|Free trade has been the lifeline of ancient Sri Lanka. It created wealth and prosperity for the nation. According to Somadewa’s findings, this level of prosperity prevailed in the country even before the millennium. That prosperity is not comparable to the type of prosperity which people have today. But by the standards of pre-millennium times, it would have been a prosperous time generated by free international trade
Sri Lanka’s early history in narrative form
Postgraduate Institute of Archaeology Don Raj Somadeva of Neth FM Unlimited History fame (available at: https://www.youtube.com/playlist?list...) has released his latest book on Sri Lanka’s history through archaeological evidence in Sinhala under the title of ‘Yakhshi’ with the subtitle ‘Connecting the Horizons of History’. This is his 17th publication.
Somadewa has presented Sri Lanka’s history as revealed in chronicles and archaeological discoveries in simple language to laymen on Neth FM Radio with Nuwan Liyanage as the radio host. This series has now run 141 episodes every week almost continuously attracting the attention of thousands of listeners and viewers throughout the globe. Yakhshi is the print form of the early part of this digital version.
Yakhshi: The source of prosperity
Since the book covers the prehistory of Sri Lanka which had been inhabited by people known as Yakhsha tribes, the book has been titled by their feminine form, Yakhshani or Yakhshi. This is because, according to Somadeva, women have made a positive contribution to the historical development of Sri Lanka from time immemorial. This has been revealed both in chronicles and archaeological discoveries. A good example, he says, is the story of local princess Kuweni as found in the great chronicle Mahavansa. The legend of Kuweni has continued unbroken in the history of Sri Lanka up to date. Hence, Yakhshi as the title of the book.
Narrative form is the best
The story is told to us as a narration, the way it should be communicated to ordinary laymen. The Buddha has characterised as one of the attributes of a good learner in the Avasa Shobana Sutta, the ability to tell another person in one’s own words what one has learned. Until this quality is attained, any knowledge is alien to the learner. Somadeva has demonstrated this quality amply in both the Neth FM series and his present publication.
Somadeva has justified this in the Foreword to the book as follows: “When knowledge is communicated, the principles relating to the use of narrative form is found in the subject called narratology. There has been a tendency to use this narrative form to communicate knowledge in late 1970s and early 1980s. This tendency has been called by M. Chirsworth as contemporary narrative turn” (my translation). Hence, Somadeva has followed the modern trend and in my view, it is a success.
However, he has been careful in making his presentation as a true historian without biases or prejudices. As cited by Somadeva (p 15), Kalhana, a Sanskrit scholar who had lived in Kashmir in India in the 12th century has said in his Rajatarangani, a writer is to be praised if he has written history without attachment or prejudice just by presenting what exactly has happened. It seems Somadewa has followed this tradition in the spirit as well as to the letter.
My mission here is to identify the economic side of what Somadeva has presented in Yakhshi and give it an economic interpretation. Somadewa, being an archaeologist, has just presented them without attempting to make an economic interpretation. He has provided a rich narration of how the pre-historic economy has functioned, and for an economist, it is a rich source of information. What I find is that pre-history macro and microeconomy are mostly like the modern macro and microeconomies.
Exposure to external shocks
The prehistory of Sri Lanka as it is today has been influenced by external factors, says Somadewa. Economists call this external shocks. The country had been known as Sinhala Dwipa, but the Greek traders had pronounced it as Sila Dwipa. They had also called it Taprobane, a variant of Thambapanni and Palesimundu which means the land located beyond oceans. Since Sri Lanka had been a vibrant trading nation even before the Common Era, those travelers from far beyond had known it. Somadeva has given a detailed description (pp 29-31) of fine pottery pieces that had been found in excavations made in Anuradhapura and the surrounding areas. These potteries had been used in North India in the 6th century BCE meaning that those Indian or other traders had brought them to Sri Lanka in exchange of produce of this country.
