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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