The Schumpeterian Gap and Muslim Economic Thought

Ameer Ali* and Herb Thompson**

Abstract

Contemporary analytical economists normally date their origins from the late eighteenth century. We argue herein that a pseudo-scientificity (which omits normative information), combined with an overriding ethnocentrism, tends to lead the disciplinary agents of economics to ignore much economic thought outside the American-British-Continental axis.
The argument is developed beginning with Joseph A. Schumpeter's classic, The History of Economic Analysis, which set what appears to have remained a trend in history of economic thought and analysis texts, by ignoring Arab/Islamic scholars.
At present, entire economies are organised, more or less, on Islamic principles. Islam is explicitly concerned with material life and provides numerous guidelines for the conduct of economic affairs for millions of people. While it is not the aim of this paper to examine the methodological or epistemological content of these principles, we argue that, at the very least, the history of economic thought should incorporate the work of Arab/Islamic thinkers.

The material foundation of Islam cannot be understood by students of a discipline which continues to promote a positivist, Cartesian, mathematical formalism, at the expense of understanding its contextual origins. The economies in which hundreds of millions of people live, work and produce, are being guided, for better or worse, by the epistemological premises of Islam. Until these premises are comprehended, and then critically evaluated, economists educated in the industrial west continue to marginalise themselves and their students in a manner which is no longer excusable.
 
 

Contemporary analytical economists normally date their origins from the late eighteenth century before which: "economic writing was frequently subservient to particular political or religious doctrines" (Samuelson 1980: 1). Today, neoclassical economics continues to eschew the normative views of what people ought to do, preferring instead to explain what is (Beed and Beed 1996: 102). This pseudo-scientificity combined with an overriding ethnocentrism, we argue, tends to lead the disciplinary agents of economics to ignore much economic thought outside the American-British-Continental axis.

Joseph A. Schumpeter, in his classic, The History of Economic Analysis, set what appears to have remained a trend in history of economic thought and analysis texts, by ignoring Arab/Islamic scholars. Schumpeter did this for one or more of a number of reasons. Three identifiable reasons taken from his work itself include: (1) his interest in what he called "economic analysis" to the exclusion of "economic thought"; (2) the normative composition of Islamic thought; and/or (3) his ignorance of the existing literature. With reference to Schumpeter's reasoning, we now have texts in the sub-discipline which are entitled "economic thought" rather than "analysis"; most authors of these texts are aware of tenuous nexus between the notions of positive and normative; and most relevant Arab and Islamic texts are translated into English. Yet Hausman, negating, in spirit, his comments cited at the beginning of this piece, shows the continuation of this anachronistic trend. While commenting on Schumpeter's work, he (1992: 188) says: "Consider the first extended discussion of returns (to factors) in Western culture, which began in the wake of the revival of commerce in Europe in the twelfth century, when such monetary returns grew larger and more common. Scholars of the church were called upon to judge the moral legitimacy of such returns, for interest on money loans had been condemned as morally impermissible usury." As it can be shown, this was not the first "extended discussion" at all. The discussion had taken place much earlier amongst Arab and Islamic scholars. "The Arabs in particular were a light to the Christian West and yet this debt has rarely been fully acknowledged" (Armstrong 1992: 225).

At present, entire economies are organised, more or less, on Islamic principles. Islam is explicitly concerned with worldly life and provides numerous guidelines for the conduct of economic affairs (Behdad 1992: 221). It is not the aim of this paper to examine the methodological or epistemological content of these principles. The intent is to argue that, at the very least, the history of economic thought should incorporate the work of Arab/Islamic thinkers. Economists presently teach economic thought in a most ethnocentric fashion and continue to ignore the ramifications of either Islamic theoretical, or practical, economic principles on a world scale. How can any inquiring mind passively accept the proposition that Islam, which built and maintained the largest empire over the longest period in history, and whose scholars made seminal contributions to the development of several branches of intellectual and scientific disciplines, such as mathematics, physics, chemistry, medicine, astronomy, geography, philosophy and language and literature, left a 'blank' in the field of economics? It is true that economics did not develop as an independent discipline in the Islamic world, but that was so even in Greek civilisation and in medieval Christianity. For that matter even Adam Smith was not an economist in the strict sense of that term. Within the overarching religious paradigm, Arab/Islamic scholars did, and continue to, provide both analytical and descriptive insights from which we can all learn. Schumpeter was, but more so we are, wrong in excluding these scholars from both our colleagues' and students' attention. Abu Yusuf (731-798) who wrote on taxation (Kitab al-Kharaj), Yahya bin-Adam ( -818) the author of a book on the same subject and under the same title, AI-Farabi (c.870-850), who authored more than one hundred books, Nasiruddin Tusi (1201-1274) who produced several treatises on moral philosophy, AI Ghazzali (1058-1111) the venerated Islamic theologian, Ibn Taimiyah (1263-1328) who wrote on the function of the market in his Al-Hisbahfil-Islam and on Public and Private Laws in Islam, and Ibn Khaldun (1332-1406) the author of The Muqaddimah, are some among the many Islamic scholars who have contributed to the analysis of economic conditions in Islamic societies and to 'theological ratiocination' on economic issues. The omission of the works of these and other Muslim authors is the real gap in the history of economic thought. This promotion of ignorance, by selection, is no longer acceptable for economics and its practitioners. It is only when we are fully informed that we may begin the productive effort of examination, critique and debate.