In addition, in the ancient cemetery of Ibbankatuwa, a necklace was discovered containing beads that had been imported from India in the 7th to 3rd centuries BCE. Unlike the clay pots which are essential kitchen items, necklaces of imported beads are items of luxurious ornaments used for feminine beauty culture. What this means is that ancient Sri Lankans had been engaged in international trade with other nations in a wide range of goods. This is demonstrated by a map of the island presented by Somadeva on page 36 marking major ports and key trading centres. There are 15 ports all along the coastal line of the island.
Similarly, there are 15 trading centres on both the coastal line and interior parts of the country scattered all over the island. At the same time, Somadewa quotes visitors who had seen many ships sailing from and to the island. What this means is that the country had been a vibrant trading partner with the rest of the world from around 7th century BCE to 5th century CE.
Sri Lanka’s pre-history is globalisation 1.0
This is demonstrative of Sri Lanka’s exposure to globalisation 1.0 at that time, in contrast to the present wave of globalisation coded globalisation 4.0. That globalisation was concerned with the exchange of goods, ideas, cultural and religious practices, and marital relations. According to the Oxford-trained historian Peter Frankopan who published the bestseller The Silk Roads in 2015, this has happened all along the ancient Silk Road that connected China with Europe via Central Asia and maritime route that passed through the ancient Sri Lanka too. To facilitate this, many nations along the road were open-minded and keen on adopting new ways. This was particularly true for Persians during this period.
Frankopan says that the willingness to adopt new ideas and practices was an important factor that enabled Persians to build an administrative system that allowed the smooth running of an empire which incorporated many different peoples (p 1). According to the reporting by Somadeva, Sri Lankans were not different. He says that this influence had affected both the political setup of the country and the institutions that had been responsible for establishing the moral code for people and propagating religious and philosophical ideas (p 34). This ancient globalisation had both positive and adverse repercussions on societies throughout the globe including that of Sri Lanka. Economists would not pass judgments on these historical developments since they have already happened and cannot be done anything about them now. So are historians and archaeologists.
Since these ancient times, the world has seen several rounds of globalisations that had been concentrated on the movement of goods from one place to another. But the goods are exchanged by people and when people move from one place to another, there is the movement of human, financial, and physical capital that delivers an external shock to those who welcome them. As Somadewa has argued throughout his Neth FM program as well as presented in Yakhshi, this should be the history of mankind and not mere enumeration of a list of a monarchies and empires.
Prof. Raj Somadeva
Monetary economy in ancient Sri Lanka
Any trading economy needs a medium of exchange for completing transactions effectively and efficiently. Societies for more than 10,000 years ago had created a token called money for this purpose. Money is not a real good like rice or a necklace which can be used for direct consumption for pleasure or as an input for further production. It is a nominal one, an imagination in the head, and, above all, a unit of value serving as a medium of exchange. In ancient times, money was chiefly made up of coins issued either by kings, or private parties.
Money was made up of metals, precious like gold or silver or cheap like copper or ordinary irons. Since there was a precise content of metal in a coin, its issue was like the operation of a modern-day currency board. If the issuer had the required amount of metal, he could issue the coins. If he did not have, he could not. Modern-day currency boards are also operating on the same basis. If the board has the required amount of foreign reserves, it could issue the currency and if it loses the reserves, it should recall the currency already issued and cancel it. Hence, the metal content was very important for the issue coins in the past.
