The Islamic economy: its origin, its world view and its claims
Aim: This article takes a critical look at the claims made by advocates of an Islamic economy, in particular that it differs fundamentally from capitalism and socialism because it is built “on a superior ethical basis. The aim is to find out whether this claim can be creditably sustained and why it is made.
Design: The world view behind the Islamic economy is probed into by means of a literature study encompassing publications by prominent students of Islam and Islamic economics, predominantly themselves Muslims, which have appeared in a wide range of professional books, magazines and paper series.
Conclusions: It is concluded that an Islamic economic system does not differ fundamentally from mixed-economy non-Islamic ones and that there is little reason for non-Muslims to accord Islamic ethics special status. Further, it is found that important drivers of the attempts to Islamize the economy are frustration about the sorrow state of the Islamic world at least since the early nineteenth century and a wish to regain something of its former glory. In other words, identity politics is at play. There may an element of subjectivity in this conclusion, as it depends on interpretations that are hard to prove or disprove conclusively, but statements by leading Muslim advocates of Islam economists give it weight. The conclusion may help to interpret developments in the Muslim world, which is an indispensable step in finding a way to deal with them.
Abu Zayd, Nasr (2000), ‘The Qur’an: God and Man in Communication’, inaugural lecture Cleveringa chair, Leiden University, http://www.let.leidenuniv.nl/forum/01_1/onderzoek/lecture.pdf.
Ahmed, Hussein (2009), ‘review of John Wright, The Trans-Saharan Slave Trade, London and New York: Routledge 2007’, Journal of Islamic Studies, 20 (1), 130-134.
Allheedan, Abdullah (2016), ‘Poverty and Wealth in Islam’s Sacred Texts’, Chapter 14 in Nathan R. Kollar and Muhammad Shafiq, eds, Poverty and Wealth in Judaism, Christianity, and Islam, New York: Palgrave Macmillan, 263-274.
al-Qaradawi, Yusuf (2000), Fiqh al zakah, vol. I, Jeddah: King Abdulaziz University, available on http://iei.kau.edu.sa/Pages-E-EnglishPublications.aspx. (In this publication his name is anglicized as Yusuf Al Qardawi).
al-Qaradawi, Yusuf (2010), Economic Security in Islam, Kuala Lumpur: Dar al Wahi Publication. First edition 1981.
Alvaredo, Facundo, Lydia Assouad and Thomas Piketty (2017), ‘Measuring Inequality in the Middle East 1990-2016: The World's Most Unequal Region?’, CEPR Discussion Paper No. DP12405.
Alwani, Zainab (2016), ‘Socioeconomic and Gender Justice in the Qur’an: Modern Challenges’, Chapter 5 in Nathan R. Kollar and Muhammad Shafiq, editors, Poverty and Wealth in Judaism, Christianity, and Islam, New York: Palgrave Macmillan, 77-103.
Amnesty International (2013), ‘The dark side of migration: spotlight on Qatar’s construction sector ahead of the world cup’.
Aristotle (1992), The Politics, translated by T.A. Sinclair, revised by T.J. Saunders, Harmondsworth: Penguin.
Asutay, Mehmet (2012), ‘The Socio-Ethical Failure in Islamic Banking and Finance’, New Horizon, Nr. 182.
Ayub, Muhammad, and Camille Paldi (2015), ‘Dichotomy between Sharī‘ah Compliance and the Economic Goals of Islamic Finance Institutions’, Journal of Islamic Business and Management, 5 (2), 69-98.
Bashir, Mohamed Sharif, Hajah Nur Annisa Haji Sarbini and Hajah Rose Abdullah (2012), ‘Zakat Management and Capital Assistances Programme in Brunei Darussalam’, The Journal of Muamalat and Islamic Finance Research, 9 (1), 27-60
Bashir, Abdel-Hameed (2018), ‘Reducing Poverty and Income Inequalities: Current Approaches and Islamic Perspective’, JKAU Islamic Economics, 31 (1), 93-104.
Biéler, André (2005), Calvin’s Economic and Social Thought, Geneva: WCC Publications, World Council of Churches.
Birt, M. Yahya Birt (1996), ‘The Message of Fazlur Rahman’, Association of Muslim Researchers, posted in 2001 as http://www.freerepublic.com/focus/fr/531762/posts.
CBUAE (2010), ‘Product details shariacompliant certificate of deposit (ICD)’, Central Bank of the UAE, www.centralbank.ae/en/pdf/notices/11-2010_2.pdf.
