A Companion to the History of Economic Thought - Chapter 3 pptx

28 H. S. HOSSEINI CHAPTER THREE Contributions of Medieval Muslim Scholars to the History of Economics and their Impact: A Refutation of the Schumpeterian Great Gap 1 Hamid S. Hosseini No historical student of the culture of Western Europe can ever reconstruct for himself the intellectual values of the later Middle Ages unless he possesses a vivid awareness of Islam in the background. Pierce Butler (1933), quoted by Mirakhor 3.1 THE GREAT GAP THESIS AS THE PROBLEM In his seminal 1954 work History of Economic Analysis, Joseph Schumpeter pro- poses a historical gap of some five hundred years in the history of economics after its beginnings in ancient Greece. “Nothing was said, written, or practiced CONTRIBUTIONS OF MEDIEVAL MUSLIM SCHOLARS 29 which had any relevance to economics” (Mirakhor, 1988 [1983], p. 301) within this “historical gap,” which stretched from the demise of Greek civilization to the writings of Thomas Aquinas (1225–74). For, according to Schumpeter (1954, p. 74), many centuries within that span are blanks. Emphasizing the contribu- tions of Thomas Aquinas, which, to Schumpeter, were instrumental in ending that five hundred years of “historical discontinuity,” the author of History of Economic Analysis writes: “so far as our subject is concerned we may leap over 500 years to the epoch of St. Thomas Aquinas (1225–74) whose Summa Theologica is in the history of thought what the South-Western spire of the Cathedral of Chartres is in the history of architecture” (Schumpeter, p. 74). According to Schumpeter, what distinguished the thirteenth century from the twelfth, eleventh, and earlier centuries was the revolution that took place due to Aquinas and the Scholastics in theological and philosophical thought. This revolution, Schumpeter maintains, had two causes: the rediscovery of Aristotle’s writings, and what he calls the towering achievements of St. Thomas Aquinas (Schumpeter, p. 87). De-emphasizing the first cause, Schumpeter writes that: “The reader will observe that I do not assign to the recovery of Aristotle’s writings the role of chief cause of the 13 th century developments” (Schumpeter, p. 88). Adherence to the Schumpeterian Great Gap thesis has by no means been restricted to Schumpeter’s 1954 book. As several writers – Mirakhor, Essid, Ghazanfaar, Islahi, and Hosseini – have demonstrated, the thesis, which ignores the contributions of medieval Muslim scholars, has been “deeply entrenched” (at least until recently) as part of the accepted tradition among historians of eco- nomic thought. Although it became more explicit and was perhaps strengthened by Schumpeter’s History of Economic Analysis, the thesis was well established in the nineteenth century, as is evident in William Ashley’s 1988 book on the his- tory of economics. According to Ghazafar, “Even Jacob Viner, proclaimed by Blaug as the greatest historian of economic thought that ever lived, unhesitat- ingly accepts the gap thesis” (Ghazanfar, 1995, p. 241). In fact, in a review essay on Schumpeter’s History of Economic Analysis, Viner simply accepts the “gap” and acknowledges Schumpeter’s claim of having accounted for “every writer who made a significant contribution to the development of economic theory” (quoted by Ghazanfar, 1995, p. 241). Whatever his reason, Viner, like Schumpeter, also ignores Islamic contributions to economics during the blank centuries (ibid.). Of course, the same can also be said of the texts in the history of economic thought, at least until recently. The Schumpeterian Great Gap thesis is problematic, for there was no historical discontinuity in those “blank” centuries; it is certainly not true that “many centur- ies within that span are blanks” (Schumpeter, p. 74). Furthermore, the Thomasian revolution suggested by Schumpeter was a reaction to the Greco-Islamic influ- ence in the Latin West and was impacted by it. Notwithstanding Karl Polanyi’s substantive and formalistic distinctions in economics, it is a fact that many non-Western civilizations made contributions to the development of economics within those “blank” centuries (Hosseini, 1995, p. 539). This is particularly true of medieval Muslim scholars – theologians, jurists, Greek-inspired philosophers, and authors of the (Persian) mirrors for 30 H. S. HOSSEINI princes. Those writers – who