack of credit instruments and high interest rates compared with Europe would likewise have

prevented entrepreneurialism from flourishing. This also overlooks the fact that the efficiency

of the Ottoman bureaucracy, particularly in the early period of expansion, would have made

such chaotic European arrangements seem hopelessly inefficient—as indeed it remained, for a

long time. Throughout the early modern period, the sultans and their officials maintained the

right to requisition supplies, either by commandeering them outright, or else by paying set

prices, which were often maintained at levels far below the market. This had the further effect

of keeping down war expenses for the Porte, which was then left at the end of a campaign

with very little debts in relation to its European rivals.

The Ottoman rulers, when faced with the task of re-nationalizing their armed forces, found

that many of the institutions upon which the modern European army was based, including

ample credit, and logistical systems based on bidding in a market system of supply and

demand, were not really available to them. While they might adopt some of the more

superficial trappings of the modern national army, such as professionalization of the officer

corps, standardized uniforms, strict discipline, and advanced drills and tactics, many of the

structural foundations of this new system were simply not there to be built upon. It is for this

reason, then, that the Ottoman Empire found that despite its best efforts at continuing

27

modernization, efforts which marked the continuation of a centuries-long policy of successful

adaptation, its attempt to adapt to the nationalist-era model of military organization were not

to meet with the success that successive generations of Ottoman administrators had come to

expect.

The Mughal Empire

Whereas the Ottoman empire developed in direct military and naval competition with various

western powers, including Venice, Spain, the Habsburgs, and later Russia, the Mughal Empire

developed a context where European influence was at first strictly naval and mercantile, and

which began as a small but growing factor in the political economy of the Indian

subcontinent. The Mughal Empire, which was founded in the early sixteenth century by the

emperor Babur (1526-1530), is known as a ―gunpowder empire,‖ because it came into being

largely due to the increased firepower of handguns and artillery enabled certain rulers of

previously turbulent regions to wield a number of traditionally independent feudal

principalities into a much larger state.72

Therefore, the primary military concern of the early

Mughal emperors was to incorporate firearms into the traditional military organization of their

region—which, over the course of a century, was very successfully accomplished.

In the Indian context, the Europeans provided little or no land-based military threat until

after 1700; even in the late sixteenth century, English forces which attempted to venture

outside of their fortified coastal bases were regularly defeated and forced to turn tail.73

Nor,

for a long time, did European naval influence become a significant concern to Mughal rulers

inland; the conquest of Goa (1510) by the Portuguese had already occurred by the time of

Babur, and thereafter the Portuguese were largely content to become but one set of players in

a large and thriving trading community that plied the waters between the Persian Gulf, the

72

For a synopsis of the genesis of the Mughal empire, see John F. Richards, The Mughal Empire (Cambridge,

1996), 29-57. 73

See Douglas Peers, ―Gunpowder Empires and the Garrison State: Modernity, Hybridity, and the Poltiical

Economy of Colonial India, circa 1750-1860,‖ Comparative Studies of South Asia, Africa, and the Middle

East 27:2 (2007) 245-258; also Bruce Watson, ―Fortifications and the ―Idea‖ of Froce in Early English East

India Company Relations with India,‖ Past & Present 88 (1980) 70-87.

28

Red sea, and points further east, with the Indian subcontinent serving as a crucial crossroads

in this trade.74

In fact, it is the coastal trading network of the Indian subcontinent that provides the

essential framework for understanding subsequent developments in military logistics. Since

ancient times, overland caravan routes had linked China, India, the Middle East, and Europe.

Beginning in the thirteenth and fourteenth centuries, however, Muslim traders had slowly

begun to increase the volume of seaborne trade that plied between East Africa and the Persian

Gulf.75

This trade had already reached a high volume, a significant level of sophistication, and

connected ports from Madagascar to Malaysia when the Portuguese suddenly burst into the

Indian Ocean shortly after 1500. While the Portuguese succeeded in arrogating some of the

Indian trade to themselves, they never attained a dominant position in the region. Instead,

native Indian merchants from many regions of the subcontinent rose to the challenge and

maintained a dominant position in Indian trading throughout the early modern period.76

