Economic History of Islam

Economic History of Islam studies the history of the Muslim peoples in the context of the realization of the Islamic norms for economic activity. It sifts from out of the general historical materials what is relevant for economic history, giving a systematic presentation. It evaluates this history in the light of the Islamic norms for economic activity. In doing so it comes across both conformity and aberration; analyses their causes and studies their effect on man's wellbeing. Success in realization of the Islamic values of freedom, justice and cooperation along with economic wellbeing is related to individual behavior, state policies and group action. Failure is traced back to faulty behavior, misdirected policies and inefficient action. The state of knowledge, the will to goodness and the degree of ingenuity men and women could exhibit lie at the root of these phenomena. Besides, there are exogenous forces too. The economic historian of Islam would put the facts in their proper perspective by relating them to these forces.

The first twenty three years of Islamic History are unique in so far as the revelation-determined Sunnah of the Prophet (pbuh)  is intertwined with human history – the history of a people in transition from un-Islamic to Islamic living. How the Islamic values were received, interpreted and translated into practice is to be studied. Man’s liberation from varied bondage, and his freedom in submission to God's Will, the gradual move towards equality and social justice through inculcation of ideas on human dignity and universal brotherhood; establishment of equality before law and creation of a cooperative attitude to living, reinforced by the institutional arrangements relating to social security, public property and laws of inheritance, etc., are some of the important points to be investigated.

Development during the thirty years that followed the age of the Prophet (pbuh) are to be evaluated in the above background. The economic policies of the Four Pious Caliphs deserve close scrutiny for distinguishing the aspects which recorded continued progress from those which possibly received a set-back during the later part of this period. The economic behavior of the common man, the character and role of the institutions inherited from the earlier period, and the emergence of new institutions, among the several other aspects of the fast expanding economy, deserve detailed study and evaluation.

It is generally agreed that during the few centuries after the year 40 A.H. the Muslim society's adherence to the Islamic norms present a chequered career. The first task in this context is to set the records right after a re-examination of the entire original historical material, a task that is not yet complete. The vicissitudes suffered by the Islamic values through these ages are to be studied with a view to discovering the causes of failure and the circumstances that made possible some progress in some respects.

As the world of Islam expanded to include countries with different economic conditions and diverse cultural heritage, the normative prescriptions of Islam acted upon entirely new situations. The economic patterns that ultimately emerged owed much to the pre-Islamic conditions of the respective peoples, while they also bore the deep imprint of the new ethos. An assignment of the relative strength of these two formative influences is an important task.

With the vast expansion in the world of Islam, and increasing diversification in the economy, new institutions and novel practices came into being. There was vast expansion in the internal and international trade, new handicrafts appeared, and the system of land tenure also changed. Parallel with the increasing volume of trade, industry and finance, juridical literature was produced evaluating the new practices and analyzing the new institutions. This literature reflects the normative-economic thinking of that age. There are also pieces of economic analysis interspersed with critical evaluation or recommendations with a view to applying the Shari’ah. Exegetical and philosophical literature of the period also deals with some of the issues involved. The treatises on political philosophy, Hishah and on the art of government deserve special attention. Subjects such as taxation, public expenditure and borrowing by the ruler, price control and regulation of trade and commerce, labor relations ad wages; and land tenure and irrigation have received attention from jurists and lay writers. A detailed examination of this vast material will reveal how Muslim thinkers have responded to the changing circumstances, with their desire for conformity with the Islamic norms, and also how they understood the functioning of the economic system. Such studies will enrich the histories both of Islamic thought and Economic thought.

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