Buddhism arose in India during a period of intense intellectual and social ferment. It was a period during which the authority of the Vedas had been placed in doubt, the concept of god as a supreme being and creator was in question, the hereditary restrictions on caste mobility were under attack, and the efficacy of Brahminical rituals was being challenged. The authors of the Upanishads had opened the door for various heterodox currents to emerge in society, and amongst the most significant of these were the Lokayatas who polemicized against religious charlatans, and the Nyayavadis whose rational epistemology created the foundation for intense philosophical debate and encouraged the investigation of the real world based on reason and logic, freed from the burden of superstition and irrational adherence to burdensome rituals. Various ideological sects competed for the attention and acceptance of the ruling elites and the public. The most important amongst these were the Jains and the Buddhists. Although each of the various sects made original and interesting contributions to philosophy, it was the early Buddhists who attempted to provide a unified philosophical system where ethical conduct and social criticism lay at the very core of their ideological system.
Although today, Buddhism is viewed as a religion by many of its followers, the early Buddhists sects were either strongly atheistic or agnostic. The atheists believed that rather than "God having created man in his own image" it was man who had created "God" in his image. In their view, the liberation of humanity was contingent upon humanity shedding the delusion that "God" existed.
Other parables from surviving Buddhist texts indicate agnosticism. For instance, there is a suggestion that Buddhist followers ought not to waste their time on unsolvable metaphysical questions such as "does god exist". The search to identify the "one true god" or to speculate on the nature of god was seen as an exercise in futility.
But the most frequently cited argument against god by the Buddhists was that if an omnipotent and omniscient being such as "God" truly existed, and who was also all good , there could not be the kind of dukkha (suffering) that was so widespread in the real world.
These shlokas (verses)    from the  Bhûridatta Jataka illustrates this point:
If the creator of the  entire    world they call "God" be the lord of every being, why does he order such    misfortune, and not create concord? 
If the creator of the  entire    world they call "God" be the lord of every being, why let prevail deceit,    lies and ignorance, why create such inequity and injustice? 
If the creator of the  entire    world they call "God" be the lord of every being, then an evil master is   he, knowing what's right did let wrong prevail!
Unlike religions that ascribed earthly miseries    to human sinfulness that brought upon the wrath of a vengeful god who needed   to be feared, Buddhism saw the root of human suffering in ignorance that  could only be ended through the acquisition of wisdom. Rather than expect  some supernatural entity to end human suffering, the Buddhists argued that  it was in human hands to end their sorrows through conduct and action driven   by  knowledge and correct understanding of human nature and the physical  world. Hence, the aspiration for knowledge (jigyasa) was seen as the  answer to blind faith. Although the Buddhists were not alone in developing  this view, the elaboration of this point of view became pivotal to early Buddhist philosophy.Central to Buddhist philosophy was an understanding of human nature and what caused dukkha - i.e. human suffering. They saw human personality as constituting five attributes, i.e. body, feeling, perception, disposition and consciousness, and used this framework to develop their understanding of human suffering. Citing examples of conditions that led to human suffering, such as aging, sickness and death, or association with the unpleasant, (or separation from the pleasant), or the inability to get what one wished - they concluded that suffering was a condition of stress and conflict inherent within human existence and interaction with the world.
They also connected suffering to the very impermanence of things. They observed how people lamented over the loss of a loved one, or experienced sorrow when something or someone that had once given them happiness became separated from them. They noted that even human pleasures were not immune from suffering because they didn't last forever, and the loss of pleasure inevitably left people feeling deprived. Seeing as how clinging to things (that were necessarily impermanent) was one of the primary causes of dukkha, they cautioned against excessive attachment. At the same time, they recognized a recurring and more general type of existential unease and anxiety (aniccha) that arises from the very transience of life, and our inability to control or comprehend all worldly phenomenon, which they characterized as viparinama-dukkha.
But the Buddhists did not see dukkha only emanating from the difficulties of an individual. They also saw suffering emerge on a much larger scale from hostile social conditions such as poverty, war, and social oppression which they described as dukkha-dukkha.
As a formula (char-mulya) for addressing these different types of suffering, the Buddhists advocated a four-fold scheme of a) recognizing the problem i.e. suffering (dukkha); b) identifying the cause of the suffering - such as craving stemming from ignorance (samudaya) ; c) establishing the goal of ending the problem (nirodha) - i.e. the cessation of suffering (nirvana); d) conducting life in a manner that was consistent with the cessation of suffering - following the right path or engaging in the right practice (marga).
