The Economic Theory of Ibn Khaldun and the Rise and Fall of Nations

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Figure 1: Statue of Ibn Khaldun in Tunis. (Source).

Ibn Khaldun (d. 1406/808) was a 14th century Muslim thinker, born in what is now Tunisia, who wrote on many subjects, including on the rise and fall of nations in his Muqaddima. His writings on economics, economic surplus and economic oriented policies are as relevant today as they were during his time. His emphasis on reduced government expenditure for mercenary armies has been heeded by many developed countries which are in the process of implementing his policy prescriptions in order to increase economic surplus by shifting resources to education and human development. He opposed taxation and tariffs that discouraged trade and production.
Ibn Khaldun opposed state involvement in trade and production activities. He thought that bureaucrats cannot understand commercial activities and they do not have the same motivations as tradesmen. He predicted relative decline of economic surplus and the decline of countries in which state involvement in trade and production exists. He saw a large army as an impediment to the expansion of trade, production and economic surplus.

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