Dated: May 2015

Classical Islamic Economic Thought

With Particular Reference to Ibn Khaldun

By

Professor DR. Abdel Rahman Yousri Ahmad

Early Contributions in Islamic economics started in the

first Hijri Century after the prophetic era. These

contributions had been built upon two pillars;

First; the religious roots, which are derived from the Quran

and Sunnah: It must be emphasized, however, that the religious

roots upon which classical Islamic economic contributions

were belt in the medieval period, can never be considered

part of these contributions nor can be part of any Islamic

economic thought any time. Religious roots of Islamic

economics, on pure theological bases, are not the outcome of

human intellect and cannot be treated within the realm of

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human thought. It is only non-Muslims scholars who are

expected to dispute this Islamic postulate.

Second; knowledge which accumulated by experience in fields

of Zakat , fiscal policies, trade, markets, money and

financial transactions. Such knowledge which gained by

experience, observed and recorded by Fuqua and other Muslim

scholars can actually be classified as “primary Islamic

economic knowledge”. This knowledge, within the seven

centuries extending approximately from the 1st till 7th

Hijri century (approximately 8th till 14-15th Gregorian

Century), was subject to deliberate intellectual efforts by

Muslim jurists (Fuqha) and other scholars towards their

scrutinization, purification, and crystallization. It was in

that manner that the early foundation of Islamic economics

(which form Classical Islamic economic thought), was built

upon sound scientific grounds . It can be asserted that the

accumulation of the Islamic knowledge as well as its

categorization and crystallization were the outcome of

steady and honest efforts of many Muslim scholars and Fuqua

and who were keenly interested in finding out the link

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between the religious roots of economics and problems of

their societies on one side and finding solutions to these

problems on the other side. The growth of economic

knowledge, as well as the contributions in Islamic

economics, was not even throughout the medieval period due

to changes in political stability, social and cultural

prosperity.

For methodological purposes, major contributions of the

medieval period have to be studied and highlighted (though

this is briefly done in this lecture). First reason for this

is to see how Muslim jurists and scholars of the medieval

period were really laborious and keen to extract,

understand, and explain the religious rules of fiscal,

financial and trade transactions (in the Quran and Sunnah)

and to be committed to them in their arguments, and

analysis. Second reason, is to appreciate, and learn how

these grand scholars (Ulema1) addressed the economic

problems of their communities, examined, classified, and

1 ) The word Ulema in Arabic may literally be translated to ع�لماء scientists or specialized scholars. But Ulema in Islamic historywere known to be wise pious people of vast and diverse knowledge.

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analyzed available knowledge to find out some accurate facts

on the nature of relationships between economic aspect and

Sharia rules and to deduce the causes and the effects of

some common economic problems. These grand scholars left to

next and to all later generations of scholars an invaluable

heritage of knowledge that should be reviewed and consulted

before making any new contributions in Islamic economics.

Unfortunately many of the young Muslim economists at

present, while in a hurry to make their contributions in

Islamic economics forget or neglect reading the invaluable

classical economic contributions in the medieval period.

Unfortunately, also, some contemporary researchers in

Islamic economics go the other extreme by treating the

medieval contributions almost as constant religious rules!

Thus, they literally stick to them without understanding

their philosophical and historical background2.

2) A number of contemporary scholars who are Fiqh- based havefallen in this error when trying to contribute to Islamiceconomics or finance. In practice Fuqua who have been employed byIslamic banks, without sufficient knowledge in economics showedover dependence on medieval judicial contributions in the financialfield.

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The contributions of some medieval Muslim jurists and

scholars in the field of economics were really outstanding.

The following paragraphs are just highlighting briefly

prominent points in (some of) these contributions; with

purpose of showing how distinctive was their quality in

comparison with known contributions of scholastic doctors in

Europe.3

One of the prominent classical Ulema was Abu Yusuf (113-182

H). He examined the causes of price increase before giving

his advice to the ruler (Haroon al-Rasheed) on the pricing

issue, and he criticized the common view which held that

market price is determined only by changes in supply.

