Origins, Evolution and the Future
Studies in Islamic Finance, Accounting and Governance series
Can Islamic capitalism, which has served Muslims so well for centuries in different periods in history, provide a viable alternative economic system to humanity? In this age of recession, the worst since 1929, this is surely a provocative question. But if this alternative is to emerge and serve mankind as a gift of the Islamic world, it must, first of all, be well understood. To start with, was there, indeed, an Islamic capitalism? Are we justified to call this system that emerged a thousand years before Adam Smith, capitalistic? What are the principles upon which this system has been built? What were the institutions which developed from these principles? How have they functioned and evolved, and most important of all, can they be modernized to address today’s needs? This book aims to address these problems. It would be appropriate to provide now a brief explanation of the term Islamic capitalism. Indeed, capitalism, for many not exactly a respectable term, is strongly associated with the West. It may therefore seem strange that the economic system practised by the Islamic world from the seventh century to roughly the middle of the thirteenth century, also known as the classical age of Islam, should be referred to with this term. But, subject to certain caveats, the characteristics of this economic system to which I will refer shortly can be best described with the term capitalism. What these caveats are will become clear below. Meanwhile let us note that the two capitalisms share important characteristics....