Economy of the Islamic World: Agriculture, Trade and Cities

A merchant in Baghdad could pay a supplier far away with a written note, and not a sack of coins. That small idea changed trade. It grew out of a rich economy built on farms, cities and long sea and land routes.

This lesson looks at how the Abbasid-era Islamic world earned and moved its wealth. We start with land and taxes. Then we move to cities, trade, paper and money.

1Who owned the land and paid the taxes?

Land was held by many hands. Big landowners, small peasants and the state all owned fields. This was true most of all in Iraq and Iran.

Land paid a tax called kharaj. At first it fell only on non-Muslims. Soon it was applied to Muslims as well. Another levy was ushr, a tax of about ten per cent on the harvest.

Paying soldiers in cash was costly. So rulers began to give officers the right to collect the tax from a plot of land. This was the iqta. It spread widely in the tenth century. The Buyids, for one, reorganised land into iqtas.

• Kharaj: land tax, first on non-Muslims.
• Ushr: about 10% of the harvest.
• Iqta: tax rights given in place of a wage.

2How did farming grow?

Farming was the base of the economy. The state and landowners built canals, dams and wells. More water meant more food.

New crops also travelled across the Islamic lands. Rice, sugar cane, cotton, melons and citrus fruits were spread widely. Some came from India, and some from China or Africa. Scholars call this an agricultural revolution.

Farmers could now grow more types of crops, and for longer parts of the year. Cotton, in turn, fed the cloth trade in the towns.

• Irrigation: canals, dams, wells.
• New crops: rice, sugar cane, cotton, citrus.
• Result: a longer growing season and more food.

3How did the great cities grow?

Many early cities began as army camps. They were called amsar. Kufa and Basra in Iraq are two famous cases. Fustat in Egypt is another. Over time they became real centres of trade and rule.

Baghdad was founded in 762 by the caliph al-Mansur. It became the Abbasid capital. In the Golden Age its population passed one million.

Older cities also grew. Damascus, Isfahan and Samarqand all gained from busy trade and richer farms.

• Garrison towns: Kufa, Basra, Fustat.
• Baghdad: founded 762, over one million at its peak.
• Older towns that grew: Damascus, Isfahan, Samarqand.

4What was at the heart of a city?

A typical city had a Friday mosque and a market, the suq. The most valued goods were often sold close to the main mosque. Faith and trade lived side by side.

Caliphs also built great mosques as symbols of power. The Great Mosque of Samarra was started in 848 and finished in 851 under al-Mutawakkil. At the time, it was the largest mosque in the world.

Its minaret stands 52 metres high. A spiral ramp winds around it.

• City centre: Friday mosque and suq.
• Samarra mosque: 848-851, caliph al-Mutawakkil.
• Minaret: 52 m, with a spiral ramp.

5Which routes carried the trade?

The Islamic world sat between India, China, Africa and Europe. That was a gift for trade. Goods moved by sea and by land.

At sea, ships used the monsoon winds of the Indian Ocean. The English word monsoon comes from the Arabic mawsim, meaning “season”. On land, caravans crossed Central Asia on the Silk Road, passing cities like Samarqand.

Spices, cloth and fine goods passed through the great ports and markets. Cities along the way grew rich on taxes and trade.

• Sea trade rode the monsoon, from Arabic mawsim.
• Land trade used the Silk Road.
• Hubs: Baghdad, Samarqand, Fustat.

6Why did paper and the Geniza matter?

Paper came to the Islamic world from the east. One old story says Chinese prisoners taught papermaking in Samarqand after the battle of Talas in 751. Modern scholars doubt this tale. Paper was already in use in Central Asia by the eighth century.

What is clear is that paper-making spread across the Islamic world. Mills grew up in Samarqand, Baghdad, Damascus and Cairo. In Baghdad it was supervised by the vizier Ja’far ibn Yahya.

Paper was cheaper than older writing materials. More people could keep records, write letters and copy books.

Records survive from Fustat. Its Ben Ezra synagogue kept a storeroom, or geniza. It held about 400,000 manuscript fragments. They include letters, contracts and business papers. Solomon Schechter saw their worth in the 1890s.

• Papermaking in the Islamic world: Samarqand, Baghdad, Cairo.
• The Talas story is doubted by scholars.
• Cairo Geniza: about 400,000 fragments, from Fustat.

7How did money and credit work?

Merchants used gold and silver coins. The dinar was a gold coin. The dirham was a silver coin. But carrying coins over long routes was risky.

So traders turned to paper promises. The sakk was a written order to pay. Traders used it from the days of Harun al-Rashid. The word cheque is thought to come from sakk. Another instrument, the suftaja, is often described as a bill of exchange.

Partnerships were common too. In a mudaraba, one partner gives money and the other does the work. They share the profit.

Islamic law bans riba, or interest on loans. So traders used profit-sharing deals in place of fixed interest. Even the word magazine comes from the Arabic makhazin, meaning storehouses.

• Dinar = gold. Dirham = silver.
• Sakk gave us the word cheque.
• Mudaraba: one partner funds, one works.
• Riba (interest) is banned.

8What are the exam traps?

• Kharaj is a land tax. Ushr is about 10%. Do not mix them.
• Iqta gave tax rights in place of pay. The same word appears in the Delhi Sultanate.
• Sakk (cheque) and suftaja (bill of exchange) are easy to swap.
• Word roots count: monsoon from mawsim, magazine from makhazin.