Islam is the youngest of the great world religions, with a history extending back over 1400 years, most of which has been chronicled in detail. The early spread of Islam was accompanied by military, political and economic success, and submission by Muslims to Allah seemed to bring earthly as well as spiritual rewards. There did not appear to be any conflict between this most modern of religions and material prosperity. Furthermore, the spread of the new religion was accompanied by remarkable scientific advances, including the development of the modern system of numbering, and a cultural and artistic development that demonstrated that Islam had resulted in the emergence of a truly great civilization.
Central to Islam is the concept of awareness, al-wa‘y, which implies that followers should constantly seek to educate themselves in its basic tenets, so that their knowledge can be applied for the benefit of society, including the economic order. All religions can be a way of life for their followers, but this usually applies to a minority of adherents. The demands of Islam, not least that to pray five times a day, results, however, in the religion affecting to an enormous degree the lives of believers, who are constantly being made aware of the basis of their faith. These demands, which consume much human energy, inevitably impinge to a great extent on economic activity. It is, in fact, difficult for Muslims to isolate the economic and the spiritual domain in their lives, as both are constantly alternating, with a daily as well as a weekly cycle.
There has been more written on Islamic economics in the last two decades than in the previous fourteen hundred years. The majority of Muslims today are aware of the basic tenets of Muslim teaching on economic matters, whereas there is much less awareness by most Christians and Jews of the positions of their own religions on economics. Indeed, the material and spiritual realms are viewed as separate and exclusive by many in the Judaic Christian tradition, whereas for Muslims, conduct in economic affairs is seen as an integral part of religious observance. Many, indeed most, may not put their religious convictions into practice in the economic sphere, but there are few who challenge the basic tenets of these convictions, and even the less devout recognize that there is some substance in Islamic economics.
Why has there been so much interest in Islamic economics? What is the substantive core? How much comes from the Koran itself, and what are the economic principles embedded in the Shariah religious law? Economic and commercial con¬ditions have clearly changed considerably since the time of the Prophet Mohammed, but part of the challenge for contemporary Islamic economists and Shariah scholars is to interpret Muslim belief in a modern context. There are inevitably different schools of thought, and disagreements, as is the case with all human endeavor, even when divinely inspired. Are there lessons from great Muslim philosophers and economists of the past such as Ibn Khaldun for those involved in current scholarship?
In this Blog the tenets of Islamic economics will be reviewed, starting from the position as spelt out in the Koran. The evolution of Islamic economic thinking is traced, and the causes of the recent revival of interest in the subject are discussed. Although it is questions of finance which have received the most detailed treatment by contemporary economists, and the spread of Islamic banking is one of the most visible aspects of the Islamic economic revival, it is important to see the revival in a broader context. Islamic economics is often viewed from a political economy perspective as an alternative economic system to capitalism and communism. Most economies where Muslims live are classified as developing, or underdeveloped. The application of Islamic economic ideals is seen by many in Muslim countries as a way out of this under-development, a means of restoring the success associated with the first century of Islamic civilization. This is the vision of Islamists, those who want to see Muslim values respected in the political and economic sphere, so that their own lives can be governed by the Shariah law.
The term Islamist in this blog is used here and throughout, rather than Islamic fundamentalist, which has taken on a pejorative used as a label for those who support violent political action. Islamists constitute a much broader church, with an interest in economic as well as political questions, yet from a particular ethical and moral position.
