Origins, Evolution and the Future
- Studies in Islamic Finance, Accounting and Governance series
Chapter 16: Democracy and the Modern Islamic Capitalism
16. Democracy and the modern Islamic capitalism Maqasid al-Shari’ah and its brief history Neither Islamic capitalism nor its institutions described throughout this book can operate in a vacuum. Indeed, even the best financial model cannot function unless it is operating in a country governed by a trustworthy state which respects the rule of law. Moreover, governments need guidance to enable them to decide what policies to pursue and what to avoid. All of the above are provided by the maqasid al-Shari’ah, which if reinterpreted, can provide the essence of a trustworthy state within which Islamic capitalism and its financial institutions can flourish and the governments be properly guided. I will first provide a brief history of the development of maqasid al-Shari’ah, to be followed by an attempt to reinterpret it. I am of the opinion that maqasid al-Shari’ah, so reinterpreted, will provide the necessary framework. For too long, it has been assumed in the Islamic world that financial institutions can operate in a vacuum regardless of the political environment. This is simply not true and it is appropriate to complete this book by describing the broader framework within which Islamic capitalism and its financial institutions can best function. Maqasid al-Shari’ah is largely concerned with the philosophy of Islamic law rather than its actual formulations. Consequently, it is often omitted in classical fiqh books. But not any more; recently important works have emerged which consider the maqasid as a fundamental methodology of fiqh.1 Auda goes even further and considers the maqasid...
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