Ibn Al-Khaldun Approaches Buchanan’s Bridge

For the student of the history of economic thought, it is interesting to think about whether the pre-Classical thinkers would grade well on an exam given by Buchanan on what economists should do. Specifically, how would Ibn Al-Khaldun fare on the exam?

James Buchanan asserts what economists ought to do and ought not to do. Rejecting the definition of the economic problem given by Lord Robbins (1964, p. 214), Buchanan favors an approach to economics that is closer to its Smithian roots, dealing with “[m]an’s behavior in the market relationship, reflecting the propensity to truck and to barter, and the manifold variations in structure that this relationship can take” (1964, p. 214). The economic problem is not one of resource allocation and optimization, but rather one that centers on the study on the choosing agent, the individual, and the interactions among individuals (1964, p. 214). 

Buchanan describes this study as catallactics (1964, p. 214), a term taken from Richard Whately. Essential to catallactics is the notion of exchange and the individual as the ultimate chooser. While some scholars adhere to the stricter definition of catallactics given by Ludwig von Mises (see, for example, Human Action) as being the study of market exchanges, the broader definition of exchange as being both market-based and non-market-based is more appropriate in the view of Buchanan (see, for example, The Limits of Liberty). Buchanan’s catallactics is not the same as the hardcore axiomatics of Mises and the Austrians.

From the basic principles of catallactics, Buchanan asserts that many economists have failed in their mission in being economists, and have become applied mathematicians (1964, p. 216). Buchanan writes, “[t]he definition of our subject makes it all too easy to slip across the bridge between personal or individual units of decision and ‘social’ aggregates” (1964, p. 214). The applied mathematicians in economists’ clothing have incorrectly crossed the bridge by imputing preferences on the part of the society in general, and consequently a means-end framework (1964, p. 214). 

Taking all this as context. Al-Khaldun sounds like a Public Choice economist who traveled back several centuries in time, writing, “[p]eople as a rule covet the possessions of other people. Without the restraining influence of the laws, nobody’s property would be safe” (2015 [1377], p. 502). Clearly, Al-Khaldun has some idea of social sciences, and would potentially even agree with the Knightian view of man as a rule maker and a rule breaker. So far, Al-Khaldun looks promising on the exam.

The underlying recognition of incentives is optimistic for the prospects of Al-Khaldun on the exam. Al-Khaldun has, one could say anachronistically, a piecemeal understanding of the Laffer Curve (2015 [1377], p. 352). Moreover, Al-Khaldun shows that he has some understanding of the division of labor and the individual incentives that lead to the development thereof (2015 [1377], p. 455). Al-Khaldun, for example, writes, “[i]t should be known that favorable conditions and much prosperity are the results of its large size” (2015 [1377], p. 457). Therefore, Al-Khaldun had some notion of the fact that individuals face incentives and that the structure imposed upon them alters those incentives, and therefore their individual choices, a fundamental assumption in catallactics.

Most importantly, Al-Khaldun highlights the importance of human action, writing, “[e]very man tries to get things; in this all men are alike” (2015 [1377], p. 479). Furthermore, Al-Khaldun acknowledges that choice is made in obtaining ends, describing that sustenance and profit can be earned by various means, such as theft, hunting, labor, and barter (2015 [1377], p. 482). In other words, Al-Khaldun recognizes that there is a choice made on the part of the individual in employing means.

To earn a passing grade on the exam, Al-Khaldun must also allow for choice on ends, after all, this is the bridge that too many economists have crossed. It is in this realm that Al-Khaldun has some issues on his exam, and regrets procrastinating his studies. Al-Khaldun writes, “His rule over them is sometimes based upon a divinely revealed religious law. They are obliged to submit to it in view of their belief in reward and punishment in the other word… by the person who brought them (their religious law)” (2015 [1377], p. 388). Al-Khaldun further refers to this as “useful for this world and for the other world” (2015 [1377], p. 388). Superficially, it appears that Al-Khaldun cannot salvage a good grade on the exam, as he has crossed the bridge and imputed the ends for which people aspire towards. However, while Al-Khaldun clearly has an issue here, the important fact remains that God has greater knowledge than man. Al-Khaldun makes this clear by ending many passages with references to the Creator knowing best (2015 [1377], see, for example, p. 369). Thus, there is necessarily uncertainty on the part of man, leaving yet still substantial room for choosing of ends.

While Al-Khaldun does not perfect the exam, he certainly did not fail. Al-Khaldun recognizes the existence of the social sciences, individual incentives, and human action. Despite having some problems with imputing preferences in the name of religion, the economist is not able to have the same knowledge as God, so the problem can largely be averted. Al-Khaldun approaches Buchanan’s bridge. The bridge remains uncrossed.