Al-Maqrizi and Inflation: 14th-Century Thought Still Relevant in Indonesia

Islamic economics has produced many figures who have contributed greatly to the development of economic thought. One interesting figure to study is Al-Maqrizi. Unlike some other Islamic economic thinkers who focused on trade or wealth distribution, Al-Maqrizi extensively discussed inflation, currency stability, and the government’s role in maintaining public welfare. His thoughts remain highly relevant because inflation continues to be one of the main challenges faced by various countries, including Indonesia.

Al-Maqrizi, whose full name was Taqiyuddin Ahmad bin Ali bin Abdul Qadir Al-Maqrizi, was born in Cairo, Egypt, in 766 H (1364 AD) and died in 845 H (1442 AD). He was known as a historian, scholar, and Islamic economic thinker who lived during the Mamluk Dynasty. Throughout his life, Al-Maqrizi observed various social and economic events in Egypt. He witnessed firsthand an economic crisis that caused rising prices, poverty, and public suffering. This experience drove him to conduct in-depth studies on the causes and solutions to various economic problems. One of his famous works is Ighatsah Al-Ummah bi Kasyf Al-Ghummah, which discusses the economic crisis and inflation of his time. In this work, Al-Maqrizi provided a systematic analysis of the factors causing inflation and its impact on society.

Al-Maqrizi’s most famous contribution is his theory of inflation. According to Al-Maqrizi, inflation is a condition of continuously rising prices for goods and services, leading to a decline in people’s purchasing power. He divided inflation into two types: Natural Inflation and Human Error Inflation. Natural inflation occurs due to factors beyond human control, such as natural disasters, drought, crop failure, disease outbreaks, and war. When the available supply of goods decreases while public demand remains high, prices will rise. According to Al-Maqrizi, this type of inflation is a natural condition that is difficult to avoid and often impacts all levels of society. Human Error Inflation, on the other hand, occurs due to human behaviour and inappropriate policies. Al-Maqrizi explained that corruption, abuse of power, excessive taxation, and poor currency management can cause unreasonable price increases. He argued that inflation caused by human error is far more dangerous because it can actually be prevented through good governance and appropriate economic policies.

Al-Maqrizi also stressed the importance of maintaining currency stability in the economy. In his era, the government often debased the circulating currency to gain short-term profits. This policy caused the currency’s value to fall and triggered price increases. According to Al-Maqrizi, the government must maintain the quality and value of the currency so that the public continues to trust the prevailing economic system. Currency stability will create a healthier economic climate and support trade activities. Furthermore, Al-Maqrizi believed that the government has a crucial role in maintaining economic stability. The government must create fair policies, supervise the distribution of staple goods, and eradicate corruption that can harm society. If the government fails to carry out these responsibilities, various economic problems such as inflation and social inequality will become increasingly difficult to overcome.

Al-Maqrizi’s thoughts remain very relevant to Indonesia’s current economic conditions. One of the problems Indonesia frequently faces is the rising price of staple foods such as rice, chillies, cooking oil, and other food commodities. In some cases, price increases occur due to natural factors like extreme weather, floods, or crop failures that reduce the supply of goods in the market. This condition aligns with the concept of natural inflation described by Al-Maqrizi. Additionally, Al-Maqrizi explained that human error can damage economic conditions. In the Indonesian context, inefficient goods distribution, corrupt practices, hoarding of goods, and inappropriate policies can cause the prices of basic necessities to rise further. The Indonesian government has undertaken various efforts to control inflation through market operations, social assistance, subsidies, and increasing food production. These efforts demonstrate that the government’s role is very important in maintaining economic stability and public welfare, as explained by Al-Maqrizi centuries ago.