We proceed in the following section to specify the ethnocentric elements within the sub-discipline of the History of Economic Thought. This is followed by comparison of the related developments found in the "scholastic school" and the early Islamic scholars in the next three sections. Finally, before we conclude, special attention is directed at Ibn Khaldun who, as Louis Althusser asserts (Althusser 1993), provided the philosophical core of Marxism 500 years before Karl Marx, an economist who is normally provided with a place of prominence in most economic thought textual discourses.
 

THE GAP
 

The ethnocentricity of economics is epitomised in the comment by Schumpeter: "So far as our subject is concerned we may safely leap over 500 years to the epoch of St Thomas Aquinas (1225-74) whose Summa Theologica is in the history of thought what the southwestern spire of the Cathedral of Chartres is in the history of architecture" (Schumpeter 1954: 74). Schumpeter's analysis follows in the tradition of earlier work, such as that by William Ashly whose two volume publication of An Introduction to English Economic History and Theory (1888) also ignored the Islamic contribution to political economy (Hosseini, 1995). Schumpeter's leap however, omits the golden age of Arab and Islamic development from 800 to 1200 AD which unfortunately falls within the infamous era of European Dark Ages. Little acknowledgment is made of the fact that European scholastics notably Thomas Aquinas, the Italian-born citizen of France, and Nicole Oresme, the Bishop of Lisieux, derived much of their intellectual armour from Arabs such as Abu Hamid al-Ghazali, al-Farabi, Ibn Sina (Avicenna) or Ibn Rushd (Averroes). The consolidation of the economic views in Europe in the thirteenth century was partly the result of the Arab crusades which brought to the cities of Italy and some other European countries "the knowledge of organising industrial and commercial activities" and partly the influence of Greek thought which was introduced into Europe through translations of the Arabic works (Pribam 1986: 4). Hosseini points out that had Schumpeter been able to "read some Persian and Arab authors of the Islamic Golden Age, he could not have written: "(A)s regards the theory of the 18th century", as if there had been no antecedent theory (1988: 56). Briffault (1930: 133-153) has identified, and Henry (1990: 62) acknowledged the fact that it was Arabic scholars, who as a social group, maintained a coherent scientific attitude during the highly unscientific Middle Ages.

In Chapter 1 entitled Graeco-Roman Economics Schumpeter takes up Plato to Aristotle (Schumpeter 1954: 53-65), and moves on to a quick sketch of the Roman eclectics, Cicero and Seneca. "The reason we have for referring to this literature is its genuinely scientific character" in that they provided social patterns that recognise "private property, and 'capitalist' commerce. ... Mainly we owe to them definitions-for instance of price, money, of purchase and sale, of the various kinds of loans, and so on-which provided starting points for later analysis" (Schumpeter 1954: 67). Six centuries of Christian thought are cursorily covered which brings the first chapter to a close; wherein Chapter 2 takes a leap over "The Great Gap" of 500 "blank" years to Thomas Aquinas. Schumpeter clarifies the scope of his effort, as to why he ignores much of the literature both before and after the Greeks, by distinguishing between economic thought and economic analysis (Schumpeter 1954: 52). While pre-Greek civilisations faced economic problems, as identified in the Code of Hammurabi or the sacred books of Israel, there is no trace of analytic effort, as there is in the work of Aristotle, for example. The Greeks mixed their economic reasoning with their general philosophy of state and society and rarely dealt with economics for its own sake. The scientific splinters that are accessible may be gleaned from Plato (427-347 BC) and Aristotle (384-322 BC). During the twelfth century more complete knowledge of Aristotle's writings filtered slowly into the intellectual world of western Christianity, partly through Semite mediation. Schumpeter cursorily mentions the work of Ibn Sina (980-1037 AD), the Arab physician-philosopher, Ibn Rushd (1126-98 AD), the lawyer-philosopher of Cordoba, and Moses Maimoides (1135-1204 AD), the Hebrew theologian-philosopher (Schumpeter 1954: 53-54, 87, 87 ftn. 7).