Followers were thus goaded into developing both a sense of personal ethics and a social conscience:
"He who has understanding and great wisdom does not think of harming himself or another, nor of harming both alike. He rather thinks of his own welfare, of that of others, of that of both, and of the welfare of the whole world. In that way one shows understanding and great wisdom." Anguttara Nikaya - (Gradual Sayings)
"By protecting oneself (e.g., morally), one protects others; by protecting others, one protects oneself." Samyukta Nikaya (Kindred Sayings)
Human actions (kamma, kaama, or karma) in the Buddhist framework were to be judged based on both the intention or motive (chetanaa) and the consequences (vipaaka)    of the action. Altruistic actions which helped in the establishment and  promotion  of a just society were encouraged in the dharmaniyama (moral  duty code). 
{The discourses,    or  suttas in the  Digha Nikaya, illustrate how there  was   deep concern with the creation of social conditions favorable to the  cultivation    of Buddhist values and the expansion of social equity and justice. These   views undoubtedly influenced the creation of a "welfare state" during the   reign of  emperor, Ashoka (B.C. 274-236)} 
In their  theories of causality Buddhists challenged    the view that human destiny was unaffected by the ethics or morality of  human  actions. They countered the doctrine of amoral causation (akriyavaada)    whose adherents argued that there was no merit in doing good and no  demerit  for doing evil. (An extreme expression of such thinking was seen  in philosophers  who denied all morality and saw no crime in the killing of any person.)Realizing that such a world-view could lead to the rejection of moral distinctions and personal responsibility for ones actions, they argued strenuously against such beliefs. They also argued against the theory of Makkali Ghosha (or Ghoshala) who believed that human fate was predetermined, and therefore denied that human actions had any bearing on the results of things (ahetuvaada) and maintained that human intention and effort were essentially powerless in changing human destiny, and therefore advocated fatalism (niyati). They also countered philosophers from the school of "absolute skepticism" who doubted everything and never committed themselves to any specific position in doctrinal debates. Philosophers from this school such as Sanjaya Belarthaputra (who was known as a theorist of endless equivocation or an equivocationist (amraavikkhepavaadin)) were criticized in the Brahmajaala Sutta (or Sutra) as "eel-wrigglers" who were incapable of taking a definitive stance on the vital philosophical questions of the day. Such skepticism was seen as emanating from both the fear of being in error and the lack of knowledge (or inability) to provide reasonable answers to question put forward for discussion. Such all-pervading doubt coupled with a cynical skepticism (vichikicchaa) was viewed as a serious mental hindrance, a fetter in the path to wisdom.
Other theories that contradicted the notion that human actions mattered were theories of accidentalism (ahetu-apachayavaada), theistic determinism (ishvaranimmaanavaada) and past-action determinism (purvaketavaada or purvekatahetu). All of these were were opposed by the Buddhists. Accidentalism was an indeterminist theory which held that whatever was experienced was uncaused and unconditioned by human intervention. Theistic determinism was a determinist theory, which held that whatever was experienced was due to God's will or by plan of a "Supreme-Being". Past-action determinism was also a determinist theory, but it held the belief that whatever was experienced, whether pleasurable or painful or indifferent was entirely due to ones past actions (from a previous life), and ones present actions had no relevance.
The danger in each of these theories was highlighted in these words: "Thus for those who fall back on these three erroneous views as essential dogma, there is neither the will to do what is ought to be done, or not to do what is ought not to be done, nor necessity to do this deed or abstain from that deed. No moral improvement or intellectual culture can be expected from them."
Some of the theories in circulation at that time  built on a germ of truth but generalized to the point of absurdity.    For instance the accidentalists were correct only to the extent that certain    things did indeed appear to happen by random chance or accident.  But they   failed to recognize that sometimes what may have seemed to be accidental   was more due to inadequate understanding or improper or incomplete perception,    and that other activities had a clearly discernible cause. To deal with  the  extreme generalizations of such theorists, they introduced a middle standpoint  for their epistemology and ethics. 
They thus rejected the theory admitting that everything exists (sabba    atthii ti) and in permanence - i.e. the extreme of  eternalism (sassatavaada), and its opposite which advocated that nothing actually exists    (sabba natthii ti ) i.e. nihilism   (the denial of all reality in real-world phenomenon) or the extreme of  annihilationalism  (ucchedavaada). Related to their critique of the eternalist and nihilist  philosophies was their rejection of  both hedonism  and self-mortification  (attakilamathaanuyoga)  which they viewed as painful, fruitless, unprofitable  and ignoble.
