Muslim Philosophers: The First Muslim Economist Ibn Khaldun

Ibn Khaldun
Reda Kerbouche / CC BY-SA (https://creativecommons.org/licenses/by-sa/4.0)

Ibn Khaldun, the first Muslim economist who had discovered the laws of economics 400 years earlier than Adam Smith, was born in 1332 in Tunisia, formerly known as the mighty Carthage that was Rome’s rival and now the capital of the Hafsid state (one of the smithereens of the powerful Fatimid Caliphate of Egypt). The Arab Muslim states of Maghreb (the western part of Northern Africa) and Ifriqiya (the eastern part of Northern Africa) after the conquest and devastation by the Mongols of the former Caliphate lands (including Khwarazm and Baghdad) remained the last bulwark of Muslim statehood, however they had to live in perpetual battle with the infidels, the Crusaders and Christians of Western Europe. Science and culture which had blossomed in the Caliphate five centuries prior to that were stamped out by the Mongols and replaced with more down-to-earth matters, like trade and economy. It is thus no wonder that the great Muslim scholar of the time Ibn Khaldun distinguished himself in those particular areas.

Having received brilliant education, Ibn Khaldun served as secretary and envoy to the Arab rulers of Maghreb and was later invited to take up the post of the Supreme Judge of Egypt.

As a very practical man in his pursuits, Ibn Khaldun applied purely practical terms to the structure of society. He was the first scholar who believed that history is not made by kings and courtiers, rather it is made by common people, peasants, artisans and merchants. Those three create the material product which is the basis of the well-being of society. It is this product that needs to be studied in order to understand how society functions and how to make it just.

The main role in Ibn Khaldun’s economic system belonged to the rulers because it is they who seize and redistribute the material product of society and force the peasants and artisans to comply with the imposed state order. How exactly the rulers will dispose of this product (sparingly or lavishly, looking after the interests of all people or only of their own) is what the economic prosperity of a state depends on. The basis of this prosperity lies in ‘asabiyyah’, the ‘social solidarity’ very similar to Randal Collins’s ‘emotional energy’ or Max Weber’s ‘charisma’. High asabiyyah is normally displayed by conquerors whereby in 4 or 5 generations it dies down and the state gets ruined.

Based on these concepts Ibn Khaldun postulates that the main goal of a society is to achieve stability. Stability lies at the core of Ibn Khaldun’s economic model. He believed that the impact of state on economics is highly negative, that the ruling class through its monopoly of power strives to attain personal enrichment and fails to notice the diminishing of economic activities and the degradation of the people. Hence it was postulated that the economic patronage of the state must be done away with. Ibn Khaldun believed the free market to be the most efficient regulator of economic relations and the aspiration for income the most efficient incentive.

Ibn Khaldun’s ideas did not find support in the Arab world. The reforms which he proposed (including the paradoxical proposal to decrease the tax rate in order to increase the total amount of taxes collected) were opposed by the rulers. But the laws of economy do not follow the will of the authorities. And who knows, maybe the unwillingness to take heed of Ibn Khaldun’s advice was the cause of the lag which the Arab world soon developed as compared to the Western economy.

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