The

vibrancy of the Indian mercantile sector is seen by the wide variety of specialties to be found,

including graindealers, moneylenders, moneychangers, brokers, local merchants, long-

distance traders, bankers, and state financiers.77

In order to raise the capital required to purchase ships and cargoes, these merchants made

use of a bill of exchange known as a Hundi in its various forms it provided an abundant

source of credit. Credit brokers of various sorts were to be found in all but the very smallest

villages by late Mughal times.78

The credit instruments in which they dealt had evolved for

the purposes of smoothing a particular type of long- and medium-distance trade between

merchants who operated in estabalish patterns, and had therefore not been subject to

manipulation by the state in the way that they had been in Europe since the middle ages. This

is because the merchants, locked into their castes, remained relatively remote from the centres

of power. Because the system did not require it, there was therefore no provision for long-

term investment, and interest rates were accordingly quite high—upwards of 10 percent.

74

J. F. Richards ―Mughal State Finance and the Premodern World Economy,‖ Comparatives Studies in Society

and History 23:2 (1981), 285-308; 301-302; for the relative indifference of the Mughal and other rulers to

Portuguese naval power in the early period, see William R. Thompson, ―Military Superiority and the

Ascendancy of Western Eurasia,‖ The Journal of World History 10:1 (1999), 143-178; 157. 75

Richards ―Mughal State Finance,‖ 296; K. N. Chaudhuri, Trade and Civilisation in the Indian Ocean: An

Economic History from the Rise of Islam to 1750 (Cambridge, 1985); Philip D. Curtin, Cross-Cultural Trade

in World History (Cambridge, 1984); R. J. Barendse, The Arabian Seas: The Indian Ocean World of the

Seventeenth Century (Armonk, NY, Sharpe, 2002). 76

M.N. Pearson, ―Brokers in Western Indian Port Cities: Their Role in Servicing Foreign Merchants,‖ Modern

Asian Studies 22:3 (1988), 455-472; reprinted in M. N. Pearson, The World of the Indian Ocean, 1500-1800,

(Ashgate, 2005), II. 77

Richards, ―Mughal State Finance,‖ 289-290 78

Habib, ―‖, 73.

29

Interest was usually calculated by the month. Likewise, loans were generally bound to come

due within the course of a year, and the law required that creditors who were not repaid within

the year had the right to double the initial interest rate.79

This custom had the effect of further

discouraging the growth of long-term instruments—although, to be fair, even in eighteenth-

century Europe long-term credit was relatively rare, and tended to be restricted to the sphere

of government finance in which it had originally evolved.80

Despite these limitations,

however, many of these instruments were negotiable, meaning that the early modern Indian

port towns were home to lively secondary markets in credit instruments. Not only this, but

early modern India was home to a large, wealthy, and important class of brokers (dallalan),

whose principal occupation was to smooth transactions (for a fee) between foreign merchants

and suppliers in the hinterlands.81

These brokers could be found both in the great cities and in

local distribution centres, and were a mainstay of Indian economic life. By the eighteenth

century, these traders had become an integral part of military supply efforts, as will be seen.82

Large numbers of moneychangers and small bankers added to the richness and complexity of

economic services available in early modern India.

Commentators have pointed out the very open nature of Indian society: throughout the

early modern period, India was home to traders from virtually all corners of the globe, from

Europe to China to Indonesia, and was generally tolerant if not welcoming. This can be

contrasted with the official policy of China under the Qing and Ming, which consistently

maintained a policy of severely restricting foreign access to its markets, and even with the

Ottoman Empire, which generally insisted that European merchants kept within designated

quarters of a few principal towns.83

Largely as a result of this openness to foreign travelers,

traders, and thus to foreign ideas, Indian merchants maintained a competition with European

merchants, which in the long run enabled them to successfully keep up with European

merchants in a much more direct fashion than Ottoman or Chinese merchants were able to do.