Although Schumpeter was concerned with analysis, and not economic thought, some effort might have been given to identifying the Islamic scholars in a manner similar to that given to the early Christian thinkers in the realm of economics. One of the greatest thinkers in medieval history, and "medieval Islam's greatest economist" as Spengler (Spengler 1963) argues, Abu Said Ibn Khaldun is referred to as simply by Schumpeter as having influenced Giambattista Vico (Schumpeter 1954: 136, ftn.22). At this point Schumpeter explains that he is only familiar with "de Slanes French translation of the first introductory part of (Khaldun's) history". This suggests that Schumpeter may be ignoring Arab thinkers, at least Khaldun, mainly because he did not look for, or he could not find, the necessary information (in English?). Given the available information at hand, he then goes on to say somewhat fatuously: "But potentially, at least, human geography complements the material of historical sociology-as Ibn Khaldun had realised ..." This statement is included in the section on "Prehistoric-Ethnological Sociology" (Schumpeter 1954: 788). Some support for his ignorance is due to the fact that the task confronting scholars in this field is enormous, where the language barrier alone is not easily surmounted by Western scholars. A decade after Schumpeter wrote, it could be said by a noted scholar in medieval Islam that, "Many of the relevant texts remain unpublished, and many of the problems to be solved have scarcely been formulated much less seriously tackled. Thus, for example, the social and economic history of medieval Islam has only just begun to be investigated" (Saunders 1965: vii).
 

THE SCHOLASTIC TRADITION
 

The term scholastic refers to the identifiable philosophical approach followed by Europe's medieval clerics such as Thomas Aquinas (1225-1274 AD), who were largely concerned with the possibility of reconciling reason with faith (Ghazanfar and Islahi 1990: 381). Their curiosity about issues such as rent and interest was driven largely by the need to make economic behaviour moral; and, according to Hausman (1992: 189), they made little attempt at systematic theorising. The context (similar to that of the Islamic zakat) was one in which the rich were held to have an obligation to aid the poor to overcome what we would today call market externalities. The Scholastics' had not yet begun to pass judgement on capitalism, as a system, or to ask whether business profits are exploitative. Instead, they offered principles for judging the practices of individuals. According to Pribram, "the economic views which prevailed in the early Middle Ages belonged to the realm of theological ratiocination rather than to economic reasoning in its own right" (Pribram 1986: 3). However, he maintains that "The history of economics starts with the Thomistic economic doctrine, a normative discipline ruled by the principles of the Scholastic philosophy" (Pribram 1986: xlix). Pribram who demonstrates his awareness of the Arab influence on Thomas Aquinas, also fails, rather mysteriously, to correct the Schumpetarian error.

Amongst the scholastics the thinking on economic problems stemmed from the ideas of Aristotle: "Access to Aristotle's thought immensely facilitated the gigantic task before them not only in metaphysics where they had to break new paths, but also in the physical and social sciences, where they had to start from little or nothing" (Schumpeter 1954: 88). As well, it has been established that Greek logic "became the heart and basis of Islamic epistemology from the ninth century onwards. It provided the only systematic scientific framework available to Muslim scholars for intellectual expression from that time" (Netton 1992: 37). This Greek logic and the thoughts of Aristotle came to the Schoolmen via the Latin translation of the commentaries on Aristotle's Ethics by the Cordoban philosopher Ibn-Rushd. While Thomas Aquinas was well acquainted with Muslim scholars such as Ibn Rushd and Ibn Sina, there exists no evidence that the Muslim thinkers of the medieval period were familiar with the contributions of the West, outside those of the Greeks (Islahi 1988: 39-40).
 

ECONOMICS ISLAMICUS
 

Unlike the Western Christian intellectual tradition which underwent a gradual process of secularisation beginning with the Renaissance and Reformation movements of the fifteenth and sixteenth centuries and continuing later through the impacts of the French and Industrial revolutions in the eighteenth and nineteenth centuries, the intellectual tradition of the Islamic world remained rigidly tied to its religious corpus. This rigidity is showing some signs of relaxation only now but the signs are too few and far between. Thus discussion on any of the intellectual disciplines has to start with a basic reference to the Quran and the Hadiths, the holiest of the Muslim religious sources. In these one finds a plenitude of commandments and exegesis in relation to human economic behaviour. In the areas of production, consumption and exchange the Quranic injunctions have been and are being interpreted and reinterpreted with the help of the Hadiths to arrive at a normative code of economic behaviour. In essence, the chief objective of this exercise is to provide a practical guide to the followers of Islam so that their material life does not conflict with the ultimate objective of success in the Hereafter. In this exercise the Muslim thinkers were highly influenced by the Oikonomikos of Bryson, a neo-Platonist of uncertain date whose text was translated into Arabic and elaborated by the Muslim scholars. They all followed the Hellenic division of practical philosophy into ethics (akhlaq), household management (oikonomia; tadbir al-manzil), and political science (ilm al-madani) (Peters 1973). One can therefore agree with Spengler that the "Muslim writers classed 'economics' as a practical science" (Spengler 1963). It is this practical approach which led to the rise of a unique kind of literature in Islam known as the "Mirror for the Princess" which advised the ruler on what was permissible and what was not in the realm of economics and politics (Peters 1973 and Spengler 1963).

