What is Wrong with Islamic Economics?

What is Wrong with Islamic Economics?

Analysing the Present State and Future Agenda

Studies in Islamic Finance, Accounting and Governance series

Muhammad Akram Khan

What is Wrong with Islamic Economics? takes an objective look at the state of the art in Islamic economics and finance. It analyses reasons for perceived stagnation and also suggests a way forward.

Chapter 7: An Islamic economic system or spiritual capitalism?

Muhammad Akram Khan

Subjects: asian studies, asian economics, economics and finance, asian economics, financial economics and regulation, islamic economics and finance, money and banking

Extract

Several Muslim scholars have tried to argue that Islam has a distinct economic system. From amongst the most influential voices, Muhammad Iqbal (1877–1938) through his poetry tried to create awareness that Islam gives a distinct economic system as compared to capitalism and socialism. Several others, notable among them Abu al-‘Ala Mawdudi (1903–79), Syed Qutb (1906–66), Baqir al-Sadr (1929–80) and, from the second generation, Khurshid Ahmad, Nejatullah Siddiqi, Umer Chapra, Anas Zarqa, Monzer Kahf and Fahim Khan, to name a few, produced an extensive literature in support of this slogan. These scholars cited prohibition of interest, the obligation of zakah, the concept of lawful and unlawful (al-halal wal haram) regulation of consumer and commercial behaviour, the limitation of private property and so on as distinctive features of the Islamic economic system. The movement for developing Islamic economics as a distinct social science was driven by the objective of studying the Islamic economic system and implementing it in the present age. Since socialism has almost died with the break-up of the USSR and the adoption of capitalism by all the former socialist states except China, the dominant system now in the world is capitalism. Even the Chinese are making modifications in their economic system to get closer to capitalism at a gradual pace. The real parallel, if there is any, of the Islamic economic system is capitalism. Let us examine the arguments presented in favour of an Islamic economic system to make it distinct from capitalism.

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