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The Essence of Economic Policy in Importance of Islamic Economics

Written by: by Mohammad Shawqi Al-Fanjari :: (View All Articles by: Mohammad Shawqi Al-Fanjari)

        To those who have come to realize that every great nation has a message to give, and that the greatest nation of all is that which carries the best of messages which presents the optimum way of life. Islam has provided us with a message to share with the world. I do not know what we can give humanity as Arabs if we cannot share with it the message of Islam which Allah has required us to do.
        To those who have come to realize that Jihad for the sake of Allah is a Jihad for material and spiritual progress, for the establishment of a society of believers, a society of faith and of increasing production. To those who have come to realize that the best way to happiness and success in both worlds is to free people from fear, ignorance, poverty. sickness and injustice so that, in the end, we could execute the will of Allah to spread love among people and peace on earth.



One of the major manifestations of the current revival of the Islamic world has been the emergence of a scientific movement which advocates the return to the sources of the Islamic thought in an attempt to derive the substance which will help devise a new approach to all aspects and applications of mental life and intellectual endeavour. The aim is not only to tackle the problems of today’s society in the light of Islamic values and prescriptions but also to open up new prospects by breaking the current monopoly of the Western positivist approach.

        The movement has given rise to new intellectual trends which investigate vital issues in the life of Muslims, including the economic issue which is a determining factor in Man’s effort to improve his material condition and to be able to lead a decent life.

        A new approach was therefore developed in economic analyses and studies with an increased awareness of the need to curb the pressure exerted by the foreign materialistic philosophy. The search for new economic rules based on Islamic material and spiritual values led to the recognition of the distinct features of an Islamic economic order which is clearly different from other economic systems, especially the positivist one, if only because it is based on fixed principles which are set in the holy Qur’an and in the Sunna and which provide for the dignity of man and for social justice.

    The aim of this book, published by the Islamic Educational, Scientific and Cultural Organization - ISESCO - is to shed light on the basic economic principles in Islam and express them in modern language. It is, thus, an attempt to see how those fundamentals apply in different economic situations and offer an answer to contemporary economic problems.

      In publishing Dr. Muhammad Shawki Al Fanjari’s “The Essence of Economic Policy in Islam and the Importance of Islamic Economics”, the Islamic Organization - ISESCO - seeks to emphasize a particular aspect of the comprehensiveness and richness of Islamic thought, a task which is in line with the provisions of its Charter calling for the dissemination of Islamic thought and cultural values. ISESCO is thus doing its best to make this part of the Islamic heritage accessible to the public so that they may comprehend the true nature of Islam, the greatness of its principles and the perennity of its message. This is indeed one of the major tasks assigned to this Organization which seeks to foster an adequate environment for strengthening the bonds of solidarity among Muslims and enhancing their position in the world.


    We hope this book will encourage the reader to give further thought to the issue of Islamic economic policy which reflects one of the aspects of the independent and comprehensive nature of the Islamic methodology.


Abdelhadi BOUTALEB

Director General,
Islamic Educational. Scientific
                and Cultural Organization


by Dr Salah Eddine Namiq

Professor of Economics and Former
Dean of the Faculty of Business
Administration, AI-Azhar University
         In the early 60’s. the Faculty of Business Administration AI-Azhar University, introduced for all its Bachlor of Arts programmes a course on “Economic Thought in Islam”. I have personally given much importance to the subject from the time I began teaching it at this University in 1964 for two major reasons first. this is a subject that is taught only at AI-Azhar and,second, this is indeed a new subject where economic theory and Islamic thought blend in harmony to provide us with an Islamic culture of great importance.
      As a result of this economic dichotomy in Islam, I never believed that this subject could be taught only by an Islamic jurist as was the case in the early sixties. nor only by an economist who has no knowledge of Islamic law. This is why I was very happy when I met Dr. Shawqi AI-Fanjari and discovered that he was knowledgeable not only in economic theory. but in Islamic thought as well. This is a harmony that was much needed both in Egypt and the Islamic world in general. I then asked Dr. AI-Fanjari who was then Counsellor to the State Council to help by teaching this course on Islamic economics. and he agreed with no hesitation. He has been teaching this course at AI-Azhar University since 1968.
      Dr. AI-Fanjari’s contribution was not limited to teaching. He supervised and examined many M.A and Ph.D. theses on Islamic economics presented by students at AI-Azhar during the last ten years. He has thus contributed a great deal to the forming of a new generation of young researchers in the field.
       Above all, Dr. Al-Fanjari has contributed by his presence and research to all colloquia and seminars on economics in Islam both in Egypt and abroad. His research on “Insurance in the Context of Islamic Law” has won the official approval of the Government of Saudi Arabia, and instigated a Fatwa from the Board of Senior Ulema in that country, (Fatwa n. 51 of 4/4/1397 A.H). Finally, I am pleased and honoured to present to the Moslem intelligentsia Dr. Mohammad Shawki Al-Fanjari, the pioneer of Islamic thought in the Arab world.


May Allah help us all in what is good for Islam and the Moslems.

Cairo, Ramadan 139&A,H,, August 1978.

       I started in 1968, while I was a counsellor to the State Council of Justice. teaching a coursse on "Economic Thought in Islam" at AI-Azhar University During my five years of teaching there. I saw this course develop into one on “Islamic Economics”. within this period, I published in 1972 the first edition of "Introduction to Islamic Economics".
     This edition was soon out of print, and I thank Allah that it had a tremendous influence on various research publications that appeared later in this field of study. Another influence of this book was that people in the Moslem world finally realized the need for teaching similar courses at the university level.
     I was asked many a time to re-edit this work, but I felt I had first to carry out some research. This was done and the result was published in the series “Economics in Islam” with the hope of disseminating it among the majority of readers.
         I started this series with the present book entitled The Essence of Economics in Islam and the Importance of Islamic Economics. This book is based on two papers delivered at the Seventh Congress of Moslem Ulema which ‘was held in Cairo from 9 to 14 September 1972. These two papers were at the origin of two recommendations proposed by the Congress. Viz..
       1.The Congress believes that the system of Islamic economics differs from other economic systems. Economics in Islam, which seeks social justice and dignity for all, is based on solid principles brought forth by the Koran and the Sunna. The Congress believes that each country will have to adapt the application originating from these principles to suit its own needs.
    2. ‘The Congress recommends that universities and research institutes in the Moslem World prepare the means and provide positions for the teaching of economics in Islam and the subordinate systems appropriate to local conditions, so that Moslem economics become free of the bondage of foreign economic theory.1
        What I hope to achieve within the limits of my ability and specialisation is to express in daily language the principles that make up the foundations of economics in Islam on the one hand, and on the other. to find ways for the application of these principles in various modern economic policies and for providing Moslem solutions to current problems. I shall do this in a contrastive analysis which will show the uniqueness and the superiority of Islamic economics over the capitalist and socialist systems.
      This, however, is not an easy task to do since research in the domain of economics in Islam is scarce as there has been no ijtihad or interpretation since the fourth century of the Hijra. Besides, due to the rapid growth of the world economy and the complexity. of modern economics. research in this domain has become of prime importance. The effort of all researchers in Islamic economics is therefore needed both at the level of discussion of the economic principles in Islam, and at the level of application of these principles to solve current economic problems.
    We shall now tackle the first topic in the series “Economics in Islam” in two parts:
Part I . The essence of economics in Islam
part 2. The importance of Islamic economics.
Publications in the same series (in Arabic)
1. Islam and Economics
  1st edition 1978.
   Anglo-Egyptian Press. 2nd ed. 1982,
   Assalam International Press.
 This book examines the question of poverty and how Islam deals with it by comparing this view to the capitalist and socialist systems.
2. Islam and Insurance

         1st ed. 1979, Cairo and Riyadh Book World Press.
         2nd ed. 1983, Saudi Arabia Okad Press,
       This book examines various insurance systems and   proposes new      Moslem way for insurance.

3.Islam and Social Security
1st ed. 1980, Saudi Arabia
Thaqeef Press, 2nd ed. 1982, idem.
This book deals with the question of Zakat and its application in the modern world
4. The Economic Doctrine in Islam
1st ed. 1981, Saudi Arabia : Okad Press.
This book answers the question of whether there is an economic doctrine in
Islam to confront the current economic situation.

Other Publications by the same author (in Arabic)

1. Towards an Islamic Economics
1st ed. 1979, Taif Zaidia Press.
2nd ed. 1981, Saudi Arabia Okad Press.
2. An Introduction to Islamic Economics
1st ed.. Saudi Arabia : Thaqeef Press.
(This book has been translated into French and English.)

3. Islam and Just Redistribution of Wealt

1st ed. 1984, Saudi Arabia Thaqeef Press.

4. The Concept and Methodology of Islamic Economics
         1st ed. 1984, Mecca Moslem World League.
May Allah help me in my endeavour to contribute to the understanding of Islamic economics. I hope that Moslems and the world at large will abide by its principles, as this is the right path to salvation. I do hope that within the limits of my knowledge, I have presented people with something beneficial to them, and hope by this act to gain the mercy and forgiveness of Allah.


The Essence of Economic Policy in Islam


It is necessary, I believe, to try to explain the economic policy in Islam for various reasons, the most important of which are:

  1. to ascertain the point of view of Islam concerning the various economic questions
  2. to understand the point of view of Islam concerning the various doctrines and systems.
  3. to evaluate any system in the modern world - whatever its nature as to whether it comes close to or departs away from the true application of Islam; and
  4. to be thoroughly acquainted with the nature and main characteristics of Islamic economics.

The economic policy in Islam presents, I believe, three major characteristics of Islamic economics.

  1. It accommodates what is Stable and what is not. This is the characteristic of the doctrine and the system.
  2. It accommodates public and private interests. This is the characteristic of the harmony of conflicting interests.
  3. It accommodates material interests and spiritual needs. This is the characteristic of the belief in and fear of Allah in every commercial transaction.

We shall now deal with each of these three points separately.


The Accommodation of what is Stable and what is Not



The Doctrine and the System

The economic policy in Islam is divine in its source and positivist in its practice. Thus, it is a stable and developing policy at the same time.

It is a stable policy that cannot be changed in the sense Moslem its economic foundations are found in the Koran and the Sunna. Moslems everywhere submit to it all the time, irrespective of the degree of development of their society. This is what we mean by the expression “the doctrine of Islamic economics”

It is also a developing policy in the sense that its principles can be applied to any situation any time. This explains the different ways these principles are applied in different societies. We shall refer to this characteristic by the expression “the economic system (or systems) in Islam”.

From what has preceded. we can derive the following three basic ideas:

  1. Islamic Economics is divine in its doctrine and positivist as far as the system and application are concerned.
  2. The Islamic economic doctrine is valid anytime, anywhere. It is not bound to any specific period.
  3. The Islamic economic system varies in time and space and, hence, does not present a singular way for its implementation.


1.1. Islamic Economics is Divine in its Doctrine and Positivist in its System

The source of Islamic economics is Allah, the Almighty. This is shown in the basic economic doctrine and principles found in the Koran on the one hand, and in the application of these principles on the other.

1. With respect to the economic doctrine, the Koran states: 

“And eat not up your property among yourselves in vanity” (The Cow 188)

“That it become not a commodity between the rich among you” (The Gathering: 7)

“And bestow upon them of the wealth of Allah which He hath bestowed upon you” (Light 33)

“And in their wealth the beggar and the outcast had due shire” (the winnowing winds 19)

“And they ask thee what they ought to spend. Say ‘that which is superfluous” (The Cow 219).

The Prophet, Peace be upon Him, has likewise declared:

“How appropriate the right fortune is to the virtuous man” (Imam Ahmed and Attabari). 

“Taken away from the rich and bestowed upon the poor" (Al-Bukhari and Muslim). 

“He who has got more food has to bestow Some on the one who his none who has none "(Muslim). 

“People are associate in three Water. food and fire. And also salt or its value” (Ahmed, Abu Da`oud and Ibn Majah), 

“He who rives a dead land owns it, and no heir has the right to get it back after three years” (Yahya lbn Adam). 

These economic principles and foundations that appear in the Koran and the Sunna are both general and specific. Islam has, therefore, required the use of Ijtihad. i.e. interpretation, in their application at different moments in time and space.

2. With respect to the application of Islamic teachings and economic principles. we realize that even if the latter are positivist due to the fact that they are open to interpretation. their source and initiator however is Allah the Almighty. Research in Islamic economics is like any other research in Islam it is applied and not fundamental. The researcher here does not invent or pronounce judgments. but rather discloses and reveals the decision of Allah concerning a given problem in accordance with his belief and thinking. in accordance with Truth which is known only to Allah the Almighty.

