From the Sand Up: An Environmental and Demographic Explanation of the Economic, Legal, and Political Structure of Arabia

Robert Allen

No 20279, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The paper uses basic theories of Marx on social structure and Malthus on demography to explain many features of Arabia in terms of the arid environment. The focus is on traditional Arabia, but it is argued that the same consideration continue to apply to modern Arabia. Beginning with the desert, it is argued that the only viable economic activity in ‘traditional’ Arabia was herding, and the only feasible system of property was communal ownership. Malthusian demography implies that the population expanded until the average product of labour equaled subsistence. Since labour was at subsistence and land had no value, neither could provide a tax base for a state. Hence, the social system was tribal–tribes had no budgets. There were two exceptions: International trade could be taxed, as in Yemen. Oasis land could also be taxed. Water meant that the average product of labour exceeded the marginal, which equaled subsistence. The difference was a taxable surplus. Some Bedouin tribes claimed ownership of oases and the implications are analyzed. The Saudi states that emerged beginning in the eighteenth century were Bedouin sheikhdoms writ large. Their finance came from oases like al-Hasa and al-Qatif near the Gulf Coast. With Shiite populations, Wahabism proved a useful ideology to justify their plundering by Sunni tribes from the interior. The finances of the Gulf Sheikhdoms are also analyzed as are the finances and investment strategies of the rulers of Oman as well as the role of slavery. Oman is a good example of a hydraulic civilization. Oil replaces water in modern Arabia, and guest workers replace slaves, but the system continues much as before since it continues to meet many needs. Wahabism continues its useful ideological role since the oil fields happen to be adjacent to the al-Hasa oasis.

JEL-codes: N35 N55 P48 Q15 (search for similar items in EconPapers)
Date: 2025-05
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