|Frankopan says that the willingness to adopt new ideas and practices was an important factor that enabled Persians to build an administrative system that allowed the smooth running of an empire which incorporated many different peoples. According to the reporting by Somadeva, Sri Lankans were not different. He says that this influence had affected both the political setup of the country and the institutions that had been responsible for establishing the moral code for people and propagating religious and philosophical ideas. This ancient globalisation had both positive and adverse repercussions on societies throughout the globe including that of Sri Lanka. Economists would not pass judgments on these historical developments since they have already happened and cannot be done anything about them now. So are historians and archaeologists
Coins issued by private parties
There had been discovery of many metallic coins in archaeological excavations in Sri Lanka as reported by Somadewa in Yakhshi. They had been issued by local elites or kings. Numismatists Osmund Bopearachchi and Rajah Wickremesinhe as reported in Ruhuna: An Ancient Civilisation Revisited, coins belonging up to the 4th century CE had been discovered in Tissamaharamaya issued by householders and local lords (p 17). They had been exchanged for the metallic value. Somadeva reports that in addition to the local coins, there had been discovery of large deposits of Roman coins made of copper or cheap metals. They had been exchanged not according to a face value but according to the weight of the metals involved (p 39). This is unusual because if a coin represents value, it should be exchanged for its face value. But there is a good reason why these cheap-metal Roman coins were exchanged for the weight of the metals involved.
Debased Roman coins
The Roman coin, called Denarius, had a silver content of close to 100% before the onset of the new millennium. Hence, they had a value and were accepted for exchange freely throughout the globe. However, the emperors starting from Nero in the new millennium had begun to debase the coins gradually increasing the copper content and reducing the silver content. As reported by Mary Boatwright and others in their 2006 book A Brief History of Romans, along with the expansion of the empire and the need for incurring high military expenses, the silver content was reduced gradually, and the copper content was increased.
By the 4th century when Diodetian was the emperor, Denarius was wholly a copper coin. Though it was the same face value and the same name, Denarius had already lost its acceptance as a medium of exchange. They were just pieces of cheap metals like the Zimbabwean dollar a few decades back. A cart load of Zimbabwean dollars could not buy even a loaf of bread. Therefore, it was not unnatural in ancient Sri Lanka that these coins were accepted for their metal content.
Hence, debasing a coin is a method like the money printing which the present-day governments are accused of liberally undertaking. For instance, if the copper value is a tenth of the value of silver, the king can issue ten coins for the same face value if he uses copper as the base metal. It is therefore, from today’s standards, money printing by ten times. But such huge money issues will lead to loss of its domestic value through price increases, and loss of international recognition leading to loss of trade opportunities.
Debasing is money printing
This is called debasing of coins which even King Parakramabahu I had resorted to during the Polonnaruwa period, according to the archaeologist Senarat Paranawitana. What is the economic impact when a coin is debased? Since the face value is the same, people are forced to accept it for exchange of a real good whose value in terms of the previous metal content would have been much higher. Suppose that previously the coin involved had 1 ounce of silver and it was exchanged for one pound of ivory. At this rate, one pound of ivory was equal to one ounce of silver. But suppose now the coin has been debased to one ounce of copper which is only a quarter ounce of silver. Now people are asked to exchange one pound of ivory for a quarter of an ounce of silver.
It is not a fair deal, and the new buyer will feel that he has been cheated. Hence, he will reject the deal. This is expressing a higher value artificially for the coin issuer like Sri Lanka holding the value of dollar at Rs 200 a year ago. It like appreciating the currency by a government when the ground economic conditions do not substantiate it. This artificial appreciation of the Denarius had a high cost on the Roman Empire in the form of losing trade, suffering from a balance of payments deficit, and when foreign goods could not be obtained for the new copper coins, a shortage of essential goods in the market. It resulted in domestic prices going up.
For instance, one modius of wheat, which was equal to a fourth of a Denarius in 150 CE shot up to 110 Denarius by 300 CE. This high inflation in the domestic economy as well as the loss of trade due to the artificial appreciation of currency caused the Roman Empire to collapse by the 5th century CE.
Free trade: Ancient Sri Lanka’s lifeline
Therefore, free trade has been the lifeline of ancient Sri Lanka. It created wealth and prosperity for the nation. According to Somadewa’s findings, this level of prosperity prevailed in the country even before the millennium. That prosperity is not comparable to the type of prosperity which people have today. But by the standards of pre-millennium times, it would have been a prosperous time generated by free international trade.
I recommend Raj Somadeva’s Yakhshi to all Sri Lankan readers.
(The writer, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at [email protected])