Ibn Khaldun is largely unknown to us in the West, outside of those who chose Arab studies as a discipline in college or the rest of us who, by one means or another, became avid readers of history. Let us start with how this happened.
From Edward Gibbon’s “Decline and Fall of the Roman Empire,” we learn some key historical events that shaped what we now call our western civilization. Among the top ten, we might count the Saxon conquest of Britain and the later Norman conquest that led to modern Britain and its numerous “spinoffs” – Canada, the United States, Australia, New Zealand, slave colonies of the Caribbean, and colonized ones of Africa, and elsewhere.
But centuries before that, the game-changer from Rome’s crumble that would give rise to future generations ascendancy and reign: the ascendancy of great Merovingian great Clovis – conqueror of Alaric and the Visigoths at Poitiers and savior of the Catholic Church who had established the French monarchy, married, and converted to Catholicism. After Clovis’ death, the Merovingians rose and declined, giving way to Pepin’s Carolingian dynasty that would rise produce descendants from Charles Martel to Charlemagne – both of whom pushed back Ibn Khaldun’s Moorish ancestors’ advance north of Al-Andalusia.
Indeed, it’s fair to note a salient fact of history: were it not for Charlemagne, the Muslim caliphates would have extended north, and much of what is today the Christian West would have likely been part of the wider Muslim world. Many of us would be speaking the language of Ibn Khaldun – Arabic.
But the ultimate game-changer was Isabella I of Castile’s marriage to Ferdinand II of Aragon. From this, we got promulgation of the Catholic religion and suppression of the Jews. It certainly brought the Castilian tongue to new territories that number over 650 million people today. Most importantly, this unification had finally put the nail in the coffin of seven centuries of Ibn Khaldun’s enlightened Moorish civilization in Spain amidst faction internecine divisions between the Umayyads and the Almohads, and the Abbasids – one of the great setbacks to humanity. It completed what Martell and Charlemagne had started.
Stanley Lane-Poole’s book tells of an enlightened civilization with educational facilities, universities (that admitted women), paved streets, advanced technologies, and artistic ventures bursting at the seams, while northern Europe was tearing itself apart with backwardness. Indeed, as Catholic Europe was busy burning books, the Moors were busy translating (and thus preserving) Greek classics, for which we are today the better.
Meeting Ibn Khaldun
I first came across the history of Ibn Khaldun and other great Arab scholars, Ibn Batuta, Ibn Haukal, and Ibn Said when I first read Flora Lugard’s “Tropical Paradise.” I then read “The Travels of Ibn Batuta” and was further mesmerized by the incredible wealth of intellectual achievements of these early Arab and Moorish scholars.
Describing the beauty of certain gardens in Andalusia that were transplanted to Morocco, Lady Lugard said, “Ibn Khaldun says that literature presently declined at the court of Fez, owing to the too great materialism of the Merinite sovereigns. This was not the opinion of the celebrated traveler Ibn Batuta but Ibn Khaldun was probably a better judge”:
The gardens of El-Mostaneer, a Hafside sovereign of Tunis who reigned from 1252 to 1277, rivaled those of the Ommeyades in Cordova. After describing the beauties of the gardens, Ibn Khaldun says of the court of this monarch, that it was always filled with distinguished persons. ‘Here’ he says. ‘were to be seen numbers of Andalusians amongst them distinguished poets and other eloquent writers, illustrious men of science, magnanimous princes, intrepid warriors. The truth is that these weren’t the beginning of economic thinking at all.
lady Flora Lugard. A Tropical Paradise [p73-74]
Lady Lugard told us that “Ibn Khaldun was born in North Africa of Arab parents but had distinguished himself thirty years earlier five and twenty (twenty-five) years earlier in travel, which extended over the greater part of the known world, and which included Europe, India, China, and Thibet.” As for Khaldun’s reasons for deciding to settle in Fez, Lady Lugard said he found “literature, science, and art more honored there than in any other center of civilization.” As regards the endowment of science and literature, he describes “the great College of Fez as having no parallel in the known world…”
As a measure of the value held out to education, science, and intellectual pursuits in Ibn Khaldun’s era, Lady Lugard described the capital of Merinite sovereigns in Fez as “beautiful palaces and gardens where learning was encouraged. In the holy war carried out against the Christians in Spain, one of the conditions of peace imposed by the Merinite king of Morocco “was the surrender of all scientific works which had fallen into the hands of the Christians in the capture of Moslem towns. Unfortunately, only 1,100 volumes had been saved. These were afterward conducted to the University of Fez.”