The most important economic issues which occupied the minds of the medieval Muslim scholars were taxation, property and inheritance, usury and exchange, and charity (zakat) and welfare. In most instances these issues were dealt with within the specialised field of jurisprudence (fiqh) which led to the proliferation of a unique literature, the hisba handbooks which detailed what was permissible and what was prohibited for a Muslim in material life. As Essid argues, "The hisba treatises are not only important documents related to the economic and social life in Muslim countries but are also sources of information about the history of economic thought" (Essid 1987).

The power and primacy of jurisprudence in the medieval Islamic world thus constrained the independent growth of several disciplines including economics. In an interesting study of the history and development of risk analysis, Bernstein believes that the reason why the Arabs, given their advanced mathematical ideas did not proceed to probability theory and risk management was their fatalistic religious beliefs (Bernstein 1996: 35).Although Bernstein's knowledge about Islam is questionable, his argument that Islam precluded the independent development of any secular discipline in the Muslim world cannot be disputed. That was also the case however in the case of Christianity until after the Renaissance and Reformation movements. just as Galileo was executed and Giordano Bruno was bodily burnt by the Christian Inquisition because they questioned the church doctrine, just so in Islam the works of Ibn Rushd and Ibn Sina were condensed and incinerated by the Muslim orthodoxy because they upheld Aristotelian rationalism (Tibi 1991). The church advocated the theory of just price and proscribed usury until Christianity surrendered to the forces of capitalism (Tawney 1990). The Muslim scholars did the same and showed far greater resistance against the onslaught of capitalism. Both, the Schoolmen as well as the Muslim scholars also explored, with some success, the possibilities of circumventing the scriptural injunctions in order to initiate compromise with the rising tide of market forces. Aquinas' permissibility of taking interest on the basis of damnum emergens, lucrum cessans, poena conventionalis and periculum sortis (Gray 1944) were, like the Muslim concession to usury under muamalah, devices to break down the religious prohibitions. Cook's conclusion on Islam that "the outcome of this prohibition has been the development of a carefully contrived range of legal fictions under which usurious transactions can take place, rather than any reduction in the volume of credit" (Schact with Bosworth 1974: 240) is equally applicable to Christianity. The heritage of the two great religions displayed enormous plasticity in application (ibid). The question therefore arises as to why the ideas of Muslim scholars on economic issues which preceded those of the Schoolmen were ignored while the latter are included in an historical analysis of economic thought.

Although one may plead ignorance of Arabic sources for this mishap, it remains a fact that European scholars in several other fields, thanks to the efforts of the orientalists, had shown by the middle of the present century the existence of an Islamic intellectual treasure. In the fields of medicine and mathematics, chemistry and physics, art and architecture, literature and metaphysics and even music and dance the contribution of Islam has been duly acknowledged. Why then did economists like Schumpeter ignore the Islamic contribution in their field? The answer may lie partly in the notion that "economic thought is in substance part of the legacy of the whole of Western civilization" (Spiegel 1991: xxi), and partly in the differentiated development of intellectual disciplines like economics, history, geography and sociology, all of which until the middle of the nineteenth century "had been a single domain of intellectual discourse with rather vague boundaries" (Wallerstein 1991: 94). On the first point, if economics is about the "ordinary business of life" (Marshall), surely then every civilisation must have thought about how to conduct that ordinary business; and the stock of their thoughts until they are sought after and discovered, must lie buried somewhere in the unearthed history of civilisations. It is the task of the historian to look for the missing gaps. On the second point, had economics remained a broader discipline following the grand visionary tradition set by the classical school and free of the narrow rational focus introduced by the neo-classical tradition, modem economists like Schumpeter might have expanded their vistas and looked into other normative paradigms for the development of economic ideas. Thus an Eurocentric view of civilisation and the dominance of positivism in economic thinking had combined to produce a history of economic thought which has totally ignored the contribution of non-European minds to economic analysis.
 