Here are some examples to make this point clear:

  1. The refusal of Khalifa Omar Ibn Al-Khattab to consider conquered lands in Irak and Syria the property of the conqueror alone. but rather public property (Abdel Jawad 1391 A.H.)).
  2. The opposition of the Prophet's Companion Abu Dur Al-Ghufari to the appropriation by a minority of the wealth of society. and his insistence that a Moslem should not own more than he needs (Sahhar).
  3. The belief of Imam Malik that one should ransom his captives even if he has to use up all his wealth (Al-Qortobi).
  4. The belief of Imam Ibn Hazm that land belongs to those who cultivate it. and that it should not be rented in any way, for its produce belongs to those who work on it or those who share it as a spoil. In his own words renting land is not permitted whether it is for cultivating, planting. building or whatever it is for a short or long period, whether it is for money or anything else” (Abu Zahra 1964).
  5. The verdict of Imam Ibn Hazm and other Ulema that, in case a man dies of hunger in a country, its inhabitants will be considered murderers and will have to pay for their murder (Al-Ghazali 1952:120).
  6. The verdict of Imam Shatibi that in case the treasury cannot satisfy the needs of the army. the Imam - if just - should levy taxes on the rich till there is enough money. If he does not do that, he loses his power and the homes of the Moslems will then be at the mercy of the infidels. (Shatibi 1332 A.H. : 295).
  7. The verdict of Imam Ali Al Mu’iz ben Abdeslam when Sultan Kutz solicited the Qadis and Ulema of Egypt for their approval to take money from the people to help him in his Jihad against the Tartars. These Qadis and Ulema reiterated the decision of Imam ben Abdeslam that money could be taken from people only when golden and expensive jewelry was taken from the Emirs first, and when soldiers had nothing more than their weapons and their horses left (Al Wahibi 1979).
  8. The recommendations of the First Congress of the Moslem Ulema held in Cairo in 1974 under the sponsorship of the Congress of Islamic Research at Al-Azhar : 
    1. that rulers must levy taxes on personal wealth so as to enable the realization of what is in the’ public interest; 
    2. that rulers in every country must limit private ownership to the degree that guarantees the warding off of moral deterioration, and the realization of the preponderant good. Evaluation of what is in the public interest is in the hand of rulers, but Moslems are required to advise them in case they do not see eye to eye with their decisions (Cf. Proceedings of the First Congress on Islamic Research 1964 : 394, 398).
  9. The recommendations of the Second Congress of the Moslem Ulema held in Cairo in 1975 under the sponsorship of the Congress of Islamic Research at Al-Azhar : 
    1. that interest on loans whether for consumption or production - is Riba, and Riba whether great or small - is forbidden. Lending money with interest is not necessary and is, therefore, prohibited. Borrowing money with interest is also prohibited, except in case of extreme necessity. Every one, of course, is left to determine his own needs; 
    2. that banking services such as current accounts, payment of cheques, promissory notes and other similar services that take place between businessmen and banks are permitted. Money paid for such services is not Riba. (Cf. Proceedings of the Second Congress on Islamic Research 1975 401 - 402).
  10. The recommendations of the First International Congress on Islamic Economics held in Mecca in 1976 under the sponsorship of the Faculty of Economics and Administration at King Abdul Aziz University in Jeddah 
    1. that commercial insurance as practiced by professional companies nowadays does not provide the legal form for cooperation and solidarity because it does not include the legal conditions to make it lawful, 
    2. that a specialized commission be formed of Ulema and Moslem economists to suggest a form of insurance that is void of Riba and that could contribute to the realization of a much needed legal cooperation. (Cf. Al-Fanjari 1979).

It is true that some legal interpretations do not succeed. To invalidate them, in this case, one should not criticize or abuse those who come up with them. but to fight them back with proofs from the Koran and the Sunna. It is necessary to show their invalidity by legal ways of measure, approval and appreciation. What is to be relied upon here is what the national legislature adopts. This is to be encouraged if right and corrected if wrong. [Note: Obedience is, of course, allowed as long as it is not obedience to carry Out what is unlawful. The Hadith says in this, respect "Every Moslem should listen and obey whether he likes it or not, as long as his obedience is not something unlawful - If not, there should be no listening and no obedience”. Hence, it becomes the right of a Moslem society as well as that of every single Moslem to rebel against any orders that are clearly unlawful.]

The conclusion from what has preceded is that economic policy in Islam is divine in its foundations and positivist in its practice. In other words, Islamic economics is divine from the point of view of the doctrine and positivist from the point of view of practice. Since a doctrine can survive only in practice, Islam has urged its followers to use the sense of interpretation (Ijtihad) and has rewarded this activity whether the person making it succeeds in it or not. In the latter case, one is rewarded for his effort. Islam has gone even further and considered interpretation its second source after the Koran and the Sunna.

 There is no doubt that the worst blow that Moslems themselves ever gave Islam, was to close the door of Ijtihad at the end of the fourth century A.H. Since then, there has been no progress in Islamic studies. The application of Islamic law froze at that time and gave birth to the false pretension that Islamic economics is primitive, not suitable for the 20th Century and an obstacle to progress. This pretence is due to our neglect of Ijtihad and to that of the application of economic principles that appear in the Koran and the Sunna to what is suitable for a specific time and place.


1.2. The Doctrine of Islamic Economics is not Time-Specific

Islam appeared fourteen centuries ago in a primitive period, an era of slavery and underdevelopment as far as economics is concerned. It goes without saying that the doctrine of economics at the time reflected that period. But Islam, as a divine economic legislation. whose principles go far beyond this primitive era, is valid for all times and all places. Islam established, from the very beginning, true equality and guaranteed the limit of wealth to every citizen. It determined an economic balance among members of society and confirmed the principle of dual ownership (i.e. private. free economics. and the interference of the State in the economy. (Al Fanjari 1981: 94 ff).

None of this was established under material or economic pressure in the Arab peninsula or the rest of the world at that time. Besides, production was not in such a development so as to warrant these principles.


1.2.1 Concepts in Perspective

To be confined to principles brought up by Islam fourteen years ago does not mean, as some people have suggested. that Islamic economics is valid only for the specific primitive era in which it appeared, and that it cannot be valid for the era of the atom and space discovery. [Note: Cf. Maxime Rodinson (1966:40) who says wrongly : “C`est I’oeuvre d`un homme inspire’ par certains ideaux propres a son epoque”] Nor does it mean, as some others have suggested, that being confined to these principles is confining the mind and limiting its field of action. This is not so for two reasons:

  1. These economic principles are quite few and limited. They are general principles and, hence, are valid anytime, anywhere. Islam, being the final religion, has established these principles to guide humanity in its progress towards its goals. These principles are, therefore, no more than a light to help the mind in its thinking. They are no more than stepping stones and broad lines to help the individual and society at large to reach happiness in this world and the Hereafter.
  2. These economic principles concern only what is essential and necessary to all individuals and societies whatever the degree of their economic development or the nature of, their means of production may be.


1.2.2. The Doctrine of Islamic Economics and Marxism

The doctrine of Islamic economics is not tied to a specific period in time or a specific means of production. As some authors claim. “this is a major area of controversy between Islamic and Marxist economics” (Sadr 1969 296). Indeed. Marxism claims that there is a necessary relationship between the degree of development of the means of production and the social system and that it is impossible for a social system to live for ever or to be of use to humanity at different stages. Marxism. therefore. sees the idea of equality applicable to the industrial world only. Slavery and bondage, then. would be natural in a society that lives on man’s manual production. This is not acceptable in Islam.

The Islamic reality that Humanity lived in its glorious times defied the historical logic of Marxism and its material calculations. Indeed, “this revolutionary fact that created an Umma, established a civilization and changed the course of history... was not the fruit of a new means of production or a change in its form” (Sadr 1969 3-1). (See also Larbi 1969 278).


1.3. The Economic System in Islam is not Limited to one Particular way in Application

The economic system in Islam is bound from the very beginning to economic principles that are valid anytime anywhere. Nevertheless, it does leave the door open for Ijtihad on these principles so that each Moslem nation can choose what goes best with its interests, In this sense, a Moslem nation can choose the system advocating public interest while another can opt for the opposite system. Economy in either case will remain Moslem as long as it abides by the idea of public and private dichotomy, since the difference between the two is a difference in their application depending on the time and the place. [Note: It is in the public interest, for example, to limit possession of agricultural land in a country where there is a shortage of arable land but a great number of inhabitants. It is in the public interest, on the other hand to do so in a country where there is enough arable and not a very large population. In this case, the minimum and maximum area of arable land to be owned will vary from country to country. The same is true for the nationalisation of some economic projects and some means of production (Cf. Abdel Jawad 1971 362).]


1.3.1. Variety of Economic Systems in Islam

In Islam there is not just one single economic system which every Moslem nation should follow. On the contrary, the economic application in Moslem countries should be varied but within the framework of the economic principles and foundations of Islam.

This is at the origin of the error made by many when they advocate a return to the economic system of the period of the Caliphs The reason for the mistake is that this system is viewed as the Moslem economic system while it is merely an example of application. It is perhaps true that the implementation of the economic system during the Caliphs era is exemplary in its application of Islamic principles and economic foundations. It is, however, an exemplary application of these principles in the context of the conditions of that time. Now that economic practices have changed and increased, and that social life has become more complicated. this system may not be applicable today. Moslem economists are then required to always find out the proper way to apply economic principles within a particular society.

Another error is made by some Moslem societies when they claim that the economic system they follow is the only true application of Islam. variety of economic implementation is part of the nature of Islam itself precisely because societies are different from each other. Moreover, to make judgments that an economic implementation is Islamic in precept or not should be based on how far it abides by the economic principles of Islam and on how far it guarantees the interests of the majority in each society. This is the true aim of Islam.


1.3.2. The nature of the Difference between Economic Systems in Islam

The difference between the various economic models in Islam is a difference in the details and not in the basic principles, for all models find their source in the Koran and the Sunna. It has been said, in this sense, that “ruling differ with time and space”, that “a difference in time and space is not a difference in proof and demonstration”, and that “a difference in kind is not a difference in opposition.” The Hadith, likewise, says : “difference among my people is a virtue [Note: This Hadith is related separately by Assayuti, AI-Maknissi, AI-Baihaqi. and Ibn AI-Hajib Others have made reference to it. It has been rejected, however, by Imam Ibn Hazm in his book AI-Ahkam Fi Usul AI-Ahkam, Vol-5, where the author states “Differences are dispraised in the Koran “Do not be in dispute with one another and become weak and lose your power”. He adds that if differences were mercy, acquiescence would be resentment, a fact that Moslem does not state. The truth of the matter is that the so-called difference is one in the parts and in the details. This has been established by the blessed Prophet and cited by his Companions.] or in another version my friends’ difference from you is a virtue”. This is so because it is a difference in details, due to the different of each society.


1.4. Conclusion

Three major conclusions can be drawn from this study so far:

  1. The economic policy in Islam is stable and permanent. for its principles do not apply to a specific time or place or to a particular system of production. This is what we mean when we say that the doctrine of Islamic economics is valid anytime. anywhere.
    It is also a developing policy in the sense that its principles can be applied in different societies according to their specific needs This is what is meant when we say that the economic systems in Islam vary in accordance with the conditions of time and space. Indeed, economic models and implementations may vary. but they do so within the principles and doctrine of Islamic economics.
  2. The economic policy in Islam groups formal logic [Note: Formal logic, also called Aristotelian logic, is a research and thinking method based on the conviction that everything in the world whether mind or matter - is permanent. Thus a tree is a tree and a seed is a seed. Therefore, what was real yesterday is real today and will be real forever. Accordingly private or public ownership is considered a permanent reality in every society and era. and dialectic logic [Note: Dialectic logic also called Hegelian logic is a research and thinking method based on the conviction that everything in the world - whether mind or matter - is constantly changing. This change is due to the contradictions inherent in either element. Thus the seed contains the tree, and the tree Contains the seed. Accordingly, what was yesterday real or possible under given circumstances is not so today, nor will it be tomorrow. Therefore, everything in the world contains the seed of its death, but also the seed of its survival, for the death of either mind or matter automatically triggers the birth of another fitter element. Everything goes through three stages thesis, antithesis and synthesis. The latter is a new situation that contains what contradicts or rejects it. Thus, there is constant progress from what is low to what is high, until the Absolute world, devoid of contradictions is reached. This is synonymous of divinity in Hegel’s philosophy. Marx adopted Hegel’s dialectic philosophy and adapted it from an idealistic to a materialistic one. Matter, according to Marx, is the source of everything and the reason for everything that exists. Unlike Hegel, Marx believes that thoughts are no more than reflection of matter. Hence the phrase “dialectic materialism” that characterizes Marx's philosophy. Marx believed that Hegel’s theory stood upside down, and that he made it stand straight again. Marxists believe that the laws of dialecticism, especially those concerning the conflict of opposites. the change from quantity to quality, and refuting of negation, govern the movement of matter and henceforth that of the world. Marxists also believe that dialectic materialism is scientific and that marxism is not restricted to dialecticism. All other methods of inquiry are but the application of this dialecticism in various aspects of life.] It gives great importance to social differences since its implementations vary with time and place.
    Economics in Islam groups what is stable and what is developing. This is achieved in an argumentation that is specific to it, and that makes it different from all other systems and doctrines. Indeed, when Islam acknowledges development and differences in life, it does not deny or disclaim one at the expense of the other as other doctrines and systems do. On the contrary, it endeavors to accommodate those differences, which are in the eyes of Islam an incitement to cooperation and not one to struggle and fighting.
  3. An economic solution, as we shall see later, is considered Islamic in nature as long as it accommodates the different interests that other doctrines consider contradictory such as the so called contradictions between the interest of the individual and that of the group. or the so-called contradictions between material interests and spiritual needs. Other doctrines and systems have proposed arbitrary solutions which are at the root of the problems and agitation that the world witnesses today.

The Accommodation of Common and Private Interests or the Harmony of Conflicting Interests


Every social or economic system, including Islam, aims at the realization of welfare by attracting the good and repelling the harmful. But welfare can be public or individual, and these two can be in conflict with each other.

