INAUGURAL PROFESSORIAL LECTURE

AN INQUIRY INTO THE

CAUSES AND COSTS OF
ECONOMIC GROWTH:
WHAT POLICY MAKERS OF TODAY CAN
LEARN FROM THE MUQADDIMAH OF IBN
KHALDUN

Prof. Dr. Syed Omar Syed Agil

Razak School of Government
 INTRODUCTION
• Economic growth has been a subject of debate and
controversy in the history of western economics.
• Research on economic growth has increased
tremendously in the past decade.
• However, we are also seeing economic welfare
declining globally.
• Governments and business find that the current
economic path is environmentally unsustainable.
OBJECTIVES OF THIS LECTURE
•To elucidate the theory of economic growth and
costs of economic growth in the Muqaddimah
•To set the record straight on the contribution of
Ibn Khaldun to the theory of economic growth and
costs of economic growth
•To contribute to the existing literature on the
theory of economic growth and costs of economic
growth from the perspective of Ibn Khaldun

•Remember, You and I are here

“to learn from each other”
 ECONOMIC GROWTH
PARADIGM
• Economic growth is measured by real rate of growth in a
country's total output of goods and services or real GDP.
• The paradigm states that the pursuit of economic growth
is a sole measure of national success
• The western economic growth theories evolved from Mercantilism,
Physiocrates, Classical economics, Keynesians, Neoclassical to modern
theories.
• Literature on the Benefits and costs of economic growth(environment,
global warming, consumerism, inflation, inequality)
BENEFIT S OF ECONOMIC GROWTH IN WESTERN
LITERATURE
THE COSTS OF ECONOMIC GROWTH IN WESTERN
LITERATURE
THE COSTS OF ECONOMIC GROWTH IN WESTERN
LITERATURE
A DIVERGENCE OF THE GPI AND GDP WOULD SUGGEST
THAT ECONOMIC GROWTH IS COMING AT THE EXPENSE OF
OTHER CONTRIBUTORS TO WELL-BEING, SUCH AS
ENVIRONMENTAL QUALITY OR LEISURE TIME
• Report published by the State
Environmental Protection Agency (SEPA
) and the National Bureau of Statistics (
NBS) re-examines China’s 2004 GDP,
estimating that pollution cost the country
511.8 billion yuan (US$64 billion) in
economic losses that year, or 3.05 percent
of 2004’s total economic output
INITIATIVES RESULTED FROM THE
NEGATIVE EFFECTS OF ECONOMIC
GROWTH
 QUICK SURVEY

How many of you

have heard OR read
about Ibn Khaldun?
 WHO WAS IBN KHALDUN?
• Born in 1332 in Tunis, North Africa and died in
1406 in Egypt.
• An outstanding 14th century scholar in various
branches of knowledge including philosophy of
history, historiography, education, political
economy and sociology.
• He came from an aristocratic family of scholars.
• He studied both religious and philosophical
sciences at an early age.
• A renowned public administrator and a Professor
dedicated to teaching and research.
 POLITICAL CONDITIONS
 The Islamic empire was in the stage of
senility
 Internal threats due the political
upheavals and fragmentation within
the Islamic empire
 Several rival dynasties emerged on the
North African coast.
 External threats due to the
encroachment of the Mongols and the
Christians
ISLAM AND TRADE IN NORTH
AFRICE
 Islam came to North Africa when the Arabs from Arabia
conquered Egypt and later Spain.
 From 8th to 9th century, the Spanish Muslim traders
converted the North Africans to Islam.
 From North Africa, the Arabs spread Islam to West African
states through the salt-gold trade network.
 Trade in Africa flourish with the advent of Islam which
triggered the process of urbanization.
 Europe was a trading partner of Africa as they required
gold, the high quality textile and steel from Africa
 Tunis became a well known trading and learning centre
 Muslim traders from North Africa shipped
goods across the Sahara desert using large
camel caravans -- on average around a
thousand camels.
 Caravan leaders and religious teachers
spread political, religious, and societal values
to the people along the trade routes
 They brought in mainly luxury goods such as
textiles, silks, beads, ceramics, ornamental
weapons, and utensils. These were traded
for gold, ivory, woods such as ebony, and
agricultural products
 To Egypt

