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Economic Philosophy of Islam

1. The idea of an all-powerful God, Who is the Creator and the Sustainer of men and women and Who commanding all that is in nature, is directly looking after their well being by making all sorts of provisions for them, and by instructing them in good life through revelation sets the proper perspective for their relationship with nature in their economic life. Man is amidst a nature that is friendly and bountiful. He has only to utilize the resources thus offered in the proper manner to attain to the highest moral excellence as well as maximum material comforts

Conscious of the vast debt of gratitude that they owe to Allah, men and women willingly turn to Him in complete submission to His will. That is the crux of man's relationship with God whose pleasure becomes the end of all human endeavors. His pleasure lies in submission to His Will, which therefore, attains value for man. The fact that life does not end at death but extends into the Hereafter, lends further weight to these ends as the good of the hereafter devolves on the realization of these values by men and women in their life on earth.

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2. Values, as reflected in the Will of God, exhibit a certain hierarchy. The spiritual values relating to man's relationship with God, and the moral values, that relate to mans relationship with fellow human beings and with his own self, are prior in this hierarchy to the material values relating to man's relationship with worldly goods – the immediate object of the ‘ordinary business of life’ that is economic activity. These latter are made subservient to the former ones and should be instrumental in the realization of the higher moral and spiritual values.

3. Economics as it has developed over the last two and a half centuries, has been "a body of systematic thinking about how Economic Welfare can be obtained.” Economic Welfare is looked upon as that part of total welfare, which springs from the provision of goods and services. But it can hardly be disputed that the manner in which these provisions are made, and the uses to which man puts them are very much relevant to the "total welfare" of which economic welfare is but an aspect rather than a part. The chief concern of the normative system of Islam is, therefore:

  1. with the relationship that man establishes with man in providing himself with goods and services, and
  2. with the ends he seeks through these provisions.

The first point relates to modes of behavior and institutional arrangements and the second relates to the ultimate ends served by the material means, the values men and women seek to realize through them.

We shall, therefore, proceed to define the higher values that Allah Wills of man to seek through economic activity and the type of relationship He is pleased to see between man and man. These higher values are: freedom in submission to God, equality, justice and cooperation and economic well being. Freedom in submission to God is the supreme spiritual value, equality, justice and cooperation are the highest moral values and, within this framework, economic well being is the material value cherished by Islam.

4. Man's complete surrender to Allah, and Allah alone, implies his freedom from every other bondage, from any other subservience. That means a total rejection of any source of value other than the Will of God. No value attaches to what man wills, individually or collectively, except in so far as human will is subservient to and expressive of the Will of God aspiring to please Him. All men and women are free and no individual or collective entity can impose its will on anyone. Man is equally free in the face of Nature, its isolated objects or the total of it. Indeed man is imbued with a sense of superiority over Nature as it lies exposed to being exploited by man, so is the Will of God. Men and women are also free of all conjured up mental categories and man-made institutions that might claim their allegiance or pose as sources of value, independent of the sole fount of value, that is the Will of God. Human freedom is constrained only by surrender to the Will of God, which happily is fully contained and defined with finality in the last Divine revelation, that is Qur’an.

This essential freedom of man is not, however, a law of nature operative irrespective of human volition. It is a norm to be realized by men and women in their life on earth. In the context of economic activity, man should strive to preserve this freedom in providing himself with goods and services. The economic order should be conducive to such freedom for each and all. It should not make men surrender to fellow human beings, because of economic necessity. It should liberate men and women from the crippling pressure of unfulfilled physical needs, from abject poverty and hunger. All forms of oppression and tyranny, institutional or otherwise, should be eliminated. The self should be purified by banishing greed, avarice, jealousy, rivalry and other unethical tendencies. Life should be free of fear, excepting the fear of God, which actually reduces to the fear of the consequences of unethical and wicked conduct.

Freedom in submission to God is, thus, a norm for individual conduct as well as a goal for social policy. Islam envisages a free society in the wide sense of a society where all conduct is value-oriented and all tendencies towards disvalue are shunned and thwarted.

5. That all men and women are created by the same One God and descend from the same parents, and that they are governed by the same Moral Law, decrees that all men and women are equal. Islam affirms equality and brotherhood of man in unequivocal terms. Differences in the color of skin, of language, race, or habitat should not divide mankind. The only valid division between man and man is that based on ethical criteria. But ethical conduct being volitional is not immutable. The bad may become good; the unbelieving may return to faith. Differences in religion too, therefore, do not count, and the brotherhood of man is truly universal. Unless human relations are based on the equality of man, freedom in submission to God cannot, in any real sense, be preserved. Equality is, therefore, one of the higher values in the normative system of Islam. Modes of behavior, social institutions, and the processes of Law and Politics, should all be conducive to the preservation of the equality of man.

In his quest for maximum economic welfare, man in history has often violated this norm. Differences in ability and enterprise, soon reinforced by inherited wealth and arrogated power, have helped the few subjugate the many for production and appropriation of wealth. Once started the process inevitably leads to maldistribution, inequity and greater inequality. It destroys freedom, distorts values and dehumanizes the masses of mankind. While Islam accepts the rights of the able and the enterprising to the fruits of their ingenuity and rejects the arithmetical notion of equality in distribution of income and wealth, it guarantees equality of opportunity and entitlement to adequate means of livelihood for all, in the framework of freedom and equality of man. Freedom and equality cannot be sacrificed at the altar of economic growth, the latter being a means to the former.