reflected Greek rationality, a sense of realism and practicality characteristic of the Persian-originated mirrors, the worldly teachings of Islam, and the “modernistic” economic institution present in medieval Islamic society – produced theories closer to the economic concepts of the more recent centuries than those of the Greeks or pre-modern Latin Christianity. That, of course, occurred before economics had become an independent discipline. Medieval Muslims also influenced Christian scholasticism and Thomas Aquinas in their economic views, another point also neglected by Schumpeter and other historians of economics. For scholasticism was a form of ecclesiasticism that contained various elements, including Islamic thought (Mirakhor, 1988 [1983], p. 304). Furthermore, medieval Islamic influence in economics may even have extended to centuries beyond the age of Thomas Aquinas, as Hosseini has demon- strated in his paper on the division of labor (Hosseini, 1998, pp. 653–81). Interestingly enough, Latin Scholastics had initially found Islam and the philosophic works of Muslims to be threats to Christian dogma (Ghazanfar, 1991, p. 130), evidenced by over two hundred condemnations, called Averroestic heresies, published by the then Bishop of Paris. The numerous translations in the eleventh, twelfth, and thirteenth centuries into Latin of the works of Muslim and Greek philosophers were so different from Christianity that, in the words of Will Durant, “they threatened to sweep away the whole theology of Christiandom unless Christianity could construct a counterphilosophy” (quoted by Ghazanfar, 1991, p. 130). To overcome that fear, Aquinas used the views developed by the prominent (Persian-speaking) medieval Muslim theologian Ghazali. For in writ- ing his book The Incoherence of Philosophers (1927), Ghazali had placed science, philosophy, and reason in a position inferior to religion and theology. According to Meyers, the Scholastics accepted this view of Ghazali and made it a character- istic of much of their philosophy (Ghazanfar, 1991, p. 130). The works of Ghazali and other prominent Muslim scholars had been translated into Latin before 1150. Muslim scholars were also instrumental in the transmission of Aristotelian ideas to the Latin West, a point also ignored by Schumpeter. Jourdain’s study of the scholars of the eleventh and twelfth centuries found not even “a single passage to suggest any of these authors suspected that the pursuit of riches, which they despised, occupied a sufficiently large place in national as well as individual life to offer to the philosopher a subject fruitful in reflection and result” (Mirakhor, 1988 [1983], p. 308). It is well documented that all of the European scholars mentioned in chapter 2 of Schumpeter were in fact influenced by Muslim thinkers (Hosseini, 1998, p. 675). The following sections will discuss the contributions of medieval Muslim scholars, the causes and roots of those contributions, and their impact on Euro- pean scholasticism. We will also explore the reasons why these contributions have not been acknowledged during the past few centuries. We will, however, discuss first the significance of Joseph Spengler’s 1964 path-breaking article on Ibn Khaldun (1332–1406). But, because Spengler’s 1964 article failed to prove the historical continuity of economic thought and thereby refute the Schumpeterian thesis in its totality, we will also discuss the impact of the more serious challenges to the gap thesis that emerged later on. CONTRIBUTIONS OF MEDIEVAL MUSLIM SCHOLARS 31 3.2 JOSEPH SPENGLER’S 1964 ARTICLE: OVEREMPHASIZING THE GREEK ELEMENT IN ISLAMIC ECONOMIC THOUGHT AND MORE Joseph Spengler’s 1964 article dealt the first blow to the Schumperian Great Gap thesis, without even mentioning it. By writing this article, Spengler became the first Western historian of economics to acknowledge the contribution of a “medieval” Muslim thinker and to view it as significant. For Spengler believed that, among other things, Ibn Khaldun “had a deep insight into the essentials of the accumulated knowledge of his time, could evaluate the manifestations of the culture of his day, could reflect faithfully the understanding which contemporary lawyers and jurists had of practical economic and financial matters that normally were not treated in books” (Spengler, 1964, p. 269). Spengler’s