A ‘Gap-Filling’ Book on Islamic Economic Thought

This book is a collection of previously-published papers on the origins of economic thought discovered in the writings of some prominent Islamic scholars belonging to the five centuries prior to the pre-modern era. This period was labelled by the late Joseph Schumpeter in the 1950s as representing the "great gap" in literary history, in particular the history of economic thought. Since then, this mishap, already well embedded in the relevant literature, was further strengthened and perpetuated. However, during this period the Islamic civilisation was about the most fertile grounds for intellectual developments in various disciplines, including economics. The present single-volume collection of papers attempts to fill that blind-spot in the history of economic thought.

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Table of contents

1. Setting the stage

2. Challenging the 'Great Gap' thesis

3. Extracts from the book

     3.1. Foreword by Professor S. Todd Lowry

     3.2. Introduction by Professor S.M. Ghazanfar

4. Table of Contents

5. References and further reading on economic thought in Islam: past and present

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Figure 1: Front cover of Medieval Islamic Economic Thought: Filling the 'Great Gap' in European Economics, edited by S.M. Ghazanfar (Routledge and Curzon, 2003).

Review of Medieval Islamic Economic Thought: Filling the 'Great Gap' in European Economics, edited by S.M. Ghazanfar; Foreword by S. Todd Lowry. Book Series: "Islamic Studies Series". London/New York: Routledge/Curzon, 2003. xv + 284 pp. (hardback), ISBN: 0-415-29778-8. Paperback 2007. ISBN-10: 0415444519, ISBN-13: 978-0415444514, 22.9 x 15.5 x 2.3 cm.

1. Setting the stage

The resurgence of various studies in recent decades on the history of socio-economic thought, focusing on the writings of various medieval Islamic scholars (e.g., Al-Ghazali, Ibn Taimiyah, Ibn Qayyim, and others), is a noteworthy progress in social sciences. This literature challenges the "great gap" thesis propounded by the late Joseph Schumpeter. This thesis argued that the centuries between the Greeks and the medieval Latin-scholastics were "blank," during which nothing of significance to economics was written anywhere. On the contrary, what emerged in recent scholarship is a totally different image. During this period several Islamic scholars wrote extensively on economics topics. Their writings, as those of their Latin-European successors, were teleological and holistic, with salvation as the ultimate purpose, but they include nevertheless significant positive content, and their discussion on numerous economic topics is remarkably similar to that found in contemporary literature. However, the mainstream literature completely omits their contributions; and, despite Schumpter's insistence on "filiation and continuity of ideas," his "gap" is thoroughly entrenched in the profession.

The book Medieval Islamic Economic Thought: Filling the 'Great Gap' in European Economics, edited by S.M. Ghazanfar, explores the field and seeks to contribute to a dialogue of mutual understanding, appreciation, and accommodation. Further, it attempts to fill the "great gap" in literary history. While only a few early Muslim scholars are included and the period covered is chiefly the Schumpeterian "blank centuries," obviously there were others during the same period and others beyond that period (e.g., Ibn Khaldun, 1342-1405) who wrote on economic issues; some wrote even separate treatise on economic matters. Beginning with the introductory essay that ignited the challenge, the book includes fifteen papers covering the works of several Muslim scholars. Themes discussed in their writings include, the functioning of the market mechanism in Islam before Adam Smith, economics of public finance in early Islamic writings, linkages and parallels between the economics of al-Ghazali and St. Thomas Aquinas, social thought of some early Muslim scholars and their influence on Latin-Europe, etc.

2. Challenging the 'Great Gap' thesis

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Figure 2: Manuscript of al-Ghazali's al-Tabr al-Masbuk fi Nasihat al-Muluk wa al-Wuzara wa al-Wulat at the Ameican University in Beirut (Source).

The book under review challenges the conventional wisdom deeply entrenched in contemporary social sciences as to literary history and the origins of socio-economic thought. Concepts such as "rationality" and "progress" have been made exclusive to western contributions to human civilisation. As such, Europe and the West are assigned the unique position (quite erroneously, to be sure) of having evolved literary history in almost all its dimensions, leading to Enlightenment and Renaissance, and dynamic forces that resulted in 17th-century Scientific Revolution. At the same time, the non-European world is viewed as static, irrational, backwards, and basically "history-less".

