The Circuit in the History of Economic Thought: The Contribution of Ibn Khaldûn

Abstract

In this tribute to Alain Parguez (1940–2022), I draw attention to the economic thought of the prominent medieval scholar, Ibn Khaldûn (1332–1406), specifically his seminal Al Muqaddimah (1377), which was the introduction (“Prolegomena”) to his universal history (Kitab al Ibar, “Book of Lessons”). While caution should be taken in reading a six-hundred-year-old book, I try to show that Ibn Khaldûn could be considered as a forerunner of the Theory of the Monetary Circuit. In his magnum opus, he attempted to lay down the factors that had pushed civilizations (especially the Arab-Muslim one) to bloom to their peak and to decline thereafter. This led him to examine the economic and social processes governing the history and the causes of wealth. Here Ibn Khaldûn anticipated some economic mechanisms which form the core of the Theory of the Monetary Circuit.