For some time now I have sporadically read that Ibn Khaldun was real founder of what we today know as economics. Khaldun was a 14th-century scholar while men like Adam Smith (credited as the “Father of Economics” existed four centuries later. But as the African proverb says, “When the hunter writes the story, it will never favor the lion.” To the victor, the spoils! Other than where Muslim contributions remain in the nomenclature (“Al-gebra”), classical history, written by the “winners,” pretty much erased these contributions from western civilization.
History Cheats Ibn Khaldun
Yet, according to Dániel Oláh over at Evonomics, Ibn Khaldun was grossly cheated by the history of economics, which chose to favor modern men like Adam Smith and Scotland, rather than Al-Andalusia, as the home of economic thought.
Daniel Oláh
In one of the most seminal works in the field of history of economic thought (History of Economic Analysis, 1954), Joseph Schumpeter argued that there is a “Great Gap” in the history of economics. Thanks to this self-created gap the most outstanding Islamic figure of the Middle Ages, the Andalusian scholar and politician Ibn Khaldun is neglected in mainstream textbooks (Screpanti and Zamagni 2005, Roncaglia 2005, Rothbard 2006, Blaug 1985). Several of these works often misleadingly start to identify the roots of modern theories with discussing the mercantilists or the Scottish Enlightenment.
The following directly quotes Dániel Oláh.
“The biggest merit of Ibn Khaldun lies in his revolutionary methodological thinking. He completely rejected the methodology of his ancestors, which made him the first “social scientist, in the strictest meaning of that term” (Fonseca, 1988). Before Khaldun, the role of Islamic historians was limited to transmit knowledge without modifying, editing, or adding any remarks to the tradition. They never questioned the validity of stories but analyzed the credibility of the transmitter quite carefully instead.”
Ibn Khaldun – Step or Real Father of Economics?
Khaldun discarded the practice, stating the need for a new, scientific method, which allows thinkers to separate true and fake historical information. But how to achieve that? According to him, we should “investigate human social organization” to have “a sound yardstick” helping us to analyze society instead of accepting absurd stories of historians (Khaldun pp. 7-8). Khaldun highlights that this is a completely new, original, and independent science, which hadn’t existed before (Khaldun p. 8).
Khaldunian thinking may be embarassingly familiar to today’s economists. He states that the division of labor serves as the basis for any civilized society and identifies division of labor not only on the factory level but also in a social and international context as well. Khaldun highlights on the example of obtaining grain that division of labor creates surplus value: “Thus, he cannot do without a combination of many powers from among his fellow beings, if he is to obtain food for himself and for them. Through cooperation, the needs of a number of persons, many times greater than their own (number), can be satisfied” (Khaldun p. 87).
Ibn Khaldun’s example of the division of production process is completely forgotten by economists and it’s no less expressive than the pin factory of Smith: “such include, for instance, the use of carvings for doors and chairs. Or one skillfully turns and shapes pieces of wood in a lathe, and then one puts these pieces together so that they appear to the eye to be of one piece” (Khaldun p. 519). What is more: opposed to Smith, Khaldun doesn’t make any distinction between productive and unproductive work.
Based on this it’s easy to understand that Ibn Khaldun presented very similar ideas as Adam Smith, but hundreds of years before the Western philosopher. But Khaldun said even more about the economy.