 Economic and social systems differ in their view of these conflicting interests. Individualistic systems as those of Western Europe, for example, advocate the interest of the individual first, and put his goals before those of society as a whole. Similarly, socialistic systems, as those of Eastern Europe, advocate the interest of society first and put its goals before those of the individual.

Islam is unique in this sense, since the economic policy it advocates is neither totally geared toward the individual such as in the individualistic system or its offshoots, nor totally toward society as is the case with the socialistic system or its offshoots. On the contrary, economic policy in Islam is characterized by its harmony and concord of the interests of both the individual and society. This is the policy of the golden mean as stated in the Koran :

"Thus we have appointed you a middle nation” (The Cow: 43),

or the Hadith 

“Beware of excess. It destroyed your forefathers” (Imam Ahmed).

It is important to point out at this stage that this golden mean, which implies moderation and harmony, is not a mathematical mean but a social, relative one. Moderation, which is a characteristic of Islam in every aspect of life, cannot be put in a mould. It is, rather relative and varies with time and place.

 In extraordinary situations such as in periods of war or famine when it becomes difficult to accommodate common and private interests it is agreed that the individual must sacrifice his interests for the well-being of society. This is the right of Allah which is above all rights. In these situations, the implementation of Islamic economics goes well beyond many socialistic systems. Three conclusions can be drawn here:

  1. Islamic economics aims at establishing welfare.
  2. Islamic economics tries to accommodate individual and common interests in case of conflict between the two.
  3. Islam favors common interests in case it is not possible to accommodate the two.


2.1. Welfare is the aim of Islamic Economics

2.1.1. Economic Legislation in Islam

Welfare is the aim of Islamic economics, as well as that of Islam itself.

  1. When the Holy Koran forbids the eating of dead animals, blood, and pork - “He hath forbidden you carrion, and blood, and swine flesh” (The Cow 173) - it does that for the well-being of man. When it allows, in the same text, their eating, it does so for the well-being of man as well. For Allah continues : “But he who is driven by necessity, neither craving nor transgressing, it is no sin for him” (The Cow 173).
  2. When the Prophet, Peace be upon Him, forbids the sale of what is not available during the transaction in his saying : “do not sell what you do not have”, he does that for the well-being of man. When he allows Salam transactions [Note: In the law of Sharia, this form of transaction implies a contract of sale, causing an immediate payment of prices, and admitting a delay in the delivery of wares. This is what actually takes place in the stock market. A Salam sale is lawful on the basis of the following verse of the holy Koran : “O you who believe, when you Contract a debt for a fixed time, write it down” - (Translator’s note)] he does that in man’s interest as well.
  3. When the Prophet, Peace be upon Him, recommended land owners to cultivate their land or give it to their brothers to cultivate, it was because wealth in Al-Madina at the time was mainly in the possession of agricultural land which was in the hands of the Prophet’s followers alone. Some of these owned more land than they needed and rented what they could not cultivate. The Prophet, Peace be upon Him, then stipulated that for the sake of common interest, land should not be rented. Those who owned more than they needed, should give their brothers what they could not cultivate without asking for anything in return. This had the advantage of allowing the refugees to find work to live. When things changed and the poor were working again, the Prophet, Peace be upon Him, allowed land owners to rent their land as they were doing before His arrival. (Al1964 :128).
  4. Common interest is also what pushed Caliph Omar Ibn Al-Khattab to put an end to theft but hold judgment in time of famine (Khallaf 1947: 91).

The foundation of Islamic legislation is the well-being of people. Hence, the statement “where there is the well-being of man, there is the law of Sunna”. In this respect, Imam Ibn Al-Kiam Al-Jouzia argues that “the foundations and ground work of sharia are justice and the realization of man’s welfare in his livelihood and destination. Sharia is all justice, all mercy, all welfare, all wisdom. Whatever dissents from justice to injustice, from mercy to unforgiveness from good to bad and from wisdom to play is not Sharia and there is no way to interpret it otherwise” (Al-Jouzia).
Sheikh Abdel Wahab Khallaf, likewise, argues that “all acts of law are bound to be beneficial to man. The reason for their being is to bring what is good and repel what is harmful. This is why the Prophet, Peace be upon Him, used to forbid whatever needed prohibition then allow it if things changed. The reason for the existence of law, then, is to benefit man. The way to achieve this when there is no statement it” the Koran or the Sunna is to use our sense of interpretation or Ijtihad (Khallaf 1350H :


2.1.2. Interests vary with the situations

Interests vary with the situations. What is considered beneficial in one situation may not be considered so in another. Imam Shatibi says in this respect “It is the case that most of what we consider good or bad is relative and not absolute. Things are good or harmful in one situation but not in another, to one person but not to someone else. They are so at one given time, but not at another.” (Shatibi).

Perhaps this is why some Ulema believe that interest given on deposit accounts, government bonds and investment certificates is not riba (Cf. Sheltout 1969 303, and Khallaf and Abou Zahra 1951).


2.1.3. Interests and their Priority

Interests as seen by the legislator are arranged in order of priority. Thus, interests that are imperative [Note: Imperative interests are those that serve as the basis to a man’s life. Their absence would create chaos. Such interests are keeping one’s faith, mind, wealth and honour.] come before those that are necessary  [Note: Necessary interests are those the absence of which would result in  making life difficult for people.] which in turn come before those that are cosmetic. [Note: Cosmetic interests are what beautifies a person’s life.] Of course, not all imperative interests are in the same order of priority. The same is true with what is necessary or cosmetic. To give an example, alcohol is permitted if drinking it saves life because the latter is more important than the mind. Likewise, nakedness would be permitted during a medical operation because this is necessary. This may be the reason why Islam does not like a life of extreme comfort, especially when some people cannot afford the basic necessities. This is what Caliph Omar Ibn Al-Khattab always believed when he repeated the words of Allah “and (how many) a deserted well and a lofty tower”. (The pilgrimage 45).


2.2. Accommodating Private and Common Interests in case of Conflict between the Two

2.2.1. Economics in the Capitalist System

Capitalism aims at fulfilling the interests of the individual first, interests which come before those of the group. Hence, capitalism allows total freedom to the individual in the areas of economy and ownership. The reason behind this is that when the interests of the individual are secured. those of the group are automatically secured as well, for society is but a group of individuals.

This capitalist policy has several advantages. it encourages individual motivation and enterprise. It induces people to work for profit and to start new economic activities. It also encourages the prosperity of the economy in general. This policy does present, however, several disadvantages. The most important of these is the raison d’etre of the capitalist economy. i.e., to make as much profit as possible irrespective of the necessary needs of society and the spread of unemployment and economic crises. Moreover, individuals in a given society have different levels of wealth, intelligence and capability, a fact which leads to the domination by the strong and the appropriation of the wealth of society by a minority. The result of this is bad distribution of wealth and income and the aggravation of the gap between different classes. This, to my mind, is the seed for all evil since it spreads hatred, encourages division and conflict and destroys the unity of society.


2.2.2. Economics in the Socialist System

Socialism aims at fulfilling the interests of society first, interests which come before those of the individual. Hence, the State intervenes in every economic activity and forbids private ownership of the means of production. The reason behind this is that when the interests of society are secured, those of the individual are automatically secured as well. The individual, after all, cannot live outside society. His value, his prosperity and his talents can only flourish to the degree of the prosperity of his own society.

This socialist policy has several advantages. The most important of these are the satisfaction of the needs of the group in general, the rationalization of production and the avoidance of unemployment and economic crises. This policy secures the interests of the majority, remedies the bad distribution of wealth, and does away with class differences, It does present, however, some disadvantages such as the weakening of personal stimulus, individual effort, and the motives for economic advancement. Add to this the many kinds of pressure, the bureaucratic complications and red-tape. the dictatorship and lack of freedom. and the feeling of insecurity.


2.2.3. Economics in Islam

Islam, however has had from the very beginning distinct policy that does not rely solely on the individual-as is the case with individualistic systems, nor systems nor solely on society as is the case with socialism. In fact, it takes care of the two interests and tries to bring them into harmony . The reason behind this is that the individual and society complement each other. By protecting one, we are also protecting the other Islam. hence guarantees the existence the both common -and private ate interests. It secures the protection of their good qualities -and the elimination of the had in either of them .

The strength of economic policy in Islam lies in keeping a good between the interests of the individual and those of society. This is expressed in the following koranic verses:” "wrong not, and ye shall not be wronged" (The Cow 279)." and wrong not mankind in their good” (The Heights 85). It is also expressed in the following hadith:" there should be neither harming nor reciprocating harm” never forbid Moslems their rights. otherwise you will encourage them to go astray (Assayuti). The Prophet, Peace be upon Him, has also shown us a simple but meaningful way to bring individual and common interests into harmony when he said : 

"If people are traveling on a ship and each person takes a seat. when one of the passengers dies into his seat with an axe claiming that it was his and that he could do whatever he wanted with it, everybody will be saved if the passenger is stopped. But everybody will be drowned if they let him die” (Al-Bukhari and Attirmidhi).

Islamic solutions to economic problems therefore differ from capitalist and socialist solutions in the sense that they bring individual and common interests into harmony.

The following three domains will serve as examples to clarify the point made here.

The domain of free enterprise and the State intervention in the economy

1. Capitalism:

In Capitalism, the essence of the economic system lies in the freedom of the individual to practice his commercial activities as he sees fit. The State, however, may intervene whenever it deems it necessary.

Undoubtedly, the evaluation of this necessity to enable the intervention of the State is bound to the conditions of time and place. The economy, however, remains a capitalist economy as long as the exception does not become the rule.

2. Socialism

The essence of the economic system in socialism is the sole intervention of the state at all levels of the economy. Exceptionally, the individual is let free to practice some economic activities. The exception may be large or small, depending on the conditions of time and place. But the economy remains socialistic in nature as long as the exception does not become the rule.

3. Islam

Freedom of the individual to practice economic activities and the intervention of the State in some sectors of the economy and its monopoly of other sectors go hand in hand. Islam acknowledges either practice as a general principle and not as exception. Each practice has its own domain and the two complement each other. They are both restricted and not absolute, To clarify

  1. Islam does advocate freedom of the individual in economic activities but with various restrictions. It is not lawful, for example, to produce alcohol or to do business with riba or to forestall the market. It is not lawful to stop money from producing, or to use it on what is not needed, or to harm the rights of others or to increase prices.
    Islam, however, does not advocate this by faith alone. To this end, it created a system of hisba, a system of accounting and price control which is one of the ways the State can control the soundness of the economic activity.
  2. Individuals are required to perform all kinds of activities in the economic sector which can be of benefit to society. However, the State has to intervene if individuals cannot perform some of these activities, such as constructing railway lines or starting factories for the heavy industry. It has to intervene if individuals refrain from carrying unprofitable activities such as creating housing projects in the desert, or if they do not practice certain activities properly, such as running schools and private hospitals.
  3. The intervention of the State is also needed because Islam guarantees a good standard of living and not just the basic minimum to every individual. For this purpose Islam created, fourteen centuries ago, the institution of Zakat which in modern terminology is synonymous to that of social security (Al-Fanjari 1982).
  4. Islam endeavors to secure the economic balance in society and rejects the appropriation of the national wealth by a minority. Witness the words of Allah “It is for Allah and the Messenger and for the hear of him and the orphans and the needy and the wayfarer) that it become not a commodity between the rich among you" (The Gathering:7). This demands that the State intervene to re-establish the balance in the distribution of wealth when needed. This is what Allah’s Messenger, Peace be upon Him, has achieved when he prohibited, in certain conditions, the rent of agricultural land. The domain of ownership

1. Capitalism:

Economy in the capitalist system is based on private ownership but, exceptionally, it allows that of the public. If required, the State can intervene in given economic sectors.

Private ownership in this system is safeguarded for it is considered the catalyst and the essence of life itself.

2. Socialism:

The rule in the socialist economy is public ownership, the exception being private ownership of some of the means of production which the State recognizes for a given social necessity

Private ownership in socialism is not safeguarded because it is, in the eyes of the system, at the root of all social problems.

3. Islam:

Islam recognizes both private and public ownership at the same time, each as a principle and not as an exception. Both practices, however, are restricted by public interest. They are not absolute. To clarify:

Private ownership is protected. It is not absolute, however, but is restricted in its acquisition, its domain, and its use. (Al-Fanjari, 1968). ‘That this is a social service is seen in the fact that the real owner of property in Islam is Allah the Almighty and that people are only inheritors. As such they should deal in what they have been left with according to the law, otherwise the State is allowed to intervene and place the property under an interdict.

Public ownership has also been acknowledged as a principle. As we saw earlier this is the case with protected, land. endowment funds and Mosques It is also the else with the expropriation of property order to enlarge it, or the State ownership of land minerals and of conquered lands. It goes without saying that if public ownership was not developed in the early period of Islam - it is because the economic condition of the time did not require it. (cf. Al Fanjari) 1981 155). The domain of distribution

1. Capitalism

The basis of distribution in the capitalist system is private ownership. This results in the wide gap between individuals in the property they own. their income and their inheritance.

