'POCKET’ FREEDOM VERSUS ‘PACKED’ FREEDOM

3rd Place (500$ Prize)
The Winner of the 2007 Ibn Khaldoun Essay Contest
Atlas Economic Research Foundation
Washington, USA
(http://www.atlasusa.org/V2/main/new.php?new_id=1754)

‘POCKET' FREEDOM VERSUS 'PACKED' FREEDOM

Mehmet Ozkan

Today there is no doubt that Muslims and Islamic societies occupy a central place in global economy, international politics and debate on terrorism. Six out of eight strategically important straits for international trade have been controlled by Muslims.[1] Petrol, gas and some other energy needs of the world are mostly supplied by the Muslims states and thus making them central in almost every issue. In terms of being a global market and having the work-force, few can compete with Muslim countries. Maybe more than any time in history, Muslims and Islam is the main issue in diplomatic and academic circles with regard to terrorism, war and ‘clash of civilizations’. Then question is simple: with all those what are the Muslims societies’ contribution to global politics, debates, economics and culture? Are they only a passive receiver or an active contributor to newly emerging globalized culture? A simple answer, unfortunately, will be mostly negative. Then, why is it so? ‘What went wrong’ as some asked the correct question but answered in a very simple way? Drawing on Ibn Khaldun’s ideas, this piece will try to answer these questions in two fronts: domestic and international environment and try to make some humble concluding remarks.

According to Ibn Khaldun, the worldly-aim of human being is production. While some other elements are necessary for doing so, human capital is the key component. Human being needs to be productive for realizing his potential, but production does emanate mainly from work-force.[2] Ibn Khaldun argues that national division of labor opens the door for international division of labor, and the basis of the latter is not natural resources, but ability of its citizens. Therefore, the main source of production is productive work-force.[3] Richness and economic development of state (city in his terms) can be obstructed if its work-force is not qualified enough to be creative and productive. After 400 years such an approach was popularized by Adam Smith, who argued that richness of a country cannot be judged by its gold and silver reserves as mercantilists understood, but the degree of productivity of its work-force multiplied with the number of productive work-force.[4] Similarly in recent times, Michael Porter explained the Smith’s motion by narrowing it: competitive advantage of nations comes from the ability to innovate and upgrade.[5] Ideas that are indispensable for a creative innovation and thus economic development are most strikingly emphasized by others too. For example, Warsh makes the point that the accelerating element in economic growth is the ideas. Thus, governments’ main priority should not be taxing system and expenditure, but the projects that speed up the innovation and creativity in the society. [6]

Today, unfortunately, mostly repressive regimes exist in Islamic world. Such authoritarian regimes are fond of only controlling power and do not open any space in new ideas/thinking/creativity. In a sharp contrast with Ibn Khaldun, they see new ideas, perspectives and creations as a potential danger to their mere existence. Therefore, from school textbooks to media outlets, no opposition is allowed. Since they are regarded as potential danger, they are eliminated when they are nascent, if not born.

With regard to international economy, Ibn Khaldun argues that the value of a product is equal to that of labor it has. By such argument, he was not only the pioneer of value-labor theories, but also against the mercantilist perspective in essence. While he agrees that an advantage in foreign trade balance could contribute to the richness/development of a country, for him, the richness comes mainly from the ability of labor, not from natural resources, or gold and silver that a state has.

From this perspective one can make a striking observation on Islamic world. On the one hand, some of the Muslim countries enjoy having natural resources and think that they are rich. Especially Gulf States are prime example here. In material sense, they might be rich but in Khaldunian sense they cannot be classified as rich, as long as they are authoritarian in nature, thus preventing new ideas and creativity.

As mentioned, another sharp contrast, some states regard having oil and gas as their richness. Yes, this is true but only in material sense. Eliminating new ideas and creating a monopoly in thinking will keep the state rich as long as those states have natural resources. Indeed, this is temporary richness and whenever natural resources lasts, those state and society could be in a shocking decline and social turmoil.

According to Ibn Khaldun, state should be limited in its involvement in economic affairs. For economic development, a stable political environment and a limited government with only its role in defense, diplomacy and public finance is required.[7] The ruler of a country should not involve in business, because it damages the civilization and populations. It could prevent the ruler to be just and fair in involving economic issues and naturally such involvement makes ruler to involve economic affairs on behalf of his benefit.