6. Equality and freedom in submission to God nurtures an attitude of regard and affection towards fellow men and women. Such an attitude is better characterized by the potent terms of justice and benevolence. Allah is just, He likes justice and wills of men and women to be just to one another. Injustice creates inequality and destroys freedom. One should willingly yield to others that which is due to them and desist from claiming from others more than what is due to him. One is further persuaded to be benevolent to make sacrifices for promoting the good of the others. Benevolence supplements justice. The dictates of justice may sometimes be difficult to discern, but the prompting of benevolence are always clear and unmistakable. While Islam had defined the demands of justice in many life situations, the stress is primarily on the will to do justice and an inclination towards benevolence. Given this will and this inclination, a formulation of just behavior in changing situations would not be impossible.

7. Social and economic justice would be secured only when it is rooted firmly in justice and benevolence characterizing individual behavior and social institutions. The task of maintaining justice among people and ensuring a just social order is not, however, left entirely to voluntary action. In the ultimate, the Social Authority is charged with this task, as also that of preserving freedom and equality.

8. Unity of purpose and the common ultimate interests are the founts of a cooperative spirit among the free and equal members of the universal human brotherhood. Rivalry and cutthroat competition make no sense in this context. Men and women should cooperate with one another in realizing the higher values, promoting the good and eradicating the evil born of pursuit of false values, those which are contrary to the Will of God. Such is the attitude explicitly willed by Allah. Man's attitude in activities directed at provision of goods and services should also be the same if these latter are to be instrumental in the realization of higher values.

9. Freedom, Equality, Justice and Cooperation all follow naturally from the central Islamic doctrine of Tawhid or Unity, the Truth to which all that is true must necessarily conform. Realization of these values makes life good and beautiful. Realization of value, however, presupposes life in efficiency and vigor. Human life is the jewel of creation, the most valuable object in the cosmos, the one to which the Will of God is addressed. God wills that men live, and that they live a healthy, vigorous and active life in pursuit of value, that is to fulfil His Will. Life, its preservation and that which makes life healthy and vigorous, in short economic wellbeing, is therefore a value cherished by Islam. The goods and services men and women need, the techniques and ideas that help in this context, and that is instrumental to economic wellbeing, attains value on that account.

10. Economic wellbeing is not, however, a value realized in isolation from or independent of the higher moral and spiritual values. It is the same indivisible integrated act of living in which any value and all value is to be realized. Men and women should produce, distribute and consume wealth in such a manner that they are able to live a well provisioned life, free in submission to Allah as equal members of the human family, doing justice to one another and cooperating among themselves.

In view of the importance of this point in the Economic Philosophy of Islam, a further analysis is required of the way the higher values act upon, and interact with, realization of economic values.

  1. In the first instance the higher values serve as the ultimate ends, beyond economic wellbeing, prompting men and women upon economic activity.
  2. Secondly, these higher ends continue to be relevant in choice between alternative means to the immediate economic goals.
  3. Thirdly they serve as constraints upon human behavior, individual as well as social, in the realization of economic values.

In this manner, the higher values motivate, condition and integrate human activity in the ordinary business of life. Production, distribution and consumption of wealth are inspired by the vision of the good society that economic wellbeing should be instrumental in ushering in. They are done in a manner that promotes the good, and the ways and means detrimental to freedom and equality or contrary to justice and the spirit of cooperation are avoided.

11. Islam has laid down certain rules of individual and social conduct that ensure an integrated realization of values, economic as well as moral and spiritual. It is these rules which form the basis of the relevant laws, permanently enshrined in the Shari’ah, and serve as guidelines for fresh Islamic legislation in changing situations. Some of these rules are briefly stated below:

  1. Fulfillment of the basic human needs for food, clothing shelter and, in case of illness, medical care, is a fundamental human right. The society owes it to each one of its individuals, who are, however, normally expected to manage it on their own.
  2. The haves have an obligation toward the have-nots, the latter being entitled to a part of the former’s wealth.
  3. Property is a trust, involving obligations towards others and subject to moral constraints in its acquisition, use and disposal.
  4. Equality of opportunity is to be ensured.
  5. Freedom of contract is granted subject to moral constraints protecting the interests of the others and that of the society as a whole.
  6. Joint enterprise should be on a cooperative basis, profits being shared by all those who bear the uncertainties involved. The lender seeking a guaranteed return is entitled only to the principal and interest is prohibited.
  7. Public interest is prior to private interest, and the larger good of the many is to be ensured even when it involves diminution in the smaller good of the few.
  8. Concentration of wealth is to be avoided and inequality in the distribution of income and wealth is to be reduced.
  9. A study of the normative system defined by the values and subsidiary rules of conduct discussed above in relation to economic behavior and policy is the task of the Economic Philosophy of Islam. It would provide the basis on which Islamic Economics can then proceed to examine the existing modes of behavior and prevalent economic policy with a view to suggesting alternatives, which could be truly Islamic.


Source: Dr. Muhammad Nejatullah Siddiqi, Economics An Islamic Approach. Republished with permission.