political fragmentation and cultural diversity 279supply would not meet the demand and the prices of these basic
goods would rise. Elasticity of demand could be inferred here, although
Ibn-Khaldùn did not use the term explicitly. In case of luxurious goods
in these affluent societies, the situation would be different: if the sup-
ply was in a state of normality, without interrupting disasters, prices
would be high, but if the supply was interrupted by any state of
abnormality the prices would come down. The elasticity of demand,
once more—for basic goods the elasticity is low, but it is high for
luxurious goods. But the inferred state of elasticity of demand was
not to be constant as it was changeable with the state of economic
prosperity, as Ibn-Khaldùn clarified. In his words, “when a city has
a highly developed, abundant civilisation and is full of luxuries, there
is a very large demand for conveniences and for having as many of
them as a person can expect in view of his situation. This results in
a very large shortage of such things. Many will bid for them, but
they will be in short supply. They will be needed for many pur-
poses, and prosperous people used to luxuries will pay exorbitant
prices for them, because they need them more than others. Thus as
one can see, prices will come to be high”. One can detect from this
explanation a state of backward demand. Demand increases even
when the price is rising.
Price of labour
Turning his attention to price of labour, Ibn-Khaldùn clarified that
labour cost may increase with the increase in the level economic
development. “Crafts and labour are expensive in cities with abundant
civilisation”, he stated. In his view, this was for three reasons. First,
their skill was much needed because of the need for luxury goods.
Second, industrial labourers would price their services highly as they
did not have to work as long hours as they might have done in case
of a less affluent society. Third, the existence of a great number of
people with “money to waste” on these luxury goods, who would be
motivated by the desire to have an exclusive access to these goods
and consequently their readiness to pay for the service more than
it was inherently worth.
Earnings, income, capital and value
From a religious perspective Ibn-Khaldùn differentiated between rizq
and kasb. Rizq is what is provided by God, even if man has not
strived to obtain it, such as the rain used in irrigation. Kasbis what