The Legal Policy on Investment Based on the Thoughts of Adam Smith and Ibn Khaldun

Hasanuddin

Siti Walida Mustamin

Muhammad Saleh

Muhammad Ridwan

Fitrayani

 

Abstract: This article analyses legal policies on investment based on the thoughts of two great economic thinkers, namely, Adam Smith and Ibn Khaldun. Adam Smith, as the pioneer of classical economics, emphasised the importance of free market with minimal government intervention, thereby driving economic growth through market mechanisms. By contrast, Ibn Khaldun offered a more balanced perspective, where the role of the state is crucial in ensuring socio-economic stability through fair regulations and moderate taxation. Although the two thinkers belong to two different eras; their competing views continue to influence contemporary legal and economic policy making. The comparison of these two thinkers provides deeper insight into modern economic governance policies, particularly the governance of investment within a state’s legal framework. This analysis suggests that effective legal policies on investment must consider local contexts, political stability, and economic justice. The article recommends a balance between the economic liberalisation advocated by Adam Smith and the fair regulations and political stability described by Ibn Khaldun to achieve sustainable and inclusive economic growth.