John,  

I agree that there were big changes in Islam around 1000.  It is the bigger
narrative that you place this matter into that I have doubts about.

I will take what seems to me to a good opportunity to prefer the unbiased
evidence from coinage over any (inevitably biased) evidence from text in my
sketch of the big picture here.  

At the time of the birth of Islam, both Byzantine and Sasanid states were
somewhat in decline, hierachical and exploitative.  The rapid success of
Islam derived from this matter.  At best the bulk of the population in
Byzantine and Sasanid territories were not willing for fight for the
existing regimes.  At worst they converted and fought with the Islamic
armies.  No big surprise here - as I recall the Guanzi puts it;  “Your
majesty cannot expect men with broken hearts to fight for you”

The new Islamic regime, by intention meritocratic and equalitarian, went on
to produce a copious coinage in copper, silver and gold, reminiscent of that
of Augustus in the late 1st century BC, or Britain in the early 19th century.

As Khadun will have it, all empires destroy themselves.  Copper coinage
disappeared in the 9th century, silver during the 10th century, so that by
1000 there was little coinage at all aside from the gold issued at such as
Nishapur.  Turkish mercenaries took power, and pushed the greater part of
the population into quasi-serfdom.  This is much misunderstood in connection
with Viking matters.  So often we see the Vikings eulogised as great
merchants, sucking in all that Islamic silver bullion.  Almost no-one pauses
to note that Islam has moved towards serfdom.  Wages are no longer paid in
Baghdad, coin is no longer needed, so really what we see is the Islamic
silver being dumped on the world market, surplus to requirements.

After a coupler of centuries however, this phase of Islamic society has run
its course.  Around 1200 (Saladin and co),  the tide turns and the silver
that was exported to Europe around 900 is now re-imported back to Islam, as
a new dynamism kicks off.  (The silver was in fact driven back and forth
between Islam and Christendom much as two piston drive each other in an engine).

I do not see anything stultified in the bits of Islamic post 1200 text I
have read in detail, Juvaini, or Saadi for instance.  Sher Shah put the case
for the invisible hand much better than A Smith ever did.  If we seek a
culture in steep decline in say the 15th century, surely (following Barbara
Tuchman or Peter Spufford), the European would be the one to pick?