THE MUSLIM TRADITION
 

AI-Farabi (c.870-950), a Neo-Platonist and commentator on Aristotle, and a Turk from Transoxiana was a prolific writer who produced more than one hundred books of varying length on subjects such as linguistics, logic, mathematics, metaphysics, politics, jurisprudence and theology (Bakar 1987; Watt 1976). In five of his books, Kitab ara'ahl al-madini al-fadilah (The Book of Opinions of the Ideal City), Kitab al-siyasat al-madaniyah (The Book on the Government of the City State), Fusus al-madani (Aphorisms of the Statesman), Risalatfi'l-siyasah (Epistle on Politics), and Kitab tahsil al-sa'adah (On Attaining Happiness) al-Farabi's ideas on political economy demonstrates the influence of Plato's Republic and Laws. In modelling the government of the state analogously to the management of a household Farabi discusses how happiness and justice can be achieved through the rational ordering of one's actions. However, in his views, "the rational ordering of one's actions should not be directed toward economic self-sufficiency but rather toward the achievement of ideal government" (Essid 1987: 86). In common with the other Muslim intellectuals of that time al-Farabi also believed that supreme happiness meant earthly happiness in this life and in the life beyond.

Abu Hamid AI-Ghazzali (1058-1110), a Khurasanian by birth, lived shortly before Aquinas and is considered "one of the most powerful personalities and possessed one of the best organised minds that Islam has ever known" (Corbin 1996: 80-1). From a historical perception about Islamic culture and civilisation Ghazzali may be considered as a rescuer of Islamic orthodoxy from the Hellenistic trend set by ibn-Rushd and ibn-Sina. Of all his intellectual output however, the four-volume Ihya ulum al-Din (The Restoration of the Religious Sciences), is the most widely read in the Muslim world. It is in this work that he spells out his views on the objectives and conduct of economic life.

The overriding theme in his work was the concept of maslaha, or social welfare (common good), which connects the individual to society. All acts were defined in terms of utility and disutility (masalih-mafasid) (Ghazanfar and Islahi 1990: 383). The social welfare function divided human need into three major categories: basic (food, clothing and shelter), secondary (the removal of impediments and difficulties in achieving the basic), and tertiary (luxury and adornment). Economic development was a socially obligatory goal for everyone and acquisitiveness was a godly act. He provided detailed discussion on the role of voluntary trading activity and the evolution of markets, based on specialisation and accumulation; and to illuminate the importance of the division of labour he used an example of needle production, analogous to the pin-factory of Adam Smith (Ghazanfar and Islahl 1990: 386-390). The role of the state was to be limited to the provision of infrastructure and police powers.

In general, al-Ghazzalis' was a normative approach to economic behaviour advocating the achievement of a golden mean between materialistic asceticism and absolute hedonism, in order to cultivate the virtues of wisdom, temperance, courage and justice. His scholarship revealed a clear understanding of voluntary, market-oriented exchange that "naturally" evolved among freely acting individuals, motivated by self-interest and mutual necessity-all of which is guided by an inspired code of ethics and moral values. Little wonder that Aquinas was deeply influenced by Muslim philosophers, reflected in his consistent referencing of al-Ghazali himself.

Ibn Taimiya (1263-1328), whose full name is Taqi al-Din Ahmad bin Abd al-Halim, is known in the West more for his Puritan reforms in Islam. He is said to be acknowledged more for having inspired the growth of Wahhabism in the nineteenth century Middle East which eventually gained a permanent foothold in Saudi Arabia (Goldziher 1981: 240-43), than for his economic ideas. Ibn Taimiya was born in Harran in modern Turkey but lived in Damascus, which was central geographically to the rapidly growing trade routes between China and India on long caravan trails to southern Russia and Asia Minor; the connection between Baghdad and the coast of Syria; and the sea route between the Indian Ocean or Red Sea and Alexandria. Alexandria was the most significant commercial centre in that part of the world for European traders who came both by sea and land. It is within this geographical and mercantile climate that the notion of the just price was given birth. Although originally an ethical and legal term "just price" became a central part of economic thinking in the Middle Ages. Although it was a notion present in Islamic jurisprudence since Muhammed, Ibn Taimiyah seems to be the first Islamic scholar to pay it particular attention (Islahi 1988: 80). The resemblance between Ibn Taimiyah's concept of the just price and that of Aquinas is quite remarkable. He also discussed state regulation of prices by the state as well as issues of monopoly and monopsony (Islahi 1988: 39-40). This is true irrespective of Schumpeter's aside "as regards the theory of the mechanism of pricing there is very little to report before the middle of the eighteenth century" (Schumpeter 1954: 305).

Ibn Taimiya had a vision of economic life based on the self-interest of individuals. "Within the limits set by the Shari'ah, men know better what is good for them and they are free to make transactions, enter into contracts and conduct their worldly affairs in a just and fair manner" (Islahi 1988: 15-16). However, self-interested activity did not imply laissez-faire. The role of the state included welfare and economic planning. The state is the custodian of public interest and the chief instrument for ensuring justice through enforcement of the Shari'ah. Islam emphasises the priority of justice over efficiency. This is not to say that efficiency is not a relevant consideration, but only that it is not decisive" (Syed Nawab Haider Naqvi, cited in Kuran 1989: 182).

