economic thought of the rightly guided caliphs 125particularly emphasised in Caliph Ali’s thought, anticipating in that
the thought of the physiocratic school, the important role of trade
was also stressed, foreseeing in that the thought of the mercantilis-
tic school. The service sector, including the army, had also an impor-
tant role to play in economic development and the role of government
in the development was particularly important. A just distribution of
economic resources was also of paramount importance in the process
of development. The economic development for the fourth caliph,
and indeed for caliphs in general, was not confined to the develop-
ment of production but it would also extend to cover the distribu-
tion of the value of production among the population. To use modern
economic terms, it was not only the increase in the value of national
product, or national income, that concerned him but also how the
national product was allocated to the individuals in the community.
He used an interesting expression to refer to the equitable distribu-
tion of national income. To him, the optimally just distribution of
income in the process of economic development was the one in
which the increase in an individual’s wealth was not accompanied
by a decrease in another’s. Such a concept of optimal distribution
is very near, if not identical, to Pareto’s concept of efficient distribution.
Without doubt, the economic thought of the fourth caliph Ali was
particularly rich. As early as the mid seventh century he tackled eco-
nomic issues and anticipated economic ideas that became of inter-
est to economists subsequently.
By the death of Caliph Ali in 661 the Rightly-Guided Caliphate,
al Khilafah al-Rashìda, came to an end, giving way to a new era
of Islamic government: dynasties. The first of these was the Umayyad
dynasty that lasted for ninety years.