Ibn Khaldun: dynastic change and its economic consequences.

AuthorAlrefai, Ahmed

INTRODUCTION

IBN KHALDUN WAS BORN IN TUNISIA IN 1332 and died in Egypt in 1406. He is a famous philosopher, and is sometimes considered the first sociologist for his critical remarks on how history should be studied. He outlined dynastic change in terms of transformations in the governing classes and related these to changes in economic conditions, for example, the introduction of new wants and new production, the effects of luxury, trends in taxation, and other features of expansion and contraction.

Ibn Khaldun is known for his history of the world (Kitab al-Ibar) written in 1377-1380, and most particularly for his long introduction (al-Muqaddimah), in which he explains the methods one should use to study society, and also the major patterns of historical occurrences one should expect to see. The Muqaddimah has become more famous than the rest of the history precisely because of its focus on principles and patterns, for here Ibn Khaldun appears as a sociologist and economist, and not as a chronicler.

In the late Twentieth Century, a renewed awareness that economy is inextricably linked to political structure has shifted interest toward cyclical rather than linearly progressive theories of history. It resumes a line of inquiry interrupted by World War II and its aftermath. In a recent book, for example, Ravi Batra(1) describes current economic events in terms of a cyclic theory of history earlier adapted from the Hindu tradition by B. K. Sarkar. This theory and the work of Ibn Khaldun turn out to have earlier inspired the elaborate historical cycles of the Russian sociologist Pitirim Sorokin.(2) Sorokin documented changes in cultural mores, fashion, ideology, and social relationships as well as in economic and political activity. He tried to show that changes in these areas were linked chronologically.

Ibn Khaldun developed a comprehensive theory of the dynastic cycle, describing how all aspects of society appear and change during the rise, zenith, degeneration and eventual collapse of a ruling dynasty. The fate of a dynasty was clearly related to events in the spheres of commerce, craftsmanship, culture, bureaucratic institutions, urban development, military organization, religion, and education. For example, he noted that increasing social stratification resulted when a dynasty approaching its zenith maintained its power by using it to distribute privileges, a method that would eventually lead to its decline. He also linked the fates of different aspects of society with each other. For example, the size of a city correlates with the variety of crafts and the degree of refinement they attain, a fact which Ibn Khaldun attributed more to intensity of competition and size of the market for luxuries than to the division of labor cited so often by Adam Smith.

Ibn Khaldun's narrative approach is piecemeal. Instead of bringing together all the aspects of first the rise, then of the peak, and finally of the decline of a dynasty, he discusses each aspect of society separately, describing what happens to it in the course of the dynastic cycle. Therefore, despite explicit connections he makes among developments in different parts of society, an image of what happens to society as a whole might have been hard to grasp had it not been for a guiding theme underlying nearly all of his descriptions. That theme is the rise and decline of "group feeling".

Group feeling is a sense of solidarity and shared identity among people that, as Ibn Khaldun is careful to say in numerous passages, derives its strength more from a long history of companionship and joint efforts than from genealogies based on blood ties. Thus it can intensify or slacken over time, spread to large numbers of people or recede back into small fragmented cliques. Changes in group feeling lead to institutional changes that, in turn, effect further changes in group feeling.

Ibn Khaldun's economic thoughts remain relevant today in that they illustrate the value of a multi-disciplinary approach to a very complicated process.

In the first part of this essay we try to analyze and evaluate Ibn Khaldun's economic ideas as they arose from the society he observed. Economic factors affect the mode of living, rate of development and demographic change, social and spiritual values, as well as the political order. This interrelationship is documented and analyzed in Ibn Khaldun's Muqaddimah. Part 1 of our paper is organized as follows: In section 1, we discuss Ibn Khaldun's views concerning factors of production and the central role of labor. Section 2 deals with trade. In section 3, we explain Ibn Khaldun's views on fiscal policy and public finance including direct and indirect taxes. In section 4, we discuss Ibn Khaldun's ideas regarding population and growth. In the second Part of this paper, we attempt to understand how Ibn Khaldun's cycle theory, especially in its economic aspects, relates to modern business cycle theories.

IBN KHALDUN'S ECONOMIC OBSERVATIONS

LABOR

Ibn Khaldun identifies the following factors of production: labor, nature and capital. This is similar to the familiar classical trinity of labor, land and capital. For him, labor is the axis around which production revolves. The recognition of labor as the most essential part of the production process is illustrated in the Prolegomena: "It should be further known that the capital a person earns or acquires, if resulting from a craft, is the value realized from his labor. This is the meaning of acquired labor. There is nothing here (originally) except the labor, but the labor is not desired by itself as acquired capital, but the value realized from it. . . . Some crafts are partly associated with others. Carpentry and weaving, for instance, are associated with wood and yarn (and the respective crafts needed for their production). However, in the two crafts (first mentioned), the labor (that goes into them) is more important, and its value is greater. . . . If the profit results from something other than a craft, the value of the resulting profit and acquired capital must also include the value of the labor by which it was obtained. Without labor, it would not have been acquired."(3)

Gains, therefore, can only come about by effort and labor; this is obvious in the case of crafts, where the labor is apparent. It is also true for the case of income derived from minerals, agriculture, or animal husbandry, for without labor there would have been no produce or profit.(4)

The importance of production and the value of labor embodied is further stressed by Ibn Khaldun's distinction between two notions of profit: ribh and kasb. Kasb is the value realized from labor. Ribh is the value realized from trade.

Saving seems unimportant in this description, and thus the marginal propensity to consume for the population of either big or small cities is equal to or very close to one. When Ibn Khaldun does speak of saving, it is not in the modern sense. When referring to the amount set aside, he speaks of "hoarding". "A person who hoards his money does so because he wants his children, relatives, or someone else to get it. No intelligent person tries to hide his money altogether from everybody."(6)

Ibn Khaldun did not present a social division between capital and labor in production. In his time capital (aside from merchant capital) generally did not belong to a distinct class; most producers were craftsmen and contributed both labor and capital themselves. It was not until the Industrial Revolution that a distinct capitalist class arose. Ashley says, "Now speaking generally, it may be said that during the period from the eleventh to the fourteenth century, there was but a very small field for the investment of capital." Ibn Khaldun did distinguish merchant capital, however, and "capital accumulation". "It should be known that commerce means the attempt to make a profit by increasing capital,"(7) or as quoted by Nashat,(8) "[Though] the gain acquired by commerce is small in proportion to the capital used, then the gain represents a good lot because a slight quantity multiplied by a large number makes a good deal."

TRADE

Ibn Khaldun advises traders that where the risk is greater in the importation of goods, gains also tend to be greater. "The transfer of goods from far away countries or through dangerous zones is of greater profit to traders and secures the fluctuations of the market in their favor, because the transferred good is rare and eagerly demanded, owing to its distant source or the risk incurred in its...

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