He analyzed markets that arise based on the division of labor and examined market forces in a simple didactic way which is very similar to the attitude of Alfred Marshall. The invention of supply and demand analysis wasn’t invented in the 19th century: Ibn Khaldun had also described the relationship of demand and supply, and also took the role of inventories and merchandise trade into account. He divided the economy into three parts (production, trade, and public sector) since the market prices in his theory include wages, profits, and taxes (Boulakia 1971).
At the same time, he analyzed the market for goods, labor, and land as well. This structured approach led Ibn Khaldun to invent the labor theory of value, which makes the Islamic scholar a pre-Marxian (or classical) thinker in this sense (Oweiss, 1988). His idea, that the produced value is zero if the labor input is zero, seems surprisingly classical, far ahead of his time.
Neo-Classical Historians Created A False Narrative
In the dynamic Khaldunian model of economic development, the government plays a crucial role. Its policies, primarily taxation, have a great effect on the development of a civilization. After the nomadic way of life, tribes change to sedentary lifestyles, giving birth to urban civilization. The sedentary lifestyle demolishes the original group solidarity and creates a need for a new clientele. Creating a new group identity is costly and needs a new army as well.
So with the deepening of urban civilization, and thanks to the increasing luxurious needs of the dynasty, the ruler has to increase taxes. In the end, tax rates become so high that the economy collapses. “It should be known that at the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments” (Khaldun p. 352) – writes Khaldun, describing the micro incentives behind taxation as well. On the other hand, he rejects customs and government involvement in trade, since the economic-political power of government is disproportionately large.
These ideas are so unique in the Middle Ages, that even Ronald Reagan quoted Khaldun’s work stating that they had some friends in common, referring to Arthur Laffer. The reason for this was that even Laffer himself regarded Khaldun as a forerunner of supply-side economics and the Laffer-curve, although Khaldunian ideas have not much in common with the Laffer-curve. The reason is that these should be interpreted in time dimension rather than as a policy rule of thumb.
So this narrative is not only false but illustrates how neoclassical economics forms economic history to justify its existence. These are unhistorical oversimplifications to create the story of a glorious and direct evolution towards neoclassicism as the most developed state of economic thinking.
In this process, scholars of the past are neglected, tried to be integrated into the context of neoclassical history – or both.
Keynesian Ideas From 14th Century North-Africa
Finally, the ideas of philosopher Ibn Khaldun had anticipated the ideas of Keynesian economic theories as well. Khaldun’s words are telling: “dynasty and government serve as the world’s greatest marketplace, providing the substance of civilization. Now, if the ruler holds on to property and revenue, or they are lost or not properly used by him, then the property in the possession of the ruler’s entourage will be small. Thus (when they stop spending), business slumps and commercial profits decline because of the shortage of capital”. “ […] Furthermore, money circulates between subjects and ruler, moving back and forth. Now, if the ruler keeps it to himself, it is lost to the subjects” (Khaldun p. 365).
These are strong arguments for government spending in the context of 14th century North-Africa.
Adam Smith – A Khaldunian thinker?
Not only Khaldunian ideas, but the methodology behind them is also truly original since it relies on abstraction and generalization. Ibn Khaldun gives us the economics of 14th-century North-Africa and numerous relevant issues. He addresses questions for which we don’t have a single solution even in the 21st-century. Khaldun helps us to bridge the gap in the history of thought showing the importance of medieval Islamic culture. He also helps to understand the relationship between Islamic economics and other schools of thought being a theoretical common ancestor.
It’s not known for certain that Adam Smith or any other classical scholar hadn’t been inspired by Khaldun’s work when developing their own theories. Among others, we have to uncover this information – which lost in the Great Gap – as well, in order to discover a new narrative that is closer to reality.
But why do we need a new narrative, rediscovering our past? The answer is simple: to avoid such superficial beliefs that Adam Smith (or Ibn Khaldun) is the father of economics. The development of economics started in the New Age to culminate in neoclassical thought. Khaldun already invented the Laffer-curve, that the financial market effectively regulates itself or a big government is always bad for the economy – among others.
With a new and more plural approach to the history of thought, the Alzheimer’s disease of mainstream economics can be cured. This is badly needed in the 21st century.