Similarly, prior to giving his opinion on the loss in the

real value of "fulus" (money coins made of cheap metals)

because of Ghala لاء (inflation) and the disputable issue of ال�غcompensating such loss in trade and financial transactions,

he analyzed the effects of high and low prices on money real

3 ) Details of medieval Islamic economic contributions should besought in specialized sources and surely they are bound to enrichthe thought of modern Islamic economists and inspire them withsome fresh ideas.

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value in general, but carefully distinguishing between gold

and silver coins on one hand and fulus on the other hand on

bases of the intrinsic value.

Another prominent grand scholar is Imam Al-Ghazali (451-

505H). He describes the problems involved in barter exchange

before explaining the benefits resulting from the use of

money and describing its main functions. Understanding that

the most important function of money in being a medium of

exchange he proceeds to explain the wisdom of the

prohibiting hoarding and usury in Islam. He was very keen

to explain in details the importance and sources of earning

income from Halal (Sharia permissible) sources.

Important contributions in classical Islamic economics

should be recognized by two grand scholars. Ibn Taymiyyah

(1263 – 1328) called the ruler to intervene in market and

set fair price to people in order to relief them from

monopolistic exploitation. Ibn Taymiyyah showed keenness to

protect the interests of poor people in markets. Ibn Qayyim

Al-Jawziyya ((1292–1350 CE / 691 AH–751 AH) , a disciple of

Ibn Taymiyyah, further improved market pricing idea by

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distinguishing between “made price” and “natural price”. The

first is set by merchants who control supply in the market

while the latter being a competitive price determined by the

natural powers of market demand and supply. Then by

differentiating between the two prices he distinguishes the

cases in which prices should be controlled by the ruler and

those when the market is competitive and should be left

free. Ibn Taymiyyah also criticized policies of some rulers

who increasingly depended on cheap metals like copper in

minting coins (fulus). Total Money supply was increasing and

prices were rising, a matter which ran against the interests

of people, particularly the poor. Ibn Taymiyyah observed

that extensive use of cheap money like fulus derived out

coins made of gold and silver (Dinar and Dirham) out of in

transactions. That observation preceded a similar one made

more than two centuries later, by Thomas Gresham (1519–

1579).4

4 ) Such phenomenon is known in economics as “Gresham's Law”which means that when two kinds of money are in circulation andgovernment overvalues one kind of money by giving it same nominalvalue of the other money that possess higher real value, thelatter one would necessarily be undervalued. The undervaluedmoney will disappear from circulation into hoards, while the

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Ijtihad in classical Islamic economics reached pinnacle in

the 7th and 8th H Centuries (14th and 15th Gregorian

centuries). During this time prominent scholars like

Abdulrahman bin Khaldun (1332-1406) and Taqi-eldin Al-

Maqreezi (1364-1441) viewed and interpreted the economic

phenomena within historical, sociological, political and

geographical contexts.

Because we are going to focus on Ibn Khaldun in this

lecture, we may briefly review the work of his disciple

Taqi-eldin Al-Maqreezi first. The grand scholar submitted

his interpretation of the hyperinflation د دي�� لاء ال�ش������ which he ال�غwitnessed in his time in Egypt. Al-Maqreezi claimed upon

historical evidences which he observed that prices in the

long run followed a cyclical pattern in rising up and

falling down. He attributed that phenomenon mainly to

natural causes, namely climate and availability and level of

overvalued money will flood into circulation. The Law is simplyexpressed as “Bad money drives out good money”. Ibn Taymiyyanoticed that fulus replaced gold and silver money not onlybecause of continuous increase in its supply by rulers but alsobecause people withdraw Dinar and Dirham from transactions tostore them and benefit privately from their real value.

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water in the Nile River, which affected agricultural produce

at the macro level. Yet, he emphasized the effect of many

institutional factors, such as monopolistic practices,

corruption (mainly through bribery) and mismanagement of the

economy by rulers. However, with respect to hyperinflation

which he witnessed in Egypt, he turned to be a true

monetarist. He firmly believed in the Gold System’s efficacy

and that rulers heavy reliance on cheap metal money (fulus)

was the main reason behind the continuous increase in money

supply and explosion of prices everywhere. Inflation in his

analysis yielded redistribution of income among different

professions in the economy because of ability or inability

to increase money income by the same rate of inflation.