2. Socialism

The basis of distribution in the socialist system is work, for property is the fruit of one’s work. In this economic system, incomes vary not because of ownership but because of the difference in people’s capabilities and talents. The resulting difference, in this case, may reach large propositions [Note: In my book "Islam and just Distribution". I make the point that the problem of national economies resides in the bad distribution of wealth among individuals, and in the bad compensation of the sources of production. Likewise, the problem of international economy resides in the gap between developing and industrial countries, and in the lack of compensation in the market due to the very low price of raw materials and the exorbitant prices of manufactured goods. What is needed to change and correct an economic system is a certain economic balance among individuals in a given society at the local level, and among nations at the international level.]

In communist economics, need is the basis for distribution in the sense of providing people with plenty of whatever satisfies their basic needs such as air and water. The system believes that, in this way, the phenomenon of differences in income would disappear and a classless society will then come into existence, [Note: James Burham (in Touchard et. al. 1982 829) claims that between 11% and 12% of Russians receive 60% of the national income, while 11% receive only 35% in the USA. Laroque (1982 114), likewise, claims that differences in income vary between I and 50 in the USSR but only between I and 10 in the USA. Vedel (1964), on the other hand, claims that there are many millionaires in the USSR. Baroudi (1966 148) argues that “it is not surprising to find millionaires in a new, powerful and advanced country such as the Soviet Union. What is surprising is that these millions are the fruit of man’s capabilities and the reward for work as claimed by the Soviet ideology”.]

3. Islam

Need, in the sense of seeking a minimum but sufficiently good standard of living is the first basis of distribution of wealth in Islam. Then, come work and ownership. Every body must first have this minimum but good standard of living which the Ulema call the limit of sufficiency to differentiate it from the "limit of pittance". Islam recognizes this as a person’s right which society or the State should provide him with irrespective of his nationality or religion. For the Lord says: "Give the kinsman his due. and the needy. and the wayfarer” (The children of Israel 26). "And in whose wealth there is a right acknowledged for the beggar and the destitute "(The Ascending Stairways 24.25). After which, to each according to his work and what he possesses, for Allah says: "Unto men a fortune from that which they have earned, and unto women a fortune from that which they have earned” ( women 32). He also says “And for all there will be ranks from what they do, that he may pay them for their deeds and they will not be wronged” (The wind Curved Sandhills I9).

In this economic system, a hungry or needy person cannot exist. Income may vary due to private property but not to work. This difference should not be great. for Allah the Almighty says “That it become not a commodity between the rich among you” (The Gathering: 7).


2.3 Priority of Common over Individual Interest in case it is impossible to accommodate the two

A basic feature of economics in Islam is the accommodation of common and individual interests. In case this harmony is not possible as in times of war, famine, or disaster, it is then agreed that individual interest is sacrificed for the benefit of common interest. This is the right of Allah which is above all rights. It is also expressed in statements such as “Harm to the individual can be endured for the sake of warding off harm done to the community” or “Low harm can be endured to ward off a higher one”, or “In the presence of two evils, the less harmful should be chosen.”


2.3.1.The Recognition of Extremist Socialist Doctrines by Islam

In extraordinary situations such as in time of war, famine or disaster, the application of Islamic economics surpasses that of the most extremist socialist doctrines. In a deprived society, it is not possible for a Moslem to own more than what he needs. It is the responsibility of the State, in this case, to intervene to take from the rich and bestow’ on the poor to satisfy everybody's needs. When this is guaranteed, there is no limit to what an individual may earn, for the Hadith says “There is no objection to the rich, provided he is pious (Al-Hakim). It is in this sense that the Koran says “And they ask thee what they ought to spend. Say that which is superfluous” (The Cow 219). Likewise, the Prophet. Peace be upon Him, while on a voyage, declared : “He who has got more food has to donate some to the one who has none” (Muslim). As for the Caliph Omar Ibn Al-Khattab, he said during a year of famine “If I cannot find what is enough for people, I would take them in homes where they would share the owners’ food till Allah brings forth the rains, People will not die with half empty stomach” (Ibn Al-Jouzi, p.01).


2.3.2. A Critique of the Opinion of the Prophet’s Companion Abu Dur Al-Ghufari

The Prophet’s Companion Abu Dur Al-Chufari expressed the opinion during the rule of Caliph Othman that one cannot own more than he needs. This is a correct Ijjtihad (interpretation) in the extraordinary conditions in which Moslems lived. In fact, there were people who were extremely rich at the time, while many others were poor and deprived.

Islam, as we saw earlier allows riches only if the necessary minimum is guaranteed to every citizen. It allows differences in income only when there is no place for poverty, hunger, and deprivation. There was no harm, then, when Abu Dur Al-Ghufari generalized this view and claimed that this was the decision of Islam in all circumstances while, in fact, this was a ruling in extraordinary cases only. Of course, one could make use of it only as a temporary remedy and when necessary. Omar Ibn Al-Khattab expressed the same idea when he declared “I shall endeavor to satisfy every want as long as we can support each other. If we fail, we shall live frugally till we all share that basic minimum to enable us to live” (Ibn Al-Jouzi).


2.4. Conclusion

Three conclusions can be drawn from the preceding discussion

  1. The purpose of economic legislation in Islam is to satisfy man’s interests. These, however, vary with time and place, and should be given priority according to their importance. Moslem rulers should not allow the construction of palaces and spending on luxuries while the needs of society are not satisfied and services are idle. This is not allowed in Islam, for Allah says : “How many a township have we destroyed while it was sinful, so that it lieth (to this day) in ruins, and how many a deserted well and lofty tower” (The Pilgrimage 45).
  2. Economic policy in Islam is based on the principle of accommodating individual and common interests. A solution to any economic problem is Moslem in nature as long as it accommodates these two interests and finds the right balance between them. It would be a great mistake to connect Islamic economics to either the capitalist or socialist systems, or to understand it as if it were a mixture of the two. Islamic economics is unique in its nature, as it is based on principles that differ from those of capitalism and socialism. If there is a certain individualism in Islamic economics. it is certainly different from that of capitalism, for it does not advocate absolute freedom of the individual in economic activities and ownership. Similarly, if there is a certain social policy in Islamic economics, it is certainly different from that of socialism. Indeed, it does not allow the total intervention of the State in economic affairs or the total abolition of private property.
    It is true that there may be penetrability between economics in Islam and other economic doctrines. and that certain Islamic solutions or economic implementations may agree with those of capitalism or socialism, These penetrability and agreement. however. are merely accidental. They occur in the details but not in the basics. Economics in Islam, then. is different from other economic systems by its unique solutions to economic problems.
  3. In the situation where the distribution of wealth is defective and not every one has a decent standard of living, private ownership is not respected but is sacrificed for the sake of common interest. This is the right of Allah which is above all rights.
    Economic thought in Islam may go beyond most extremist social systems as when the Prophet’s companion Abu Dur Al-Ghufari claimed that an individual cannot own more than is required for a decent living. This measure does not mean that Islam agrees with these extremist systems since it acknowledges that it is possible in extraordinary situations only, and that it is used as a temporary remedy when the need for it arises.



The Accommodation of material Interests and Spiritual Needs or The Fear of Allah in one's Actions


The sole aim of economic activities in positivist doctrines, whether individualist or socialist, is to guarantee material interests, These may have as objective the guarantee of the maximum profit as in the case of capitalism. or the satisfaction of public needs as in the case of socialism.

Economic activities in these two systems, different as they are, purely materialistic.

In Islam, however, even though economic activities are materialistic in nature, they, nevertheless present a religious or spiritual character. The latter is based on experience of Allah the Almighty, His fear and the desire to be in His presence. This is so because ,in Islam ,people do not only deal with each other, but they basically deal with Allah the Almighty.

If then other economic systems are based on materialism as the only way that regulates peoples dealings with each other, the source of economics in Islam is Allah the Almighty. In Islam, it is the fear of the Lord, the desire to act according to his command and to win His grace which regulate peoples dealings with each other.

As a corollary to this, Economics in Islam shows various characteristics which make it a unique system. We shall deal here with three of these:

  1. The element of faith and spiritual conviction in economic activities
  2. Duality and scope of control
  3. Exaltation of the aim of economic activities.


3.1. The Faith and Spiritual Conviction in Economic Activities

3.1.1. Positivist Economic Systems in Perspective

Materialism is the basis of all positivist economic systems. These have mistakenly considered men as matter only. The reality of the world is seen as purely materialistic. Income and material sufficiency are the only reason for man's life. There is no wonder, then. if we witness this spiritual emptiness and personal failure in materialistic societies.

There is no doubt that capitalist societies, which seek to realize the maximum profit. suffer most from this spiritual void and this personal failure. This has resulted in much harm as well as in the corruption of so many people who sought material benefits by all means. It also resulted in their enslavement to money. This is reason enough for those who have turned away, and still do, from such systems.

Marxist societies, on the other hand have not succeeded in elevating their socialist policy to the level of religion in spite of their continuous effort to achieve this. Belief in socialism remains materialistic. It does not satisfy the spiritual hunger or the religious needs of its people. These societies have been, thus, led to lighten their attacks on religion and to allow some religious activities. Aware of the need of religious beliefs in economic affairs, some States, such as East Germany. Poland and Hungary, have gone further and allowed funds in their budgets for religious activities.


3.1.2. The Spiritual in Islamic Economics

Even though Islam acknowledges the material element and material profit in economic activities, it does not neglect, however, the spiritual side in man. In his commercial transaction, a man is required to seek the Lord in order to gain His grace. For Allah says “And each one hat a goal toward which he turned” (The Cow 148), “And strive to please thy Lord” (Solace 8), “And be not ye as those who forgot Allah, therefore He caused them to forget their souls” (Exile 19). 

The blessed Prophet has likewise said:

“Work is worship" [Note: Work is worship as long as it is honest. It is worship as long as it is carried out in the way of the Lord, and in the best way possible. for the blessed Prophet says “Allah loves those who do their work well”.] “Allah, the Almighty, accepts only the virtuous deed which is done in the Way of the Lord” (Abu Daoud and Annassai). The way to this is the intention, for the blessed Prophet also says “Actions are but by intention and every man shall have but that which he intended” (Al-Bukhari and Muslim), and “Allah accepts what is said only when supported by a deed and accepts a deed only when supported by an intention” (Assayuti). 

This has given birth to various sayings of the type “Deeds are judged by what they were intended for and “Lord, I worship you with my work” said by Moslem jurists.

Undoubtedly, seeking the Lord in one's commercial activities is not an end in itself, for Allah the Almighty is neither served nor harmed by whether people seek Him or Not. “Allah is altogether independent of His creatures” (The Spider 6). Seeking the Lord in this case finds its value in protecting man against himself, for Allah says “Lo! as for those who believe not in the Hereafter, We have made their works far-seeming unto them so that they are all astray” (The Ant 4). Seeking the Lord will guarantee the soundness of man's commercial activities for this is an effective way to the righteousness of man and society at large. As the Lord says:" That is best for those who seek Allah's countenance. And such are they who are successful” (The Romans 38). "And who so magnifieth the offerings consecrated to Allah, it surely is from devotion of the hearts" (The Pilgrimage 32), “0 mankind! Ye are the poor in your relation to Allah! He is the Absolute, the Owner, the Owner of Praise” (The Angels 15), and “Their flesh and their blood reach not Allah, but the devotion from you reached Him” (The pilgrimage 37).


3.1.3 The Relation of the Material and the Spiritual in Islam

It is obvious from what has been said so far that a major characteristic of economics in Islam is the direction this economy takes toward Allah Almighty. This reflects upon the economic activities the feature of spiritual faith and the feeling of satisfaction and tranquility.

An important point is raised here by many, namely that Islam does not differentiate between the material and the spiritual. The fact is that every material or worldly activity that is practiced by man is seen in Islam as a spiritual act as long as it remains lawful and geared toward Allah the Almighty. It is simply not true that there is a conflict between religion and worldly life, or that there is one domain for activities in this life and another for those in the Hereafter. Islam recognizes this metaphysical division between the material and the spiritual only on the basis of lawfulness and the seeking of the Lord. It is said that some Prophet's companions then exclaimed

“How if this hurry were in the Way of Allah ! “The Prophet, then, answered “Do not say that. If he is out in search of his child's food. then he is acting in the Way of the Lord. If he is out to seek food for his elderly parents, then he is acting in the Way of the Lord. If he is out to find his own food. then he is acting in the Way of the Lord. But if he is out seeking dissimulation or glory, then he is acting for Satan's sake” (Assayuti). 

Moreover, the true sign of faith in Islam is doing good deeds and producing what is useful to society. Allah the Almighty says in this respect “And say unto them Act. Allah will behold your actions, and so will His messenger and the believers "(Repentance 105). “There is no good in much of their secret conferences save in him who enjoineth alms-giving and kindness and peace-making among the people” (Women 114).

The blessed Prophet, likewise suggests that the most effective way to reach the Lord and gain His Grace is to love and help His people for “man’s place with the Lord is his place with his fellow men”. For the blessed Prophet, “Allah loves more those who are most useful to others” (Muslim). A Prophet's companion once wanted to be on his own to pray and mediate. when the Prophet, peace be upon Him, remarked “Do not do that for the standing of one of you for the sake of Allah, i.e., for the sake of society. is better than his praying at home seventy years "(Assayuti),

Faith in Islam is not absolute, but concrete. It bears relationship to work and production, to justice and right redistribution, to correct dealing and to helping others. Its final objective is to serve society. Hence the insistence of the Prophet, peace be upon Him, that Islamic monarchism is jihad for the sake of Allah, i.e., for the sake of society, a society of production and services. He advises : " Love me in your poor  ". In another Hadith he declares

“Allah the Almighty says during the day of judgment .O son of Adam, I fell ill but you did not visit Me. He will say O Lord, and how could I visit you when you are the Lord of the Worlds ? He will say : Did you not know that My servant So-and-So had fallen ill and you did not visit him ? Did you not know that had you visited him. you would have found Me with him, O son of Adam, I asked you for food, but you did not feed Me. He will say : O Lord, and how could I feed you when you are the Lord of the Worlds ? He will say : Did you not know that my servant So-and-So asked you for food and you did not feed him ? Did you not know that had you fed him you would surely have found your reward with Me ? O son of Adam, I asked you for water and you gave me no drink, He will say :O Lord, how could I give you to drink when you are the Lord of the worlds ? He will say My servant So-and-So asked you to give him to drink and you did not give him to drink. Did you not know that had you given him to drink, you would have found your reward with Me ?” (Muslim).