They were also happy to utilize European services whenever this option proved more

79

Lakshmi Subramanian, ―Banias and the British: The Role of Indigenous Credit in the Process of Imperial

Expansion in Western India in the Second Half of the Eighteenth Century,‖ Modern Asian Studies, 21:3,

1987), 473-510; 477-78; Habib, ―‖, 74. 80

Larry Neal, The Rise of Financial Capitalism: International Capital Markets in the Age of Reason,

(Cambridge, 1990), 5-9. 81

A. Jan Quaisar, ―The Role of Brokers in Medieval India,‖ The Indian Historical Review 1 (1974) 220-46. 82

Cf. Subramanian, ―Banias and the British,‖; also C. J. Bryant, ―British Logistics and the Conduct of the

Carnatic Wars (1746-1783) in War in History 11:3 (2004), 278-306; Kaushik Roy, ―Military Synthesis in

South Asia: Armies, Warfare, and Indian Society, c. 1740-1849,‖ The Journal of Mlitary History, 69:3

(2005), 651-690; and James W. Frey, ―The Indian Saltpeter Trade, the Mlitary Revolution a,d the Rise of

Britain as a Global Superpower,‖ The Historian 71:3 (2009), 507-48. 83

Karen Leonard, ―The ‗Great Firm‘ Theory of the Decline of the Mughal Empire,‖ Comparative Studies in

Society and History 21:2 (1979), 151-167; 165.

30

profitable, as for example the extensive use by Gajurati merchants of British shipping in the

western Indian Ocean during the early eighteenth century.84

It has been maintained in the previous section that one of the principal failings of the

Ottoman logistical system by the end of the eighteenth century was that it never went through

a phase of military ‗brokerage‘ or entrepreneurialism. This was largely due to the fact that

there were, simply put, very few entrepreneurs in the Ottoman Empire who might have been

enlisted for the purposes of supplying military needs. The empire had never placed a premium

on the protection of mercantile property, or the protection of private capital accumulation,

meaning that large-scale merchants were rare; state officials with their various monopolies on

production tended to be the primary beneficiaries of trade, but this style of monopolistic

production lent itself almost exclusively to patrimonialist, rather than capitalist, modes of

logistical organization. By contrast, we can see from the preceding discussion that the Indian

subcontinent, with its healthy populations of native ship owners, merchants, brokers, and

moneychangers, did have a good deal of the raw materials that might make for a system of

military brokerage.

And yet, the eighteenth-century history of India shows what might be regarded as two

great ‗disasters‘ from the point of view of native Indian military organization. The first of

these was the fall of the Mughal Empire itself. In 1700, towards the close of the long reign of

Aurangzeb (1658-1707), the empire appeared to be at a high point of power, organization, and

prosperity. A succession crisis on the death of Aurangzeb, however, suddenly and

unexpectedly began to tear the empire apart. By 1720, the empire had permanently dissolved

into a number of successor states. During the rest of the eighteenth century, these states

realized that European armies, particularly the British but also the French, were beginning to

pose genuine threats to their sovereignty in a way that had never before been the case.85

They

also realized that the increasing European ability to use effective military force on land was

likewise limiting Indian princes‘ ability to negotiate terms in the realm of international trade.

Since, from Mughal times onward, Indian princes were some of the largest investors in

overseas and intra-Indian trade, the impetus to modernize their land-based military forces

became all the greater.

A great deal of ink has been spilled on the question of why the Mughal empire fell, and it

is obviously not our part to provide even the barest outline at the present. What is germane to

our discussion however, is that one of the major schools of thought as to the reasons behind

84

P. J. Marshall, East Indian Fortunes. The British in Bengal in the Eighteenth Century (Oxford, 1976), 79. 85

Cf the narrative and treatment of the major states in Roy, ―Military Synthesis.‖

31

the disintegration of the empire points to the fact that it was not only the Mughal Empire

which fell at this time, but the Safavid and Uzbek states as well; it has been pointed out that

the Ottoman empire likewise began a long decline from about the period 1720.86

A prominent

strain of argument suggests that economic factors were strongly to blame for the

disintegration not only of the Mughal Empire, but of other affected states as well. M. Athar

Ali suggests that the reason that few historians have linked this decline to the rise of the

Europeans in the region is because, in 1700, European armies were anything but automatically

successful on the Asian continent: it is well established that European armies were effective

largely as garrison forces at this time.87

According to an earlier version of the economic

decline theory, the rise of European trade volume began to make traditional Asian modes of

production seem relatively insignificant; attempts were made by rulers to increase agrarian

production, but these largely failed, due to their half-hearted implementation.88