 Buddhist texts also expressed suspicion    about claims by heretical teachers of being constantly "all-knowing" and    "all-seeing" and in possession of "all-embracing knowledge-and-vision."  Such  claims were countered with arguments relating to the actual behaviour  of such charlatans in different situations. For instance, they wondered why   such "all-knowing" and "all-seeing" spiritual teachers lost their way in  an unfamiliar place or why they were unable to escape from trouble while countering a fierce animal such as dog, elephant, horse or  bull.  Moreover, if they were really omniscient, they wouldn't need to ask for people's  names, clans, or the name of a village or market town or make enquiries about anything.   That they did such things indicated  that their knowledge was evidently limited  just like that of any average  worldly person (puthujjana).
Unlike religions that were based on revealed truth or the sanctity of every word in a holy textbook, the Buddhist    belief system prescribed reasoning based on investigation as the means of   determining ones dhamma, (or dharma as in Hindu practise). In a parable in the Kaalaama Sutta, followers of Budhism are advised not to accept any moral codes on the following ten grounds: (1) Vedic authority (anussava),    (2) tradition (paramparaa), (3) hearsay or report (itikiraa),    (4) textual authority (pittakasampadaa), (5) apparent agreebility   of the view (sama o no garu), (6) authority of the holder of the view   (takkahetu), (7) apparent logicality of the view (nayahetu),    (8) the fact that the view is an accepted standpoint (aakaaraparivitakka),    (9) inadequate reflection on reasons (bhabbaruupataa), or (10) the   fact that the view agrees with one’s own (ditthinijjhaanakkhanti).
In this manner, the Buddhism developed    a very sophisticated philosophical system in which social ethics were integrated    with rational investigation of human nature, social organization and the   physical world. Buddhist ideas and concepts left a powerful impression on   other Indian philosophical and religious belief systems, and over time, many  commonalities developed amongst the competing ideologies.
However, there were also certain problems with the Buddhist world view which prevented its complete acceptance by intellectuals committed to the scientific method. For instance, although the Buddhists rejected the theory of past action determinism, they did posit the existence of a soul which survived a person's death and carried with it the merits and demerits of a person's past lives. Presumably this concept was essential to the Buddhist goal of encouraging right conduct but it was rejected by those who considered the soul as inseparable from the body and did not believe that the soul survived death. Those who rejected the concept of transmigration  of the soul naturally couldn't accept the idea that  human destiny had anything to do with merits and demerits accumulated in previous incarnations of the "soul". In their view, morality and ethics were entirely social constructs and had to be dealt with accordingly. The realists (such as the Nyayavadis) who shared the Buddhist concern for  morals and ethics in society argued that while morals and ethics ought to be encouraged, they could only be enforced through societal laws and judicial codes. 
Another problem facing the Buddhists    was that in many ways, their views were too advanced for their times. Society    had not yet developed to the point where education was universal, and knowledge    of the real world sufficient to prevent superstitions and irrational beliefs    from being completely abandoned by the masses. In an era where society had only limited control over nature,    it was inevitable that sections of society would continue with beliefs in   deities and supernatural phenomenon in the hope that they may be spared  from  natural disasters or that their  crops might withstand attacks from  pests  and disease. Thus although the Buddhists had a very important and salutatory  effect on Indian society, the most advanced  Buddhist concepts could be understood  and practised by only a minority in society. 
Over time, the spirit of inquiry and rational investigation that had spurred the early Buddhist scholars towards    dialectical thinking and critical social analysis became more and more replaced   by narrow and literalist interpretations of the earlier texts. For instance,   advice against accepting something that appeared "logical" without personal   verification was taken to mean that logic could be rejected. Advice against   wasting ones time on unsolvable metaphysical questions was also taken too   literally and many Buddhist scholars remained aloof from the metaphysical   debates pursued by other philosophical schools such as those of the Jains   and  the Nyaya Vaisheshikas. What they didn't anticipate was that some of   these debates might lead to useful advances in mathematics or deeper understanding  of human thought processes and new insights on human memory and psychology. These led to valuable advances in the interpretation of moods and emotions - thus benefiting Indian art, literature and music.
In addition, later Buddhist monks    lapsed into some of the very things that had been attacked by the early  Buddhists  such as indulgence in unnecessary and elaborate rituals, belief  in supra-natural  phenomenon, and alienation of the priests from the masses.  Activities such  as meditation which were encouraged as a means to gaining  wisdom became ends  in themselves, and were turned into idealistic fetishes.  Although Buddhist  monks dutifully delivered sermons on right conduct and  right action, they  often failed to engage in relevant and timely social criticism - and did not always connect the textual suggestions to concrete practice. Intra-Buddhist  disputes developed around less significant details, even as some of the most  important ideas that had initially shaped the philosophy  were pushed into  the background. As a result Buddhism as it was practised  came to be associated  with idealism and inaction. Whereas the early Buddhists  saw no merit in worshipping god or its images, later Buddhism developed a pantheon of deities not very different from other Indian religions.  