Spirituality in Islam is doing good deeds to seek the Lord. The Caliph Omar Ibn AlAI-Khattab, may the Mercy of Allah be upon him, had a point when he declared : “By Allah, should non-Arabs come up with work and we did not, they would then deserve Mohammed better than we do in the day of judgment.” May the Mercy of Allah be also upon the Moslem thinker Jamal Ed-Deen Al-Afghani who declared ‘I do not understand what they mean by dying for Allah. Perseverance should be for the creatures of Allah to educate them and raise their consciousness of the means to their happiness and their well-being” (Ar-Rafii).


3.2. Duality and Scope of Control

3.2.1. Control in the Positivist

Economic Systems: This is an outside control in economic activities that is based on law. It is, therefore, limited and ineffective.


3.2.2. Control in Islamic Economics

Economics in Islam is controlled by the law and the Sharia, but at the same time it is also controlled by a subjective notion of faith in Allah and in the day of judgment. There is no doubt that this presents a strong guarantee for the soundness of social behavior and the lawfulness of economic activities. Indeed. the believer feels that if he can avoid control of the law, he certainly cannot escape that of Allah the Almighty. The Hadith says in this respect “Worship Allah as if you could see Him, for if you cannot see Him, He surely sees you” (Ibn Hanbal). The Prophet, peace be upon Him, has also declared “At the moment of committing crime, an adulterous or a thief is not a believer” (Al-Bukhan and Muslim).


3.2.3. Religious Restraint and its Effect

We can conclude from the preceding discussion that economics in Islam presents a special factor which is a religious restraint in economic activities. The restraint is a feeling of the Moslem that he is under the Lords control in every transaction that he carries out, and that he is responsible before Allah. The system of economics in Islam, hence, encourages this religious feeling. for the Moslem abides by the rules of Islamic law spontaneously and out of his deep faith. There is no need in this case for the State to intervene.

Positivist systems, on the other hand, are different since they do not take into consideration - and some of these systems even refute - the religious constraints in shaping economic activities. The effect of this can be seen in the fact that so many people in these systems try to avoid their responsibilities or cheat in their commercial transactions every time the State and its machinery cannot, for one reason or another, keep them under control.


3.3. Exaltation of the Aim of Economic Activities

3.3.1.Material Interest and Positivist Systems

Material interest is an aim in itself in all positivist systems. This is true whether the aim is to guarantee the maximum profit as in capitalism. or that of sufficiency and material prosperity as in socialism.

This has been at the source of the rabid conflict from which capitalist society are suffering and of the economic dominance and control in the socialist states.

Materialist economic systems, both capitalist and socialist, have realized various gains and much prosperity. These, however, are bound to disappear due to this frantic conflict that ravages the essence of these systems as long as material profit remains an objective in itself.


3.3.2. Material Interest and Islamic Economics

Even though material interest is an aim in Islamic economics, it is not an aim in itself. Rather, it is a means to guarantee the success and happiness of humanity. Islam views this life as a preparatory step to the Hereafter, and man as the replacement of the Lord on this earth, for Allah says “Lo !I am about to place a viceroy in the earth” (The Cow 30).

As a corollary, money in Islam is not an end in itself. And if the Moslem is required to seek it, invest it and make it grow. he does not do so for money's sake but because he considers it an effective means to his voyage to Allah the Almighty. This is why the blessed Prophet has said “Great is money when it helps man worship Allah” (Addilmi).

And the Lord said “See ye not how Allah hath made serviceable unto whatsoever is in the earth and hath loaded you with his favors both without and within ?” (Luqman 20). The Lord also said : “He is who hath placed you as viceroys on the earth and hath exacted some of you in rank above others, that He may try you by the test so that which He hath given you” (Cattle 166), “And who are shepherd of their pledge and their covenant (The Believers 8), and “then on that day, ye will be asked concerning pleasure (Rivalry in Worldly Increase 8).

We can conclude from what we have just seen that a major characteristic of economics in Islam is the desirability of what is material. The Lord says in this respect “Dispense in the land and seek Allah's bounty” (Congregation 10). and “And We Have given you (mankind) power in the earth and appointed for you therein a livelihood” (The Heights 10).. The Prophet, peace be upon Him, likewise says : “Seeking a legitimate living is an obligation” (Assay’uti), and “Man must use his mind to improve his living” (Addilmi and Assayuti).

In Islamic economics however, seeking what is material is not an end in itself Allah says in this respect ‘Then, as for him who rebelled and chose the life of the world, Lo Hell will be his home” (Those who Drag Forth 37-39). The Prophet. peace be upon Him, likewise says “Wretched is he who is enslaved by money” (Al-Bukhari and Muslim), and “Love of material life is the origin of every sin” (At Baihaqi; Addilmi).

Money in Islam is sought to worship the Lord and appreciate His Generosity “Seek of Allah’s bounty and remember Allah much, that ye may be successful” (Congregation 10), “But seek the abode of the Hereafter in that which Allah had given thee” (The Narration 77). Similarly, the Prophet, peace be upon Him says : “How appropriate the right fortune is to the virtuous man” (Imam Ahmed; Attabarani), and “There is no objection to the rich, provided he is pious” (Al-Hakim)


3.3.3. The Aim of Economic Activities

Another major characteristic of economics in Islam is that the aim of economic activities is to vitalize the world and live comfortably in it. The aim is not economic restraint and dominance, or the appropriation by one group of people or by the State itself of the wealth of society as is the case with positivist economic systems.

There is no wonder, then why world crises have always had their origin in losing track of this aim. This would also explain the old killing and the continuous conflict between tribes, then nations about nature's resources. This conflict is now taking place between the two super powers (the USA and the USSR) as both are trying to dominate other nations and appropriate their resources instead of helping and complementing each other. Hence, this turmoil and disturbance that the world is witnessing today, and this waste and splitting that the present generations are struggling with in bitterness.

In Islam, on the other hand, the aim of economic life is to inhabit and vitalize the world so as everybody would enjoy its resources. Islam considers man a replacement of Allah on earth, and man is required to live up to this situation by populating the world and managing its resources for the benefit of future generations. Allah, the Almighty says in this context “And hath made of service unto you whatsoever is in the heavens and whatsoever is in the earth” (Crouching 13). Similarly, the Prophet, peace be upon Him, says “the world in which Allah has brought you is beautiful. See, therefore, how you can work in it” (Muslim).
The Prophet, peace be upon Him, aware of the importance of productivity in Islam has gone so far as to say : “If it were the end of the world and someone happened to have a palm seedling and succeeded in planting it, he would be rewarded in the Hereafter” (Al-Aini).

The Lord has chosen that the riches of the world be spread in its various parts and divided among its nations, so that what one nation lacks, another possesses. This is done with the purpose of realizing complementarily between nations, and not to encourage conflict and killing. Had the world realized the full meaning of this divine wisdom. and had it been aware of the directions of Islam in the economy and followed them. it would have profited a great deal from its enormous capacities that are squandered everywhere. But this is not the case.


3.4. Conclusion

Three major conclusions can be drawn from this analysis so far :

  1. Economic policy in Islam is not restricted to material benefits, but accommodates them with the spiritual. This policy is based on the belief in Allah the Almighty, and on one's responsibility before Him. This is what gives Islamic economics its characteristic of belief and spirituality purported by the need to be in the presence of Allah in all commercial transactions.
  2. The control of the economy in Islam is dual in its nature, in the sense that it is not based on Sharia only, but on the belief in Allah and the last day of judgment.
  3. The exaltation of the aim of Islamic economics can be seen in the fact that the material is not sought for its own sake, but for the prosperity of mankind. The aim of the redistribution of natural resources is the realization of complementarily between different peoples and nations, and not the encouragement of conflict and killing.

There is no doubt that Islamic economics contributes effectively to putting an end to exploitation and corruption. It contributes to doing away with dominance and conflict and to solving the problems of war and killings. with the hope that in the end the world would live in peace, love and cooperation.


The Importance of Islamic Economics


Economic studies, in general, are quite important. This importance has increased at present to the extent that we can safely say that a truly educated person - no matter what his job is - cannot be described as such unless he possesses a knowledge or an awareness of economics which would enable him both to keep abreast of local or international events, and to evaluate them soundly. The study of Islamic economics is perhaps among the most important economic studies at the moment. This is not simply due to our relation to Islam, but to our sincere belief that Islamic economics can play an important role both locally with respect to our prevailing underdevelopment and internationally with respect to the state of conflict which is threatening the world.

Islamic economics failed to play its role partly because of our lack of awareness of its importance. It also failed because our Ulema did not convey the foundations and policy of Islamic economics in the language of today, nor did they relate these foundations and policy to what is taking place in our economic life today.

These ideas will be dealt with in the following chapters:

  The importance of economic studies.
  The role of Islamic economics .
  The teaching of Islamic economics.

The Importance of Economic Studies


Economic studies are important in many respects:

  1. Economic activity is man's predominant and essential activity.
  2. The laws of every society are the result of its economic conditions and development.
  3. People's customs and the Way of thinking in every society are the product of their economic conditions and development.

Man's material and spiritual progress is dependent on his economic conditions.


1.1 Economic Activity is Man's Predominant and Essential Activity

  1. The importance of economic studies is due to the fact that man's essential and predominant activity is economic.
  2. Although we believe that the material factor is crucial in life and that economics is essential in the orientation of the action of history. we are. however, strongly opposed to the idea which claims that material interests alone determine people’s behavior, and that economics is the key to history. There exist other interests and factors. e.g. moral. religious. Psychological, etc. Man does not live on bread alone. (Al-Fanjari I982: 37 ff.).
  3. The importance of economic studies has increased following the evolution and development of production strategies, and the expansion of economic activity. The conflict between East and West is purely economic. The present world problems are caused by the emergence of Europe. Japan and China as world economic powers. The major problem of the Third World, represented by Asia, Africa and Latin America, is underdevelopment. The world’s main concern today remains economic development. (Cf. Namiq 1968; Nasr (1965) [Note: Dr Nasr(1965 309) argues that national progress means good longevity average for the people (about 70 years in the West). a high standard of living, provision of various health. educational and leisure services. National progress means the use of machines to replace man in doing oppressive work. It means respecting Man giving women their rights and not allowing children to work at an early age. Last, but not least, it means development and enrichment at fast speed. Underdevelopment in a given country means short longevity (between 30 and 40 years in poor countries). lack or insufficiency of proper food. Clothing and housing. It means the spread of disease. Ignorance and witchcraft as well as that of unemployment and the exploiting of workers. It is employing women and children in exhausting jobs. It is also dictatorship of parliament, when there is one. and the slow rate of development if it ever takes place. In many cases, underdevelopment also means backwardness due to the increase of the population and the decrease of production”.]


1.2 Jurisprudence in any Society is a Product of its Economic Circumstances and Development

  1. The prevailing type of economic activities is another aspect which shows the importance of economic studies because it determines the various levels of organization in any society - be they political, social or economic.
    Thus, the slavery and aristocracy systems which prevailed in the past were no more than an expression of the dominant economic conditions in those days. Also, the emergence of socialist systems and their triumph in the modern world is not simply the result of coincidence or of preference of one ruler over another but it was the natural consequence of a particular stage in the economic development of the world. We agree, in this respect, with those who say that, instead of sheer insults and invective, the best critique of feudalism or capitalism should be launched on the grounds of their inability, at a certain period in the economic development of the world, to cope with the needs of the community and their failure to meet the requirements of growth and progress (See Zakaria, 1965 pp.4 and 337)
  2. However, although we take for granted the effect of economic circumstances and development in determining legislative systems, we do not accept it as the unique or predominant influencing factor, since, undoubtedly, each people’s readiness and religious commitments, its ideals and aspirations as well as its conception of Justice contribute effectively with other elements to differentiate between legislative systems regardless of economic circumstances and situations. Perhaps, the best illustration of this is the Moslem society in the early days of Islam; for it is not surprising to see science and civilization flourish in an environment where both the means of knowledge and the elements of growth abound; but that they should prosper in an arid land not suitable for crops is indeed a phenomenon that calls for serious thought.
  3. Moreover, the relationship between law and economics has increased nowadays according to economic activity and its expansion so that if economy is the essence, law is the form which is worked out to organize and maintain that essence. Thus, with the expansion of the field of economic activity and its increasing threat, a new discipline, ‘Economic Law”, has seen the day. (Cf. De Loubadir 1971, Atia .1972).


