Ibn Khaldun warned us about Mayor Zohan Mamdanis ideas. I first encountered Ibn Khaldun while studying Islamic political thought at the American University in Cairo. His 1377 masterwork, the Muqaddimah (The introduction to his universal history), pioneered systematic approaches to historiography, sociology, economics, demography, and the philosophy of history.
Khalduns book features a clear description of what became known six centuries later as the Laffer Curve â the economic theory that, as tax rates rise there will be a peak in revenue, beyond which as rates continue to go up, revenue starts to decline as economic activity collapses.
Per Khaldun, early in a dynasty, low taxes encourage enterprise; revenue rises and civilization flourishes. Later, rulers demand more luxury and larger armies. Taxes climb. Businessmen compare their shrinking profits to the growing burden and lose incentive. Production falls, and with it tax yields. At that point, governments often turn to subsidies and then enter commerce themselves â buying and selling, establishing monopolies, competing directly with private traders. Independent merchants are further discouraged. Many leave or quit. The tax base collapses. The empire weakens and falls.
EXPERTS SCORCH MAMDANI’S GROCERY PLAN AS AN ‘ILLUSION’ THAT WILL HAVE TAXPAYERS FOOTING THE BILL
New York City Mayor Zohran Mamdani is now testing a modern version of the later stages of that cycle. The mayor is advancing a plan for city-owned grocery stores â one in each borough â with the first expected to open in the Bronx in 2027 and others by the end of his term. The city will own the land, cover construction (tens of millions of dollars already allocated), waive rent and taxes, and subsidize a core basket of staples so they sell roughly 30 percent below typical retail prices. A private operator will handle day-to-day management under city-set rules on pricing and labor.
Supporters frame this as relief for high food costs. History and Khaldun suggest a different trajectory. When government subsidizes and then operates in a competitive sector, private operators face distorted competition. Capital and effort shift away from the independent businesses that generate the tax revenue governments need. Inefficiencies multiply. Shortages and declines in quality follow. The temporary political win of cheaper eggs and bread is purchased with long-term damage to the commercial vitality that sustains cities.
Mamdanis background makes the irony sharper. As the son of a prominent scholar of postcolonial societies, it is conceivable that he would be familiar with Islamic Golden Age thinkers who analyzed why states thrive and why they decay. Ibn Khaldun stands among the most famous. His warning was empirical, drawn from observing North African and Near Eastern dynasties: When the state moves from light taxation and order to heavy extraction and direct commercial intervention, the productive classes withdraw. Civilization contracts and then collapses.
Quoting Khaldun: “It should be known that the finances of a ruler can be increased, and his financial resources improved, only through the revenue from taxes. (The revenue from taxes) can be improved only through the equitable treatment of people with property and regard for them. ⦠Other (measures) taken by the ruler, such as engaging in commerce or agriculture, soon turn out to be harmful to the subjects, to be ruinous to the revenues, and to decrease cultural activity.”
