I have argued that the Buddha did not reject the caste system as a secular social hierarchy, but only the applicability of caste to religious asceticism. For the Buddha, the renouncer—i.e. the monk—had no caste, but relied on his own virtues and efforts for spiritual development.
What then to make of the Buddha's several takedowns of Brahmans who came to assert the supremacy of their caste? Don't these falsify my thesis?
First of all, they have to be understood in their context: the confrontation between two religious cultures, one a culture of householder priests based in the village economies of Kuru-Pancala in the west, the other a renunciate culture based in the urbanizing east—Magadha, etc.
So when Buddha asserts in Ambattha Sutta that ksatriya is the highest caste, we can see he is not just using irony to take the young brahman down a peg or two, but referring to a society in which ksatriya is indeed higher. He asserts this order applies to the secular world.
But he is also responding to a challenge to his authority to teach. In Vedic brahmanism, only brahmans had the authority to teach religion. Many brahmans challenged the Buddha on this basis, that he was a ksatriya and therefore an illegitimate teacher.
The Buddha rejected this idea and the social organization it implied, something not unlike a medieval rabbinical theocracy with a proliferation of arcane religious regulations of private life adjudicated by a priesthood.
The Buddha advised the various polities in his milieu to carry on with their political traditions. So for example he advised the Vajjians not to abandon their republican customs. And indeed the Buddha prescribed a republican kind of organization for the Sangha.
Elsewhere, however,.we see the Buddha and Buddhism endorsing monarchy. They give a secular empirical account of its origins in a social contract (kind of), the origins of kingship and social inequality as necessary to enforce law and order, particularly property rights (kind of).
(All of this language of social contracts and rights is of course alien to Buddhism, but I'm using it as an approximation of Buddhist ideas for brevity's sake.)

For Buddhism this primordial agreement is the origin of the hereditary right of ksatriyas to rule.
Note three interesting things here. 1. The physical beauty of the ruler is an outward sign of his superiority and virtue. 2. Kingship—and thus ksatriya, not brahman— is associated with the dispensation of Dharma. 3. Ksatriya rule is "in accordance with Dhamma, not otherwise."
This is also according to Agañña Sutta the origin of brahmins, who were practitioners of virtue but came to write books, as well as vessas (merchants) and suddas (hunters)—social differentiation by occupation as society became more complex and humans more immoral.
Social inequality and political authority are necessary because of IMMORALITY and CRIME. Utopianism finds no purchase in this straightforward, pragmatic theory.
Again, the social divisions of brahmin, vaishya, shudra, and celibate renunciate (who stands outside the former catgeories) are "in accordance with Dhamma, not otherwise."
Again in Aggañña Sutta, the Buddha repeats his quotation from Ambattha Sutta that "The khattiya is the best among those who value clan." Elsewhere it is said, "The khattiya is the best of bipeds."
Underscoring the point, the Buddha says this verse "was rightly sung, not wrongly, connected with profit, not unconnected. I, too, say, Vasettha: 'The khattiya's best among those who value clan...'"

Could there be a clearer refutation of the claims that he was a social reformer?
In addition to this hereditary, caste-based idea of rulership, Buddhism adds another source of monarchical legitimacy: the personal virtue and spiritual quality of the individual king. Inasmuch as he embodies these virtues, he is a legitimate king.
Notably absent from this account is the investment of kingship with a divine aura, or any such theological justification. The political/social order is a purely secular arrangement. Inequality of authority and status emerge by necessity as solutions to social problems.
This is a historical empiricist way of thinking. Implicit in this theory is the view that social/political traditions are formed to solve social/political problems—which implies that breaking the tradition will cause the reemergence of the same problems it was intended to solve.
Here we see an alternative version of caste, which is not justified mythologically (e.g. various castes coming from various parts of Brahma's body) but by a naturalistic speculation about the origins of human institutions.
It is clear from all this that Indian Buddhism saw the caste system as a valid way of organizing secular society (but not ascetic life) and that it argued for the legitimacy of hereditary monarchy in which the king is drawn from the ksatriya caste, "in accordance with Dhamma."
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