1.3. The Character of People and their Thinking are the Product of the Economic Conditions and Circumstances of Society

  1. Another clue to the importance of economic studies is the fact that the character of people and their way of thinking are the outcome of economic development and circumstances. Hence the remarkable difference between agricultural and industrial societies. Thus, while we find the farmer rather contented and resigned, sowing and awaiting such fatal judgments as aspects of the weather and agricultural catastrophes. his counterpart in industry is more ambitious and combative as he is in control of the machine and of production (see Hilmi I961). It is a fact that the basic difference between advanced and underdeveloped societies stems from their differential decrees of economic growth and development.
  2. However, although we take for granted the effect of economic growth and development in shaping the lives of people and their ways of thinking. we do not accept them as the unique or the predominant factor.
    There is no doubt that the prevailing creeds in society whether divine or secular, play a vital role in molding the character of people and their way of thinking. Perhaps, the best evidence for this Islam, which, in a very’ short span of time. has turned lost and backward peasants into masters of and guides to, mankind who changed history and enriched and gave a profound meaning to life.
  3. Marxism on the other hand attributes all change and development to the means of production and to the material conditions of society and claims that it is these elements only that guide mankind and shape society affirming that it is not people’s perceptions of the world which define or determine their living but their material status.

Islam refutes this altogether by highlighting man's role and his faith as the effective and crucial elements in change. Thus, from the viewpoint Islam, rather than matter, it is man who changes and development and only he can chance and modify the modes and relations of production. Hence the words of the supreme Being :"Lo! Allah changeth not the condition of a folk until they (first) change that which is in their hearts” (The Thunder II). and also His words “That is because Allah never changeth the grace He hath bestowed on nay people until they first chance that which is in their hearts. and (that is) because Allah is Hearer, Knower."(Spoils of War 53). Undoubtedly material conditions have their part to play since man cannot detach himself from his environment: and it would be a sterile and unfair attempt to judge an individual or a nation irrespective of their material possibilities or economic circumstances.

Nevertheless. man's will and his lucid faith hold pride of place in bringing about change and realizing progress. Hence, the primary concern of Islam with the preparation of the spirit and its education according to right ethics in the first place.

That is the point of departure since it is a truism that individuals and nations can only exist with good morals and human relationships and not with wealth, social status, or material progress. The exact conception of Islam stems from its concern, on the one hand, with the education of man and, on the other, with the betterment of his living since these affect, and complement, each other to the extent that humanity cannot further its progress if it neglects either of these aspects the will of man and the conditions of the environment.


1.4. Man's Material and Spiritual betterment is Conditioned by the Improvement of his Economic Situation

  1. Lastly, the importance of economic studies emerges from another angle which is the synthesis of the previous ones, namely that man's material and spiritual betterment is conditioned by the amelioration of his economic conditions. Thus, material underdevelopment cannot lead to civilization. Similarly, we cannot expect high moral standards and good behavior from the hungry and the deprived.
    It is from this perspective that we understand the balanced concern of Islam with Sharia as well as with faith; and how, being the ultimate religion, it is concerned with both the spiritual and secular aspects of life. This is because unless people are comforted in their living, and unless they feel that society is ready to help and secure them in dire need, their faith cannot be expected to be incorruptible nor their morals develop.
    We have mentioned above, the securing to all citizens of a good standard of living (Al Kafaf) and not just the satisfying of their basic needs (Al Kafaf) and that private property, difference in wealth and riches should not be allowed until this right is guaranteed to all.
  2. Although we take for granted the importance of the material aspect, we do not agree that it is only its abundance that brings about welfare to human communities. This material welfare must be twinned with faith; otherwise it will turn into threat, the effects of which we clearly see in the U.S.A. and in the Scandinavian countries in the increasing suicide incidents and immoral behavior. [Note: An alarming report broadcasted by the Swedish Ministry of Social Affairs declared that 25% of the Swedish population are mentally ill. The report has also shown that the suicide rate has increased, that 30% of the health budget is spent on mental health, and that 40% of those who retire prematurely or because of their inability to work are mental patients. On the grounds of the statistics it cited, the report concluded that material progress without faith or control is likely to render people miserable and crush the solidarity of society.]
  3. Likewise, we do not question the fact that the underdevelopment of Moslems nowadays stems basically from their economic underdevelopment. This state of affairs reflects itself on their behavior to the extent that they repudiated their Islamic ethics and wandered away from the essence and spirit of Islam. (Cf. Al-Fanjari 1978: 39 ff.).
  4. Economy has become so important in modern times that the issue of human development and progress has become the issue of economic development or underdevelopment. Yet, if the purpose of any society is to progress and improve morally, then we have to understand that it is necessary for progress to be complete with both its material and spiritual aspects, i.e., its economic and religious facets. Concern with one aspect at the expense of the other will lead to disequilibria and disorder in the lives of individuals and of society.

In this respect, I am happy to report parts of an illuminating lecture, entitled “How I converted to Islam”, delivered in French by the Moslem French thinker Raja Garaudy on March 11, 1986 A.D. (1 Rajab, 1406 A.H.) in Riyadh. The lecturer said among other things “The Third World is dying because of a penury of means, whereas the Capitalist Western and the Socialist Eastern Worlds are dying because they lack ends.”

"Indeed, Modern science and technology have put great potentials in the hands of a little deviate and straying man which he exploited to serve his whims for power, pleasure and material growth, thus threatening the rights of the majority, crushing it with hunger, frustration, and suffering. This phenomenon has led to what is now referred to as consumed peace or balance which is based on horror and which might lead the two conflicting super powers to annihilate all life on this planet”.

“There are millions of well-intentioned people all over the world who seek worriedly through this darkness to give a meaning to their life and death as well as a sense to their common history”.

“To all these people, Islam can bring a light which leads to the right path to which Allah guides His people. Only Islam can bring back to human reason, illuminated by divine commandments, its two genuine and full dimensions

  1. The dimension of a means-seeking science.

  2. The dimension of an ends-pursuing wisdom which seeks Allah the Creator.”

It is this full and endless use of reason which combines human science and divine revelation that made the greatness of the early Moslems.

Such a living Islam. Practiced in the same way and according to the same principles. can enjoy an expansion which will have nothing to enjoy to its expansion in its flourishing era in the 8 th century. Islam was able in those days in the face of two able in those days in the face of two great powers- the empires of the Sassamidal and Byzantium- which were eaten away by the same forces of disintegration and turmoil which we witness now to give a feeling of their genuine humanity and a sense to their secular life to millions of people and bestowed upon them a new blissful life by setting them on the path to Allah the One and Only to whom we must return, and to whom we shall be accountable. for, he who makes the slightest good shall be rewarded for it and he who makes the smallest harm shall be punished for it. [Note: This Koranic verse is given no reference in the text. It has been rendered into English by the translator.]

I converted to Islam because I found in it what I have sought throughout my life ... and if Islam is the sincere answer to the call of Allah . We shall surely live and die as Moslems.



The Role of Islamic Economics



The importance of Islamic economics is three-fold. It has to do with:

  1. The struggle against underdevelopment through economic growth.
  2. The Islamic world in particular.
  3. The world at large.


2.1.The Role of Islamic Economics and the Struggle against underdevelopment through Economic Growth

2.1.1.The Importance of Economic Growth in Society

The economic struggle today is one of eliminating underdevelopment through economic growth. Economists nowadays agree that it is not enough that the government , as people's representative, control the most important sectors in the national economy such as the financial domain (e.g. banking and insurance foreign trade, major industries as well as the basic means of transport. It is not enough to prepare economic projects and follow their execution at the official level either. what is necessary is a general mobilization of the whole population in order to achieve maximum growth and eliminate all elements of corruption and exploitation . In this case, the importance of economic projects should be clear to all citizens ,who would then act in the most effective way. The fact that each citizen is aware of his clearly defined responsibility within the overall plan of action means that independent action will succeed. Moreover, when citizens share a common responsibility within the framework of the national plan the probability of success is reinforced. This represents at the same time an important redefinition of the concept of national action, replacing the broad, ill-expressed generalities by clear thinking and precise planning. This procedure establishes, on the one hand. the relationship between the individual in his daily struggle for existence, and the united action of society as a whole. On the other hand, It integrates the individual within the concept of development and simultaneously influences events in the long term.

Now, it has long been agreed that economic development is not simply an elegant action, but one that has tremendous effects on society. Hence action has focused on the necessity of the participation of the population at all levels, not only In the discussion of developing projects but also in the evaluation of the results. There is no doubt that the indifference exhibited by the Islamic world in general, and the Arab world in particular, are a consequence of the citizen’s lack of awareness and confidence in the process of their participation in the establishment and realization of economic objectives. It goes without saying that whenever an individual or society achieves success and progress, it is because of a strong belief in the objectives and a firm commitment to ensure their realization. The outcome of this is benefit and profit for the individual and society.


2.1.2.Economic development and the Sacred Jihad

It is generally accepted that the support of the whole society is required to achieve any kind of economic development or to wage a successful battle against sustained under-development. It is, therefore, necessary to study the perception and psychology, as well as the history, of every society in harnessing its energy and potentialities to fight underdevelopment. As far as the Islamic world is concerned, there is no doubt that Islam itself is considered a major, if not the major, factor to assure the success of any action undertaken by society.

Jamal Ed-dine Al-Afghani has succeeded in connecting the idea of the sacred Jihad and that of liberation from the bond of colonialism. Furthermore, because of the force and clarity of Islamic guidelines regarding dignity and liberty, Islamic societies have courageously fought for their independence. Many nations such as Indonesia, Pakistan, Syria, Libya, Morocco and Algeria would not have been able to willingly accept the sacrifice made by millions of martyrs without the impetus of Islam.

Here is what the Lord says in this respect “Whoso fighteth in the way of Allah, be he slain or be he victorious, on him We shall bestow a vast reward” (Woman 74). The Lord adds “And call not those who are slain in the way of Allah ‘dead’. Nay, they are living, only ye perceive not” (Cow 154). Since the basic problem that Islamic societies face today is under-development, it is necessary to unite economic development with the sacred Jihad in order to create an outlet for the energies of the individual Moslem and to transform economic development into religious practice. This is because a basic tenet of Islam is to enjoin people to do good deeds and to forbid them from doing evil. As the Lord says “Ye are the best community that hath been raised up for mankind. Ye enjoined right conduct and forbid indecency” (The Family of Imran 110). Accordingly, to “enjoin right conduct” implies in this case the struggle to achieve economic development. To forbid indecency” would then mean the abolition of underdevelopment which always leads to various negative social conditions and moral failings.

We should, therefore, undertake a sacred war against underdevelopment.

The Prophet, peace be upon him, says in this respect “Each nation has its own destiny, and the destiny of my nation, is the Jihad in the way of the Lord”. When asked, one day, what was best in Islam, the blessed Prophet replied:" Faith in Allah and in the Day of Judgment and fight in the way of Allah". The blessed Prophet also declared one day after his return from one of his successful battles We have returned from a little battle to face a greater one” (Al-Bukhari and Muslim). The former battle, here, refers to war, while the latter refers to the personal struggle to establish a society based on the principle of enjoining the right conduct and forbidding evil. As the Prophet, peace be upon Him, says "Jihad continues until the Day of Judgment” (Assayuti), for life is a continuous struggle between right and wrong, and between what exists and what should exist. So, Jihad which is the goal and raison d’etre of Islam and whether it is carried out in war or in peace, aims principally at warding off injustice and establishing a God-fearing society. This society is one that enjoins right conduct and development, and forbids evil and backwardness.

Sacred Jihad in the domain of Islamic economics is a fight against underdevelopment It is a fight for economic growth and progress. Hence, the importance of Islamic economics and the role its plays in its domain. Development projects thus become for the Islamic world a sacred Jihad and a religious practice.


2.1.3. The Reality of the Israeli Challenge

Islamic economics and the role it plays in the struggle against under- development are quite important, especially for the Arab world. Thus, the Israeli challenge is not one of military power only, but is rather, and more importantly, an economic challenge. In reality, Israel’s objective is to gain economic control of the Arab world. So, our struggle with Israelis not simply limited to eliminating Israeli aggression, but should also reflect the need to combat underdevelopment and to promote rapid development. The latter requires the mobilization of all available resources and the exploitation of all Arab potential.

The danger that we face today is not Israel’s power, but rather the Arab world’s disunity and underdevelopment (especially in the economic field), and this in spite of the available human and economic resources. [Note: It is obvious that the Arab world has the human and natural resources, the know-how and the money to make it a great power able to Compete with the USA, the USSR, Western Europe, Japan or China. This is not, however, the case for the simple reason that the countries of the Arab world remain disunited and do not complement each other economically: The Arab world, in fact, still imports what is basic to its immediate needs, and is dependent of foreign countries even for its food and the like, in spite of its 250 million acres of arable land that has not been exploited yet. Of these 250 million acres; 100 millions are in the Sudan, 40 millions in Morocco, 25 millions in Irak, 14 millions in Algeria, 12 millions in Syria, 11 millions in Saudi Arabia, 9 millions in Tunisia, 8 millions in Egypt, 7 millions in Jordan, etc.]

Thus we realize the necessity for Arab unity - This sacred unity is required not simply for the sake of history but first and foremost for our future generations We live in an era where there is no place for small entities -and when the requirements for economic development surpass the resources of any single country Some Arab countries such as Saudi Arabia - Libya - Kuwait and Abu Dhabi for example have the necessary capital to enable them achieve economic development but they lack the workforce and technological skills. Other countries such as Egypt have abundant labor force and technological skills but lack the capital. If their countries pool their resources together they can complement each other. Development can thus be secured and underdevelopment eliminated with the elimination of underdevelopment - which is, in fact - the central issue in our struggle with Israel - neither Israel, nor its supporters will represent any danger to us. we would ultimately, be strong enough to withstand the enemy and emerge triumphant.