Ibn Khaldun

Our plan in the remaining part of this lecture is to review

Ibn Khaldun’s economic thought, focusing on his theory of

Umran. By reviewing the main pillars of this theory,

highlighting its properties we expect to gain insight and

fresh thought towards its possible benefit in our present

time.

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Ibn Khaldun, this fine scholar, depended in his economic

analysis on several tools, most important of them historical

evidence and sociology. His methodology was mainly inductive

but this had not restricted his reliance on deduction. Ibn

Khaldun’s contribution in economics includes several

important areas and topics. Yet the theory of Umran is most

prominent in his work and it combines many of his economic,

political and sociological ideas within historical frame

besides displaying his distinctive analytical ability.

The meaning of the word Umran deserves attention and clear

understanding. Translation of this word umran as civilization

oversimplifies its meaning. No blame should be placed on the

translators because Ibn Khaldun used to be very selective in

his Arabic words and phrases showing so much sophistication,

which made his linguistic style sometimes difficult to

comprehend.

In Arabic the word umran is a state or circumstances

resulting from action (s) taken by people dwelling houses,

inhabiting land areas where they get active in producing

their needs, and constructing utilities needed for their

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life. Umran is necessarily connected with population,

settling in towns, cities or countries and developing and

developing their social and economic activities. Therefore,

Ibn Khaldun’s interpretation of greater or smaller umran, i.e. the

degree of umran, is based on greater or smaller society as

measured by its population size. The meaning of the word

umran has further taken more specific or specialized meaning

in Muqaddema. In Ibn Khaldun’s usage umran is treated within

historical context and is never separate from sociological and political

factors that initiate, accompany, or influence it. In this

manner the degree of umran would always be reflective of the

state of civilization.

Ibn Khaldun’s theory of umran is a multidimensional theory.

It is not only an economic growth or development theory or one

that merely interpret human civilization. It is unique in the

sense that it presents an attempt to interpret

socio/economic growth and human civilization within a dynamic historical

frame.

So far as human civilization in the very long span of time

is concerned, Ibn Khaldun classified three historical

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phases; the Nomadic ways of life, the Agrarian society, and

the industrial society5. He deeply analyzed factors that

caused movement of human civilization from one phase to

next. Ibn Khaldun’s analysis focused on man’ search for

material needs satisfaction and his natural instinct to be

sociable. Focusing on the agrarian society and gradual

transformation to the industrial society, the historical

period that he witnessed, Ibn Khaldun focused on defined

period of time that is associated with the “Dynasty”. The

length of dynasty was defined within a political frame to be

120 years, and Ibn Khaldun divided this period into three

generations. Each generation’s length is 40 years. Dynamic

changes affecting umran within the Dynasty are dependent on

play of political, sociological, economic factors together.

From the political point of view the dynasty would start

with its founders, the rulers, who would take over and

govern society by support of some strong group of people.

5 ) We have carefully, however, to distinguish industrializationwithin its 15th century techno/socio/economic context from thatstage known later on after the industrial revolution andincreasing dependence on self-propelling machines, physicalcapital, modern managerial methods, standardization etc.

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Ibn Khaldun was also emphasizing that the strength of the

dynasty is not merely dependent on group feeling but also on

good principles that is raised by its founders and

preserved. The founders of dynasty would be successful as

long as they are near to their subjects and maintain

principles of justice. At the beginning of dynasty, rulers

are kind, and benevolent to their citizens, matters that

would be reflected in fair taxation system, taking the word

taxation to include also Zakat, and Kharaj6. He noticed, on

bases of actual observations, that these duties, which are

imposed according to Shar’ia are not economically

burdensome, as long as collected strictly in compliant with

fair Islamic tradition. Applying principles of justice to

the taxation system, he distinguished between the first

stage in which rulers are kind and benevolent to their

6 ) A Tax that was firstly devised by Omar Ibn Al-Khatab to beimposed on land held by endogenous non-Muslim people in countrieswhich were annexed by force to the Islamic State. Tradition beforethat was to take their land and distribute it among Muslimsoldiers. Kharaj rate was quite reasonable and fair in comparisonto taxes that were imposed by Romans on people in Egypt and Iraqbefore the Islamic rule. The Kharaj, later on, had to be removedwhen land holders adopted Islam voluntarily.