From Hadramaut,
Yemen
 WHAT DID HE WRITE?
• Kitab Al-Ibar-The Book of History which consists
of 7 Volumes
• The Muqaddimah or also known as the
Prolegomena is the first volume and it is the
introduction to Kitab Al Ibar
• The Prolegomena alone contains more than 1,500
pages and it was written in just 5 months
• He also wrote his own biography or Al-Taarif bi
Ibn Khaldun.
 WHAT ARE HIS GENERAL
CONTRIBUTIONS?
1. A precursor and forerunner of modern historiography,
economics, sociology, education and political theories.
2. He studies the rise and decline of nations based on
empirical and rational nature of inquiry
3. He was the first to develop a scientific approach to the
study of human behavior, society and history
4. He discovers the theory of human social development
WHAT THE WEST SAY ABOUT
IBN KHALDUN?
• In more than 1,000 years between the times of
the philosopher Aristotle in ancient Greece and
the writer Machiavelli in Renaissance Italy, the
most preeminent social scientist was a Muslim
Arab scholar named Ibn Khaldun. He was a
historian, philosopher of history, and
sociologist, much of whose life was devoted to
public service and teaching (Encyclopedia
Britannica)
• It is true that Tacitus and Thucydides lay
much of the groundwork of the science of
society. However, it is Ibn Khaldun who
makes the headway in turning the study
of society and history into a scientific
endeavor. If Thucydides is the inventor
of history, Ibn Khaldun introduces
history as a science(Lakoste)
• After reading through a small piece of Khaldun's
work, I have to admit I am awed by the man's
genius. How could I have spent so much of my
life in politics without being led to him
before?.....Ibn Khaldun is not an Arab neo-
Platonist, as his world view subsumes theirs and is
an original one not previously expressed in the
world. This singular breakthrough not only is
awesome, but practically evidence of divine
inspiration (Jude Wanniski, Supply Side
Economist)
• In his chosen field of intellectual activity he
appears to have been inspired by no predecessors,
and to have found no kindred souls among his
contemporaries, and to have kindled no answering
spark of inspiration in any successor; and yet, in
the Prolegomena (Muqaddimah) to his Universal
History he has conceived and formulated a
philosophy of history which is undoubtedly the
greatest of its kind that has ever yet been created
by any mind in any time or place (Arnold
Toynbee, British Historian)
 WHY DID HE WRITE THE
MUQADDMAH? THE RAISON D‘ETRE

• Changing circumstances (changing

composition of the population, pandemic)
• Errors made by past historians (the internal
and external meaning of history)
• It gave him the opportunity to write history
in a different way.
KUALA LUMPUR IN THE 1880s- A
SWAMPY AREA
KUALA LUMPUR 120 YEARS LATER
From swampy to rapid development and
growth and now the side effects of growth.
 THE KHALDUNIAN MIND
 What Shapes it
 His View of the World
 Theory of Man and Society
WHAT SHAPES THE KHALDUNIAN MIND
 His dual education in religious sciences
and philosophical sciences
 His experiences as a public
administrator and teacher
 The trials and tribulations
 The political, economic and social
realities of his time.
 The Muqaddimah is a reflection of these
events and his experiences.
 PRINCIPLE OF
CAUSALITY
 IbnKhaldun believes there are
nexus between events.
 There are similar patterns in the
past, the present and the future.
 Use inductive and deductive
methods to derive economic
theories and laws which he finds
govern economic and social
phenomena.
 INTERRELATIONSHIPS IN THE
MULTITUDE OF FACTORS
• He believes in the interrelationships between
economic, social, political, psychological and
religious factors.
• They are inseparable and an economic problem is a
result of a economic and non economic factors.
• We cannot understand economic phenomena
merely by economic factors alone.
 Is More Better Than Less?
 There is a fundamental
notion in economics that
more is better than less
 Ibn Khaldun disagrees
with this.
 At one point more of
anything will cause
detrimental effects on
man, society and
environment.
 His View of Man
 He began his analysis of economic
growth by looking at the 4 qualities
of man
 Ability to think.
 Natural need for leadership
 Economic ways of living
 Natural need for society, cities and
civilizations
 MAN AND HABITS
A trait or quality as a result of doing
things repeatedly.
 Habits in knowledge and skills result in
higher quality of human capital and
goods.
 It is bad when it comes to excessive
luxury or blameworthy qualities
 It will be difficult to get rid of it even
though it has detrimental effects on the
society and the environment.
 SOCIETY
 Man needs society to obtain his basic
needs and wants
 Society needs leadership and the
spirit of solidarity to achieve
prosperity and growth.
 He differentiates the rural and urban
societies.
 Society behaves like an organism
and introduce the life-cycle theory of
society, leadership and civilization.
IBN KHALDUN’S CONTRIBUTION TO
THE THEORY OF ECONOMIC
GROWTH
 LIFE CYCLE THEORY AND
ECONOMIC GROWTH
• Ibn Khaldun suggests a life cycle theory of
society.
• Due to 2008 financial crisis, some contemporary
western economists are now talking about
cellular economic theory.
• Business behaves according to the nature of living
things that goes through the cycle of birth, growth
and death.

