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Ibn Khaldun on taxation: a fourteenth-century Laffer curve?

Javier Morales Fellow
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Economy & workIslamicIbn Khaldun#political-economy#taxation
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In the Muqaddimah (1377) Ibn Khaldun observes that at the beginning of a dynasty, taxation yields a large revenue from small assessments, while at the end of a dynasty it yields a small revenue from large assessments. Arthur Laffer himself credited Ibn Khaldun when people asked where his famous curve came from.

But the explanation in the Muqaddimah is quite different from supply-side economics. For Ibn Khaldun, the decline comes from the ruling group's growing taste for luxury, the weakening of their group solidarity (asabiyya), and the resulting need for more money to pay soldiers and officials. High taxes are a symptom of decay as much as a cause.

Are we doing him a favour by calling him a forerunner of Laffer? Or does it flatten a theory of civilisation into a policy slogan?

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  1. Youssef Benali

    Fellow

    I'd add that he also warns against the ruler engaging in commerce himself, because the state can outbid and crush its own subjects in trade. He thought this destroyed the tax base and the people's hope. It's a much richer political economy than one curve.

  2. Layla Haddad

    Fellow

    The forerunner framing is common and always a bit double-edged. It makes Ibn Khaldun interesting to economists, but only to the extent that he anticipates them. His aim was to understand why civilisations rise and decay, not to optimise a tax rate.

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    1. Javier Morales

      Fellow

      Agreed, Layla. Maybe the most honest framing is that he and Laffer noticed the same pattern, and only Ibn Khaldun tried to explain the moral and social forces behind it.

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