Economics of Ibn Khaldun

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Ibn Khaldun is one of great Muslim scholars that lived in 14th century. Ibn Khaldun was born in Tunis, Tunisia in Northern Africa and lived from 1332-1406. At an early age, Khaldun received tradition education and he showed signs of a very bright student who was eager to learn. Khaldun engaged in active politics and this made him move from place to place with changing political environments (Lowry, 215). For example, when the ruler of Tunis appointed Khaldun to be the seal bearer of Sultan Abu who was a captive at that time, Khaldun learned a lot of things about how the court politics worked and in the process learned many weaknesses of the government. This gave Ibn Khaldun a good chance to leave Tunisia and settle in Morocco (Issawi, 174).

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While in Morocco, Ibn Khaldun played a big role in helping Sultan Abu Salem to overthrow the government that was being led by al-Mansur. This made him to be appointed to top government position but he had to escape from Morocco to Spain when political environments started changing against him. Ibn Khaldun had good relations with politicians in Spain and he was given high positions in government. Khaldun decided to go back to Tunisia when he realized that his relationship with political class in Spain was no longer good. He did not live long in Tunisia and decided to go to Egypt where he continued to live until his death in Cairo, Egypt in 1406 (Issawi, 202).

Ibn Khaldun received education in various fields such as philosophy, Islamic education and law among others. One of the characteristics that distinguished Ibn Khaldun from the rest of early Muslim scholars is that he did not have an interest of explaining socio-economic factors as was required by God (Allah). He rather believed that development of societies were governed by natural laws and had an interest of discovering how the natural laws influence economics (Fischel, 97). His approaches to economic phenomena were very interesting and thus this piece of work tries to analyze Ibn Khaldun’s understanding of economics.

Labor and value

Khaldun explained that God created man and everything on earth. He added that God and man posses everything on earth but other people may not appreciate what a person possesses unless the person offers in exchange an equal value of whatever he/she possesses. He further indicated that gain can only be obtained by human beings through efforts and labor (Fischel, 104). This simply implies Ibn Khaldun held an opinion that people can only obtain appreciable gains when they work hard. He used crafts to give an example that the gain that an individual obtains from crafts is equivalent to the value of the individual’s labor. Khaldun explained that in all kinds of occupation, the value of labor should be included in the cost of production because there can be no produce without labor (Fischel, 172).

Supply and demand theory

Khaldun described that the production of a particular item can only increase when the demand for that particular item increases. He implied that human beings cannot continue to produce products that are no longer demanded in the market. No person can be interested in wasting efforts without gains because gains which are sources of livelihoods for many people come out of labor. On the other hand, if a commodity is in high demand, people will tend to work hard to produce more of the commodity because they are likely to gain from it. He frequently used crafts to give examples relating to economics. For example, he described that if demand of craft products fall, people cannot put their efforts in crafts because the sales of craft products are also expected to fall (Enan, 251). He also tried to explain that if one type of good is in high demand from the state and another kind of good is demanded by private individuals, people are likely to concentrate more on producing the good that is in high demand from the state. According to him, a state can provide a very large market and cannot be compared with the market provided by private individuals (Enan, 179).

The cost of production is one of the factors that determine the prices of products. For example, the increase in the production in agricultural sectors results in the increase in prices of foodstuffs. Ibn Khaldun gave an example of a case in which Christians took all the fertile agricultural lands in Andalusia and therefore forced Muslims to unfertile coastal regions and hilly areas that could not produce good agricultural products. The situation forced Muslims to invest heavily in improving the conditions of their agricultural lands. It resulted in increased agricultural production cost which in turn resulted in increase in prices of foodstuffs (Enan, 27). The situation was completely opposite in the areas that were occupied by the Berbers. The lands of the Berbers were very fertile that it did not require them to incur extra expenses in making the lands fertile. This resulted to very low prices of foodstuffs in the lands of the Berbers (Enan, 193).


Ibn Khaldun tried to explain some of the reasons, which according to him, contribute to increase in prices of commodities. This situation is worsened by traders and middlemen who try as much as possible to add all the expenses they incur to prices of goods. On the other hand, people tend to consume more of luxurious goods in prosperous districts and thus the supply of such goods decline. In other words, when the demand of a particular product increases more than its supply, the price of the product rises. In such a situation, only the rich people will be able to buy the product because they will be willing and able to purchase the product at high prices. This leaves the poor people to suffer because even though they need the product, they cannot afford it because of high prices. Ibn Khaldun tried to explain the interdependence of prices by illustrating that if the price of a particular good is low and continues to be low and there are no improvement in the sales of the same good, losses are likely to be incurred (Issawi, 34). This makes traders to shift their activities to start working with other goods that can give them profit.