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people and other stages when this condition is not

fulfilled.

People in Ibn Khaldun’s analysis work, produce, and trade in

markets to earn their income. Profits realized by producers

in agricultural, industrial, and trade activities depend on

market value of their products on one side and costs

involved in production, on the other. One of the important

items in costs incurred by producers is represented in

duties, or taxes which are collected by the state. Thus, as

long as Zakat, Kharaj are collected fairly by civil

servants, people will feel no burden and will be encouraged

to produce and grow their production. The state may,

however, impose other taxes on people. If these taxes are

little or moderate, profits realized by producers will not

be much affected and their production motives are likely to

remain the same. Thus, one of the important aspects in Ibn

Khaldun’s analysis was focused on people’s incentive to

produce, increase their production under conditions of

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minimum duties or fair taxes imposed by government upon

them7.

Ibn Khaldun explained that main functions of the government

are to defend people against enemies, establish justice and

maintain security in society. He asserted that the

government is not supposed to lead any economic activity,

i.e. authority held by rulers, per se, should not be used to

enhance public revenues or earn extra income.8 “Political

Authority” in his words is not a “natural mean to earn

income”. The government therefore depends on revenues

collected from Zakat and other fair taxes in fulfilling its

functions. Ibn Khaldun asserted that rulers in the first

generation of dynasty are keen to be just to their subjects

and fulfill such condition. Thus, they are never trying to

exploit their authority for making wealth for themselves by

imposing extra taxes, or raising their rates or intervening

in trade or production activities.

7) It should be noticed that in Medieval Europe the legal andeconomic power of the Lord of the Manor, was supported byobligatory duties collected from the peasant population under thejurisdiction of himself and his manorial court. These obligationswere payable in several ways, in labor, in kind, or in money. 8 ) Such conception was repeated later on by Adam Smith.

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Such political atmosphere would be reflected according to

Ibn Khaldun on population growth and on their production

motivations. Growth of population in society would be

encouraged by the favorable socio/political Climate. Feeling

of security encourages people to dwell; build houses, marry,

get children, and practice their economic and social life.

These are the natural forces of growth. The inflow of

immigrants to the country also plays a role in increasing

the size of population. People in that time were free to

emigrate from one place to another. Thus, people in nearby

towns or cities or nations will now start coming into the

society which is ruled by a tolerant and just authority. To

emphasize, tolerance and justice in Ibn Khaldun’s analysis

is reflected economically in fair taxation system (in

compliant with Shari’ah), and non-intervention of rulers in

production, and markets. So these are the two reasons behind

population growth; net positive immigration and natural

growth.

Let us move to a focal point in Umran theory, namely the

relation between population and growth. Ibn Khaldun, father

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of sociology, asserted that Man is a “Social Being by

nature”. Consequently people are bound to co-operate in

economic activities. Upon this conception, Ibn Khaldun went

on to explain how co-operation in production means “Division

of Labor” and how this results in “Surplus”. The conception

of division of labor had been vested by other scholars,

centuries before Ibn Khaldun. Yet none of these scholars

explained division of labor like him. In his words “the

individual human being cannot by himself obtain all the

necessities of life. All human beings must co-operate to

that end in their civilization. But what is obtained through

the co-operation of a group of human beings satisfies the

need of a number many times greater (than themselves). For

instance, no one, by himself, can obtain the share of the

wheat he needs for food. But when six or ten persons,

including a smith and a carpenter to make the tools, and

others who are in charge of the oxen, the plowing of the

soil, the harvesting of the ripe grain, and all the other

agricultural activities, undertake to obtain their food and

work toward that purpose either separately or collectively

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and thus obtain through their labor a certain amount of

food, (that amount) will be food for a number of people many

times their own. The combined labor produces more than the

needs and necessities of the workers.” 9

More important in his analysis is that division of labor

yields greater surplus, the greater is the size of

population in society. In his words “The more numerous and

the more abundant the population in a society (city or

nation), the more luxurious is the life of its inhabitants

in comparison with that of the inhabitants of a smaller

society”. Hence, economic growth depends on population

growth in society, a factor which is, however, mainly

dependent (as he explained) on favorable political and

economic atmosphere, i.e. prevalence of justice, and good

governance.

