Political Economy of Ibn Khaldun

Arif Abuhayja Abstract: This essay examines the enduring relevance of Ibn Khaldun’s fourteenth-century insights on taxation, statecraft, and the cycles of civilization, tracing their unexpected echo in Arthur Laffer’s modern “Laffer Curve” and in the rhetoric of U.S. policymakers, including President Ronald Reagan. Drawing on recent scholarship that reimagines work and capital through Ibn Khaldun’s civilizational lens, it argues for the value of deep-referencing in economic thought—anchoring contemporary debates in the wider, cross-cultural history of ideas. Far from being an antiquarian exercise, this approach expands the intellectual toolkit of policymakers and economists, offering historically tested frameworks for balancing prosperity, justice, and state stability. Economic ideas rarely spring from nothing. They are usually rediscoveries, reformulations, or refinements of much older insights. The famous “Laffer Curve,” sketched on a napkin in 1974 to explain the limits of taxation to senior U.S. officials, was presented as an elegant revelation of supply-side logic: tax rates that are too high erode the very revenues they are meant to raise. Yet Arthur Laffer himself admitted he had not invented it. He had drawn it, in spirit and substance, from a fourteenth-century North African scholar—Ibn Khaldun, whose name means “son of Khaldun,” and whose work is best understood as part of a long tradition of Islamic economic thought. In the Muqaddimah, Ibn Khaldun argued that a just government should, in accordance with Islamic law, impose low taxes. Low taxes stimulate commerce and industry, expand wealth, and thereby enlarge the tax base; high taxes, by contrast, dampen activity, […]