Of all the so called laws in economics the one which says that bad money drives out good is, according to Galbraith, "one of the major misattributions of history" (Galbraith 1987: 30). The law is named after Sir Thomas Gresham, an Elizabethan merchant, financier, diplomat and one of the founders of the Royal Exchange. According to Galbraith, centuries before Elizabethan times, Nicole Oresme (c. 1320-1382), the Bishop of Lisieux, appears to have observed this trend and if a name were to be given to this so called economic discovery it should be called the Oresme Law. However, Ibn Taimlya who died eight years after Oresme was born had discussed this phenomenon extensively in his writings (Islahi 1988: 143-5). Might we suggest the Taimiya Law?

Nasir al-Din al-Tusi (1201-1274), a Persian who died in Bagdad was in the service of the Mongol ruler Hulagu and is well known for his work Akhlaq-i nasiri (Nasirean Ethics) which was originally written in Persian but later translated into English by Wickens (Wickens, 1964). He is reported to have authored more than one hundred works most of them in Arabic. The primary concern of Tusi in the Nasirean Ethics however, was with the criteria of human behaviour, first at the individual level, then at the economic level and finally at the political level. In keeping with the medieval Islamic attitude he treated none of the levels in isolation or from a pragmatic point of view. His was a holistic approach purported to lead humans towards the achievement of supreme perfection and happiness. In his discussion on the household and government he adapts the theory of Plato's philosopher-king to the Islamic ideal and deals with the nature of humans, the need for co-operation, association and management, the need for a divine institute, a governor, and a monetary currency which "is the preserver of justice, the universal adjuster and the lesser law" (Wickens 1964: 157).

In describing the characteristics and functions of money Tusi sounds more like a monetarist than a philosopher. In virtue of its existence, and by equating a little of its kind with a great amount of other things, one is able to accomplish the labour of transporting provisions from dwellings to more remote dwellings: this, in as much as the transportation of a little of it (being of the value of a quantity of provisions) serves for that of a quantity of provisions, and it is therefore possible to dispense with the inconvenience and trouble of carrying the latter. Likewise, in view of the solidity of its substance, the firmness of its constitution, and the perfection of its composition (which called for permanence), it was possible to conceive of the stability and fixity of acquired gains; for if it were to change or disappear, this would necessarily nullify the trouble taken to gain supplies and to gather acquisitions. Moreover, with its acceptance by the various peoples, its full usefulness was organised for all" (Wickens 1964: 157).

Tusi's writings like those of his Muslim predecessors clearly show the influence of the Aristotelian oikonomia, the management of the household and platonic politics of the philosopher-king and Tusi pays tribute to these philosophers by concluding his book "with a chapter from the utterances of Plato of profit to the generality of men; namely the testament that he gave to his pupil Aristotle" (Wickens 1964: 258). Although Tusi was a contemporary of Aquinas and Roger Bacon he appears to have never heard of them.

Ibn Khaldun (1332-1406) was an exception to all these writers in the sense that he provided a rationalist approach to economic reasoning and developed models of the economy which are considered unparalleled among the writers of medieval times (Soofi 1995: 387). In his magnum opus, The Muqaddimah, described by Toynbee as "the greatest work of its kind that has ever yet been created by any mind in any time or place" (Spengler 1963), he attempted to discover the natural laws that governed the macrodevelopment of societies: "We must study human society and distinguish its essential features from its accidental ones and trace the social laws that are at work within it and use them as criteria as to the value of historical assertions" (Khaldun as cited in Nashat 1945: 380-381).

The foremost finding was that economies developed cyclically, from a limited economy to a more diversified, more productive, and integrated one (Shatzmiller 1994: 399-400). From here however, a cumulative process of underdevelopment begins. The richest cities attract more producers making them richer. However, given the physical limits to the city such as energy and food, as well as the increasing propensity to tax producers by the State, the productive elements of society are driven away.
 

The natural economy satisfies the basic needs, as defined above by al-Ghazali, through farming, fishing and hunting. "The income of the Bedouins is not large, because they live where there is little demand for labor, and labor is the cause of profit. In fact, the threat of famine always hung over Bedouin society (Saunders 1965: 4). Bedouins, therefore, do not accumulate any profit or property. In the desert. (the Bedouins) can satisfy their needs with a minimum of labor, because in their lives they are little used to luxuries and all their requirements" (Khaldun 1958 Vol. 11: 280). Along with these material conditions go moral qualities of simplicity, courage and independence. As the tribes expand through population growth and/or conquering other peoples, a sedentary urban civilisation is constructed and the rudiments of state power are devised. The means of subsistence are transformed, division of labour and specialisation characterise labour, and production is re-directed to luxury goods. With the material shift comes depravity, luxury, idleness, economic decay and markets decline (DeBoer 1970: 205-206; Essid 1987:91).