Today in Islamic world, most of the state has absolute monopoly in economic affairs. Government is the only employer, and key player in economic field. Besides that, most of the rulers in Muslim countries have involved in business. Today’s globalizing world, economy and politics are so interlinked and cannot be separated easily. This makes the rulers in the Islamic world kept involved in economic affairs rather than trying his outmost to be a just and fair ruler above different players.

In world history, it does not really matter who rules the world or a state, but the crucial one is whose ideas rule the society. That is why in Islamic theology, there is no Islamic government proposed as fixed beforehand. All Islamic resources give some general ideas, values and understanding that could be institutionalized in different forms in different times in human history. Islamic societies need to have political and economic space (even in a limited form) to allow freedom in thinking and action.

Today in Islamic world in particular, there exists an alienated and excluded periphery that has almost no voice or influence in decision making process, along with an elite controlling everything, named as center. Turkey is no exception. A case can be made here for Turkey and some insights can be drawn from Ibn Khaldun’s thoughts and Turkish experience. In Turkey there was an absolute control of center on the state institutions until 1950 that automatically excluded periphery. However, there existed relatively independent state institutions that allowed periphery to keep in the system, be it through elections or otherwise.

Turkey’s acceptance of neo-liberal and free-market economic policies after 1980s actually has accelerated the periphery’s integration and pawed the way for the widening of the freedom in Turkey. This freedom took place and has still been taking place in several fronts. Economically, the historically disadvantaged, excluded periphery has gradually gained economic independence from the state through trade/business, because state was the only job-giver. With the creative ‘individualistic’ successes of Anatolian Tigers, as it called, periphery gained not only its economic independence and in turn power in society, but also mental freedom.[8]

If Turkey has grown in last six year approximately 7 percent each year, this is partly the result of newly emerging Anatolian creative and independent thinking business. Their import-export contribution to Turkish economy and their production has been essential. This is the result of free market economic policies after 1980s in Turkey and its influence on freedom and creativity. Even current ruling Justice and Development Party should be seen as the political repercussion of this increasing new elite/middle class from periphery.

In the Islamic world, no institutional structure that allows the periphery to have a “voice” exists, making them to resort violent most of the time. State institutions are under absolute control of autocratic regimes, in other words the center, similar to pre-1950 condition of Turkey. As seen in Turkish case, first an “opening up” of institutions strategy should be implemented, then gradually pushing toward a more accommodative center-periphery relation along with free-market economic policies in order to promote freedom. Therefore, as Brumberg[9] notes “for democracy [and freedom, MO] to have any hope in the Arab [Islamic, MO] world, it is not Islam to be fixed, but politics itself”. For this to be, free market policies could contribute in a way that it could open the way for having a creative and qualified labor, as Ibn Khaldun argued, as the centre of economic development.

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[1] See Ahmet Davutoglu, “The Clash of Interests: An Explanation of the World (dis)Order”, Perceptions: Journal of International Affairs, Vol 2, No 4, (Dec 1997-Jan 1998).
[2] Jean David C. Boulakia, “Ibn Khaldun: A Fourteenth-Century Economist”, The Journal of Political Economy, 79/5 (Sep-Oct 1971), p.1107.
[3] Ibn Haldun, Mukaddime, trans. Suleyman Uludag, 4th edition,Istanbul: Dergah Yayinlari, 2005, Vol 2, p.695.
[4] Adam Smith, The Wealth of Nations, New York: Modern Library, 1994, pp.3-13.
[5] See Michael Porter, The Competitive Advantage of Nations, London: Macmillan, 1990.
[6] See David Warsh, Knowledge and the Wealth of Nations: A Story of Economic Discovery, New York: W.W.Norton, 2006.
[7] Joseph J. Spengler, “Economic Thought of Islam: Ibn Khaldun”, Comparative Studies in Society and History, 6/3 (April 1964), p.293.
[8] See Hasan Kosebalaban, “The Rise of Anatolian Cities and the Failure of the Modernization Paradigm”, Critique: Critical Middle Eastern Studies, 16/3, 2007, pp.229-240.
[9] Daniel Brumberg, “Islam is not the Solution (or the Problem)”, The Washington Quarterly 29 (Winter 2005-2006), p.99.