Much that was written about the history of Egypt in the nineteenth century arose from a premise that the reign of Muhammad Ali ushered in a new form of government and a new economic system, both of which turned Egypt into a modern nation state. Muhammad Ali was credited with being an innovator, ‘The Founder of Modern Egypt’ to paraphrase the title of a book, and was supposed to herald a total break with the mamluk past. While there is some truth in such a belief, it is nonetheless my contention that Muhammad Ali did not introduce a wholly new economic system into Egypt, but rather refined and expanded the existing system, and that his new form of government arose out of the exigencies of that economic system. While Muhammad Ali certainly helped to turn Egypt into a modern state, he did not start with a tabula rasa, but had precedents that showed him the path to take.

In one sense Egypt's strategic location and her membership within the family of the Ottoman empire determined her line of development regardless of who the rulers of the country were. Egypt's local production and her agricultural strength also were determinants that drew the general lines of the economic system along which the country was to develop.