At the micro level, Khaldun devoted an entire chapter to the various aspects of making a living, including observations about the role and value of labour in contemporary economy and society, discussing the trades and crafts at great length (Khaldun 1958 Vol. II: Chapter V). To Khaldun, as to Marx, homo faber is what distinguished the human species. Only labour provides useful results and through its organisation and specialisation the species becomes more skilled and productive (Boulakia 1971: 1107).

Khaldun's division of the total product of labour into "sustenance" and "capital accumulation" is similar to the Marxian notion of "necessary" and "surplus labour". His argument that "All their efforts and all their labors are (means) for them (to acquire) capital and (to make a) profit. Human labor is necessary for every profit and capital accumulation the capital a person earns and acquires, if resulting from a craft is the value realized from his labour" reflects the Marxian argument although "profits" may not have the same exact meaning that it did for Marx (Issawi 1959: 85; Khaldun 1958 Vol. 2: 109 and 313-314). As well as developing classical conceptions of economics, he also followed the tradition of Xenophon and Aristotle by touching on the " marginal revolution" in identifying "utility" as a source of the value and determinant of the price of a product (Soofi 1995: 392).

Finally, without the techniques or pre-existing concepts available in the eighteenth century, Khaldun could be said to have elaborated the virtue and necessity of the division of labour before Adam Smith; the value of labour before David Ricardo and Karl Marx; a theory of population before Thomas Malthus; fiscal responsibility of the State before J.M. Keynes and cyclical analysis before both Marx and Joseph Schumpeter.
 

CONCLUSION
 

Foucault has identified the inextricable linkage between power and knowledge; with the clear implication that that there is no knowledge that does not presuppose and constitute at the same time power relations (Mumby 1992: 82). The dominance of neoclassical economics occurred with the transfer of world economic supremacy from Europe to the United States. The discipline's prescriptions were consistent with the domestic and global policies of the United States, and given the Cold War, non-believers (such as Marxists or Institutionalists) were marginalised, and indeed, in some extreme cases driven out of academia.

As recognised in the Introduction, (Beed and Beed 1996), normative evaluation appears to be directly contrary to the essential thrust of Western thought since the European Enlightenment when rationality and science were established as the sole legitimate means of producing and appropriating knowledge. "Normative" is often used in discourse to suggest unscientific, illogical or irrelevant thinking. This, of course, is meant to imply the semiotic power of homo economicus or the rational economic human. Rationality and self-proclaimed objectivity are meant to suggest real, paradigmatic knowledge, only itself worthy of being passed on the young.

In fact, homo economicus epitomises the alienated, separated individual acting independently on the world. Whether this fictional character be Robinson Crusoe, the hero of an Ayn Rand novel, or the individual entrepreneur rationally expecting the future, it also suggests an isolated ego acting in opposition to the world around us. The notion of rational, calculating, individuals, maximising their utility implies the greatest happiness for the greatest number, but is predicated on one's separation from others and the world on which we all, collectively, depend. Rather, it could be argued that economic growth, pursued by isolated egos, is a vain attempt to fill a void with material enrichment (See Hamilton 1994). We have argued that, at the very least, Economics remains essentially ethnocentric. Further, its practitioners ignore the historical precursors and precepts which set the foundation for Islamic economic practice, similar in content to groups and individuals (eg., Marx or the Scholastics) who are thoroughly explicated. Contextually, we suggest, that the material foundation of Islam cannot be understood by a discipline which continues to promote a positivist, Cartesian, mathematical formalism, at the expense of understanding its contextual origins. The economies in which hundreds of millions of people live, work and produce, are being guided, for better or worse, by the epistemological premises of Islam. Until these premises are comprehended, and then critically evaluated, economists educated in the industrial west continue to marginalise themselves and their students in a manner which is no longer excusable.
 

REFERENCES
 

AI-Azmeh, Aziz (1990), Ibn Khaldun, London & New York: Routledge.

Althusser, L. (1993), The Future Lasts a Long Time, London: Chatto & Windus.

Backhouse, R.E. (ed.) (1994), New Directions in Economic Methodology, London: Routledge.

Beed, Clive and Beed, Cara (1996), "A Christian perspective on economics", Journal of Economic Methodology, 3(1): 91-112.

Behdad, S. (1992), "Islamic Economics: A Utopian-Scholastic-Neoclassical-Keynesian Synthesis! A Review Essay" Research in the History of Economic Thought And Methodology, 9: 221-232.