article, while important in acknowledging the neglected contributions of various Muslim scholars, was not without its share of problems. According to Mirakhhor, “Perhaps due to his zeal to show the influence of Greek writings on Muslims, which he does on every page of the first section of his paper, Spengler only considered some of the available evidence from the ninth century onwards” (p. 309). While we cannot deny the impact of Greek thought on Islamic civilization – for the latter is a confluence of Arab, Greek, and Persian (i.e., Iranian) elements – we should at the same time not overemphasize the share of individual components in that synthesis. However, by exaggerating the Greek share in that totality, Spengler diminishes the extent of the contributions of the pre-Ibn Khaldun Muslim scholars that he surveys: “Such attention as was given to theoretical economics seems to have been prompted less by an early and persisting interest in taxation than by contact with Greek philosophical and scientific writings, especially those of later Platonic and neo-Platonic orientation” (Spengler, 1964, p. 270). Spengler, being aware that Ibn Khaldun’s knowledge of economic behavior was superior to that of Bryson of Heraclea and other Greek thinkers, fails to understand that Ibn Khaldun’s substantial knowledge of economic matters reflected the realities of medieval Islamic society and the knowledge of many Muslim scholars of the “Gap” centuries. Furthermore, by concentrating on the contributions of Ibn Khaldun – who lived after the Schumpeterian blank centuries – Spengler, in effect, did not pro- vide sufficient ammunition to negate the Schumpeterian Great Gap thesis; Spengler’s article was not in total support of the historical continuity of economic thought, although it was a step in the right direction. In addition, by overemphas- izing the impact of Greek thought, Spengler downplayed the contributions of Muslims who were not affected (at all or very much) by Greek thought. He also ignored the contributions of those scholars who wrote during the first two and a half centuries of Islamic history, since it was some two and a half centuries after the rise of Islam that the works of Greek thinkers were translated into the Arabic language. In spite of the significance of the 1964 path-breaking article by Spengler, the real challenge to the Schumpeterian Great Gap thesis came about as a result of the 32 H. S. HOSSEINI work done by a few economists with roots in Muslim lands (although the work of the Belgian economist Leuis Baeck and the personal encouragement of Todd Lowry should not go unnoticed). These historians of economics, in addition to demonstrating the contributions of medieval Muslim scholars, also chal- lenged the accuracy of the Schumpeterian thesis, and tried to show the impact of medieval Islamic scholarship on Aquinas and Christian scholasticism. 3.3 ECONOMIC ACTIVITY IN MEDIEVAL ISLAM Jourdain’s observation (above) was indicative of the medieval Christian scholars’ disapproval of the pursuit of riches. The Greeks too were less approving of the pursuit of riches than medieval Muslims. In Plato, we see a derogation of eco- nomic activity, reinforced by his description of the property arrangements for each class. For him, only the lowest classes – farmers and artisans – were allowed to work for profit and accumulate property; the pursuit of money by the base would not arouse the envy of wise rulers more than the prudent exercise of power by the latter would antagonize artisans and farmers (Hosseini, 1998, p. 66). And, as stated by McNulty (1975), for Plato, the desire to engage in ex- change is not a universal human characteristic; rather, it is a specialized activity. This view is obvious in the Republic, in the discussion between Socrates and Adiemantus. Plato rejected private property, at least for the upper class, because it causes selfishness. Although Aristotle defended private property, he rejected exchange and had no Platonic appreciation of the division of labor (Hosseini, 1998, p. 66). Medieval Muslim scholars viewed wealth and gainful activity more positively. This was partly because Islam had mercantile roots. It is worth mentioning that the Quran (believed by Muslims to be the direct words of God) and the Hadith (reported words and acts of the Prophet) have a negative view of what the Quran calls Riba (interest, or as some argue, only excessive usury). However, these two highest sources of Islamic law regard wealth and profit, on both exchange and productive activity, very positively (Hosseini, 1988, p. 58). In the Quran and the Hadith, production and trade are viewed as noble prac- tices (Essid, 1987, p. 78). (In contrast, the medieval Christian Church was insisting that no Christian ought to be a merchant.) According to Sami Zubaida, “The Meccan milieu of Mohammad and his followers was a business milieu. Before the call to Islam, Mohammad and his companion engaged in trade extensively. Mohammad was a relatively small merchant, but also worked as agent for other merchants in trade with Syria. The early Muslims of Mecca and Medina con- tinued in trade” (Zubaida, 1972, p. 321). According to Maxime Rodinson, in medieval Islamic society, “the capitalist sector was undoubtedly well-developed in a number of aspects, the most obvi- ous being the commercial one” (Rodinson, 1978, p. 28). According to Nasser Khusraw (1003–60) – a Persian poet, essayist, and traveler – in the year 1052 there existed in the central Persian city of Isfahan some two hundred money changers, although usury is forbidden in Islam (see Hosseini, 1995, p. 543). Many economic CONTRIBUTIONS OF MEDIEVAL MUSLIM SCHOLARS 33 historians – such as Udovitch (1970), Labib (1969), Tuma, and S. G. Goitein – have elaborated on these aspects of medieval Islamic society. These writers have demonstrated attempts by early Muslim leaders at enforcing fiscal and monetary policies, deficit financing, the use of taxation to encourage production, and the existence of credit and credit instruments for the rudiments of checking and saving accounts, banking institutions, and procedures for the formation of part- nerships, commendam contracts, and monopolies, all of which developed before the ninth century. By the ninth century, these developments had been enshrined in Islamic law (i.e., figh manuals). According to S. G. Goitein: “A subject worthy of such special study is the mer- chant class and bourgeoisie of early Islam. This class developed slowly during the first hundred and fifty years of the Muslim era, emerged into the full light of history at the end of the second, became socially admitted during the third and asserted itself as a most powerful socioeconomic factor during the fourth” (Goitein, 1957, p. 584). Of course, the early Islamic bourgeoisie was not able to obtain political power, nor was it able to enjoy other powers necessary to become as effective as the type that eventually emerged in Western Europe centuries later. This is because this early bourgeoisie “never became an organized body and, as a class, never obtained political power, although many of its members occupied positions as the highest executives of the state” (Goitein, 1957, p. 584). As stated by Goitein, “Before all this happened, however, Islam as a religion and civilization, had fully taken shape, and it was largely members of the bour- geoisie, who had developed Muslim religious law, which is the backbone and very essence of Islam” (Goitein, 1957, p. 584). 3.4 ISLAMIC VIEWS OF THE ECONOMY AND ECONOMIC POLICY PRIOR TO THE NINTH CENTURY Medieval Muslims had already held and expressed a positive view of economic activity before the ninth century, when the Abbasid Caliph Maamoun ordered the translation of the works of the Greeks into Arabic. In fact, numerous scholars and jurists had written on economic issues, almost from the inception of Islam (Mirakhor, 1988 [1983]; Ghazanfar, 1991; Hosseini, 1995). Prophet Mohammad is reputed to have said that the state should have only a limited role in the productive process, in market structure, and in the movement of prices. According to Elias Tuma, the role of the state “was restricted to factors which distorted normal conditions, these being competition and price determina- tion through invisible forces such as God’s will and the interaction of supply and demand. However, when intervention by the state was deemed necessary it was usually kept at a minimum and exercised through the market” (Tuma, 1965, pp. 10–18). Mohammad, as the prophet and political leader of the Islamic community, refused to combat price rises by direct action, stating that only God alone sets prices (i.e., invisible hand? – see Tuma, 1965, p. 14). Mohammad is believed to 34 