Most historians differ about the extent to which iron contributed to the emergence of new relations of production in the age of Buddha and Mahavira. However there is a degree of consensus on various elements that marked the new relations of production. There is a noticeable expansion of economy and within that of marked the new relations of production. There is also expansion of the economy and within athat of agriculture. Rice cultivation based on transplantation to a virtual demographic revolution.
The Jain and Buddhists text mention numerous settlements attesting to an expansion of settlements, the extension of cultivation and of people into unexploited lands. Along with an expansion of agriculture and settlements there was increased craft production, numerous crafts are mentioned in the texts as also coinage signifying a money economy, trade routes and corporate commercial activity in the form of srenis.
The age of the Buddha has also been characterized as the period of second urbanization. From the texts it is also clear that the gahapatis, a category of persons mentioned in the accounts in the context of economic activity played a crucial role in the expansion of agriculture. Some of them were in control of substantial tracts of land. The gahapatis were the primary taxpayers in the monarchical janapadas and in his capacity they were regarded as intrinsic to the sovereignty of the king.
The growing complexity of the economy was expressed in the emergence of a sharply stratified society. While some sections of society had large concentrations of land there were others who had no access to the means of production. The period is marked by the appearance of such categories as vaitanika (wage earner) and karmakaras (labourers who hired out their labor).Karmakaras are mentioned often along with the dasa ( servant) and together they implied elements of servitude and made them unfree in some way. The term dalidda denoting extreme poverty also appears for the first time while its counter position with wealth suggests sharp economic contradictions in the new society. Economic contradictions were accompanied by some social contradictions certain families were regarded as of high status others were regarded as low; the Brahmanas were staking their claims to preeminent status based on birth but there is evidence of such claims being contested. In the sixth century BC life was one that was in the throes of rapid change.
Apart from the emergence of inequality the transformation and reformulation of political units and socio-economic institutions entailed the breakdown of clan and kin organizations and the collective units of the earlier periods. In its place what was visible was individuals and greed. There was power in the hands of some while no norms had yet evolved which could mediate between the exploiters and the exploited or between the king and his people.