The 75th death anniversary of national poet-philosopher Allama Mohammad Iqbal would budge but a few on April 21, 2013. A poet with a profound philosophy though internalized by just a handful, most of whom remain powerless to influence and wake up nation’s dormant conscience, a philosopher with a sound poetic-message; though entertained by very few, most of whom dwell introvert, not to disseminate. Likewise, the first ever book on economics in Urdu language ‘Ilmul Iqtesaad’ (Science of Economics -1903), swiftly goes unnoticed, not to be realized, never to be acknowledged.
The mere creation of ‘Ilmul Iqtesaad’ renders him economist in the same-way as the Wealth of Nations (1776) does make Adam Smith an economist, or the Das Captia does Karl Marx; albeit the sublimity differs a lot. In the context of subcontinent, at Iqbal’s times economics was not taught anywhere in the universities, and certainly no book existed in Urdu language. In fact Iqbal had deep insight into the economic plight of the Indians and was deeply concerned with the unequal income distribution that turned the rich richer and the poor poorer. On 28 May I937 he wrote: "The problem of bread is becoming more and more acute. The Indian (Muslim) has begun to feel that he has been going down and down during the last 200 years. Ordinarily he believes that his poverty is due to (Hindu) money-lending or capitalism. The perception that it is equally due to foreign rule has not yet fully come to him. But it is bound to come."
Iqbal’s book titled ‘Introduction to Ilmul-Iqtesaad’ (the knowledge of economics), has a structure like this: forward from Mr. Mumtaz Hassan, prelude from Mr. Anwar Iqbal Qureshi and introduction from Allama Mohammad Iqbal himself. The book has five parts: Part One: The Science of Economics, Part Two: Production of Wealth, Part Three: Exchange of Wealth, Part Four: Stakeholders in Production of Wealth and Part Five: Population, Needs & Consumption. The book ends at an annex that includes English translation of terminologies used in the book. The book within its constraints, engulfs all branches of economics except for the quantitative techniques and modeling. Naturally, these areas were too advance to be included in an introductory book on economics.
The Part One, ‘The Science of Economics’, deals with the nature of economics and its methodology of research. The nature of economics as postulated by Iqbal is inverse of the notion as being ‘science of wealth’ due to very reason the nineteenth-century philosophers like Ruskin and Carlyle had to name economics a ‘pig philosophy’. To Iqbal the study of economics does not lead to lust for wealth rather it emphasizes modalities through which legitimate earning and prudent spending is ensured, devoid of usurping and exploitation on either side. This in other words means a state of affairs or general economic equilibrium whereby dominance of wealth is founded on equal and equitable distribution, and predominance of wealth over human welfare and human sentiments. To Iqbal, a research-based analysis would determine the partial equilibrium in various sectors of the economy and modes of factor pricing. At the same time Iqbal urges human development through exploration and preservation of natural resources and improving human / societal relations. In this manner Iqbal envisions today’s HDI (human development index), much in vogue in the field of development economics.
The part two discusses ‘production of wealth’, the famous four factors of production land, labor, capital and organization (today’s entrepreneur). While the entrepreneur prioritizes profitability and the consumer does utility and eventually for the former profit being utility, Iqbal differentiates place utility from time utility which simply implies usefulness of a good or service or phenomenon with respect to geographical location and the time (or timing). Surprisingly Iqbal discusses regional specialization in producing goods and services and quite legitimately brings in the notion of comparative cost. This means a region or country must redouble its expertise in its optimized area of production which would necessitate comparison of opportunity cost of producing that good or service. In economics the opportunity cost is the cost of the opportunity we lose while availing of a given opportunity. For example if we produce wheat on a piece of land where as its best alternative use could be developing a plaza on it, now the opportunity cost of producing wheat would be the plaza which we could alternatively build and made use of. The comparative cost is the comparison of cost of production between two regions or countries. Now the country with lesser comparative cost will produce the good under consideration. Then Iqbal discusses protective trade, which today is known as ‘infant industry argument’ or protectionism. This concept favors the newly established industries that must be given ‘tax holiday’ and must be protected against foreign competition, so as to flourish and consolidate.
Under part three: ‘exchange of wealth’, the chapter deals with issue of value as to how it differs from person to person and also with respect to spatio-temporal constraints. Then the chapter identifies proportion of labor as a factor of production in formulation of value embodied in that product. As is customary, the chapter deals with market forces of demand and supply affecting value of the product. The variables like stock and flow (supply) are also part of this chapter. Inherent in the concept of value is the characteristic of money that quantifies the value, and then the velocity of money that indicates change of hands money faces while it circulates in the economy. This tendency has profound effect on the speed and volume of economic activity taking place in the country that in turn determines GDP (gross domestic product) and speed of returns on investment (ROI). This part ends with discussing cost of coining, intrinsic value of money, convertible and inconvertible paper money and nevertheless the credit money.
The fourth part: stakeholders in production of wealth carries in detail the issue of factor pricing, the microeconomics part of the book. As is commonly mentioned in text books, the chapter explains that how land gets rent, capital earns interest, labor wins wages and entrepreneur grabs profit as his share as a risk-taker. The last part: ‘population, needs & consumption’ postulates that population increases in geometric progression. This is akin to Malthus who gave a similar opinion about population in 1810, with a difference of means growing mathematically. Then Iqbal brings to light the needs of the modern era as marked with greater liberalization, mutual peace, foreign trade and the rich countries helping the poor. Here it is worth mentioning as contrary to this concept, how aid has sporadically damaged the poor countries, called ‘aid syndrome’, also called ‘false paradigm’ by advanced countries.
One nation pastures on the other,
One sows the grain which another harvests,
Philosophy teaches that bread is to be pilfered from the hand of the weak,
And his soul rent from his body,
Extortion of one's fellowmen is the law of the new civilization,
And it conceals itself behind the veil of commerce. (Iqbal)