 We
We know
know intuitively
intuitively and
and logically
logically that
that
continuous
continuous growth can't be sustained in
growth can't be sustained in
living things. It's likewise
living things. It's likewise
unsustainable
unsustainable (and
(and undesirable)
undesirable) inin
business. Cellular economic theory
business. Cellular economic theory
suggests
suggests anan alternative
alternative toto linear
linear growth:
growth:
circular
circular growth. `We are realizing all
growth. `We are realizing all
systems are like biological systems--even
systems are like biological systems--even
economic
economic ones.
ones. Growth-at-all-costs
Growth-at-all-costs
business
business is malignant’ (Stalnaker,
is malignant’ (Stalnaker,
Stan(2009).
Stan(2009). The Next Evolution in
The Next Evolution in
Economics: Rethinking Growth, Harvard
Economics: Rethinking Growth, Harvard
Business
Business Review.)
Review.)
 INDUSTRY LIFE CYCLE
Gort and Klepper (1982) defined five life cycle
stages:
•Introductory stage
•Growth stage
•Maturity stage
•Shakeout stage
•Decline stage

(
http://bear.warrington.ufl.edu/dickinson/Dickinson_Working_Pap
)
 PRODUCT LIFE CYCLE
The stages through which
individual products develop over
time.

The classic product life cycle has

four stages: introduction; growth;
maturity and decline.
Product Life Cycle Theory
 Corporate Entrepreneurship
Stages of Firm Growth (Life cycle theory)
(Taken from the lecture slides conducted by Prof. Rice in the Babson College
entrepreneurship workshop collaboration with UNITAR

Startup Growth Maturity Renewal

or Decline

Size

Time
 BUSINESS CYCLES
•Economic activity
fluctuates in business
cycles in every society
with contractions and
expansions representing
short-term changes
 LIFE CYCLE HYPOTHESIS

Franco Modigliani (1954,1980)

