What Rey Dalio can learn from Ibn Khaldun and the 1400 years of the Islamic Economy

“But human labor is necessary for every profit and capital accumulation. When (the source of profit) is work as such, as, for instance, (the exercise of) a craft, this is obvious. When the source of gain is animals, plants, or minerals, (this is not quite as obvious, but) human labor is still necessary, as one can see. Without (human labor), no gain will be obtained, and there will be no useful (result).

Gold and silver are the (measure of) value for all capital accumulations. All other things are subject to market fluctuations, from which (gold and silver) are exempt. They are the basis of profit, property, and treasure. If all this has been established, it should be further known that the capital a person earns and acquires, if resulting from a craft, is the value realized from his labor.” Ibn Khaldun, Al Muqaddima, (1398), Page 480.


1, Introduction

In his important new book, the billionaire Ray Dalio discovered the big cycles of power and wealth in the world in the last 300 to 500 hundred years: From the Dutch Florin in the 18th. century, to the British Sterling in the 19th. Century, to the American Dollar in the 20th. Century. What will replace the Dollar in the coming years? The Chinese Yuan or the Bitcoin?

China economy grew by 3.2% in the second quarter of 2020. The United States economy fall 9.5%. Two more years like that, and the dollar is over. Why United States has only few months reserve for import, while China has few years?

Will the Chinese Yuan become center of the power and wealth in the 21st. Century?

From: https://www.principles.com/the-changing-world-order/

But we see two limitations in Dalio forecast, that will constitute the two parts of our book:

First, A narrow historical perspective, that do not include what happen before the rise of the West and of the Capitalism (Holland, Britain, USA). Our perspective will be wider and include Spain, the Muslim world, and the Roman Empire. By this we will enrich Dalio’s analysis, with the perspective of the big historian of 2,000 years of the Mediterranean world Ferdinand Braudel, and the historians of “the world system” like Wallerstein et al.

Second, A blindness to the “Black Swan of the 21st. century: The Bitcoin as a post national and a global reserve currency that will replace both the Dollar and the Yuan and the GO(L)D. Even more, a new post national entity will emerge from the Bitcoin: BITCONIA as a “Global State”.

2, Work and measure of value

2.1, Work is bio-energy metabolism of input — value added — output (IVO).

2.2, The two sides of a barter transaction believe that a given cow of the farmer has the same value (same of investment of work) as chair of the carpenter.

2.3, Because of scalability and saleability (Saifedean, 2018), the carpenter can take the cow and give the farmer some amount of money (as a measure of value, like Gold, Fiat, Bitcoin, Etc’)

2.4, Thus MEO, SOV, and UOV are different expression of one thing.

2.5, Wars, revolutions, and robberies, are kinds of works that do not make the cake grow, but only cut the cake differently. No POW.

2.6, Thus money is the oxygen of the metabolism of the society. The people in power take the Oxygen for themselves

2.7, Four stages cycle: Every global reserve currency pass four stages:

· Growth (USA in 1944–1964, after Bretton Woods).

· Disillusionment (1964–1984, Vietnam War)

· Fear (1984–2008, from Reagan to Bush)

· Decadence (USA in 2008–2029)


Key to the map of Ibn Khaldun

5 Empty beyond the equator becauseof the heat 45 Azerbaijan 6 Equator 46 Desert Eastern India 10 50 Tashkent 11 52 China 13 14 Nubia 54 15 Abyssinia 55 Brittany 16 Ghanah 56 Calabria 17 57 France 18 58 Venice 19 Morocco 59 Germany (Alaminiyah) 20 Tangier 60 Macedonia 21 23 Ifriqiyah 63 65 Armenia 26 29 Upper Egypt 69 Bulgars 30 Egypt Syria 73 Magog 34 Yemen 74 ‘Iraq 77 78 Gog 40 Western India 80

Lecturer and Consultant in top Universities in Israel, China, USA,

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