 Thus even as Buddhism had    spread almost throughout Asia by the 5th-6th   C AD, it gradually began to lose its distinct edge and liberating influence    on much of Indian society. Within the Indian subcontinent, strains of Buddhism   survived in Sri Lanka, Bengal, Bhutan, Sikkim, parts of Bihar and Nepal,    and parts of Sindh, Punjab, Kashmir and Afghanistan. In parts of Orissa and adjoining    regions (such as Chhattisgarh and Telengana), Tantric (and other) influences  reshaped the practice of Buddhism. Yet, Buddhism    continued to have an impact outside India and developed pockets of    influence as far West as  Syria, as well as in much of Central Asia (including    what is now Uzbekistan, Tajikistan, Kyrgyzia, Kazakhstan) and Tibet. In the East, its influence was felt on virtually every nation including Burma, Thailand, Malaya and Indonesia, Laos, Cambodia,    Vietnam, China, Korea and Japan. 
As noted earlier, the vast literature    of Buddhism (like much of Hindu or Jain literature) was not a literature   of revelation and authority. Its essays on social ethics and moral responsibilities,   its treatises on philosophy and science, its art and poetry were but  pointers   to a path to wisdom. This gave Buddhism both flexibility and adaptability.  Owing to its non-hegemonic   character and humanist appeal, Buddhism was adopted without coercion or force.  It was also successfully fused with Hinduism in many parts of South East Asia just as elements of it had been integrated into Hindu practices in India.  In China, it was integrated with Taoism and Confucian principles; in Japan  with Shinto beliefs. For several centuries, within India and outside, several  people followed multiple faiths and identified as both Buddhists and Hindus,   or as both Buddhists and Tantrics,  (or Buddhists and Taoists) and so on. During the Gupta period (and  in other reigns), philosophers from various schools of thought received royal  patronage and temple grants were conferred for the construction of Buddhist  and Hindu monuments alike. 
It is also important to recognize that the form of Buddhism that was embraced in each nation was often quite different. For instance, in Western and Central Asia, it was not the philosophical or intellectual aspects of Buddhism that were popularized, but rather, its personal moral codes. Buddhist prosletysers imbued their stories of the Buddha with examples of miraculous healing and super-natural compassion so as to win more followers.
It is also important to recognize that the form of Buddhism that was embraced in each nation was often quite different. For instance, in Western and Central Asia, it was not the philosophical or intellectual aspects of Buddhism that were popularized, but rather, its personal moral codes. Buddhist prosletysers imbued their stories of the Buddha with examples of miraculous healing and super-natural compassion so as to win more followers.
While such tendencies were    also to be seen as Buddhism travelled within India or outwards, in Burma,    Sri Lanka and Thailand, Buddhism developed organizational structures that    appear to have been much more resilient. It was perhaps realized that the    development of Buddhist virtue would require leadership and constant interaction    with the community. In these nations, Buddhism did not degenerate into the   extremes of mysticism or retreatism that became commonplace in certain parts   of India (such as in the foothills of the Western Himalayas). Burmese and   Thai monks maintained a practical and benevolent connection with the community,   and thus retained a measure of respect within the community. This also appears   to be the case in Japan. In Korea, the emphasis on gaining wisdom was taken   very seriously, and Buddhist monks took the lead in promoting  mass literacy.   This propelled the growth of technologies associated with  the production  of paper, writing instruments, inks, and furniture. And unlike in India, (where due to Upanishadic influences, "inner" wisdom came to be favored over outer wisdom), Buddhist concern for disseminating the writings of the Buddha had significant positive secular impact. In Korean (and other Eastern) Buddhism, there was the correct realization that a Buddhist mindset, or that a Buddhist society could not be constructed overnight. There was thus the emphasis on the (helical) upgradation of individuals and society towards greater "Buddhahood". This philosophical element was perhaps signficant in that it prevented the sort of philosophical stagnation that occurred in India, where followers too often sought immediate succuor, and thus not only became divorced from reality,  but also lost sight of the strategic potential of the philosophy.
