New book: Capitalism born in the Middle East

Press Release 7th of May 2018

Dr. Nima Sanandaji’s new book The Birthplace of Capitalism – The Middle East, is perhaps the most comprehensive deep dive into the early history of the market economy and traditions of enterprise ever made. The author hopes that the book will remind readers that the Middle East has a history with far more depth than any other region in the world.

A new book by the Swedish author Dr. Nima Sanandaji, of Iranian-Kurdish roots, is making the headlines this month. Although the topic is well known within academic circles and have been on the lips of historians for a long time, Sanandaji is unparalleled in his ability to demonstratively show example by example how the market economy first took shape in the Middle East at about 4000 years ago.

”Nima Sanandaji has in this excellent book enhanced the understanding of the Middle East by observing the region through the perspective of trade. He shows deep knowledge in both trade and Middle East history. The combination of these aspects is an important contribution to the ongoing debate in Europe on migration and integration,” says Eli Göndör, Ph.D. History of Religion/ Islamology & Middle East

The book, entitled The Birthplace of Capitalism – The Middle East, is a 200-page journey from the tamkarum entrepreneurs of ancient Mesopotamia to the first corporations in India and the medieval Arab economic thinkers such as Ibn Khaldun, the true originator of the now famously known economic concept of the Laffer curve – the tendency for tax revenue to shrink beyond a certain peak in taxation levels.

“The idea that government tax revenues will fall when the tax rates reach a certain level is today associated with the U.S. economist Arthur Laffer. While Laffer certainly has contributed to the modern understanding of how high taxes can burden the economy, this theory was originally developed by the 14th century North African Arab intellectual Ibn Khaldun. He used the theory of stifling government taxation to explain the rise and fall of entire dynasties,” says the author Nima Sanandaji.

In the modern age, Sanandaji attributes the prevalence of totalitarian and partially centrally planned regimes in the Middle East to the regions wealthy oil reserves. Just like the River Nile in ancient times, Sanandaji notes, oil is a resource that encourages the state to take upon a detrimentally large role over the economy. While the ancient and medieval Middle Eastern tradition of enterprise and commerce came to an end with the invasion of the Mongols and later with the British gun boat diplomacy, Sanandaji wants to remind his readers that the Middle East is not eternally plagued by wars and conflict, it is rather a parenthesis in the longer historical frame.

“We need to find a hopeful vision for countries like Iraq and Syria. These countries have a tradition of entrepreneurship dating back thousands of years and which still today comes visible when people from these regions, such as Kurds, Lebanese, Syriacs to name a few, migrate to the West and engage in commercial activities. While today all we see is war, it is important to remember that this region used to be the economic centre of the world for thousands of years,” Sanandaji says.

In addition to the vast examples of impressive Middle Eastern engineering and proofs of commercial ventures that Sanandaji mentions in the book, it also deals with the mythological and ideological side of human activity. This is an intriguing observation, that paradoxically, market economy eventually took off in the West where profit-seeking individuals have always been fictionally portrayed as villains, while in the Middle East, they are the heroes of each story. One example is Sinbad the Sailor.

“There is a lot of inspiration to be drawn from old Middle Eastern stories when it comes to entrepreneurship. I am optimistic that just like the old market economy of Syria managed to rebuild the country after an earthquake, the peoples of these countries still harbour these same ideals that will be needed to rebuild the country once peace has been secured,” Sanandaji concludes.

The book, released this week, is published by the Swedish free market think tank Timbro.

“This provocative and educated account on the roots of capitalism offers a humbling corrective to the all too familiar claim that there are cultures that are inherently anti-market. Thus, in the spirit of Bastiat, Sanandaji makes a convincing case that the way to recovery for the Middle East must lie in releasing – not restricting – economic activity, as is currently done through sanctions and military intervention. A hearting must-read in an era of ever-increasing polarization and pessimism,” says Karin Svanborg-Sjövall, President & CEO of Timbro.