H. S. HOSSEINI have declared that one who supplies the market with a commodity receives his income as a blessing, but the monopolist who withholds his supplies receives his income as a curse (Tuma, 1965, p. 15). Among the pre-ninth-century Muslim scholars endowed with a deep under- standing of economic issues and matters, the Iraqi jurist Abu Yusuf (731–98) stands out. Having studied Islamic jurisprudence under Abu Hanifah (founder of the Hanafi Sunni School of thought), Abu Yusuf, a judge for several Abbasid Caliphs, was eventually chosen by Abbasid Caliph Harun al-Rashid as his chief jurist (Qadi al Qudat) in Baghdad, the capital. It was in his capacity as chief jurist that Abu Yusuf composed The Book of Taxation (Kitab al-Kharaj), addressing Caliph Harun al-Rashid. In this volume, the eighth-century jurist exhibits his understanding of taxation, public finance, agricultural production, and other related economic issues (Ghazanfaar, 1991, p. 125; also see M. N. Siddiqui, 1964; S. A. Siddiqui, 1968). In Kitab al-Kharaj, Abu Yusuf shows his preference for a proportional tax on agricultural produce, instead of a fixed rent on land. He finds a proportional tax on agricultural produce more just and, at the same time, as providing a greater incentive for bringing more land into cultivation, thus creating more revenues for the government. Abu Yusuf strongly opposes tax farming – a practice by which the tax collector could confiscate land in case of delinquency (Ghazanfar, 1991, p. 5). Interestingly enough, this eighth-century Muslim jurist suggested certain principles that anticipated those proposed 1,000 years later by Adam Smith (1985 [1776]) as the four canons of taxation; namely, equity, certainty, convenience, and economy. As a result of these principles and to ease the burden of taxes on taxpayers, Abu Yusuf proposed the ability-to-pay principle of taxation and convenience regarding time, space, and the manner of payment of these taxes. Furthermore, to reduce the likelihood of corruption in the collection of taxes, Abu Yusuf proposed a centralized tax administration and the use of strictly supervised salaried workers as tax collectors. Abu Yusuf also provided a deep insight into issues such as the distribution of tax revenues, government responsibilities concerning societal welfare, the promotion of economic development, and the building of socioeconomic infra- structure and public works such as roads, bridges, and canals for irrigation or transportation purposes. He also discussed various types of taxes, including specific taxes on commodities, death taxes, and import duties, and problems related to water supply, fisheries, and forest and pasture lands. Concerning private projects and state responsibilities, he writes: “As for smaller canals from which people obtain water for their own farms, fruit orchards, vineyards, vegetable gardens, etc., the expense of cleaning and restoring them should be borne by the residents themselves. There should be no burden on the state treasury” (Kitab al-Kharaj; quoted by Ghazanfar, 1998, p. 22). To Abu Yusuf, no part of the expense should be borne by the taxpayers if the project benefits the entire Muslim community. CONTRIBUTIONS OF MEDIEVAL MUSLIM SCHOLARS 35 3.5 MEDIEVAL MUSLIM CONTRIBUTIONS TO THE HISTORY OF ECONOMICS BEYOND THE EIGHTH CENTURY Although scholars in the first two and a half centuries of Islamic history demonstr- ated a thorough understanding of the economy of their age, their understanding of the economy was enhanced when they witnessed the rise of non-Islamic thought in their midst. Islamic understanding of economic matters benefited from the works of Greek masters, and the mirrors of Persian origin which were translated into Arabic. 