This paradigm disregards the rest of the world when it comes to considering the progression of the ideas critical to the evolution of all human societies. Basically, it has been taken so much for granted that only "The West" has had any impact on "history" and "rational thought" and "knowledge" have been viewed as almost the exclusive domain of the Western mind.

In this context, Joseph Schumpeter, the Austro-American economist propounded the "great gap" thesis, arguing that between the collapse of the Greco-Roman civilisation and the dawn of the Enlightenment (the period generally identified as the European "Dark Ages"), no significant socio-economic thought or literary progression ever took place. He argued that "economic analysis begins with the Greeks," not to be re-established until the Latin-Scholastics emerged with St. Thomas Aquinas (1225-1274)—the intervening centuries were simply "blank." Such a thesis ignores any contribution of the rest of the world to the history of economic thought and overlooks the numerous writings left by scholars from the early Islamic civilization in particular, but also from the Byzantine, Chinese, and Indian traditions.

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Figure 3: Map of the Silk road and the Arab trade sea route (Source).

Since the world we live in now is pretty much defined by the economic successes of Europe and the West in the last two centuries (post Industrial Revolution), then it was never seen as necessary or possible to dispute the Schumpeterian thesis, like other Eurocentric ideas in the realm of culture or religion has been. It is in this context that Professor Ghazanfar's book is so original. It is an attempt to show that the aforementioned paradigm is patently absurd. Thus, the main objective of the book is to demonstrate, with well-documented evidence, that within the world of North Africa and West Asia, not only was economic activity (albeit in its non-European, non-Industrial form) alive and well, but so was economic thought in its various dimensions. By exploring and documenting the works of scholars who influenced the course of economic events and thought in this region and even directly influenced numerous medieval European minds (particularly the ecclesiastical and secular thinkers such as Aquinas or Bacon), Ghazanfar attempts to bring in ample examples of economic forces (from those designed to regulate the market to the relationship between private-sector economic activities and the role of the public sector) in order to show that the "great gap" was not present in the world to the south and east of the Mediterranean. In this, he is remarkably successful and is further assisted by auxiliary and complementary articles describing the situation in the Islamic lands beyond the Mediterranean environ. Some debates and discussions are also included, broadening the conversation to include more than a few issues particular to the world of medieval Islam. However, the fact that the book is an edited volume of several independently-written articles, each requiring its own introduction and narrative, the book tends to become a bit repetitive towards the end, although these parts can be easily escaped when they are absorbed properly from the earlier articles.

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Figure 4: Islamic coins of the Abbadis period (Caliph Harun al-Rashid, r. 170-193 H/786-809 CE). Dirhams, script on each side "Madinat-al-Salaam mint", dated 190 H (Source).

While the focus of the book, Medieval Islamic Economic Thought, is primarily on economic thought originating in the writings of several medieval Muslim scholars, it also documents the multi-dimensional influences from the early Islamic civilization which gave rise to an unprecedented intellectual revival in Latin-Europe. Economic ideas of a few early Islamic scholars are documented and it is argued that these ideas are remarkably similar to those found in contemporary textbooks, though not as elegantly presented. For example, Abu Hamid al-Ghazali discussed the notions of specialization and division of labour in the early 11th century, something that is usually attributed to Adam Smith's Wealth of Nations (1776).

Further, one finds discussion of incentives-based free-enterprise, voluntary-exchange economy, demand and supply forces and their intensities, production efficiency, stages of production, hierarchy of consumption needs, environmental concerns, poverty and income distribution, social welfare optimization, role of money (including currency debasement, counterfeiting), regional trade, public finances (including various types of taxes and their incentive-equity effects), elements of cost-benefits analysis, role of the state, regulation of markets, role of a market regulator (the muhtasib), etc. Indeed, the essential roots of modern capitalism lie in the early Islamic world.

