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INAUGURAL PROFESSORIAL LECTURE

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.

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INAUGURAL PROFESSORIAL LECTURE

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  1. 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

  2. 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 decliningglobally. • Governments and business find that the current economic path is environmentally unsustainable.

  3. 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 IbnKhaldun 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 IbnKhaldun • Remember, You and I are here • “to learn from each other”

  4. 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)

  5. BENEFIT S OF ECONOMIC GROWTH IN WESTERN LITERATURE

  6. THE COSTS OF ECONOMIC GROWTH IN WESTERN LITERATURE

  7. THE COSTS OF ECONOMIC GROWTH IN WESTERN LITERATURE

  8. 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

  9. 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

  10. INITIATIVES RESULTED FROM THE NEGATIVE EFFECTS OF ECONOMIC GROWTH

  11. QUICK SURVEY • How many of you have heard OR read about IbnKhaldun?

  12. 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.

  13. 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

  14. 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

  15. 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

  16. To Egypt From Hadramaut, Yemen

  17. 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.

  18. WHAT ARE HIS GENERAL CONTRIBUTIONS? • A precursor and forerunner of modern historiography, economics, sociology, education and political theories. • He studies the rise and decline of nations based on empirical and rational nature of inquiry • He was the first to develop a scientific approach to the study of human behavior, society and history • He discovers the theory of human social development

  19. 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)

  20. 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)

  21. 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)

  22. 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)

  23. 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.

  24. KUALA LUMPUR IN THE 1880s- A SWAMPY AREA

  25. KUALA LUMPUR 120 YEARS LATER

  26. From swampy to rapid development and growth and now the side effects of growth.

  27. THE KHALDUNIAN MIND • What Shapes it • His View of the World • Theory of Man and Society

  28. 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.

  29. 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.

  30. 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.

  31. Is More Better Than Less? • There is a fundamental notion in economics that more is better than less • IbnKhaldun disagrees with this. • At one point more of anything will cause detrimental effects on man, society and environment.

  32. 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

  33. 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.

  34. 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.

  35. IBN KHALDUN’S CONTRIBUTION TO THE THEORY OF ECONOMIC GROWTH

  36. LIFE CYCLE THEORY AND ECONOMIC GROWTH • IbnKhaldun 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.

  37. We know intuitively and logically that continuous growth can't be sustained in living things. It's likewise unsustainable (and undesirable) in business. Cellular economic theory suggests an alternative to linear growth: circular growth. `We are realizing all systems are like biological systems--even economic ones. Growth-at-all-costs business is malignant’ (Stalnaker, Stan(2009). The Next Evolution in Economics: Rethinking Growth, Harvard Business Review.)

  38. 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_Paper.pdf)

  39. 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.

  40. Product Life Cycle Theory

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