2 Philosophy entered Islam when, during the ninth century, the Abbasid Caliph Maamoun ordered Syrian Christians at Baghdad to translate the works of the Greeks into Arabic. These translations gave rise to a great deal of philosophic activity and some of the greatest philosophers in history, who debated, reproduced, added to, and wrote commentaries on the philosophic works of the ancient Greeks. The first Greek-inspired Muslim philosopher was (Arab) Al-Kindi (d. 870), who was soon joined by many others, mostly of Persian origin. However, even before Al-Kindi, a rationalist Islamic “philosophic school” – the Mutazeleh school – had emerged, peaking when scholar Abd al-Jabbar composed a volume in dialectical form. The Islamic mirrors for princes literature was “an important and characteristic branch of Persian belles letters” (Lambton, 1980, p. 449). It entered Islamic thought when the Iranian Ibn Muqaffa (724–57), a Zoroastrian convert, translated four Persian (of pre-Islamic Sassanid-age) books of moral counsel into Arabic, and wrote two more mirrors in Arabic himself. Soon Ibn Muqaffa was joined by numerous other writers who – writing in Persian, Arabic, and other Islamic languages – produced a branch of thought that was rich in an understanding of economic activity (Hosseini, 2001). The availability of Persian and Greek sources in Arabic, the language of intel- lectual discourse among all scholars of medieval Islamic society, introduced these scholars to the issues (economic or otherwise) debated by ancient Greek thinkers or raised in the pre-Islamic Persian books of counsel. Such availability enriched the economic discussions of Muslim scholars and elevated their discussions to a higher plane. From the ninth century onward, early writers were joined by many more scholars, such as theologians and Muslim jurists, as well as philosophers and authors of the mirrors. Of course, they were also occasionally joined by writers who did not fit any of those categories, such as the Persian scientist and essayist Biruni (b. 973), the twelfth-century Syrian merchant Dimishqhi, or the North African historian and social theorist Ibn Khaldun. Among the theologian/jurists who contributed to the development of eco- nomic thought, we can include Ghazali (1058–1111), al-Mawardi (1075–1158), Ibn Taimiyah (1263–1328), and al-Maqrizi. Among many philosophers who made contributions we can include Farabi (873–950), Ibn Sina or Avicenna (980–1037), Ibn Miskaway (b. 1030), Nasir Tusi (1201–74), Asaad Davani (b. 1444), and many 36 H. S. HOSSEINI more. After Ibn Muqaffa translated a few pre-Islamic books of counsel and wrote the first two Islamic mirrors, various Muslim scholars, of different languages, composed numerous mirrors for princes. These works of an expedient edifying and moralizing nature Islamized pre-Islamic (and thus Zoroastrian) Persian maxims and made impartial use of examples of Sassani Persian kings, as well as those of Arabic (i.e., Islamic) Caliphs, Sufi saints, and Persian sages. These included a great many economic concepts. Interestingly, the pre-Islamic Persian materials that found their way in the mirrors also influenced Iranian and non-Iranian theologians. One example is the theologian Ghazali, who wrote Nasihat al Muluk. Yassine Essid’s 1995 book discusses the Arab theologian al-Mawardi, whose works were influenced by pre-Islamic Iranian sources (Essid, 1995, p. 37). Muslim scholars after the first two and a half centuries of Islamic history provide a surprisingly detailed discussion of various economic issues. The fol- lowing are examples of these discussions. 3.5.1 Wealth, poverty, and acquisitiveness In contrast to their European counterparts, medieval Muslim writers praised eco- nomic activity and the accumulation of wealth, viewed individuals as acquisitive, and scorned poverty. Kai Kavus, in Qabus Nameh, gives his son the following advice: “My son, do not be indifferent to the acquisition of wealth. Assure your- self that everything you acquire shall be the best quality and is likely to give you pleasure” (Kai Kavus, 1951, p. 91). To Khajeh Nasir Tusi (1985, p. 159), “The intelligent man should not neglect to store up provisions and property.” Accord- ing to the theologian Ghazali, “man loves to accumulate wealth and possessions of all kinds of property. If he has two valleys of gold, he wants to have a third” (translation, from the Ihya, by Ghazanfar and Islahi, 1990, pp. 384–5). According to Kai Kavus, “you must realize that the common run of men have an affection for the rich, without regard to their personal concern, and that they dislike poor men, even when their own interests are at stake. The reason is that poverty is man’s worst evil and any quality which is to the credit of the wealthy is itself a derogation of the poor” (Kai Kavus, p. 92). Like a post-Smithian proponent of self-interest, Kai Kavus writes: “And never, in anything you do, lose sight of your own interest – to do so is superfluous folly” (Kai Kavus, p. 109). Or, accord- ing to the philosopher Ibn Miskaway, “The creditor desires the well-being of the debtor in order to get his money back rather than because of his love for him. The debtor, on the other hand, does not take great interest in the creditor” (Ibn Miskaway, undated, p. 137). 