3. Extracts from the book

3.1. Foreword by Professor S. Todd Lowry

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Figure 5: Front cover of The Bazaar: Markets and Merchants of the Islamic World by Walter M. Weiss, Kurt-Michael Westermann (Thames & Hudson, 1998).

"The Anglo-American intellectual tradition focuses on the north European Atlantic-oriented societies during their cultural development over the last few centuries. This is particularly true of the history of economic thought. The consolidation of nation states and the growth of international commerce in England, France, the Low Countries, and the Hanseatic cities during the 16th and 17th centuries provided the foundations for the agricultural and industrial revolutions of the 18th and early 19th centuries. It is not surprising, therefore, that the classic paradigm in economic thought, set out in J.A. Schumpeter's erudite History of Economic Analysis in 1954, concentrated on the thought of this period with an emphasis on the "Great Gap" between the philosophical contributions of ancient Greece and their rediscovery in the Middle Ages. The interval between the intellectual culture of antiquity and its north European "rebirth" or Renaissance has been labelled the "Dark Ages" from a north European idiosyncratic perspective. Professor S.M. Ghazanfar has formally challenged this mindset, the "Great Gap" thesis that was emphasized by Schumpeter.

"The historical facts are undeniable, namely that the culture of antiquity was sustained and developed in the Islamic world during the medieval period; and the intellectual darkness in northern Europe from the 7th to the 11th century AD was a strictly local phenomenon. The torchbearers of ancient learning during the medieval period were the Muslims, and it was from them that the Renaissance was sparked and the Enlightenment kindled. This has been amply demonstrated in the history of science and mathematics in recent years. For example, in the early 12th century, the Englishman Adelard of Bath travelled to Muslim Spain and Syria, collecting and translating Arabic manuscripts on mathematics. He is credited with bringing Euclid's Elements into the medieval academic world. What has been generally ignored, however, is the character and sophistication of Arabic writings on economic subjects.

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Figure 6: The Egyptian Bazaar in Istanbul (2007) (Source).

"The Muslim Scholastics oriented much of their work in terms of theological discourse, as did the Christian schoolmen. The number of these Christian writers that were able to read Arabic is little noted and the parallels between Muslim and Christian writings have yet to be definitively drawn. We can observe, however, for illustrative purposes, that the Scholastic doctrine of Lucrum Cessans or A Value Conceded, used by Christian theologians to justify the charging of a price to cover lost income resulting from the lending of money (opportunity cost), was a Muslim doctrine dating from early medieval times, according to Maxime Rodinson's Islam and Capitalism (1978). The influence of Aristotelianism as characterized by Louis Baeck in his The Mediterranean Tradition in Economic Thought (1994) was primarily moral. The Muslim Scholastics, preceding the Christian schoolmen, also couched their writings in moral or religious terms. They were, however, primarily dealing with practical issues of the day in the idiom of their culture. Yassine Essid, in his A Critique of the Origins of Islamic Economic Thought (1995), has described the administrative orientation of the institution of the muhtasib, or ombudsman, or market manager and judge. The manuals that provided guidance and instruction for his conduct give us a clear picture of the economy of the Muslim city. This official was in charge of weights and measures as well as standards of fairness and quality that are preconditions for the functioning of markets. Regulations varied with the need to protect the public and the economic health of the city from forces that would limit the fair balance of trade or take advantage of shortages of necessary consumer goods. This tradition was carried into Muslim Spain with the institution of El Señor del Suq, or master of the market. The Arabic word for market, suq, is preserved in modern Spanish as zoco or zocolo meaning central market or plaza.