A more articulate version of this decline thesis now holds that the great banking

companies of Mughal India had a large share in the downfall of empire, as European

mercantile colonialism on the continent became more established—and furthermore, that

military supply figures prominently in this story. Like the Ottomans, the Mughals relied on a

strong centralized system of administration and military provision, in this case called the

mansabdari system. In it, officials and soldiers known as mansabdars were given fiefs known

as jagirs, from which they were supposed to maintain troops and perform other duties tied to

their post. Thus, they correspond to the Ottoman timar system, except that the Mughal

accounting system is known to have been less efficient than that of the Ottomans.89

Unlike in

the Ottoman system, however, the presence of powerful and well-organized groups of urban

merchants and bankers by the seventeenth century, as the mansabdari system was being

concretized. This meant that, unlike in the Ottoman Empire, military supply remained quite

firmly in the hands of consortia of merchants at the local level, throughout the empire, to an

extent that was never relied upon in the much more centralized Ottoman system. It is true,

however, that much production in the Mughal Empire remained under the auspices of nobles,

who employed forced labor in large factories.90

Furthermore, Indian craftsmen were known to

make use of very few metal tools, for example, and their productivity was accordingly very

86

M. Athar Ali, ―The Passing of Empire: The Mughal Case,‖ Modern Asian Studies 9:3 (1975) 385-396; 386. 87

Watson ―Fortifications and the ―Idea‖ of Force.‖ 88

For the failure of agriculture to modernize under the Mughals, see Irfan Habib, ―Potentialities of Capitalistic

Development in the Economy of Mughal India,‖ The Journal of Economc History 29:1 (1969), 32-78; 50.

For the failure of successor states such as Mysore to create meaningful mechanisms for the capitalization of

agrarian production see Roy, ―Military Synthesis,‖ 668-69. 89

Ali, ―The Passing of Empire,‖ 385 90

Ali, ―The Passing of Empire,‖ 390.

32

low.91

Thus, while Indian merchants did rely on sophisticated credit mechanisms and supply

networks in order to fulfill the logistical needs of the emperors, the elasticity of the market,

and its ability to meet increased demand with reliable supply, was never as thorough as the

more thoroughly monetized, more laissez-faire system of Europe was able to be. Part of this

was due to the fact that Indian revenue systems remained much less flexible than those of

contemporary European states. Despite their ostensibly ―absolutist‖ status, Mughal rulers

never developed reliable means by which they could increase their citizens‘ tax burdens

during time of war. Thus, while they were innovative in terms of the types of credit

instruments and arrangements, that they might employ, their bottom line remained quite

immobile. The traditional land tax accounted for over 2/3 of Indian tax revenues in the

eighteenth centry, and the British, as they began to inherit these systems, frequently lamented

that an inability to levy indirect taxes, due both to tradition and to the fact that the labourers

themselves were so unproductive and so poor, meant that Indian states were very restricted in

terms of the additional revenue they could accumulate, even in times of dire emergency.92

This inflexibility did not lend itself to the adoption of more fluid credit mechanisms to aid the

running of the fisc; at times, even an addition of a few percent to the government‘s revenues

might have been enough to secure new loans, which in the Indian context could not be

forthcoming.

That being said, the Emperor‘s very reliance on great banking houses for credit and supply

in time of war did result in the creation of a financial system which began to gain a will of its

own.93

As Karen Leonard and others have argued, the interests of the Mughal state and that of

the great banking firms could sometimes come into conflict. There is much evidence to

suggest that these firms began to favor the business of English and Dutch traders by the end of

the seventeenth century.94

Increased exactions from Mughal emperors began to be seen as the

hindrance to trade that they in fact were, and, bit by bit, the Indian merchants realized that

their own commercial interests would on the whole be better protected by the company-

governed English settlements than on Mughal territory.

91

Irfan Habib, ―Potentialities of Capitalistic Development,‖ 62. 92

Peers ―Gunpowder Empires,‖ 253-54. 93

Ali, 391, says that they were highly influential and important to the court. While Richards, in ―Mughal State

Finance,‖ notes that Mughal rulers paid in specie from surplus treasure as a rule, this does not preclude the

use of mercantile credit for many aspects of military logistical preparation. 94

Leonard, ―Great Firm Theory,‖. For a critique of Leonard, see Richards, 289-290; however, the thesis that

Mughal merchants helped foster the decline of Islamic states and the rise of European colonial polities is now

quite well established. On this see Ashin Das Gupta, Indian Merchantas and the Decline of Surat c. 1700-

1750 (Weisbaden, 1979), 74-88; Also Subramanian, ―Banias and the British‖ for a similar argument.

