The "Laffer Curve" Was Discovered by a Medieval Islamic Philosopher

[Chris]

"Progress, far from consisting in change, depends on retentiveness. When change is absolute there remains no being to improve and no direction is set for possible improvement: and when experience is not retained, as among savages, infancy is perpetual. Those who cannot remember the past are condemned to repeat it." -- George Santayana

The "Laffer Curve" Was Discovered by a Medieval Islamic Philosopher

...The funny thing is that Arthur Laffer’s theory was far from new.

He was rediscovering a concept that had been acknowledged during the Golden Age Islamic period of free-market policy. Laffer has himself explained that he didn’t invent the curve, but took it from Ibn Khaldun, a 14th-century Muslim, North African philosopher. Indeed, many of the ideas we today associate with Western free-market thinkers originated in the Islamic world during the Islamic Golden Age.

...At the beginning of the 6th century AD, the Persian king Khosrow introduced property rights and tax collection reforms, which weakened feudal control and strengthened private ownership. After the Arab conquest of Persia, which occurred in the middle of the 7th century AD, the system of private property was further strengthened which stimulated economic growth and dynamism. A bourgeois class of merchants, capitalists, and craftsmen arose in Persia, which was despised by conservatives who favored a feudal economy.

...The most prominent supporter of low taxes was Ibn Khaldun. Born in 14th-century Tunisia, Khaldun was a prominent scholar and one of the founders of economics and social sciences. Khaldun believed that a just government should only, in accordance with Islamic law, impose low taxes. This stimulates business activity and thus creates wealth, which makes it possible to collect more taxes.

...The modern theory of high taxation is simply that it will ultimately erode the tax base. Khaldun went further and explained that ultimately the government would be bloated and the tax base eroded—at this point the state would often implode under its own weight, leading to a period of chaos and the rise of a new state.

...Arthur Laffer started an intellectual tradition of questioning high-tax policies because he knew of the work of Ibn Khaldun many centuries before and built on this tradition. Knowing the history of free markets is valuable for guiding the present. The ancient free-market intellectual tradition that existed in the Middle East, and independently also arose in China, is not well known today....