"It was an Islamic principle not to set prices for the market, but, by the same token, there was no equivalent to the 18th-century belief in natural order emerging from the market. The market regulators could set maximum and minimum prices for goods and had elaborate rules illustrating the need to protect a zone of fair bargaining from a very sophisticated capacity for mercantile fraud. Requiring similar crafts and traders to be aggregated in separate sections of the market promoted competition and comparative shopping. Close supervision of weights and measures and quality also supported the market function. Once when a Tunisian friend came into my office, I was apprised of an old Arabic epithet when he commented, "This place looks like a suq!"--a jumbled mess. It is in this context that we must approach Professor Ghazanfar's interest in the economic writings of the Muslim theologians and the parallels with their Christian cohorts. Not only were the Muslim commercial towns of Spain and north Africa more sophisticated and better managed than the nascent towns of 11th- and 12th-century Europe, excepting Italy, but the European Scholastics and mathematicians looked to the Muslim world for their intellectual progress, as did the merchants. The Greek classics, particularly Aristotle's work, were accessible through translations from the Arabic. The strength of the commercial culture of the Mediterranean during the Middle Ages has been somewhat ignored and brushed aside by the idiosyncratic nationalism of the Atlantic states. We have forgotten the trade languages, Lingua Franca in the eastern Mediterranean and Saber in the western Mediterranean, and the academic contacts between Cordoba and Paris. When, in the 13th century, the English sought to protect their small farmers from cattle theft and untrustworthy continental cattle buyers, they established special market towns with specific market days. The market rules prohibited forestalling, engrossing and regrating. Forestalling was buying from a farmer en route to the market with cajoling stories of collapsed prices, etc. It also meant that sales had to take place in the open market to be legal. In this way stolen cattle could be identified. It is hardly an accident that these three restrictions existed in the Muslim market rules with similar definitions (Essid, 155-7). As the "less developed" countries--France, the Netherlands and England--took up an active commercial life, it makes sense for us to look at their intellectual and practical evolution as an extension of the Mediterranean experience.

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Figure 7: Spices trade in the market in Fez, Morocco.

"The eminent analyst of medieval Scholasticism, Odd Langholm, in his recent book The Legacy of Scholasticism in Economic Thought (1998), brings out the institutional practicalities of Scholastic policy and theory. This same perspective on the relation between Muslim and Christian Scholasticism is in order and is a badly needed step toward a proper understanding of the influence of the superior Muslim scientific and philosophical erudition of medieval times. Not only can it be documented that many scientists and theologians in the medieval period read Arabic, it is strange that St Thomas Aquinas' embrace of Aristotelianism has seldom been correlated with a familiarity with Muslim academic erudition, since Aristotle's works were being drawn from Muslim intermediaries. Aquinas was raised in Naples, in the shadow of the then cultural sophistication of the Court of Frederick II in Sicily. Professor Ghazanfar has the study of Aquinas' Arabic sources.

"Furthermore, it is well known that the work of Averroes (Ibn Rushd) and Avicenna (Ibn Sina) were dominant influences in the School of Paris. It is, therefore, high time for extensive study of the Muslim literature of the time as the basis for a broader perspective on our theoretical heritage and the history of our economic customs and practices. It is seldom noted that our word cheque for a financial instrument comes from an Arabic term, and that our word magazine for storage room or literary collection comes from the Arabic word for warehouse".

3.2. Introduction by Professor S.M. Ghazanfar

"While the 9/11 apocalyptic nightmare and subsequent events have generated an environment in which academic discussions of the "civilizational clash" vis-à-vis the West and the Islamic world have surfaced to the common consciousness, this very phenomenon also suggests the intense need for a dialogue across cultures and nations. That indeed was the spirit behind the 1998 United Nations resolution which declared 2001 as the "Year of Civilizational Dialogue". While the present volume focuses primarily on economic thought in the writings of several medieval Islamic scholars, it also documents the multi-dimensional linkages and influences, extending over several medieval centuries, between the then vibrant Islamic civilization and the evolving Latin-European culture. In that sense, this book may make some modest contribution toward cultivating the spirit of dialogue and appreciation of inexorable historic connections between the two worlds whose origins lie in the same crucible.

"The book is a single-volume collection of papers, published during recent years in various national and international journals, on the subject of the origins of economic thought among medieval Islamic Scholastics; this is not a book about Islamic economics, however. A key stimulus for these papers emanates from a blind spot that has long prevailed in the relevant literature and which was further strengthened and perpetuated by the late Joseph A. Schumpeter. In his classic History of Economic Analysis (1954), Schumpeter propounded the "Great Gap" thesis, namely that the several centuries between the Greeks and the Latin Scholast