received his Nobel price in
economics due to his contribution in
the development of the life cycle
theory of savings.
 MEMORABLE COMPANIES THAT
VANISHED: REAL WORLD
16 year old Enron, 233 year old Barings Bank, 150 year old Lehman
Brothers, 85 year old financial power house Bear Stearns, 33 year old
American Motors Corporation(AMC), 129 year Montgomery Ward, 64
year old Pan Am, 41 year Standard Oil, 23 year old WorldCom, 89 year
old Arthur Anderson, 71 year old TWA, 20 year old Compaq.
http://money.aol.com/special/companies-that-have-vanished
Why Great Companies Have
Disappeared - Consider
Firestone
http://www.articlesbase.com/management-articles/w
Companies that will
disappear in 2009
http://247wallst.com/2008/12/19/companies-that/
 LABOR AND ECONOMIC
GROWTH
 He considers labor as a source of
economic growth.
 Division of labor creates economic
surplus and wealth (does this ring a
bell?)
 He outlines the labor theory of value
in which value of a product is based
on the amount of labor embodied in
it or needed to produce it.
POPULATION AND ECONOMIC GROWTH
 Ibn Khaldun finds that population is a
cause and effect of economic growth.
 The Dual Sector Model(Lewis, 1954) in
which rural-urban migration cause an
increase in population and economic
growth.
 Ibn Khaldun’s findings show that
initially higher population results in
higher economic growth but eventually
beyond a certain level higher
population cause lower economic
growth due to the social costs.
 Meier(1995), Becker, Glaeser, and
Murphy(1999), Dawson and Tiffin (1998),
Thornton (2001), Easterlin (1967);
Thirlwall (1972); Simon (1992); Kelley and
Schmidt (1996); Ahlburg (1996),
Fumitaka(2005), Zhang and Li(2007),
Savas (2008), Habtu(2003)
 Malthus(1798), Steinmann and
Komlos(1987), Simon-Steinmann Economic
Growth Model(1984)
 This model states that an increase in total
population would lead to increase in technology
and innovation and yield a greater per-capita
income.
NATIONS WITH HIGH POPULATION
AND ECONOMIC GROWTH IN THE
MUQADDIMAH
 DOES RELIGION RESULTS IN
ECONOMIC DECLINE?
Ibn Khaldun says Definitely No!
In fact religion stimulates economic
growth.
Africa became the world’s largest
trading centre in the 14th century
after the advent of Islam.
HOW RELIGION SPURS
GROWTH?
 Hisfindings support the thesis by Max
Weber(1904) and the recent empirical studies
by Barro and McCleary (2003), Noland(2005),
Osoba(2008), Khan and Bashar(2008), Blum
and Dudley(2001), Guiso et al. (2003),Grier
(2003),
(1997) that there is a positive relationship
between religion and economic growth. In
fact Noland(2005) using multivariate analysis
finds that Islam promotes economic growth.
 GOVERNMENT SPENDING, TAXES
ECONOMIC GROWTH
 Economic growth depends on the type of
political leadership, size of the government and
economic freedom.
 Leadership or government plays an important
role in affecting the economic conditions of a
city or nation.
 Religious government establishes justice and
safeguard public interest creating incentive for
business and entrepreneurial activities
compared to rational politics.
 Excessive public spending is the cause of bad
public policies.
 Policy to introduce higher taxes will discourage
commercial and entrepreneurial activities,
reducing the tax base and tax revenue.
 Policy that allow governments to get involve in
business activities will create unfair competition
with private sector.
 He suggests moderate government spending,
moderate taxes and other business friendly
public policies to promote growth and increase
government revenue.
• The Heritage Foundation and the Wall Street Journal
created the Index of Economic Freedom in 1995,
Hanke and Walters (1997), Goldsmith
(1997Heckelman(2000), Altman(2007) find that
there is a positive relationship between economic
freedom and economic growth.
• States that have lower taxes, smaller government and
flexible labor markets tend to have comparatively
more economic growth( 2006 annual report from the
National Center for Policy Analysis (NCPA) and
Canada's Fraser Institute
 ADAM SMITH OR KEYNES