In addition, it ought to    be noted that Buddhism in India also had to contend with strongly anarchic    and ultra-democratic tendencies. Precisely because its philosophical structure    emphasized the relative and changing nature of truth, different tendencies    under the Buddhist mantle competed for leadership through argument and debate.  Initially, this led to important advances in democratic practices within the Sanghas. But over time, it also led to clashes of egoes, hair-splitting   and deadlock. While some Buddhist sects compromised and fused with other  tendencies (even alien tendencies), others remained fiercely autonomous. To survive, Buddhism had to confront both the tendency to be co-opted, as well as the tendency to atomize. 
However, the catastrophic demise   of Buddhism  in India was triggered by the onslaught of Islam which first   obliterated the remnants of Buddhism in Central Asia, and then later in Afghanistan  and India.  By and large, Buddhism  survived only in those countries that  escaped invasions by Islamic conquerors. As a gentle faith that encouraged   its followers to abjure violence, it was perhaps unable to protect itself   from iconoclasts and proselytizers who intended to enforce a new religio-political   order. Accustomed to centuries of peaceful co-existence, India's Buddhists had not anticipated the need to develop viable strategies for self-defence that could have combated the violence of India's Islamic conquerors who virtually obliterated Buddhism from the land of its birth.
 Yet, it also appears   that (in large part) later Buddhism had deviated considerably from the rational principles   outlined in the early texts. Monasteries often became isolated from mainstream   society, and monks who focused exclusively on meditative practices and idealistic   or esoteric philosophical speculation contributed little to social progress.   Some have even argued that the monastic orders had degenerated into sheer   parasitism and were becoming a heavy social drain. Consequently,  value judgements  on the demise of Buddhism and the rise of Islam in India need to be made with a measure of caution. 
Nevertheless, it must be acknowledged that the ascent of Islam was concomitant  with the eclipse of Buddhism, and since the influence of Buddhism was greatly  dependant on the existence of the monastic orders, the destruction of monasteries  and their conversion to mosques and institutions of Quranic learning simply  lead to mass conversions to Islam. 
In the long term, this could have had the effect of stunting India's future intellectual development, since the destruction of important institutions of Buddhist learning also led to a notable decline in the opportunity (and social sanction) to study secular subjects such as logic and epistemology (which were also taught at Buddhist universities - such as Bhagalpur). 
It might also be observed that the destruction of Buddhist centers of learning coincided with the destruction of extremely valuable textual materials - which could have been potentially rediscovered, and revived or reinterpreted by future generations of Indians so as to achieve a society that was more thoughtful and learned.  Islamic texts did not offer anything comparable in terms of causality or epistemology. Nor did they offer the psychological, sociological, or moral insights that had been developed under the ambit of Buddhism. Nor was there any comparable stress on seeking knowledge or constantly updating ones understanding of nature and human society. 
One can, therefore, only speculate as to the full consequences of this profound sociolgical and cultural loss (and discontinuity).
But East of India, Buddhism did survive, and in countries such Korea, Thailand and Burma, it continued to enjoy a loyal popular following. Philosophical innovations also took place, and as noted earlier, Buddhist scholars in China, Korea and Japan offered their own commentaries and somewhat individual interpretations of Buddhist concepts and formulations outlined in later (5-7th C.) Indian texts. And although the sacking of monasteries and centers of learning (such as Nalanda and Vikramshila in Bihar) led to records of the original Buddhist texts being permanently destroyed, it has been possible to reconstruct some of them from translations that survived outside India such as in Thailand and Tibet. Notwithstanding the virtual erasure of Buddhism in India, it is possible to infer from these reconstructed texts and other archaeological records (and surviving monuments and artifacts) that Buddhism had a very powerful impact in shaping the destiny of India, and in triggering a social and cultural renaissance that would take Indian and other Asian civilizations to a higher level of social, cultural and material development.
But East of India, Buddhism did survive, and in countries such Korea, Thailand and Burma, it continued to enjoy a loyal popular following. Philosophical innovations also took place, and as noted earlier, Buddhist scholars in China, Korea and Japan offered their own commentaries and somewhat individual interpretations of Buddhist concepts and formulations outlined in later (5-7th C.) Indian texts. And although the sacking of monasteries and centers of learning (such as Nalanda and Vikramshila in Bihar) led to records of the original Buddhist texts being permanently destroyed, it has been possible to reconstruct some of them from translations that survived outside India such as in Thailand and Tibet. Notwithstanding the virtual erasure of Buddhism in India, it is possible to infer from these reconstructed texts and other archaeological records (and surviving monuments and artifacts) that Buddhism had a very powerful impact in shaping the destiny of India, and in triggering a social and cultural renaissance that would take Indian and other Asian civilizations to a higher level of social, cultural and material development.
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