EstablishingA New World Money Order:Key Elements Of Islamic Economics
THE TIMES HIGHER EDUCATION SUPPLEMENT 21.10.77
Key elements of Islamic
economics
Labour
The economic system of Islam is
based on the assumption that if a
man is given the chance to apply
his labour/skill/intelligence to eco-
nomic activity he will always be
able to get the basic necessities of life. If a man is incapable of work, society and State must help and support him. If a man is able and willing to work but cannot find a job, it is the responsibility of the State to provide him with one.
Land
Ownership of land is conditional on its use. The individual does not own” the land; it is in trust from Allah. He is responsible for the use and abuse of this trust. The size of land-holding is limited not by a uniform arbitrary ruling but by the extent of actual cultivation on the part of the tenant by himself and with the help of hired labour. Property
Private property, in so far as it is permissible, is as sacred and in- violable as the life of the owner. Islam considers the abolition of pri- vate property or its quantitative limitation by fixed ceilings against human nature.
Hoarding
Islam forbids hoarding of com- modities of any kind, particularly food, if the aim is the creation of an artificial scarcity and rise in prices. All methods of creating arti- ficial price increases are condemned in the severest terms. Price control by State authorities is also ruled
out.
Zakah
Zakah is usually translated as “the poor tax”. This is in fact wrong as Zakah is not solely for the poor, nor is it a tax: although the Islamic State collects it, it does not levy or impose it. It is a spiritual due required of all Muslims. Pay- ment of Zakah is a duty which is laid on all property.
Interest
Islam forbids all transactions involving interest of any kind. The Koran has laid down strict injunc- tions with regard to interest
Those who swallow usury, cannot rise up. Allah permitteth trad ing and forbids usury…. As for. him who returneth (to usury) such are rightful owners of the Fire”,
Establishing a new
World money order
Khursid Ahmad on a
research centre which will propose Muslim solutions to the world’s economic difficulties
If crisis in a science means its con-
tinued inability to meet the chal- lenges that confront it, then few would disagree that economics is in the throes of a deep crisis. The phoenix-like rise of macro-econo- inics from the charred debris of the crash of the 1930s generated a new confidence among economists. Solu- tions problem to almost every All looked seemed within sight. green in the valley of economics. The confidence was short-lived. Not only did the old problems re- main unsolved. New ones emerged with overtones: mass take-offs in
threate iong
poverty; development at regional, national levels; ger and affluence; irrat irrational use of resources; incon- non-renewable between technology and
disparities and inter-
; coexistence of hun-
problems can be approached not as economic problems in isolation but in the context of an entire social system.
a
This argument constitutes point of departure for the Muslim economist. Islam is not a religion in the limited sense of the word, interested only in man’s salvation in the life to come. Human life is looked upon as as an organic whole and its problems are approached not in a mechanistic way, but in the light of the moral values and social ideals that Islam expounds. purely positivistic vision of the social sciences developed in the West becomes obsolete in this new context. Man is the
The
possessor of a morted as oral personality, not just a complex of molecules. Outside the Muslim world the social sciences have followed almost the model of the unreservedly natural sciences with the result that are being technocratic solutions imposed in the name of science.
a
Muslim economists believe that reorientation of approach and reconstruction of the entire frame- work for economic analysis and policy is needed to harness econo- again to the service of humanity. During the last 50 years over 800 books and articles have been written by Muslim economists
mics once
eralmental needs; unsuitability articulating different aspects of the
of production and consumption pro- cesses to to environmental needs; ex- ploitation of the poor and the weak by the rich and powerful; inflation and stagflation; structural deformi- ties in relations between developed and developing countries.
All these and many more prob- lems have failed to be tackled with- in the framework developed by post-Keynesian economics. This is being realized even by those eco- nomists who had earlier thought that their sophisticated economic models would be able to deliver the goods.
a
The predicament of economics has been searchingly examined in new book Economics in the Future: Towards a new Paradigm (editor Kurt Dopfer; contributors: Jan Tinbergen, Harvey Leibenstein, Sir Roy Harrod, Gunner Myrdal, William Kapp and Shigeto Tsuru. London: Macmillan, 1976).
new paradigm they want to develop.
In February 1976, the First Inter- national Conference on Islamic Economics was held in Mecca under the chairmanship of Dr Muhammad Omar Zubeir, the leading Arab economist who is President of King Abdul Aziz University. The confer ence was attended by 200 leading Muslim economists from all over the world.
Thirty-five papers were presented on such subjects as the nature of Islamic of economics; problems pricing; consumption, distribution and growth in an Islamic economy; the establishment of an interest-free economy; and the development of economic nomic cooperation among Mus- lim countries.
The conference resolved that an International Centre for Research on Islamic Economics should be established to continue its work. King Abdul Aziz University accep. ted the proposal and has now established the centre under the chairmanship of Dr Hasan Balkhi. Veblens’ analogy, from the tangled Another leading Muslim economist, weeds” in which it is struck at the Dr Anas Zarqa, is to help the centre bottom of a rubbish-ridden pool, is in its initial phase. Dr Muham not just some new interpretation mad chapra, from Pakistan, are Saqr, from Jordan, and Dr
The near-consensus that emerges is that what is needed to salvage the duck of economics
to use
of this or that, economic theory or some changes within the current paradigm of economics, but a new economic paradigm under, which
among others acting as advisers. Dr Zubeir remains the moving spirit behind the entire scheme:
Behind the entire scheme.
centre are:
The main objective of the
in
To initiate, sponsor and coord-inate research on different aspects of Islamic economics. This cludes the development of a more rigorous Islamic critique of contemporary economic theory and policy, an evaluation of the present world economic situation and reconstruction of economic theory and sooio-economic policies all the light of the values and principles of Islam.
To build a data bank for the Muslim countries and sponsor research on the prospects of economic cooperation between them.
To produce text books and other educational medium on Islamic economics and promote the teaching of Islamic economics over the Muslim world.
To sponsor doctoral and post-doctoral research on themes of Islamic economics in different academic centers of the world.
To establish a library and documentation centre on Islamic economics and make arrangements to share these facilities with scholars interested in Islamic economics all over the world.
The centre plans to hold an International seminar on monetary and fiscal economics of Islam in April, 1978. Twenty Scholars will present papers to this seminar. The themes have been published in Monetary and Fiscal economics of Islam: an outline of Some Major Subjects for Research, produced jointly by King Abdul Aziz University and the Islamic Foundation, Leicester.
The long-term aim of the centre is the formulation of an economic model which will rely neither on exploitative capitalism nor inhuman socialism.
Professor Khurshid Ahmad is director of the Islamic Foundation
PROF KHURSHID