3.5.2 The division of labor Various medieval Muslims discussed the division of labor and its benefits in the economic process. Among them are Kai Kavus, Ghazali, and the philosophers– ethicists Farabi, Ibn Sina (Avicenna), Ibn Miskaway, Nasir Tusi, and Davani. The discussions provided by these authors of the division of labor were much more CONTRIBUTIONS OF MEDIEVAL MUSLIM SCHOLARS 37 sophisticated than those of the Greeks, and included division of labor within the household, within society (i.e., social), within the factory (manufacturing or tech- nical), and among nations (Hosseini, 1998, section 4, p. 670). While it is believed that it was Thomas Hodgskin (1787–1869) who, in 1829, applied the division of labor to the household for the first time (see Hodgskin, 1966 [1829]), Hosseini has argued that this was discussed by the Persian Muslims Avicenna and Nasir Tusi several centuries earlier (Hosseini, 1998, p. 668). All of these writers have discussed the social division of labor; and Farabi, Ghazali, and Kai Kavus have applied it to the international arena. According to Farabi, each society is imper- fect because they all lack all of the necessary resources. A perfect society can only be achieved when domestic, regional, and international trade all take place (Farabi, 1982, p. 25). The same view is expressed in Kai Kavus’ Qabus Nameh: “To benefit the inhabitants of the west they import the wealth of the east and for those of the east the wealth of the west, and by doing so become the instruments of the world’s civilization” (Kai Kavus, p. 156). Thus, like Adam Smith, these two medieval authors view international trade as a nonzero-sum game. Although writing before the age of industry, medieval Muslim writers under- stood the application of the division of labor to a productive unit (such as a factory), and its usefulness, rather well. Recognizing that “there are a thousand things to be done before anyone can put a morsel of bread in his mouth,” they recognized that it is useful to assign different tasks to different workers (Hosseini, 1998, p. 671). Reminiscent of Adam Smith’s statement in The Wealth of Nations about the woolen coat being the joint product of a multitude of workers, Ghazali argues that “you should know that plants and animals cannot be eaten and digested as they are. Each needs some transformation, cleaning, mixing, and cook- ing, before consumption. For a bread, for example, first . . . Just imagine how many tasks are involved; and we mentioned only some. And, imagine the number of people performing these various tasks” (Ghazanfar and Islahi, 1990; quoted by Hosseini, 1998, p. 672). For Ghazali and Tusi, as for Smith, exchange and division of labor are related (Hosseini, 1998, p. 672). Interestingly enough, Tusi, like Smith, argues that exchange and division of labor are the necessary consequences of the faculties of reason and speech. And both indicate that animals, such as dogs, do not exchange one bone for another (ibid., p. 672). Smith’s substantive economic analysis of the division of labor appears with the celebrated illustration of the productivity of the pin factory (Lowry, 1979, p. 73). This example is very similar to Ghazali’s discussion in his Ihya al-Ulum al-Din that: “Even the small needle becomes useful only after passing through the hand of needle makers about twenty-five times, each time going through a different process” (Hosseini, 1998, p. 673, quoting Ghazanfar and Islahi’s translation). 3.5.3 Barter and money Ibn Khaldun, and various medieval Muslims before him, had understood the problems of barter and the importance and functions of money in a more complex economy. For example, Ghazali (1058–1111), in his Ihya, identified three problems [...]