In order to achieve this objective, we must be totally aware that it is not possible to impose overall Arab unity by slogans and speeches which stir emotions. It cannot be achieved through politics and constitutions - but only through unified economic action. (See Al-Kasibi 1978:5-15) - The unity of the German States was possible only because the latter were linked by railway -and custom systems (Zollverein ). European economic unity was made possible only after the Benelux agreement between the Netherlands. Belgium and Luxembourg. Europe-in political unity, likewise, is now taking place through the European Economic community. similarly, the rise of Japan following its defeat in the Second World War, its present economic challenge to the USA as well as the impact it has left on the world nations are the clear result of its new -and rational policy. The latter is based on the principle of politics for the benefit of the economy - and not the reverse.

In any case, we must declare Jihad against Israeli injustice and our economic backwardness. In order to eliminate all traces of this injustice -and to ensure economic development, our fight must be linked to the concept of Jihad. Similarly. Arab countries must be economically united first as this is the surest -and shortest way to political unity.


2.2.The Role of Islamic Economics in the Islamic World

2.2.1.Islamic Economics is what Works Best for the Islamic Countries

The Islamic world embraces more than one billion Moslems (150 millions of which are Arabs), that is about 15 % of the worlds population. In other words, one person in every six or seven people professes Islam. To quote Handam (1971 : 12). “Islam is always acquiring new territories and new forces in the four corners of the Globe. There is little doubt that Islamic population will remain the increase, and that by the end of the Century. one fifth of the world will be of Moslem faith”.

These Islamic communities are closely bound to Islamic law in faith, mind and feeling, as well as politically and economically. It follows that Islam remains the best way to urge these communities to act and to obtain a quick response from them. It should be remembered that during the Bolshevik Revolution there was strong resistance from the Moslems of the Soviet Union, particularly in the areas where there was a Moslem majority such as those of the Caucasus and the Tartars.

The Soviet leaders could only penetrate those areas when they pretended to go there in order to apply Islamic law, such as eliminating monopolies and exploitation or establishing equality and democracy and building an economy devoid of riba. (Cf. Al-Fanjari 1970 :148 ff and 1971.)

It is certain that when we choose a strategy of reform, we must take into consideration the specific conditions of each nation as well as its historical and social contexts. We must also keep in mind that changes in the Islamic world take place when Islam supports them, or at least when it does not object to them.

The importance of Islamic economics and the role it plays within the Islamic world is, thus, quite obvious. Moslems everywhere trust it, respect it and respond favorably to it.


2.2.2.Islamic Economics is the Most Effective Economic System

In addition to what was said above, it should be emphasized that Islamic economics is based on Sharia which Moslems believe is sacred and inviolable. This is, of course, due to their profound belief in Islam as a divine religion transmitted by the last Prophet, and to their belief that Islam does not limit itself to prayer but is rather a way of life, a political, social and economic ordering of the Islamic community.

The fact that Islamic economics is bound to religious faith, undoubtedly, paves the way to, and creates the right circumstances for the acceptance and execution of its legislation. And if the only way to achieve social and economic change or betterment is first to impregnate the population with ideas and principles to be put into action, then we should benefit from the Islamic religious faith for this is a religion of change, growth and common interests . (Cf. Al-Fanjari 1968, 1971.) In this kind of faith, belief - as mentioned earlier - is not abstract or metaphysical, but is rather a specific belief liked to action and production, for the Lord says : “(And) Lo those who believe and do good works are the best of created beings” (The Clear Proof 7). It is also linked to even handed justice and fair redistribution, for the Lord says : “Deal justly, that is nearer to your duty (The Table Spread 8). The worst denial of religion is to let individuals suffer from perdition and deprivation. The Lord says “Hast thou observed him who deniefth religion ? That is who repelleth the orphan, And urgeth not the feeding of the needy” (Small kindness 1, 2, 3). We must establish, therefore, our economy on the basis of Islamic guidelines to assure effectiveness and execution. This is the purpose of any economic strategy meant to be successful and permanent. The significance and role of Islamic economics in the Islamic world are thus made clear. They constitute the economic path followed faithfully by Islamic populations for its effectiveness and for its power of execution.


2.2.3. Islamic Economics is a Strategy which Assures Unity and Harmony

There is another issue which compels responsible people in the Islamic world to practice and stick to Islamic economics since its principle is to eliminate the conflict from which Moslems are suffering because they are torn between their religious consciousness and their conventional laws.

Actually, most constitutions in the Islamic countries assume that Islam ‘is the official religion of their country as the Islamic Sharia is the main source of legislation. However, these assumptions will remain mere insignificant slogans as long as jurists do not make the social, political and economic Islamic guidelines clear, and as long as they do not show how these can be implemented in different places at different times. This will also remain true as long as the rulers do not put these guidelines into practice allowing for counsel and freedom of expression, and for self sufficiency and economic balance between all the people. (Cf. Al-Fanjari 1967, 1981.)

Hence the importance of Islamic economics and its function in the Islamic world since it is an economic strategy which can achieve unity and harmony between the material and the spiritual life of the people.


2.2.4.The inevitability of the Islamic Solution

A logical conclusion of what has preceded is “the inevitability of the Islamic solution”. We do not use this expression here as mere rhetoric like those in the Moslem world in general or in the Arab world in particular who talk of the “inevitability of the socialist solution” or “the inevitability of free market.” We use this expression to refer to the circumstances, events and conjunctures in our Arab world and our Moslem world that will inevitably lead to this Islamic solution, especially after the failure of all imported solutions and the decay of all artificial systems. (Cf. Al-Kasraoui 1971: 5 ff.).


2.3.The Role of Islamic Economics in the World at Large

2.3.1.The Essence of Islamic Economics

Two opposing trends are discernable in the world, the individualist (capitalism) and the collectivist (socialism). We have seen that each of these two trends has a specific economic policy with advantages and drawbacks. We have also made it clear that Islam has a specific orientation and distinctive policy. And even if the latter resembles other economic policies in various aspects it remains, nevertheless quite unique since it is:

  1. a static and developing policy at the same time It is static in principles and foundations, and in its assurance, from the very beginning, of the basic needs of both the individual and society regardless of its degree of development or the prevailing means of production. It is also a developing policy because its basic tenets are susceptible to different methods of application in time and place.
  2. a policy which serves both the individual and common interests. It does not ignore the interest of the community as is the case with the individualist system, nor does it ignore that of the individual as the socialist system does. The Islamic economic policy is rather, from the start, concerned with both interests as it permanently tries to maintain them in balance.
    However, if this harmony or equilibrium is not possible. such as in the exceptional circumstances of war, epidemics or famine, then common interest should prevail at the expense of the interest of the individual. In such circumstances, the Islamic solution, compared with all other systems, allows for the most extreme measures to be taken and solves the most difficult problems just as the Prophet’s companion Abu Dur Al-Ohufari once did.
  3. A policy that serves material welfare as well as spiritual needs. It considers individual in his economic activity pious as long as his activity has been planned and oriented for the cause of Allah the Almighty. Moreover, the individual is gratified and rewarded to the extent that his activity is thorough and beneficial to the majority of the Moslem community.

In Islam there is no conflict between matter and soul as there is no separation between economy and religion. There is rather a strong bond between the two, a fact which guarantees success in this world and in the Hereafter. After all, this world is a field for the next. Man is the “viceroy of Allah on His earth”, and the purpose of Islamic economics is to construct the world and endow it with life.


2.3.2. The Dialectic of Islamic Economic Policy

As we saw earlier, economic policy in Islam is a global policy that takes all human aspects in consideration. It takes care of all human needs and tries to accommodate them in a dialectic way (See 1.4).

This dialecticism is special in its own way, for Islam recognizes the social contradictions that are inherent in life, viz., the static versus the developing individual versus common interest. material versus spiritual needs. However, the major point of difference between Islam and other systems resides, as we saw earlier. in the fact that these social contradictions are seen in Islam as the basis for cooperation and complementarily , not for conflict and killing. Islam, therefore. contrary to all other systems, makes sure these contradictions exist and accommodates them all without jeopardizing any. In some instances, however, one element may take over , at the expense of the other. When this happens, it is on a temporary basis and according to the need in order to re-establish the balance and guarantee cooperation.

If Islamic economics, as we have just seen, accommodates conflicting interests in order to secure the interest of all, to solve economic problems and hence those of war and peace, it is advisable that this Islamic economics contributes to solving world problems as well.

Hence, if the importance of the role of Islamic economics for the world has not been fully appreciated, it is because our Moslem Ulema have not exhibited the characteristics, value, essence and superiority of Islamic economics.


2.3.3.Islamic Economics Seen by Non-Moslem Scholars

In spite of the little effort done to show the value of Islamic economics, we have been hearing lately of Non-Moslem scholars advocating this system. These scholars have argued in favor of Islamic economics simply because some aspect or other has become clear to them, e.g., the accommodation of individual and common interests, that of material and spiritual needs or that of the stable and the ever developing.

We do not know how far the world would go if all aspects of Islamic economics and their application have been made clear. G.B. Shaw, for one, has declared that he saw in Islam the religion of Europe in the end of the 20th Century. (Quoted in Ben Nabi 1971). The German thinker Goethe has, likewise, declared “ If this is Islam, are we not all Moslems ?” (Quoted in Bammate 1958:21) [Note: The quotation is in French and goes as follows : Si tel est I’lslam, ne sommes-nous pas tous Musulmans ?” (Goethe). The Swiss scholar, George Rivoire who became Moslem under the name of Haidar Bammate adds : “L’Islam devient un des elements essentiels du jeu dont dependra le sort futur.du monde”.]

The French Economist Jacques Austruy wrote in 1961 in his book Islam and Economic Development that the way to development is not restricted to the capitalist or socialist systems but is apparent in a third one which is Islamic economics. The latter, in his view, will dominate the world in the future because it is a global way of life that guarantees success and avoids evil. [Note: The author also states (1961:175) ‘.L’avenir n’appartient a personne, et c'est une erreur historique aussi grossiere que commune de croire les sources d’invention humaine taries avec notre jeunesse. L'avenement d’une economic musulmane qui s’annonce apportera, sans doute. Ia preuve que Ia croissance esycholomique n’est pas necessairement soumises aux modalites psychologiques et sociales quc montrent tes deux systemes aujourd’hui dominants. Les chances de ertation economique de l’lslam onus paraissent grandes et ses tentatives de construction d’un systCme originat sont I encourager”.]

The French scholar Raymond Charles (1969), in a critique of my Ph.D. thesis presented in 1967, argues that Islam shows an advantageous way to development. In the production domain, it glorifies work and forbids all aspects of exploitation. In the domain of redistribution, it first guarantees the basic minimum to everybody and then advocates the system of "to each according to his work” irrespective of his religion or nationality. As the Hadith says ‘There is no objection to the rich, provided he is pious.” In any case, Islam allows wealth and riches only after poverty and deprivation have been eliminated. It does not allow extravagance and secures the economic balance between individuals. [Note: Raymond Charles (1969) also writes : “La specificite de l’Islam doit, en ces domaines comme dans celui de Ia science, s’integrer au rythmc do developpement mondial, auquel elle-meme ouvrira des voies originates. L’Islarn exalte Ie travailleur et detourne toute forme d’exploitation, il s’efforce d’edifier one societe fondee sur Ie labeor. Qoant a Ia distribution, il honore les deox principes fondamentaux A chacun selon ses besoins et a chacun. seIon son travail; Ie premier est garanti a titre de droit de Dieu par Ia societe a ses membres sans discrimination de race, dc religion ni de nationalite’, toute transgression entrainant Ie rejet pourt infideli’te hors de Ia communaute; Ie deuxieme ne saurait engendrer aucun ecart de classe, ni luxe ni l’opulence ne sont toterables tant qu’iI subsiste un seul necessiteux dont Ia misere doit disparaitre, tot-ce par Ia confiscation privee sans indemnite, au bref par Ia socialisation des biens".]

This is a clear proof that many Orientalists argue for the need to go back to Islam and to study its strength especially in the political, social and economic domains. (See Gardet 1969).


Teaching Islamic Economics



The first leading university in the area of teaching Islamic economics as an academic subject is Al-Azhar University. This teaching is administered in two faculties : The Faculty of Commerce (Within the curriculum of the fourth level of the Bachelor’s program), and the faculty of Sharia (within the curriculum of the Legal Politics degree in the graduate program).

This subject matter has been introduced only recently by virtue of law no.102 issued in 1961 on the restructuring of Al Azhar and its constituent institutions. This development occurred quite late, in spite of the long-established existence of Islamic economics which is as old as Islam itself and whose emergence took place fourteen centuries ago. It also occurred quite late in spite of the opinion expressed by Moslem and non-Moslem theologians, and pertaining to the fact that Islamic economics, on the one hand, is unique and enjoys a separate identity and on the other hand, that the foundations and principles that underlie it meet the needs of modern times and guarantee man’s happiness on earth and in the Hereafter. Furthermore, the introduction of Islamic economics into school curricula was started quite late in spite of the enthusiasm shown by the Moslem peoples and their leaders towards the application of the precepts that contain the principles of Islamic economics.

