Journal of Al Azhar University-Gaza 2004, Vol. 7, No. 1 P 41-48 IBN KHALDUN CONTRIBUTION TO THE SCIENCE ECONOMICS Suleiman Abbadi Faculty of Administrative & Financial Sciences Arab American University - Jenin. E-mail: sabbadi@aauj.edu ABSTRACT: Ibn Khaldun was a famous historian, sociologist and philosopher and the founder of sociology. Western economists egnored him though he contributed to several economic areas such as public finance, economic growth, market equilibrium and the theory of value. Ibn Khaldun preceded Adam Smith and David Ricardo in realizing the labor as the main source of value he also introduced the natural wage rate which depends on expenditures rather than prices of necessary means of substance as Marx claimed. Market prices of commodities increase or decrease according to demand, wage rate and hoarding the commodity. He introduced what is called now the Walrasing Law in two places in the Moqademah. To him, prices adjust upward with excess demand and downward with excess supply. Whereas Ibn Khaldun’s growth theory depends on populations and thus the labor force alone whereas modern growth theories added capital to the labor. In public finance he discovered what is called now the Laffer curve 600 years before it was discovered by Laffer. He claimed that sales and import taxes are indicators of the end of the state. Like other classical economists he doesn’t believe in government intervention in the economy. Finally a decrease in government expenditures causes a decrease in government revenues and thus a recession. INTRODUCTION Ibn Khaldun was born in Tunis in 1332, He received his education there, then served in various capacities several of the rulers who divided Moslem North Africa and Spain between them. One of the important position he held was a Judge of Peter the Cruel at Seville. In 1382 he traveled to Cairo in which he was appointed as Professor of law at Al-Azhar University, and later a Judge, in which he held until he died in 1406. (1) Ibn Khaldun was a famous historian, sociologist and philosopher. He is well known to the sociologists, as they consider him the founder of the science of sociology. But he was ignored by the economists even though