The Amazing (Muslim) Arab Scholar Who Beat Adam Smith by Half a Millennium

Neoclassical economists created a false narrative of the history of economics

Evonomics: 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. The concept justifies the general ignorance in economics curricula towards economic thinking between early Christian and Scholastic times, emphasizing the lack of relevant positive (“scientific”) economic thinking in this period.

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 truth is that these weren’t the beginning of economic thinking at all.

Establishing social science in the 14th century

The biggest merit of 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.

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).

The stepfather of economics

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).


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