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Ibn Khaldun used agricultural foodstuffs to describe a scenario of interdependency of prices. One of the good characters of Khaldun is that he understood very well all the concepts he tried to explain and in most cases he illustrated his answers with valid examples. For instance, he explained that in an area with fertile agricultural land, prices of agricultural produce are likely to be low. If the prices of agricultural products continue to be low, the profits received by the people involved in agricultural activities will shrink and this can even force them to start spending money from their capitals. A situation where by price of a particular commodity persistently remain low can lead the people whose operations depend on such a commodity into poverty. This made Khaldun to conclude that the prosperity of business individuals is insured when the prices of their produce remain moderate together with a quick turn over (Issawi, 79).

Stages of economic development

Ibn Khaldun came up with very interesting ideas on the stages of economic development. Even though Khaldun wrote about this topic many years ago, his ideas are still very much applicable in the current world in which business competition is very stiff. Khaldun started this topic by stating that the difference between people comes about because of the differences in their occupation. He continued to write that most people give first priorities to occupations that can fulfill the basic necessities of life. Other things that bring comfort and luxury to people are usually given the second priority (Lowry, 126). This is the main reason why most people engage themselves in agricultural activities such as growing food crops and keeping livestock to meet the demand of their basic needs such as food and shelter. Once people have had enough resources to satisfy their basic needs and they have surplus, they can then start engaging in luxurious lives.

This applies in the current world in which the people living in rural areas engage in agricultural activities so to obtain their basic needs before considering other necessities which are not basic. People who live in urban centers and work in industries also use their salaries to purchase their basic needs before spending on the secondary needs. It should be noted that people who live in urban centers depend on people who practice agriculture in order to obtain their foodstuffs. As the profits from agricultural sectors increase, the agriculturalists improve their lives and continue to work hard to increase the produce. This is how the economy improves according to Ibn Khaldun. Khaldun frequently referred to people who practiced agriculture as nomads because they move with their livestock in search of pasture and fertile land for cultivation. This can be a bit confusing because nomadic people are those people who move with their livestock from one place to the other in search of pasture but it does not include crop growers. He concluded on this topic by stating that nomadic stages and town stages are all necessary for human beings (Lowry, 291).

Economic consequences of oppression

There are situations in which the government may be forced to confiscate properties owned by private individuals. This should happen if it is established through a due process of law that an individual obtained properties from the public through fraudulent means. However, there are some governments that use oppressive policies to confiscate properties owned by the citizens. Khaldun noted the rate of slackening in enterprises increases when the rate of confiscation is high (Fischel, 272). This comes about because many citizens lose interest in participating in productive economic activities. The economy of a country is lowered by such oppressive policies.

Societies can be completely destroyed if the rate of oppression is high. This also explains the reason why there are differences in the economic strengths of different areas within a given country. It happens when the oppressive policies are applied more in some parts of a country than in others. These are some of the factors that pull down economic development in most nations (Fischel, 135). This kind of economic analysis by Ibn Khaldun should not be ignored because just as it has been indicated in the introduction of this paper, Khaldun travelled to and lived in many countries and he may have wrote his books out of experience. In all the countries that Khaldun lived, he had the opportunities to serve in top government positions and therefore his description of relationships between political and economic activities should be keenly analyzed because they are likely to be valid. This does not mean that all the economic concepts that Khaldun described were correct but they make a lot of sense to most people who are interested in economics around the world.

In conclusion, the translation of the works of Ibn Khaldun from his native language to English and other languages that are widely spoken in the world has made it possible for many people to read his great ideas. His clear understanding of politics, philosophy and economics make many people to be interested in reading his works. This also made him to be ranked one of the best Muslim scholars of the 14th century. In fact it was indicated by some Western economists that it was regrettable that the works of Ibn Khaldun did not reach them early enough. If the translation of al-Muqaddimah into English and other European languages could have come early, the economy in Europe could have been bigger than it is now (Fischel, 241).

Works Cited

Enan, Mohammad. Ibn Khaldun: His life and Great Memorable Works, New Delhi: Kitab Bhavan, 1979.

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Fischel, Walter. Ibn Khaldun in Egypt: His public functions and his historical research (1382-1406). A study in Islamic Historiography. Berkeley: California University Press, 1967.

Issawi, Charles. Great Economic Concepts: An Arab Philosophy of History. London: John Murray, 1950.

Lowry, Todd. The Greek Heritage in Economic Thoughts: in Pre-Classical Economic Thought. Boston: Kluwer Academic Publishers, 1987.

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