33

Thus, although in the 1620s the English trading companies were generally looked down

upon as competitors by the Gujarati merchants, by the 1660s the English port of Surat in the

northwest became a primary outlet for Gujarati credit. Likewise, by the early 1700s the pre-

eminent firm of Jagat Seth moved its base from Mughal territory into English-controlled

Calcutta and Bombay.95

It is not strange that the advanced Indian banking houses should

realize that their own best interests lay in areas which were controlled by merchants, rather

than emperors: precisely the same process had unfolded in renaissance and early modern

Europe, where experience proved time and again that merchant fortunes were most secure,

interest rates lowest, and profits correspondingly highest in territories which were governed

by mercantile consent, rather than by absolute monarchs.96

According to some scholars, the

increasing links between the great firms of Indian merchants with English and other colonial

trading interests therefore helped to hasten the decline of the Mughal Empire, because one of

the primary pillars of their administration essentially defected to the west.97

As the value of Indian trade grew, and the possibility of defection to the west grew

stronger, Indian merchants found that their political influence upon English policy in India

increased throughout the period, whereas it tended to stagnate or even decrase in the halls of

native princes. This tendency was already evident by the seventeenth century.98

This tendency

towards defection did not cease after the breakup of the empire by 1720, but rather continued

to gain momentum well into the nineteenth century. Throughout the successor-state period,

that is, Indian banking firms became an increasingly important pillar of English colonial

administration. The British rulers, many of whom were mercantile-minded representatives of

the East India Company, realized that a policy of wooing the Indian financial houses was in

their own best interests, and they pursued this policy well into the nineteenth century.99

Many

95

Leonard, ―Great Firm Theory‖; 161. 96

For the monopoly of property holding by the sovereign in Mughal India; for the lack of security of property

and person, and the susceptibility of great merchants to plots, libel, slander, and property confiscation, see

James D. Tracy, ―Asian Despotism? Mughal Government as Seen from the Dutch East India Company

Factory in Surat,‖ Journal of Early Modern History 3:3 (1999), 256-280; For low interest rates in EIC areas,

see Peers, ―Gunpowder Empires,‖ 255. 97

Sanjay Subramanian, ―A Tale of Three Empires: Mughals, Ottomans, and Habsburgs in Comparative

Context,‖ Common Knowledge, 12:1 (2006), 66-92; 74. Muzaffar Alam, The Crisis of Empire in Mughal

North India: Awadh and the Punjab, 1708-48 (New Delhi, Oxford, 1986), 169-75. and see n. 7, above. 98

Ali, ―The Passing of Empire,‖ 393. 99

Subramanian, ―Banias and the British ,‖ 474; for the nineteenth century see Peers ―Gunpowder Empires,‖ 255,

and P.H.H. Vries ―Governing Growth: A Comparative Analysis of the Role of the State in the Rise of the

West,‖ Journal of World History 13 (2002), 67-138.

34

scholars have argued that the British domination of India might have been impossible without

this cooperation.100

From a military perspective, then, we can say that during the Mughal period, the state

failed to keep the interests of its own banking firms aligned with that of the state apparatus.

Nor did this process occur only in banking: important resources were also effectively taken

over by European interests at an early time period, as for example when the Dutch began to

gain a slow monopoly over the Indian saltpeter trade beginning in 1618. Dutch success in the

seventeenth century lay primarily in commercial maneuvering of native supply chains, rather

than military force per se, although a combination of the two tactics was what enabled them to

maintain a domination position for as long as they did.101

The British, likewise, skillfully

combined mercantile and political interests from the time of their earliest appearance on the

subcontinent, to similar, and eventually superior, effect.102

From these examples we can see

that the financial and logistical services provided by the Gujarati and other merchants were

gradually brought out from the control of the central Mughal bureaucracy, whence they

became available to the highest bidder. The decentralization of state finance, and its

movement into the hands of bankers and provincial state administrations is often seen as a

cause of the decline of the Mughal system.103

However, it did not have to be that way: had the

state been able to negotiate a federalized power structure, of the sort that existed in Europe,

this might have been a strength, rather than a weakness. As it was, the state did lose control,

and so was quickly eclipsed.