... Schumpeterian Great Gap, the lost Arab– Islamic legacy, and the literature gap Journal of Islamic Studies, 6(2), 234 – 53 —— 1998: Early medieval Arab–Islamic economic thought: Abu Yusuf’s ( 731 –798 AD) economics of public finance University of Idaho Discussion Paper #98/5 —— and Islahi, A 1990: Economic thought of an Arab Scholastic: Abu Hamed Ghazali History of Political Economy, 22(2), 38 1– 4 03 —— and Islahi,... find the use of Arab or Arab-Islamic inappropriate Writing in Arabic, the language of theology, the Prophet and the Caliphs until the Ottoman days, and the medieval international language of Muslims from Spain to the Far East, should not make one Arab Although the overwhelming majority of the medieval scholars of the Muslim world were Muslims, some non-Muslim scholars, such as the Jewish Maimonides in... HOSSEINI 38 associated with barter – the lack of double coincidence of wants, the indivisibility of goods due to the lack of a common denominator, and limited specialization (Ghazanfar and Islahi, 1990, p 39 1) Ghazali was able to trace the evolution of a money-exchange system and the functions of money in modern terms; in particular, its being a means of exchange Ghazali also discussed the use of gold and... at a Syriac Jacobite Church and famous during the thirteenth century, copied chapters of Abu Hamed Ghazali’s Ihya al-Ulum-al-Din – including a chapter containing Ghazali’s economic ideas – without referring to him Bar Hebraeus’ book was considered fundamental in monastery teachings (Mirakhor, p 33 4) Another example is the Spanish Dominican Monk Raymond Martini, who borrowed from Ghazali’s Tahasof al-Filaso a. .. Medieval Islamic (Persian) mirrors for princes and the history of economics Journal of South Asian and Middle Eastern Studies, XXIV(4), summer Ibn Sina, Abu Ali Hossein (Avicenna) 1940: Tadbir-e-Manzel (Household Management) (in Persian) Tehran, Iran: Sina Ibn Miskaway, Abu Ali Mohammad undated: Tahdib al-Akhlar (Ethics) (Persian translation) Tehran, Iran: Zurooyk Kai Kavus Ibn Eskandar (Prince of Gurgan)... silver as money and the harmful effects of counterfeiting and currency debasement (Ghazanfar and Islahi, 1990, p 39 2) Ghazali was able to develop an early version of Gresham’s Law (Ghazanfar and Islahi, 1990, p 39 4) 3. 5.4 Demand, supply, and the market mechanism Medieval Muslim scholars demonstrated an understanding of the forces of supply and demand, and their role in price determination For many of these... Abu Hamed undated: Ihya-al-Ulum al-Din (Revival of the Religious Sciences), 4 vols Beirut, Lebanon: Dar al Nadwaa —— 1927: Kitab Tahafut al, Falasafah (The Incoherence of Philosophers) Beirut, Lebanon Ghazanfar, S M 1991: Scholastic economics and Arab scholars: the Great Gap thesis reconsidered Diogenes: International Review of Human Sciences, no 154, 117–40 —— 1995: History of economic thought: the. .. scholars threatened Christian dogma The list of condemnations of ideas published by Stephen Tampier, Bishop of Paris, in 1277 (and other similar condemnations at Oxford and elsewhere) was a manifestation of these fears Thus, Aquinas wrote his Summas to halt the threatened liquidation of Christian theology by Muslim interpretation of Aristotle; the industry of Aquinas was due not to love of the Greek Aristotle,... Islamic Banking, Tehran, Iran: Central Bank of Iran, 299 35 4 Original paper presented in 19 83 at the Annual Meetings of Southwestern and Midwestern Economic Associations (US) Richards, D S (ed.) 1970: Islam and Trade of Asia Philadelphia, PA: University of Pennsylvania Press Rodinson, M 1978: Islam and Capitalism Austin, TX: University of Texas Press Sarton, G 1 931 : Introduction to the History of Science,... Tahasof al-Filaso a and three other books, including the Ihya, without providing any reference In fact, Robert Hammond (1947) has demonstrated the extent of the borrowing and assimilation of ideas of Muslim thinkers by placing some of the arguments of St Thomas Aquinas opposite those of Farabi and showing that they are virtually the same (see Mirakhor, p 33 4) Authors such as Brifault, Crombie, Harris (1959), . SCHOLARS 43 speakers, I find the use of Arab or Arab-Islamic inappropriate. Writing in Arabic, the language of theology, the Prophet and the Caliphs until the Ottoman days, and the medieval international. century, the Abbasid Caliph Maamoun ordered Syrian Christians at Baghdad to translate the works of the Greeks into Arabic. These translations gave rise to a great deal of philosophic activity and. translated into the Arabic language. In spite of the significance of the 1964 path-breaking article by Spengler, the real challenge to the Schumpeterian Great Gap thesis came about as a result of