Al-Maqrizi’s Theory of Inflation

In the name of Allah, the Most Merciful, the Most Compassionate. Praise be to Allah, Lord of the Worlds, and peace and blessings upon the Messenger of Allah and the Seal of the Prophets.

In his treatise “Ighāthat al-Ummah bi-Kashf al-Ghummah” (“Relief of the Nation by Exposing the Calamity”), Al-Maqrizi documents the inflation and high prices that he himself witnessed, demonstrating his point by comparing contemporary price lists of essential goods with their historical prices. He attributed this surge in prices to poor economic management, asserting that mismanagement was the cause of the crisis, not environmental factors such as drought or flooding of the Nile, nor epidemics or plagues. These, he argued, had explained famines and periods of high prices in earlier times, but not the particular calamity under his study.

Causes on the Supply Side
According to Al-Maqrizi, the crisis on the supply side stemmed from a shortage of agricultural produce. This decline was due to the deterioration of agriculture: the high monetary rents imposed on farmers, combined with the heavy taxes and levies they were forced to pay, impoverished them. Furthermore, the control of influential elites over the food supply and their monopolization of trade in foodstuffs and production inputs—especially seeds and fodder—caused prices to rise. Farmers could no longer sustain cultivation, their livestock perished, and they abandoned their lands in order to escape their financial obligations to powerful landholders, who competed in bidding for land leases (the qabālah system of fiscal and military feudalism prevailing at the time).

Causes on the Demand Side
On the demand side, Al-Maqrizi saw the problem in poor monetary policy. The state had expanded the circulation of money after making copper-based coins (fulūs) the common medium of exchange. In Islamic jurisprudence, fulūs referred to token coins made from metals other than gold and silver. Unlike precious metals, these were abundant, making it difficult to limit their supply. The state treasury found in their issuance an easy and inexpensive source of financing.

As a result, the shortage of goods (agricultural produce) on the one hand, and the expansion of the money supply through the excessive issuance of fulūs on the other, combined to fuel inflation and widespread famine. What distinguishes Al-Maqrizi’s analysis is not only his identification of both demand-pull and cost-push inflationary forces, but also his recognition that inflation did not affect all social groups equally: the ruling elite and major merchants benefited from it, while ordinary people suffered.

Al-Maqrizi’s Proposed Remedies
To address inflation, Al-Maqrizi advocated a return to a bimetallic standard (gold and silver, with their naturally limited supply). He considered this a moral and religious imperative, rejecting the use of non-precious metals as currency. He emphasized:

“… The currencies which serve as the prices of sales and the value of labor are none other than gold and silver. There is no authentic or weak report from any nation or people, in ancient or modern times, that they ever adopted any other form of money besides them …”

It seems, however, that Al-Maqrizi was not so much concerned with establishing a scientific truth as he was passionately opposing the expansion of the money supply through the use of abundant metals. Otherwise, he himself records in the same treatise instances of societies using alternative forms of money: in Baghdad during the 5th century AH, bread was used as money, treated like dirhams in transactions; he also mentions paper money in circulation among Chinese merchants, seashells (wadaʿ) used in Upper Egypt, and other similar practices. He cited these examples not to endorse them but to denounce token coinage (fulūs) and ground his legal stance against it because of the inflation it caused.

In this sense, Al-Maqrizi stands out as one of the earliest proponents of what later became known as the Quantity Theory of Money—the direct relationship between money supply and the general price level.

Reforming Administration and Agriculture
On the supply side and within the real economy, Al-Maqrizi called for reform of state administration, particularly the abolition of the qabālah system. Under this system, officials and military leaders would pledge large cash sums to the state treasury in return for the right to collect taxes from farmers. Driven by greed, these intermediaries imposed crushing taxes far exceeding what they owed the state, profiting from the difference while devastating the peasantry. Al-Maqrizi believed this system was what destroyed the Egyptian countryside and ruined the provinces.

He argued that reforming the administrative system was essential for reviving rural life and revitalizing agriculture. This focus on supply and its flexibility was, in his view, an indispensable half of the solution to inflation.
And Allah, the Lord of Might, is exalted above what they ascribe to Him. Peace be upon the Messengers, and praise be to Allah, Lord of the Worlds.

Abduljabbar Al-Sabhany
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