People are growing in numbers because their rulers are

kind, tolerant and just. Total output in society would be

increasing because people are cooperating, and division of

9 ) Notice that same conception and similar explanation wasoffered by Adam Smith later on but without reference to thephilosophical and sociological background which concerns socialhuman nature and motivation to co-operate.

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labor is taking place, and “surplus” is increasing. This

surplus is the main reason behind “better life” and would

gradually, through other economic forces that he displays,

lead to greater economic and social affluence. Ibn Khaldun

expressed “better life” that accrues upon the “surplus” of

division of labor in terms of three aspects: (a) more

commodities that can be consumed, or (b) less hours needed

to work and produce same output or necessary livelihood

needs, or (c) goods that can obtained by exchanging the

"surplus" with other nations, i.e. through external trade.

The surplus of division of labor, which is an “extra

output”, can also be measured and expressed in terms of

“extra income”, which is in turn reflected in “extra

expenditure” in markets. Extra expenditure through the

market would mean more demand for commodities. This in turn

means more of commodities to be produced, and greater demand

for services of craftsmen and other producers (as he

explained) which is expressing the modern conception of

derived demand.

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Clearly, Ibn Khaldun found out through his analysis what we

can call the “cumulative power of growth”. Greater Output,

because of greater population, and greater division of labor

means greater Income, and greater expenditure, which call

again for greater production efforts and greater output. In

other words growth is fed by sustainable self-mechanism,

i.e. growth breeds growth. Prosperity, thus, increases, and

living conditions become more favorable and favorable by

time.

Ibn Khaldun was very clear and quite explicit in explaining

that the value of output in any period of time is reflected

exactly in income and that income when spent in the market is

equal to expenditure. Thus with every growth in output,

because of the surplus of division labor income increases

and expenditure increase, and this would happens according

to him again and again in second and third rounds etc. Upon

this you can talk about first version of income multiplier

theory in the history of economic thought, almost five

centuries before Keynes or Schumpeter in the 20th century.

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Now let us shed light on another distinctive dimension of

economic growth according to the profound analysis of this

great scholar. He explains that when output, income and

expenditure increase, people are requiring not only more

quantities of same commodities but also better quality of

commodities. So Ibn Khaldun talks about the development of

production not only in terms of greater quantity but also in

terms of better quality and diversified structure. New goods

with better quality will be produced to satisfy people

living requirements at higher state of welfare. He extends

this meaning to every aspect of life, i.e. better quality of

dresses, better quality of housing, and better quality of

carpets, of books and of vessels etc.

As inhabitants of the growing society are seeking better

quality of commodities, creativity or invention, better

skill and experience on the part of craftsmen or

manufactures will be needed. People are also asking for

better and higher quality of agricultural commodities. But

what kinds of agricultural commodities which are more

demanded when people are enjoying higher income? These are

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not necessities or basic needs as he observed, but luxuries

and conveniences. He gives examples of these commodities in

fruits, seasonings10 and special kinds of vegetables.

According to Ibn Khaldun changes in size and pattern of

consumption happens gradually over the very long run in

association with Stages of Human Civilization, but such

changes are observable within the Dynasty through growth of

Umran.

By and large this Khaldunian analysis emphasizes the

importance of human Intellect, creativity, technology, and

labour skill to economic growth, and that all these are

linked with welfare of people in society.

As inhabitants in society are enjoying better living

conditions, seeking not only more goods but also better

qualities, they have to pay more to producers. This applies

in particular to craftsmen or manufactures. In fact, as he

explained higher demand for manufacturers or craftsmen will

enable them to demand higher prices for their services,

which necessarily get them higher incomes. 10 ) Seasoning in the medieval period were considered among mostexpensive commodities that are used by rich people.