• Although Ibn Khaldun(1377) like Adam

Smith(1776) believes that economic freedom is a
necessary condition to foster business activities,
like Keynes, he also believes that government
spending is necessary to promote growth and
macroeconomic stability.
• Government presence should not be too large at
the expense of private businesses and
entrepreneurial activities.
Inverted U shaped relationship
between size of the government and
economic growth (The Rahn Curve)
Inverted U shaped relationship
between taxes and economic growth
(The Laffer Curve)
Moderate taxes and public spending
for optimal economic growth.
Ibn Khaldun(1377), Arthur
Laffer(1974), Jude
Wanniski(1978) believe that the
relationship between tax rate
and tax revenue is an inverted
U shape curve
 LEADERSHIP, MOTIVATION AND
ECONOMIC GROWTH
• In other words Ibn Khaldun believes there
is a significant relationship between
political leadership, motivation and
economic growth.
• Leadership and government should
introduce polices that enhance the
motivation of individuals and businesses to
promote growth.
•Recent empirical analysis suggests
that individual national leaders can
have large impacts on economic
growth(Jones, Benjamin F(2009),
Menon, Sudha (2007), Zainal Aznam
Yusof, Deepak Bhattasali(2008),
Stimson, Stough, Salazar(2009)
 AMERICAN ECONOMIST JAMES GWARTNEY
SHOWED THE HIGHER THE LEVEL OF TAXATION
AND SIZE OF GOVERNMENT THE LOWER THE
GROWTH RATE
• Arthur Laffer himself admitted that it was Ibn Khaldun
who first introduced this idea of the inverted U shaped
relationship between tax rates and tax revenue (Laffer,
2004).
• Laffer attempted to proof the validity of this theory of
Ibn Khaldun by citing examples in US history:
During the 20th century, the U.S. had three major period of
tax-rate cuts: the Harding/ Coolidge cuts of the mid-
1920s, the Kennedy cuts of the mid-1960s, and the
Reagan cuts of the early 1980s. Each of these periods
of tax cuts was remarkably successful in terms of
virtually any public policy metric (The Laffer Curve,
Thinking Economically).
A 2009 study by Harvard economists
suggest that taxes and spending
should be cut to spur economic
growth and reduce deficits.(Alberto
Alesina and Silvia Ardagna, 2009).
They argued that fiscal stimuli based
upon tax cuts are more likely to
increase growth than those based
upon spending increase.
 RAHN CURVE
• Rahn Curve is an economic theory,
developed by Richard Rahn supported by
empirical analysis which says there is a level
of government spending which maximizes
economic growth.
The “Rahn Curve” relationship is similar to the “Laffer Curve”
relationship between tax rates and tax revenue.
 IBN KHALDUN, LAFFER
CURVE AND RAHN CURVE
• Laffer Curve and the Rahn Curve are
consistent with the views of Ibn
Khaldun which suggests that there is an
optimal level of government spending
and tax rate which maximizes the rate
of economic growth.
 POLITICAL STABILITY AND
ECONOMIC GROWTH
• Ibn Khaldun finds that one of the causes of
economic downturn is political instability.
• He believes that political stability creates a
conducive environment for business to
flourish, create employment opportunities
and migration into the cities which increase
demand and stimulate economic growth.
• Younis, Lin, Sharahili,
Selvarathinam(2008) found that there is
a positive relationship between political
stability and economic growth in Asia.
• A study by Feng Yi(1997) indicates a
positive relationship between political
stability and economic growth.
 INTERNATIONAL TRADE
AND ECONOMIC GROWTH
• During his time, North Africa was in a global
trade business.
• He cited nations like China, Egypt, Syria and
India which were prosperous and achieve
economic growth because of international trade
• He suggest ways to become a successful global
trader including finding new markets even though
it may be riskier.
 IDEAS AND ECONOMIC
GROWTH
 Role of ideas, education and learning by doing
in economic growth
 With his ability to think, interactions, constant
practice and habits, man is able to find new
ways of doing things resulting in higher
economic growth.
 He traces the evolution of the various industries
and skills known to man during his time and
how these industries emerged and transformed
as new ideas and technology were gradually
introduced.
IBN KHALDUN AND THE RELATIONSHIP
BETWEEN EDUCATION, IDEAS AND
ECONOMIC GROWTH
Ibn Khaldun’s theory is
consistent with the
findings of Paul Romer with
his Economics of Ideas and
Robert Lucas with his
Learning by Doing
 COSTS OF ECONOMIC
GROWTH
• CONGESTION
• POLLUTION
• EPIDEMIC
• INFLATION
• UNEMPLOYMENT
• POVERTY
• CORRUPTION
• CRIME
• MIGRATION
COSTS OF ECONOMIC GROWTH
 HABITS AND COSTS OF
ECONOMIC GROWTH
• High economic growth results in excessive
spending leading to luxury habits and
conspicuous consumption
• Difficulties to get rid of the habits
• Spending exceeds income
• Inflation, corruption, crime, poverty,
unemployment, environmental degradation
ECONOMICS AND LIMITS TO
GROWTH
Dennis Meadows, MIT
Professor.

