What do 14th-century Arab Muslim scholar Ibn Khaldun, US President Ronald Reagan’s tax policies, and the conservative economic revolution of the 1980s all have in common? A lot more than you might think: The hidden lineage of economic thought from medieval North Africa to the corridors of the White House.
The 1970s turmoil in America’s economy, plagued by inflation, high unemployment, and stagnant growth, propelled Ibn Khaldun, the father of sociology and economic theory, as an intellectual godfather to modern conservative tax policy in the 1980s. Economists called it ‘stagflation,’ and policymakers were baffled. As chairman of the Federal Reserve, Paul Volcker made a bold and painful move: he slashed the money supply to rein in inflation. The resulting economic jolt — now known as the Volcker Shock — triggered a deep recession. But it also paved the way for a new political era.
Reagan, Supply-Side Economics, and Islamic Thought
In January 1981, Ronald Reagan took office as the 40th US President. His mission? To pull the country out of crisis — not through spending or government expansion, but through radical tax cuts and deregulation. This was not just economic policy. It was a philosophy. A revolution with intellectual roots in Ibn Khaldun’s mind.
Ronald Reagan — the icon of American conservatism — frequently cited the work of Ibn Khaldun, born in 1332 in present-day Tunisia. Reagan invoked Ibn Khaldun’s economic theories to support his tax policies, particularly the idea that lower tax rates increase government revenue by encouraging economic activity.
In October 1981, Reagan explained the difference between cutting tax rates and reducing tax revenue, pointing to Ibn Khaldun’s belief that excessive taxation stifles business — and that a just ruler should ease the burden to unleash prosperity. It was striking: the Gipper quoting a medieval North African scholar to justify supply-side economics.
What Is the Laffer Curve and Its Islamic Roots?
Economist Arthur Laffer, who called Ibn Khaldun his inspiration, would years earlier become the cornerstone of supply-side economics. He sketched a graph at a Washington bar on a napkin as he met Nixon administration officials Dick Cheney and Donald Rumsfeld. That graph became known as the Laffer Curve — the cornerstone of supply-side economics. It argued that there’s a sweet spot for taxation: raise rates too high, and you discourage productivity. Lower them, and you might increase revenue.
Centuries earlier, Ibn Khaldun had written that high taxes destroy motivation and reduce economic output. Entrepreneurs withdraw. Trade declines. And state revenues shrink — the exact logic behind the Laffer Curve. Laffer Curve influenced Reagan’s Economic Recovery Tax Act of 1981, slashing the top marginal tax rate from 70% to 50%, and ultimately to just 28%.
The Paradox: Conservative Policy vs Islamophobia
Reagan and conservative economists embraced ideas rooted in Islamic thought, but modern conservative politics in the US and Europe have become deeply intertwined with Islamophobia, often dismissing or demonizing Muslim civilizations. That’s the paradox: the very foundation of conservative economic theory owes a debt to Ibn Khaldun, a man born in Tunisia who traveled through Al-Andalus, Morocco, and Egypt, and who shaped ideas centuries ahead of his time. Conservatives frequently deny Muslim contributions to global civilization, even as they build their policies on them.
Who Was Ibn Khaldun?
Ibn Khaldun was far more than just an economist. He is hailed as the father of sociology, a pioneer of historiography, and a visionary political thinker. His magnum opus, the Muqaddimah, explored everything from economics and politics to education, art, and even mysticism. He believed that property rights were essential for civilization and that when states violate those rights through excessive taxation or corruption, society begins to crumble.
He warned of bloated governments, eroding tax bases, and the eventual collapse of empires under their weight. His cyclical theory of history — where nomads conquer cities, become soft and decadent, and are overthrown by new nomads — resonates with political theorists to this day.
Yale scholar Franz Rosenthal said that Ibn Khaldun treated history as a science, combining economics, sociology, geography, and politics into a unified vision. Ibn Khaldun was a product of the Islamic Golden Age — a time of dazzling intellectual achievement across the Middle East, North Africa, and Spain.
Writers like Abu Yusuf, Al-Mawardi, and others were developing economic principles long before Adam Smith was born. Nima Sanandaji, in The Birthplace of Capitalism, argues that many free-market ideas — limited taxation, property rights, minimal government interference — have deep roots in Islamic thought. Even cost-benefit analysis was used by 8th-century scholars to assess infrastructure projects.
And yet, these thinkers are rarely mentioned in Western textbooks. The intellectual lineage of modern economic policy doesn’t begin with Reagan or Laffer — it stretches back to Ibn Khaldun, who wrote more than 600 years ago that “civilization slumps, and everything decays” when free markets are suffocated and property is not respected. He understood that incentives matter, that history has patterns, and that civilizations rise and fall based on knowable causes.
In a world where identity politics often cloud our judgment, Ibn Khaldun’s story reminds us of a more profound truth: Great ideas transcend time, religion, and borders. And sometimes, the mind that reshapes the modern world comes not from Wall Street or Washington, but from the winding alleys of 14th-century Tunis.