Boulakia, J.D. (1971), "Ibn Khaldun: A Fourteenth Century Economist". Journal of Political Economy, 79(5) September/ October: 1105-1118.

Briffault, Robert (1930), Rational evolution, New York: Macmillan.

Corbin Henry (1996), History of Islamic Philosophy, London and New York: Kegan Paul International.

Deboer, T.J. (1970), The History of Philosophy in Islam, London: Luzac & Company.

Essid, M. Yassine (1987), "Islamic Economic Thought", in Lowry, S. Todd.

Galbraith, J.K. (1987), A History of Economics, London: Hamish Hamilton.

Ghazanfar, S.M. and Islahi, A. (1990), "Economic thought of an Arab Scholastic: Ibn Hammid al-Ghazali", History of Political Economy, 22(2): 381-403.

Goldziher Ignaz (1981), Introduction to Islamic Theology and Law, New Jersey: Princeton University Press.

Gray, Alexander (1944), The Development of Economic Doctrine, London: Longmans, Green & Co.

Hamilton, C. (1994), The Mystic Economist, Fyshwick, Australia: Willow Park Press.

Hausman, D.M. (1994), "Kuhn, Lakatos and the Character of Economics", in Backhouse, R.E. (ed.): 195-215

Hausman, D.M. (1992), "Explanatory progress in economics", in Hausman, D.M. 1992 Essays on Philosophy and Economic Methodology, Cambridge: CUP.

Henry, John F. (1990), The Making of Neoclassical Economics Boston: Unwin Hyman.

Hillel, D.J. (1991), Out of the Earth: Civilization and the Life of the Soil, New York: The Free Press.

Hosseini, H. (1988), "Notions of Private Property in Islamic Economics in Contemporary Iran: A Review of Literature% International Journal of Social Economics, 15(9): 51-61.

Ibn Khaldun (1958), The Muqaddimah: An Introduction to History, written in 1377 AD, translated from the Arabic by Franz Rosenthal in three volumes, New York: Princeton University Press.

Islahi, A. (1988), Economic Concepts of Ibn Taimiyah, London: The Islamic Foundation.

Issawl, C. (1950), An Arab Philosophy of History, London: John Murray.

Kuran, T. (1989), "On the Notion of Economic justice in Contemporary

Islamic Thought% International Journal of Middle East Studies, 21, May: 171-191.

Levine, C. (ed.) (1992), Construction of the Self, New Brunswick: Rutgers University Press.

Lowry, S. Todd (1987), Pre-Classical Economic Thought: From the Greeks to the Scottish Enlightenment, Boston: Kluwer Academic Publishers.

Mumby, D.K. (1992), "Two Discourses on Communication, Power, and the Subject: Jurgon Habermas and Michel Foucault", in Levine, C. (ed.), Construction of the Self, New Brunswick: Rutgers University Press.

Nagarajan, K.V. (1982), "Ibn Khaldun and 'Supply-Side Economics': a Note% journal Post Keynesian Economics, 5(1).

Nashat, M.A. (1945), Ibn Khaldun Pioneer Economist, Cairo: Imprimerie Nationale Boulac.

Netton, I.R. (1992), AI Farabi and His School, London: Routledge.

Peters, F.E. (1973), Allah's Commonwealth, New York: Sifflon and Schuster.

Pribram, Karl (1986), A History of Economic Reasoning, second printing, London: The Johns Hopkins University Press.

Samuelson, P. 1980 Economics, 11th edn. New York: McGraw-Hill.

Saunders, JJ. 1965 A History of Medieval Islam, London: Routledge and Kegan Paul.

Schacht, J. and Bosworth, C.E., 1974 The Legacy of Islam, Oxford: Clarendon Press.

Schumpeter, J.A. 1954 History of Economic Analysis, London: Geo Allen & Unwin.

Shatzmiller, M. 1994 Labour in the Medieval Islamic World, New York: E.J. Brill.

Soofi, A. 1995 "Economics of Ibn Khaldun Revisited% History of Political Economy 27(2): 387-404.

Spiegel, H.W. 1991 The Growth of Economic Thought, London: Duke University Press.

Tawney, R.H. 1990 Religion and the Rise of Capitalism, Harmondsworth: Penguin.

Tibi, B. 1991 Islam and the Cultural Accommodation of Social Change, translated by Clare

Krojzl, San Francisco and Oxford: Westview Press.

Turner, B. 1974 Weber and Islam: A Critical Study, London: Routledge & Kegan Paul.

Watt, Montgomery, W. 1976 The Majesty that was Islam, London: Sidgwick & Jackson.

Wickens, G.M. 1964, The Nasirean Ethics by Nasir ad-Din Tusi, London: Allen & Unwin.