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Ibn Khaldun’s dependence on induction and historical

observations led him to believe that economic growth would

not continue on same pace during the dynasty. He noticed

that rulers in the second stage unlike the founders. With

economic growth, higher incomes and wider markets seem to

motivate the second generation of rulers towards seeking

better life for themselves. Sharing in prosperity and

affluence enjoyed by inhabitants is not, however, possible

to rulers unless they are engaged in economic activities or

imposing duties or taxes on production to obtain greater

public revenue. Once such changes take place in practice,

the socio/economic climate would consequently change and

would inevitably become less favorable to merchants and

producers.

We have to recall that Ibn Khaldun in his analysis asserted

that government should not exploit its political authority

in getting greater revenues. Political authority, as he

said, is not natural mean of earning income. Thus when

second generation rulers try to earn money by “unnatural

means” they would necessarily spoil the economic activities.

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Imposing new taxes or raising rates of existing taxes would

get rulers more revenues, but will negatively affect

producers’ incentives. Intervening in markets by conducting

government trade would be worse in effect.

Rulers gradually in the late second stage of dynasty would

build big palaces, enjoy luxuries, employ more servants, and

establish stronger armies to strengthen their authority and

not merely to defend the society. Besides, they would spend

from public revenue to maintain loyalty of their subjects.

Public expenditure would therefore be increasing gradually

in the second generation and this is what Ibn Khaldun called

first sign of disorder or disequilibrium.

Under these conditions, output would continue growing, but

not as before because extra payments of taxes would reduce

producers’ incentive. But in later stages, with more

taxation whether by imposing new taxes or raising their

rates, producers’ profits might turn into losses and it

would be difficult to keep their business going on. Ibn

Khaldun discovered that such tax policy would potentially

reduce public revenue! In his analysis if tax rates keep on

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rising they would discourage economic growth, and thereby

reducing government revenues. In modern economics, this

relation has been expressed by “Laffer curve”. Economist

Arthur Laffer does not claim to have invented the curve and

admitted that he got the idea of the curve from Ibn Khaldun.

Thus the curve is also known in literature as Khaldun–Laffer

curve11.

Ibn Khaldun also explained how government intervention in

economic activities would further worsen the economic

climate. He observed that rulers by establishing public

trade for their own benefit would cause losses to private

producers. Rulers according to his observations exploited

their authority and procured grains and other necessities

from farmers in harvest time at the lowest prices. On the

other hand they were selling these goods to people at higher

prices irrespective of market prices. Such “unnatural

activity” achieved high revenues to rulers, but really

caused great harm to agricultural activities. Farmers who

11 ) The Laffer curve illustrates the concept of taxable incomeelasticity, i.e. taxable income will change in response tochanges in the rate of taxation.

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faced losses would neglect their activities. With further

deterioration in conditions, Ibn Khaldun noticed that

farmers would abandon their land, leave their property

behind and move to other places or may immigrate to another

city or another nation12.

Ibn Khaldun explained that such conditions would naturally

be reflected on people life. Taxes that are imposed on

commodities are reflected in higher consumer prices, a

matter that burdened poor people in particular. According

to his observations prices of necessities are more affected

by duties imposed upon them than luxuries13.

Lastly, in the 3rd generation, more intervention in economic

market activities is carried by the rulers and more taxes

12 ) Similar events happened in the 20th century when governmentin some countries, that adopted socialism and intervened inmarkets, took over commodities from farmers at lowest procurementprices, that were much lower than market prices. Agriculturalproduction was adversely affected in all years to follow. Someinternational reports (by the World Bank and other internationalagencies) considered Ibn Khaldun to be first scholar in the wholeworld who defended the private sector because of denouncinggovernment intervention in economic activities.13 ) This can be analyzed by using modern economic tools. Pricesof necessities are more affected by duties imposed upon them thanluxuries because the demand for necessities is mostly inelastic.

