Ibn Khaldun isn’t exactly a household name—but he should be. Fascinatingly, one great American president was a big fan of Khaldun: Ronald Reagan. “The Gipper” quoted him throughout his Presidency no less than 10 times.
A medieval historian from modern-day Tunisia, Khaldun wrote “The Muqaddimah” in the 14th century. The work was a monumental, “universal” history—an attempt to synthesize all known history from an Islamic perspective and elucidate lessons he hoped would benefit Islamic civilization.
On Low Taxes
What he said about taxes is particularly interesting. In short, Khaldun believed that low taxes helped build civilization, and high taxes helped destroy civilization. Not only that, but he observed that lower taxes tended to bring in more revenue, while higher taxes tended to bring in less revenue.
Khaldun summarized his position on taxes in “The Muqaddimah” as follows: “It should be known that at the beginning of a dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments.”
For Khaldun, low taxes were the traditional way to help build a society, whereas high taxes destroyed it.
‘Desert Attitude’ Versus ‘Sophistication’
Khaldun makes a fascinating observation: a society with a “desert attitude” is strong, and could get along just fine with lower taxes. The “desert attitude” was a reference to the sort of Bedouin approach to life that was common in the Middle East at that time. This didn’t mean that only Bedouins could build civilizations. Rather, the Bedouin ethic of independence, moderation, and restraint builds civilizations.
However, civilizations who abandoned this traditional approach invariably became overrun by luxury and materialism, which Khaldun called “sophisticated,” by which he meant that their desire for material luxuries increased, and with it their greed and decadence.
First, let’s see how Khaldun describes the “desert attitude,” and why it was more compatible with lower taxes:
“When the dynasty follows the ways of group feeling [Asabiyyah] and (political) superiority [by which Khaldun means something akin to the common good], it necessarily has at first a desert attitude, as has been mentioned before. The desert attitude requires kindness, reverence, humility, respect for the property of other people, and disinclination to appropriate it, except in rare instances. Therefore, the individual imposts and assessments, which together constitute the tax revenue, are low. When tax assessments and imposts upon the subjects are low, the latter have the energy and desire to do things. Cultural enterprises grow and increase, because the low taxes bring satisfaction. When cultural enterprises grow, the number of individual imposts and assessments mounts. In consequence, the tax revenue, which is the sum total of (the individual assessments), increases.”
In other words, the “desert attitude” enables lower taxes, which in turn better enables the “cultural enterprises” that advance civilization. This is all possible because there is a traditional ethic undergirding the “desert attitude,” a shared feeling of solidarity which Khaldun called Asabiyyah.
For him, cultures that had high Asabiyyah flourished—those who had low Asabiyyah decayed and eventually collapsed. Like the great Scottish economist Adam Smith, who wrote “The Theory of Moral Sentiments” before he wrote his famous “Wealth of Nations,” Khaldun understood that a marketplace requires individual initiative, yes, but also a shared ethic, and a sense of solidarity with others. The marketplace is the Golden Rule in action: a place where you do, but “as you would have others do to you.” You do through service to others. Such is the essence of the “cultural enterprises” he speaks of—the fruit of the “desert attitude,” which leads to Asabiyyah.
Let’s now see how Khaldun described the “sophistication” of a decaying civilization, and why it is invariably (partially) caused by, and leads to even higher taxes:
“When the dynasty continues in power and their rulers follow each other in succession, they become sophisticated. The Bedouin attitude and simplicity lose their significance, and the Bedouin qualities of moderation and restraint disappear. Royal authority with its tyranny and sedentary culture that stimulates sophistication, make their appearance … Their customs and needs become more varied because of the prosperity and luxury in which they are immersed. As a result, the individual impost and assessments upon the subjects, agricultural laborers, farmers, and all the other taxpayers, increase. Every individual impost and assessment is greatly increased, in order to obtain a higher tax revenue … Then, gradual increases in the amount of the assessments succeed each other regularly, in correspondence with the gradual increase in the luxury, customs, and many needs of the dynasty and the spending required in connection with them. Eventually, the taxes will weigh heavily upon the subjects and overburden them.”
The results are catastrophic. The incentives to engage in “cultural enterprises” decrease. With fewer “cultural enterprises” producing revenue, along with an increasing appetite for taxation, the state feels a need for even greater taxation, which only continues the destructive cycle:
“The assessments increase beyond the limits of equity. The result is that the interest of the subjects in cultural enterprises disappears, since when they compare expenditures and taxes with their income and gain and see the little profit they make, they lose all hope. Therefore, many of them refrain from all cultural activity. The result is that the total tax revenue goes down, as individual assessments go down.
Finally, individual imposts and assessments reach their limit. It would be of no avail to increase them further. The costs of all cultural enterprise are now too high, the taxes are too heavy, and the profits anticipated fail to materialize. Finally, civilization is destroyed, because the incentive for cultural activity is gone.”
Economic Freedom Leads to Prosperity
Khaldun concludes with an enthusiastic endorsement of low taxation, a position he justifies not merely by appealing to historical experience, but the common-sense psychology of allowing people to benefit from their own labor:
“If one understands this, he will realize that the strongest incentive for cultural activity is to lower as much as possible the amounts of individual imposts levied upon persons capable of undertaking cultural enterprises. In this manner, such persons will be psychologically disposed to undertake them, because they can be confident of making a profit from them.”
In other words, low taxes not only help increase the revenue of the state, but the prosperity of society as a whole.
For those of a more traditional bent, this should come as a surprise. In fact, it should serve as a confirmation of the low-tax position, one that is not unique to various modern political factions but is in fact based on universal truths of the human condition.
Low Taxes Help Build and Preserve Great Civilizations
So the next time someone criticizes the traditional and time-tested position that lower taxes help society prosper and flourish, tell them about Ibn Khaldun. Tell them that this isn’t just an American thing, but a history thing.
Joshua Charles is a bestselling author, historian, researcher, and international speaker. He is a passionate defender of America’s founding principles, Judeo-Christian civilization, and the Catholic faith, to which he converted in 2018. He loves telling, and helping others tell, great stories that communicate great truths. Follow him on Twitter @JoshuaTCharles or see JoshuaTCharles.com