After about 1720, then, the Mughal Empire broke up into several successor states.104

Many historians have noted that these smaller states were by no means ‗bound‘ to be weaker

than the forces fielded by the English East India Company, or any other colonial power.

While it was once asserted that the period after the Mughal disintegration was a ‗Dark Age‘

for India, it is now realized that the successor states presided over a continually increasing

economy.105

Furthermore, it has recently been realized that Indian armies in the successor

states were quite capable of keeping up with European technological developments in

100

For a similar formulation with regard to the impact of economic ―soft influence‖ on nineteenth-century China

and Japan, see Thompson, ―The Military Superiority Thesis‖, 174. 101

Frey, ―The Indian Saltpeter Trade,‖ 512. 102

See Philip J. Stern, ―Politics and Ideology in the Early East India Company-State: The Case of St. Helena,

1673-1709,‖ The Journal of Imperial and Commonweatlh History 25:1 (2007), 1-23. 103

For the decentralization of state finance as a cause of decline, see Richards, ―Mughal State Finance,‖ 294-95. 104

Ali, ―The Passing of Empire,‖391. 105

Muzaffar Alam, The Crisis of Empire in Mughal North India: Awadh and the Punjab, 1707-48 (Oxford,

1986).

35

throughout the eighteenth century.106

Indeed, the armies of Mysore and the Maratha Empire

were able to field 20 to 30 thousand men by the later eighteenth century, and many of these

were armed, equipped, and trained after the European fashion.107

The Duke of Wellington,

who took part as Colonel Arthur Wellesley in the Fourth Anglo-Mysore War of 1798-99,

considered his victory at Seringapatam over Tippu Sultan to be the most hard fought and

tactically difficult battle of his career—including any in the Peninsular Campaign against

France.108

Despite all of these advances, however, historians have equally had to conclude

that the Indian successor states were in the end unsuccessful in assimilating and countering

European advances in military logistics. The question that remains to be answered, is why?

One of the most influential opinions is held by Kasushik Roy, who argues that the south

Asian states failed to compete with European military organization due to what he terms

‗defective military synthesis‘ between Asian and European models. He believes that Indian

armies ultimately failed at four different levels: the conceptual, institutional, economic, and

the political, but points out that the British still took over 100 years to successfully subdue

these successor states, for all of that.109

Interestingly, then, while Indian armies were generally

able to keep up with Europeans in terms of simple technology, it was the long-term

maturation of European logistical patterns which consistently gave European armies the edge

in eighteenth and early nineteenth century warfare. As in the Ottoman historiography, we hear

that the Indian lack of formal military training, particularly of officers, provided a major

tactical stumbling block. Likewise, bureaucratic organization tended to be haphazard after the

breakup of the Mughal regime, giving Europeans a decisive edge.

But in the end, it would appear as though the inability of native princes to take command

of the Indian credit and supply system which decisively turned the tide of war against them. It

was in India, in fact, where the future Duke of Wellington first devised and implemented

careful strategies for ensuring supply lines, a concern that would become one of his

hallmarks. In this, Wellington was not creating a wholly new policy. On the contrary, it is

well documented that the British East India Company had been consciously utilizing native

supply networks as a means to organize their inland campaigns since at least the 1750s. For

example, Indian warfare relied strongly on the availability of bullocks as a means of

transporting food, munitions, and other supplies. The ability to raise large herds of hundreds

106

Thompson, ―Military Superiority Thesis,‖ 151-152. 107

Roy, ―Military Synthesis,‖ 668. 108

For the ―often desperate‖ nature of the EIC in the early period, see C. J. Bryant, ―The Cavalry Problem in the

Early British Indian Army, 1750-1785,‖ War in History 2:1 (1995), 1-21; 2. 109

Roy, ―Military Synthesis,‖ 656-67.