Chapra, M. Umer (1992), Islam and the economic challenge, Hemdon, VA, USA: The International Institute of Islamic Thought; Nairobi and Kano: The Islamic Foundation.
Clifford Chance (2016), ‘New product documentation for Wiqayah Min Taqallub As'aar Assarf (Islamic Foreign Exchange Forwards)’, available on http://www.iifm.net/published-standards.
Cronin, Stephanie (2016), ‘Islam, slave agency and abolitionism in Iran, the Middle East and North Africa’, Middle Eastern Studies, 52 (6), 953-977.
El-Ashker, Ahmed A.F. and Rodney Wilson (2006), Islamic Economics: A Short History, Leiden and Boston: Brill.
El-Gamal, Mahmoud A. (2006), Islamic Finance: Law, Economics, and Practice, New York: Cambridge University Press.
El-Gamal, Mahmoud A. (2007a), ‘Incoherent pietism and Sharia arbitrage’, Financial Times, 23 May.
El-Gamal, Mahmoud A. (2007b), ‘Mutualization of Islamic banks’, in M. Kabir Hassan and Mervyn K. Lewis (eds), Handbook of Islamic Banking, Cheltenham, UK and Northampton, MA, USA: Edward Elgar, 310–24.
Fanack (2018), ‘In the United Arab Emirates, Human Rights Under Attack’, 9 August, www.fanack.com.
Farooq, Mohammad Omar (2008), ‘The Challenge of Poverty and the Poverty of Islamic Economics’, Journal of Islamic Economics, Banking and Finance, 4 (2), 35-58.
Farooq, Mohammad Omar (2012), ‘Exploitation, Profit and the Riba-Interest Reductionism’, International Journal of Islamic and Middle Eastern Finance and Management, 5 (4), 292-320.
Galbraith, John Kenneth (1963), American Capitalism: The Concept of Countervailing Power, 2nd edition, Harmondsworth: Penguin. Originally published in 1956, first edition 1952.
Ghazanfar, Shaikh Mohammad, and Abdul Azim Islahi (1990), ‘Economic thought of an Arab scholastic: Abu Hamid al-Ghazali (A.H. 450-505/A.D. 1058-1111)’, History of Political Economy, 22 (2), 381-403.
Garnier, Sébastien (2018), review of Amira K. Bennison, The Almoravid and Almohad Empires, Edinburgh University Press, Edinburgh 2016, Studia Islamica, 113 (1), 2018, 97-103.
Ghazanfar, Shaikh Mohammad, and Abdul Azim Islahi (2011), Economic Thought of Al-Ghazali, Jeddah: King Abdulaziz University Press.
Hassan, M. Kabir (2017), ‘Introduction: empirical research on Islam and economic life’, in M. Kabir Hassan, ed., Handbook of empirical research on Islam and economic life, Cheltenham: Edward Elgar, 1-19.
Howard, Douglas A. (2017), A History of the Ottoman Empire, Cambridge: Cambridge University Press.
IFN Alerts (2016), ‘UN Global Compact lacks Islamic banking participation’, firstname.lastname@example.org, 21 February.
IFN Alerts (2017), ‘Dubai Declaration on sustainable finance welcomes first and only fully-fledged Islamic financial institution’, email@example.com, 1 September.
IFN (2018), Morocco Report 2018, https://www.islamicfinancenews.com/supplements/ifn-morocco-report-2018.
Khan, Tariqullah, and Amiirah Bint Raffick Nabee Mohomed (2017), ‘Ethical Banking and Islamic Banking: A Comparison of Triodos Bank and Islami Bank Bangladesh Limited’, Islamic Economic Studies, 25 Special Issue, April, 111-154. Also in Journal of Islamic Economics, Banking and Finance, 12 (4), 2016.
Khan, Muhammad Akram (2016), ‘Reconstruction of Islamic Economic Thought: Need for Innovative Thinking (Ijtihad)’, working paper, https://ssrn.com/abstract=2892074.
Kunhibava, Sherin, Sarah Tan Yen Ling and Md Khalil Ruslan (2018), Sustainable Financing and Enhancing the Role of Islamic Banks in Malaysia, Arab Law Quarterly, 32 (2), 129-157.
Kuran, Timur (1995), ‘Islamic economics and the Islamic subeconomy’, Journal of Economic Perspectives, 9 (4), 155–73, reprinted as Chapter 2 in Timur Kuran (2006), Islam and Mammon: The Economic Predicaments of Islamism, 3rd edn, Princeton, NJ: Princeton University Press, 38–54.
Kuran, Timur (2006), Islam and Mammon: The Economic Predicaments of Islamism, 3rd edn, Princeton, NJ: Princeton University Press.