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are imposed by them. Fighting among rulers is also observed,

a factor that will enhance fall down of the dynasty.

Civilization would be brought to an end by reverse of all

factors that were responsible for its rise. Political

conditions would deteriorate, social stability will be lost,

and population would not only cease growing but will

decrease. Thus fruits of division of labor will be gradually

lost, craftsmen are getting losses and neglecting their

activities. Output would fall down, and consequently income

and market expenditure in multiple manner. This will

continue until a new dynasty is established.

To pull the thread of the theory together;

Development of civilization is explained on basis of

progress of human needs and how these were met under

different historical conditions. Growth of production came

in response to growth of population and their needs. As

Muslim scholar Ibn Khaldun recognized that the whole

universe was created by Allah for mankind interest and that

Islam encourages population growth. Allah orders people to

work and co-operate in good deeds. The greater the amount of

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work and co-operation among population, the greater will be

the surplus of “division of labor” and the larger will be

the size of their output and market expenditure. Ibn Khaldun

cited examples of greater civilizations in history linked

with greater number of population. The role of human

intellect combined with productive efforts was so important

through successive historical stages in upgrading the

standard of living and bringing about higher level of

civilization. Thus through the historical development of

communities from nomadic to agrarian and then to industrial

societies, as he explains, population was growing, human

professions and skills were improving and the desire for

perfection continued to motivate creativity and growth of

production in quantity and quality. Over dynasties Ibn

Khaldun showed how rulers’ tolerance with their subjects

would be reflected in economic and fiscal justice. Zakat

which is recognized with its low rates (besides fair taxes

that may be imposed) would encourage producers and lead to

greater output and greater public revenue and vice versa.

Thus he showed how a just fiscal system would be reflected

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on the growth of production, markets and real incomes. This

Khaldunian analysis is in fact remains very useful not only

because of its scientific nature but also because it shows

how economic events along history were never isolated from

other political, sociological and cultural factors or from

moral and religious values.

End of Lecture entitled:

“Classical Islamic Economic Thought with Particular

Reference to Ibn Khaldun”

Professor Dr.

Abdel Rahman Yousri Ahmad

References:

1- Abd al-Rahman ibn Muhammad Ibn Khaldun (Author), Franz

Rosenthal (Translator), “The Muqaddimah. An

Introduction to History”. Three Volume, 1958. Also Ibn

Khaldûn (Author), N. J. Dawood et al (Editors), “The

29

Muqaddimah: An Introduction to History (Princeton

Classics), Abridged, 2015.

2- Abdulrahman Yousri Ahmed, “The contribution of Ibn

Khaldun in Economic Thought” in ( ة� لام�ي� س������ ة� ا� ص����ادي�� ت� ات� اق�� ,(دراس������Vol. 13, 2nd Issue, 2007, IRTI, Islamic Development

Bank, Jeddah. Also Translated into English

3- Abdulrahman Yousri Ahmed, “The Scientific Approach to

Islamic Economics: Philosophy, Theoretical Construction

and Applicability” in Habib Ahmad (Editor),

“Theoretical Foundations of Islamic Economics”, The

Islamic Development Bank, Islamic Research and Training

Institute” First Edition 1422H (2002), Jeddah

4- Ahmed A.F. El-Ashker and Rodney Wilson, “Islamic

Economics: A Short History”, [Chapter 6], Leiden,

Boston, 2006.

5- Islahi A., “Contributions of Muslim Scholars to

Economic Thought and Analysis,(11-905 A.H./632-1500

C.E.)”, Islamic Economics Institute, King Abdulaziz

University, Jeddah, 2nd Edition, 1434/2013.

30

6- Chapra, M. Umer, Islamic Economic Thought and the

New Global Economy, Islamic Economic Studies, Vol.9,

No.1, September 2001

7- Ghazanfar, S.M.( Editor), “Medieval Islamic Economic

Thought: Filling the 'Great Gap' in European

Economics”, (Routledge and Curzon, 2003

8- Giovanni Ceccarelli, “Economic Thought in the Middle

Ages”, in “Encyclopedia of Medieval Philosophy, 2011,

pp 283-290

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