36

or thousands of bullocks lay squarely in the hands of local and regional merchants with

established connections and reliable cash reserves. After some initial diasters, the British

began to learn how to utilize and organize such complex regional issues.110

Because the

Indian financial and supply networks, even at the rural level, had evolved in a decentralized,

credit-focused manner that was not unlike those in Europe, the British logistical planners of

the EIC therefore found themselves quite at home in implementing the brokerage-style supply

system that had been the mainstay of European models.111

In utilizing the brokerage method,

European military planners in India were not only co-opting native systems, but creating an

effective demand which had a transformative effect on the Indian economy. Because the

British and Indian systems were so relatively compatible, the Indian economy continued to

develop along European lines throughout this period. However, it was, as we have noted, the

British who were able to maintain ultimate control over both the Indian merchant houses, and

the logistical supply networks which eventually led British armies in India to victory. This

was possible because well into the nineteenth-century, mercantile interests held political sway

in British India, and the merchants of the EIC proved to be the most adept at playing this

game of economic logistics.112

Conclusion

We argued in the previous section that the Ottoman Empire failed to keep pace with western

military developments, not because it failed to re-nationalize its armed forces at the same time

that the Europeans were doing so, but because by the time they did re-nationalize, they

attempted to do so from a position of extreme economic backwardness. While Europe and

India were both developing extensive credit markets, native mercantile houses, and money

economies in the early modern period, while protecting the ability of private merchants to

accumulate vast capital reserves, the Ottomans were not. Consequently, when the Ottomans

attempted to re-nationalize their military in the late eighteenth and early nineteenth centuries,

they found that there was very little logistical network upon which they could build their new

military force. They could purchase uniforms, they could drill their men, equip them with the

latest armaments, and even learn to train officers at military academies, but in the end, the

110

G. J. Bryant, ―British Logistics and the Conduct of the Carnatic Wars 1746-1783),‖ War in History 11:3

(2004), 278-306; 280-81. 111

Bryant, ―The Cavalry Problem,‖ 19. 112

Peers, ―Gunpowder Empires,‖ 248-49.

37

amount of money and credit that they had at their disposal was far less on a per capita basis

than most contemporary European states, and the supply networks that they might attempt to

commandeer into national service were far too primitive for any such programme to succeed

vis-à-vis western competition.

In Mughal and successor-state India, however, a different problem emerges. The Mughals

and other kingdoms of the Indian subcontinent had embraced international, including

European, models of trade from the earliest decades of the early modern period. Native

merchant houses were encouraged to grow, and were generally left in peace, at least by Asian

standards. Precisely because these merchants were indeed skilled capitalists, however, it had

become apparent to the Gujarati merchants by the middle of the seventeenth century that due

in part to lower interest rates and higher standards of security, British and Dutch traders were

the most profitable partners for them to engage with. By the end of the seventeenth century,

however, this policy began to have political repercussions, and most historians agree that the

ability of the British, in particular, to woo the merchants, with their command of vast inland

trading networks, into their own enclaves, helped to provide long-term strategic advantages

that smoothed the way to the colonial domination of India by the mid-nineteenth century.

Putting this into the terms of our military logistical model, we can say that the Indian

Mughal state began as a centrally-organized patrimonial state, but that the growth of

capitalism, which was greatly accelerated with the arrival of increasing numbers of European

traders from the sixteenth century onwards, helped to push it towards a brokerage model of

logistical organization. Some of these same centrifugal forces may indeed have helped to

break up the Mughal empire into the group of successor states that followed it. These

successor states found that although they attempted at some levels to utilize native supply

networks, they were out-maneuvered by British mercantile and political interests, which in the

long run proved more attractive to native banking houses than any native absolute monarchy.

This, coupled with the fact that native militaries were always saddled by entrenched local

interests which saw Europeanization as a threat to their own livelihoods, helps to explain why

the successor-states‘ attempts to modernize, most notably that of Mysore under Tippu Sultan

in the later eighteenth century, were in the end incapable of creating armed forces that could

successfully resist British inroads. Unlike the Ottomans, the Mughal successor states were in

possession of the rudiments of a brokerage-supply apparatus, but in this case, direct

competition with European economic and political agents meant that Mughal successor states

found themselves to be at a perennial disadvantage when attempting to utilize native credit

and logistical networks. It can therefore be argued the British were able to successfully

38

encourage the growth of a native military supply system, and then retain control of that

system, to the detriment of their political competitors. Without the backing of such an

economic system, the Mughal successor-states found that, like the Ottomans, their own

attempts at the nationalization of military supply and other aspects of their military systems

were not strong enough to compete with contemporary European militaries that could build on

well-established mercantile networks.