Leins, Stefan (2010), ‘Zur Ethik des islamischen Finanzmarktes’, Zeitschrift für Wirtschafts- und Unternehmensethik, 11 (1), 66-75.
Marx, Karl, and Friedrich Engels (1890), Manifest der Konnunistischen Partei, in Karl Marx and Friedrich Engels, Ausgewählte Schriften in zwei Bänden, Berlin: Dietz Verlag 1974. Nach der letzten von Engels besorgten Ausgabe von 1890. First published 1848.
Maududi, S. Abul A’la (1941), ‘The economic problem of man and its Islamic solution’, address delivered at the Muslim University, Aligarh, 20 October, in S. Abul A’la Maududi (1999), Economic System of Islam, 4th edn, Lahore: Islamic Publications, 8–36.
Opwis, Felicitas (2017), ‘New trends in Islamic legal theory: maqāṣid al-shariʿ̄a as a new source of law?’, Die Welt des Islams, 57 (1), 7-32.
Rubin, Jared (2017), Rulers, Religion, and Riches; Why the West Got Rich and the Middle East Did Not, New York: Cambridge University Press.
Rahman, Fazlur (1964), ‘Riba and interest’, Islamic Studies (Karachi), 3 (1), 1–43.
Rodinson, Maxime (2014), Islam et capitalisme, Paris: Éditions Demopolis. First edition Paris: Éditions du Seuil, 1966.
Sadeq, Abu Al-Hasan (2002), A Survey of the Institution of Zakah: Issues, Theories and Administration, Discussion Paper No. 11, Jeddah: Islamic Research and Training Institute, Islamic Development Bank, 2nd edn, available on www.irti.org.
Sairally, Beebee Salma (2013), ‘Evaluating the corporate social performance of Islamic financial institutions: an empirical study’, International Journal of Islamic and Middle Eastern Finance and Management, 6 (3), 238 – 260.
Shaikh, Salman Ahmed (2017), ‘Welfare Potential of Zakat: An Attempt to Estimate Economy wide Zakat Collection in Pakistan’, Journal of Islamic Economics, Banking and Finance, 13 (1), 52-70.
Suharto, Ugi (2018), ‘Riba and interest in Islamic finance: semantic and terminological ıssue’, International Journal of Islamic and Middle Eastern Finance and Management, 11 (1), 131-138.
The Economist (20180, ‘Choosing plan B’, 11 August, p. 53.
Thomson Reuters (2017), Outpacing the Mainstream; State of the Global Islamic Economy Report 2017/18, SalaamGateway.com.
Transparency International (2018), Corruption Perception Index 2017, available on www.tranparency.org.
Umar, Sohaib (2015), ‘Commodity Murabahah / Tawarruq: Why Regulators Must Stop Its Use’, in Islamic Commercial Law Report 2016, ISRA and Thomson Reuters, 64-67.
Zaman, Asad (2015), ‘Building Genuine Islamic Financial Institutions’, Journal of Islamic Economics, Banking and Finance, 11 (2), 13-31.
Zaman, Raquib (2011), ‘Riba and interest in Islamic banking: an historical review’, Chapter 12 in Mohamed Ariff and Munawar Iqbal, eds, The Foundations of Islamic Banking: Theory, Practice and Education, Cheltenham: Edward Elgar.
The author transfers on the Wrocław School of Banking, free of charge and without territorial limitations, with all proprietary copyrights to the said piece of work in the understanding of the act of 4th February 1994 on copyrights and derivative rights (Journal of Laws of 1994, no. 24, item 83, as amended) on an exclusivity basis, i.e. the rights to:
a) exclusively use the piece of work in question under any kind of activity conducted by the Wrocław School of Banking, and particularly by the Digital Library established by the Wrocław School of Banking,
b) produce, record and reproduce in multiple copies the piece of work using any techniques whatsoever, including printing, reprography, magnetic recording and digital processing, and particularly its reproduction by recording on CDs and similar data carriers,
c) provide chosen sections of the piece of work for promotional purposes in publications, promotional materials, the Internet and the Intranet type networks managed by the Wrocław School of Banking,
d) enter the piece of work into computer memory managed by the Wrocław School of Banking,
e) copy and reproduce the piece of work using photo-mechanic technologies other than those commonly known at the time of the signature hereof (photocopies, Xerox copies etc.),
f) translate the piece of work into foreign languages,
g) sell, lend for use and dispose of the piece of work in any manner whatsoever,
h) process the piece of work, transferring it into an electronic form, and distribute it on the Internet without limitations.