The City of London, that great engine of global finance, might do well to pause and consider a dusty volume from the 17th century. Newly surfaced reports from Mughal India, preserved in the UK’s historical archives, offer a masterclass in fiscal management that our current Chancellors would be wise to study. The Mughal Empire, at its zenith under Akbar and his successors, operated a tax system that was both efficient and remarkably stable for its time. Their land revenue system, the Zabt, was based on measured yields and market prices, adjusted regularly to prevent exploitation. Compare that to today’s chaotic property tax regimes and the mess of council tax banding. The Mughals understood the principle of predictable taxation: stability encourages investment. A lesson lost on modern Westminster, which seems to invent a new levy every Budget Day.
But it is in governance that the archives truly shine. The Mughals maintained a vast network of provincial governors (subahdars) and civil servants (mansabdars), all paid from the imperial treasury. Corruption was punished severely, and promotion was based on merit. The result? A centralised state that could mobilise resources quickly, build infrastructure, and maintain coinage purity. Sound familiar? This is the very definition of fiscal discipline. Yet today, our civil service is bloated, Whitehall is a byword for inefficiency, and our gilt yields are at the mercy of every half-baked fiscal event. The Mughal model of a lean, accountable bureaucracy is one we should import, not Indian spices.
Of course, no empire is without its flaws. The later Mughals fell prey to overspending on wars and monuments, a lesson in the dangers of unchecked public expenditure. The Taj Mahal is beautiful, but it didn’t pay for itself. One wonders if the same can be said of HS2 or the endless subsidies to wind farms. The archives also reveal a sophisticated system of credit and bills of exchange (hundis), which facilitated trade across the subcontinent. This was a precursor to modern finance, yet we now face capital flight as investors flee the UK’s volatile tax environment and regulatory overreach. The Mughals understood that trust in the state’s financial instruments is paramount. Today, the pound sterling’s credibility is eroded by every stealth tax and unfunded spending pledge.
What does this mean for the man in the street? Quite simply, history shows that sound money and efficient government lead to prosperity. The Mughal Empire, for all its autocracy, delivered low inflation and stable prices for over a century. Contrast that with the Bank of England’s current battle against double-digit inflation, a direct consequence of quantitative easing and fiscal incontinence. The archives are a reminder that printing money does not create wealth; it simply redistributes it, usually to the already wealthy. The Mughals knew better: they hoarded bullion and minted coins of consistent fineness. The result was a currency that held its value, unlike today’s sterling, which has lost 99% of its purchasing power since the end of the gold standard.
Finally, the UK’s historical archives themselves are a testament to our global standard of record-keeping. They preserve these lessons for scholars and policymakers alike. Yet, as we digitise and catalogue, do we truly learn from the past? Perhaps not. We continue to indulge in the fantasy that endless government borrowing is free money, ignoring the Mughal fate of eventual decline from fiscal profligacy. The message is clear: either we embrace the discipline of the past, or we repeat its mistakes. The City is watching, and the bond markets are not forgiving.