What caused the environmental

degradation and global warming affecting
us today ? HABITS.
http://www.youtube.com/watch?v=4iHr9mzLEZU
HUMAN NATURE, ECONOMIC
GROWTH AND BEHAVIOUR
…… when
when people
people become
become more
more
prosperous,
prosperous, they
they move
move from
from
consuming
consuming necessities
necessities to
to
conveniences
conveniences toto luxuries.
luxuries.
Eventually,
Eventually, they
they reach
reach aa
point
point where
where consuming
consuming more
more
brings
brings trivial
trivial benefits
benefits ……
(Seigel,
(Seigel, 2006
2006).).
 WHAT POLICY MAKERS CAN
LEARN FROM THE MUQADDIMAH
• Determinants of economic growth as propounded by Ibn
Khaldun are the combination of the Classical, Neo
Classical, Keynesian and New Growth Models.
• Ibn Khaldun’ s Growth Theory also includes the Rahn
Curve, Laffer Curve and life cycle theory which are not
emphasized by western economic growth models.
• Fiscal policy should therefore consider these findings in
proposing the optimal combination of taxes and
government spending as suggested by Ibn Khaldun.
• The role of religion, ethical leadership and good
governance to stimulate growth
• However, he sees the relationship between
economic growth and costs of economic growth.
• That relationship stems from the presence of
luxury habits and excessive spending by the
government and the consumers.
• Excessive spending by the government causes
budget deficit and the introduction of bad policies
to finance the deficit resulting in economic
contraction.
• Excessive spending by the consumers may lead
to inflation and eventually lower spending and
lower economic growth.
• He suggests business friendly public
policies based on economic freedom,
justice, public interest and fairness to spur
economic growth.
• Due to the exposure to excessive luxury
resulting in luxury habits, human nature
unleashes the elements of greed and love of
power that weakens the human soul and
solidarity and the emergence of unethical
behavior
• Self interest, greed, the lack of solidarity and the
decay in the spirit of common good due to luxury
habits can cause a decline in economic and political
power of nations and cities.
• There is a need to address these issues through the
use of religious and spiritual methods so that the
members of the society share the common goals of
nation building, protecting public interest and
human welfare.
• GDP should not be the only criteria for human
welfare. Economic growth paradigm should be
revisited.
• The economic system is a part of a larger
ecological system and they are
interdependent and interwoven.
• Economic system is connected to the
ethical, environmental, social and political
systems.
• Therefore policy makers also should
consider the effects of an economic
decision on other subsystems to reduce the
costs of economic growth and slows down
the limit to growth.
• Ibn Khaldun finds that ideas, human capital,
innovation and technology are important for
economic expansion although the limit to growth
is inevitable.
• Ibn Khaldun focuses on man’s ability to think as
an impetus to growth.
• Therefore intellectual development has to be
nurtured in various ways including education,
freedom of expression, intellectual network and
discourses, and commercial exchanges and
network.
 THAILAND ECONOMIC MODEL:
SUFFICIENCY ECONOMICS
• Focus on sustainable profit, moderation, avoid indulging in
overconsumption, ethical approach to business, role of
government in alleviating poverty and guiding
macroeconomic policies, careful risk management, mental and
spiritual development.
• Raising ethical standards for economic management, getting
rid of conflicts of interest and introduce transparency.
• This economic model was endorsed by United Nation's main
development agency(UNDP)
• http://www.dailynews.lk/2007/03/20/fea03.asp
 FINANCIAL CRISIS
• Ibn Khaldun’s view: As a result of luxury habits,
man is transformed from a moral individual
seeking common good to a self interest economic
man indulge in excessive spending causing
corruption, unethical behavior, financial and
economic crisis.
• Non economic factors affect the economy.
• We have to differentiate between the root cause
and the symptoms.
 ROOT CAUSE OF THE
ECONOMIC CRISIS
• The economic and financial crisis that have
affected the global community is partly due to
self interest and greed which characterized
the capitalist economic system.
• This include the 1997 Asian Financial Crisis
and the recent 2008 Global Economic
Meltdown.
• ….the nation's current economic crisis was not
the result of chance but the result of
greed…..there is plenty of blame to go around,
from greedy Wall Street executives who made
dangerous decisions to lax regulators to banks
that did not take into consideration whether
borrowers could make good on their loans to
consumers who took advantage of easy credit to
take out mortgages they could not afford.
• "Reckless greed and risk taking … must never
endanger our prosperity again," (Barack Obama
in a speech at George Mason University in
Fairfax, Va)
 “International financial crises, I might
even say domestic financial crises, are
built into the human genome. When we
map the whole thing, we will find
something there called greed and
something called fear and something
called hubris. That is all you need to
produce international financial crises in
the future. I have not seen anything to
raise any doubts about that.” (Paul
Volcker (1999), former Chairman of
the Federal Reserve Board, referring
to the Asian Financial Crisis in 1998, )
 For us urban dwellers and the so
called modern man, Ibn Khaldun
asks
• Why the demand for physicians is
higher in the urban areas than rural
areas?
• Abundance of food
• Poor air quality
• Lack of exercise
ABUNDANCE OF FOOD
POOR AIR QUALITY
RUBBISH AND POLLUTION
ROTTEN FOOD AND
POLLUTION
LACK OF EXERCISE
 IBN KHALDUN’S IDEAS ON
ECONOMIC GROWTH.
 More growth may  Higher taxes may lead to
lead to social costs lower economic growth
 Excessive spending and tax revenue(Laffer
and luxury habits Curve)
 Higher government
may cause unethical
spending may reduce
and immoral private business
behavior, inflation, activities, economic
unemployment, growth and
poverty and revenue(Rahn Curve)
environmental
degradation.