President Reagan, in his news conference yesterday, cited a 14thcentury Islamic scholar as an early exponent of the ''supply-side'' economic theory on which his Administration bases many of its policies. An authority on the scholar later said that the reference seemed accurate.
Supply-side theory, among other things, holds that a cut in tax rates will stimulate the economy and thus generate even greater tax revenues.
Responding to a question about the effects of tax and spending cuts that began taking effect yesterday, Mr. Reagan said the supply-side principle dated at least as far back as Ibn Khaldun, who is generally regarded as the greatest Arab historian to emerge from the highly developed Arabic culture of the Middle Ages.
Paraphrasing the historian, Mr. Reagan said Ibn Khaldun postulated that ''in the beginning of the dynasty, great tax revenues were gained from small assessments,'' and that ''at the end of the dynasty, small tax revenues were gained from large assessments.''
''And,'' said the President, ''we're trying to get down to the small assessments and the great revenues.'' Interpretation Held Accurate
Franz Rosenthal, the Sterling Professor of Near Eastern Languages at Yale University, who has translated many of Ibn Khaldun's writings and is regarded as one of the world's foremost Ibn Khaldun scholars, said later that the President's interpretation of the historian's ideas on taxes appeared to be accurate.
Ibn Khaldun, who was born in Tunis in 1332 and died in Cairo in 1406, was an official of the Tunisian and Moroccan courts, a judge and teacher in Cairo and the author of many volumes on history. His most noted contribution, Professor Rosenthal said, was to treat history as a science that incorporated politics, economics, sociology and geography.
Ibn Khaldun is perhaps best known as the author of ''Kitab al-Ibar,'' a four-volume universal history, and ''Muqaddimah,'' an introduction in which he argues that rise and fall of human societies may be traced to specific, discoverable causes.--The New York Times, October 2, 1981, p. 26.
It was moderately newsworthy once that President Ronald Reagan invoked Ibn Khaldun as an athority in a news conference.[*HT Robert Irwin] It would be more startling now that many of our politicians and too many our very own intellectuals try to convince audiences, learned and unlearned, that being Islamic de facto means being intellectually backward. (For a minority of them the association with Reagan or supply-side economics would prove the point.)
In the press conference (see here for the transcript; the video must be of slightly different occassion, and what follows is my comment on the video), Reagan reminds his audience that he was an economics student in college. (He was an econ and sociology major at Eureka college.) Irwin implies that the reference to Ibn Khaldun originates with Reagan's "speech writers." That's not impossible, of course. But it is also not impossible that an educated economics or sociology professor (these could be the same persion in that period) could have said it in a depression era economics (or economic soociology) course. After all, most such economics/sociology faculty were trained in the history of economics--then still a central part of graduate education in economics (and sociology). While it would be silly to suggest that Ibn Khaldun was famous, he was not wholly unknown to educated English language readers (as this google search reveals).
And, in fact, the very claim that Reagan fondly remembers can, in fact, be found (I was surprised to learn) in a translation of Ernest Nys's (1899) Researches in the History of Economics, p. 15. (Here's a fuller text of the french original.) Nys is an important early contributor to the development of international law (and, alas, apologist for Leopold's rule of Congo); I had no idea he also wrote about the history economics. (Sadly a hard copy of the text is not in Eureka's library.) That text would have been the cutting edge when Reagan's economics teacher was a student. In fact, I think Nys may well be the original source for Reagan (or his speech writer) because in his speech, Reagan treats of Ibn Khaldun as an Egyptian (which would be a natural way to read Nys) and talks of tax rates in "the empire" which is precisely how Nys talks about Ibn Khaldun's claim (but not the direct translation of Ibn Khaldun--for example, in his English translation, Rosenthal goes for 'dynasty' [which is surely closer to Ibn Khaldun's intent]).**
There are two further reason to allow that Reagan, who had great fondness for his college education long before he became President, is drawing on his own memory. First, that's because he makes a major gaffe. He claims "Ibn Khaldun lived 1200 years ago in Egypt." (That's about 8-10 second mark.) That would have been ca 780 (the gaffe does not exist in the press conference of 1 October 1981--in the transcript he makes clear this is not the first time he spoke about Ibn Khaldun).
Second, in his remarks at the 1981 press conference (but not in the video), he uses Ibn Khaldun to illustrate his claims about the effects of tax policy of the 1920s. That's not peculiar if you learned about those tax policies alongside a remark about Ibn Khaldun in that same decade.
In his book, Irwin associates Reagan's claims with the Laffer curve. But there is no evidence in the press conference (or video) that Reagan makes that connection. Rather, he claims that tax cuts can generate more revenue than they bring in. (Of course, that's not unconnected to the Laffer curve.) And he claims the principle of that (supply side economics) claim goes back to Ibn Khaldun. That's not all wrong: Ibn Khaldun does recognize that there are conditions in which low taxes bring in larger revenue than high taxes. But the conditions that do so are (as Irwin correctly notes, p. 149) the cause not the effect of the tax rate(s). Some other time I have more to say about (recall) Ibn Khaldun's political economy.
*HT: I learned the fact from Robert Irwin's (2018) Ibn Khaldun: An Intellectual Biography, Princeton University Press, p. 143.
**Ibn Khaldun's claim is (in Rosenthal's translation): "it should be known that at the beginning of the dynasty, taxation yields alarge revenue from small assessments. At the end of the dynasty, taxation yields asmall revenue from large assessments." I am not claiming Nys would be the only source for knowledge about Ibn Khaldun (Spengler was very interested in him).
Comments