It seems that the issue involves a missing link. We shall try to clarify this in the following three sections :

  1. The novelty of Islamic economics as a subject matter.
  2. Neglecting the teaching of Islamic economics as a school subject.
  3. Neglecting the application of Islamic economics.


3.1. The Novelty of Islamic Economics

3.1.1.Islamic Economics is as Old as Islam Itself

As it has been indicated earlier, Islam is not simply a religious faith; it is also a political, social and economic system for the Islamic society. That is what is intended by the phrases that describe Islam as “a religion and a code of life”, and as ‘a faith and Sharia”.

Islam was not revealed to man for spiritual guidance, as was Christianity which advocates the principle of "Give to Caesar what belongs to Caesar and to God what belongs to God”. Instead, Islam came in order to organize man’s life in all its aspects, whether they are political, social or economic. The Messenger Mohammad, may Allah’s prayer and peace be upon Him, was not only a Prophet but also an executive judge.

Thus, Islamic economics is as old as Islam itself.


3.1.2.The Novelty of Islamic Economics as a Subject Matter

Although Islamic economics dates back to, the emergence of Islam fourteen centuries ago, its introduction into teaching curricula as a separate subject is a flew development. Besides, the research and the areas of study pertaining to this subject are still limited.

Our objective is not to explore the reasons for this failure or that contradiction. Suffice it to point out that Islam has brought new principles and unique foundations in the area of economics. The study of Islamic economics knew its heyday in the early Islamic era, to the extent that several old books are full of original ideas that compare favorably with the modern concepts and theories of economics. More than that, the first world scientifically-oriented books of economics did not appear until the Seventh century (Gregorian), in the light of Islam and through the creativity of Arab writers (See Salah, 1932, Nachaat, 1944 and Mourad, 1952). Subsequently, the study of Islamic economics declined following the cessation of the Ijtihad in the fourth century (Islamic calendar). Since that time, there has been almost no research on Islamic law and, consequently, the studies on Islamic economics have ceased to face the changing needs of society.

This state of affairs has caused the study of Islamic economics to lag behind to such an extent that the content of this subject matter has. been forgotten even by the Moslems themselves and faded out of the minds of their own theologists. Several intellectuals still do not imagine the existence of an Islamic economic system which can meet the needs of modern society and compare favorably with the two dominant economic systems of capitalism and socialism.


3.1.3.Type of Effort Required in the Subject Matter of Islamic Economics

There may now be strong calls for going back to Islam, with the view of applying its economic principles and involving it in the solution of the world problems. However, before doing so, we need to clearly show these economic foundations and the manner in which they can be applied for the benefit of each society and in accordance with the conditions of time and space.

The true enthusiasm and the sincere calls in favor of Islamic economics will be wasted if no efforts are made to highlight the political social and economic precepts of Islam in the Language of modern times, and if no explanations are given as to how these precepts can be applied in such a way as to further the changing interests of society. If such conditions are met, instead of seeking the adoption of the Islamic precepts through mere talk and dogmatism, these godly precepts will impose themselves not only to the Islamic countries but to the whole world, for it is in all times and places the road to salvation. peace and happiness for all humanity.

From the above we can realize the necessity of economics as a scientific and separate subject which lends itself to wide ranging research studies on the economic problems of our times and which finds the Islamic solutions for them.


3.2.Neglecting the Teaching of Islamic Economics

3.2.1.World’s Aspiration Towards Islamic Economics

As it has been indicated earlier, Islamic economics is an independent system which enjoys a separate identity. It is a self-contained system with its own economic policy which encompasses all the different interests - (whether private or public material or spiritual)-, takes into consideration the variations in time and space and, in the final analysis, achieves all the advantageous results and avoids all the inconveniences.

Several foreign and international voices cry out in order to stress the fact that Islamic economics is the hope for the salvation of humanity from the extremist positions adopted by each of the two dominant economic systems capitalism and socialism.


3.2.2.Islamic Universities’ Neglect of Teaching Islamic Economics

In spite of all that, the majority of the universities in the Islamic world itself provide courses on the capitalist and socialist economic systems but not on the Islamic one.

In Egypt, we have created specialized faculties of economics, such as the Faculty of Economics and Political Science, without any mention of the study of Islamic economics. Worse than that, we have set up specialized institutes for Arabic and Islamic studies such as the Institute for Advanced Arab Studies. in which we do not provide any teaching on Islamic economics as a separate subject and yet it is the area of Arabic and Islamic studies that is most worthy of our attention and care.

As was indicated earlier, Al-Azhar University, especially its Commerce and Sharia faculties, is the first leading university in the teaching of Islamic economics as an independent and scientific subject following a law related to the restructuring of Al-Azhar and issued under number 102 in the year 1961. Then there was King Abdulaziz University (Faculty of Economics) in Jeddah Which became the second leading university in the teaching of Islamic economics by virtue of its statutes issued in 1374H/1964 Later. the Seventh Conference of Moslem Ulema held in Cairo in September 1972. issued a resolution on the necessity to teach Islamic economics in the different institutes and universities of the Islamic world. Unfortunately this resolution has not found its way to application until after the First World Conference on Islamic economics which was held in Holy Mecca in February 1976.

Today, Islamic economics has almost become one of the prescribed subjects in several institutes and universities of the Islamic World. especially in the Kingdom of Saudi Arabia, although it has been harmed by some faculties by including it within the subject of Islamic culture.

Some Islamic universities and their specialized institutions may excuse themselves for not teaching Islamic economics as an independent subject by arguing that it is a new study area whose components have not been clearly delineated and about which there are limited basic references. However, is this not one more reason why Islamic universities and institutions should have set up departments and professorship chairs that are specialized in this subject matter ? Such an action will attract interested students and will consequently generate the relevant research, activate the study of the subject and foster its existence, thus imposing it on human thought. It will also play an effective role in the service of Islam and in the guidance of Moslems’ life.


3.2.3.The Mission to be Accomplished by the Leaders of Islamic Economics

When departments and chairs are created for Islamic economics, occupants will have numerous difficult responsibilities, especially the following :

  1. Preparing studies on Koran and Sunna texts that relate to Islamic economics, showing how these texts can be implemented in ways that are consistent with the conditions of time and space, and suggesting Islamic solutions for the different economic problems of the time.
  2. Conducting comparative studies between the Islamic and other economic systems showing the extent to which the differences in their respective applications are a result of differences in the systems themselves, and providing an evaluation of each system.
  3. Consulting the volumes written by the experts on Islamic Sharia, extracting their detailed opinions on questions of economics and expressing them in terms used in the current economic literature along with the presentation of relevant commentaries.
  4. Keeping abreast of the developments in the economic thought among the Islamic thinkers through out the different Islamic eras and countries, identifying the differences among them, and determining the bases of each opinion and presenting an evaluation of it.
  5. Supervising the setting up of a scientific library which contains the volumes research studies, dissertations and specialized journals that deal with economics in Islam.
  6. Encouraging the writing of master’s and doctoral dissertations in Islamic economics and providing for the training of young researchers who combine the two cultures the first being one of Islam and Fiqh (Islamic jurisprudence) and the second being one of technical economics.
  7. Studying the economic situations in the Islamic world investigating the underdevelopment that it suffers from, and drawing plans for the setting up of Islamic economic structures which will ensure cooperation among Islamic countries and their complementarily, and will benefit humanity.

We are not being unrealistic in our recommendations. We look forward to the setting up within the Islamic world of centers or institutes that are specialized in Islamic economics. [Note: The First World Conference on Islamic Economics which was convened by the Kingdom of Saudi Arabia and organized by Kint Abdelaziz University in Holy Mecca in Safar 139 February 1976 led to he creation of the World Center for Research on Islamic Economics (as a part of King Abdelaziz University). Similarly. the First World Conference on Fiqh which was convened by the Kingdom of Saudi Arabia and organized by Imam Mohamed Ibn Saoud University in Ryad in Do Lqiada. 1396/November 1976 led to the creation of a department of Islamic Economics in the Sharia faculties. The department is intended for the study of Islamic economics in four complete years and started operating in the academic year 1399-1400 AH. Later this department became a separate Faculty of Islamic Economics.  In addition to the above. the Commerce Faculty of the AI-Azhar University took the initiative of setting up the "Sheikh Abdellah Kamil Center for Research and Studies on Islamic Commerce” which delivers, in the name of AI-Azhar University master’s and doctoral degrees in Islamic economics.]

Economy is the vital context which reveals the material and spiritual strength of Islam and through which the Islamic Ummah can achieve its cohesion, strength and universal mission.


3.3. Neglecting the Application of Islamic Economics

3.3.1.Gap between Belief and Reality

Nobody doubts the Moslems’ faith in Islam and nobody questions their belief in the soundness of the principles that constitute the basis of this religion, especially in the context of the organization of society in its political. social and economic activities.

Several voices cry out at different official and non-official levels some die out in insistence while others burst out in anger calling for the application of the foundations and the principles of Islamic economics. Sometimes, these voices find attentive ears and a strong echo among the people in charge as well as a sincere response and a confirmed interest on the part of the peoples and their leaders. However, the response stops there.


3.3.2. The Reasons for not Applying the Principles of Islamic Economics

Although the Moslem peoples and their leaders adhere to Islam and experience the application of the Sharia, they, nonetheless, seek the solutions to their different economic problems outside Islam and thus, we see their societies swinging awkwardly between the capitalist and socialist systems, neglecting their Islamic economic system.

This state of affairs does not mean the forsaking of Islam or doubt about its economic principles. Neither does it mean negligence on the part of Moslems or atavism (reversion) on the part of the leaders. The reason for not applying the principles of Islamic economics is that the solutions which are presented in the name of Islam for the problems of our modern times (and they are complex economic problems) are simplistic and unpractical. In fact these solutions are suggested by some men of religion who are not specialized in economic matters, relying in doing so on some old time religious leaders or theologists. In doing so, they ignore some important matters which are as follows :


  1. Islam does not have a place for men of religion as such for all Moslems are men of religion. However, it does have a status for men of knowledge. Nowadays, it is not enough for a person to be educated in the large domain of Fiqh in order to be able to formulate legal opinions about modern complex economic matters. Rather. it is necessary for him, in addition to that, to have a specialized knowledge that comprises the foundations and the details of the economics science.
  2. The judgments by Ijtihad made by the old time Islamic leaders and theologists, in spite of their great importance, cannot be taken in their absolute meanings. since they are essentially opinions. Added to this is the fact that most of these judgments were formulated in a period and in conditions which are not ours and on problems which are not ours. Today. We are called upon to make serious attempts as the old time theologists did in order to reveal Islam's judgments on the new financial transactions and economic problems.
  3. Several writers on Islamic economics limit their studies to subjects that relate essentially to the questions of riba and the prohibiting of interest insurance companies, banking transactions ,as if Islamic economics were limited to these questions. Even in their dealing wit h these topics and in the conclusions of prohibition and unlawfulness that they usually reach (without making any distinction between different banking or insurance operations). most of these writers do not present to us a detailed study on the practical alternative to what they prohibit. This ends up in cutting short the investigation for the required solution.

Some people make the confusion between Islamic economics and Islamic financing science. They entitle their works Islamic economics and inside they deal with the topics of the ‘fifth” (khumus). the “tenth” part (a’ouchour), land-or poll-tax (kharaj) body and face partnerships (sharikat al’abdan and sharikat lwujuh). Although the majority of these topics have acquired historical importance. they nevertheless present no serious studies that can be reliably related to the reality of our modern world.


3.3.3.The Cause of the Problem and it Solution

In the final analysis, the cause of the problem is that we do not have enough specialists in Islamic economics.

There lies, in my opinion. the ill that we are suffering from and there lies too the missing link.

Modern economists lack the thorough knowledge of Islam. and therefore they spontaneously get weary of studying the economic foundations for the economic problems of our time. On the other hand our theologists lack training in modern economics, a fact that makes them unable to do well in revealing the economic foundations of Islam and using them in ways that are consistent with the requirements of our time and with the reality of our current complex economic world.

This state of affairs has led the Moslems of today, common people and leaders alike. to turn in a vicious circle, aspiring to Islamic economics and calling for Islamic solutions to their problems while, at the same time, dividing themselves between the capitalist and the socialist Systems and applying the solutions of this or that system about which they do not feel comfortable or secure.

The only choice for the solution of this problem or the escape from this vicious circle is to train specialists in Islamic economics, who combine “the rich Islamic culture” and “the contemporary modern economic culture".

This will be achieved not through call for determination and appeals to theologists for seeking specialization, but through the creation of departments and chairs for this subject matter in the Islamic universities, administration institutes, faculties of commerce and law, etc. This will lead to the constitution of a specialized student body for this subject matter.

Through this systematic approach, we will highlight the economic foundations of Islam with the spirit of contemporary life, and show the possibility of applying them in a way that is consistent with the changing needs of society. It is only with this approach that we will be able to put an end to all kinds of blind fanaticism and empty appeals, and that we will enable Islamic economics to develop and flourish. and thus contribute to the solution of world problems and the fostering of world peace.

This is a cry from the depth of my heart, which I am addressing to all Moslems, especially the economists and theologists for the sake of knowledge and truth, and for Islam and Moslems, The rationale is that Islamic economics is the material and spiritual strength of Islam, and that it provides the means for the achievement of the Islamic Umma’s cohesion, strength and world mission.

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