Lectures on Islamic Economics
Course Outline
Lecture 1: Principles of Islamic Education
Lecture 2: Origins of Western Social Science
Lecture 3: Islamic and Western Conceptions of Scarcity
Lecture 4: Limits to Market Economy
Lecture 5: Rebuilding Islamic Societies
Lecture 6: Contrasts between Islamic and Western Economic Views
Lecture 7: Roots of European Thought
Lecture 8: Legitimization of Pursuit of Wealth
Lecture 9: The Evils of Interest
Lecture 10: The Normative Foundations of Scarcity
Lecture 1: Principles of Islamic Education
1. Islamic Approach to Knowledge:
وَمَاخَلَقْتُالْجِنَّوَالْإِنسَإِلَّالِيَعْبُدُونِ(51:56)
51:56 I created the jinn and humankind only that they might worship Me.
Every act in the life of a Muslim should be an act of worship. It is stated in a Hadeeth that those who get to paradise will have no regrets, except for the moments they spent in neglect/forgetfulness of Allah. As a teacher, my teaching should be an act of worship. As a student your study should be an act of worship. How can we make this happen?
There are three major requirements for an act of worship (and many minor ones). The first is the intention. All acts are judged according to intentions, and even the greatest ones, like acquisition of knowledge, or the sacrifice of ones life, or wealth, can fail to be worship if the intention is not purely the pleasure of Allah Subhanahu wa T’aala. Similarly, a small act, like giving a date in charity, can be of great value in the eyes of Allah if done with the pure intention of pleasing Allah. Secondly, the action must be done in obedience to the commandments of Allah. Thirdly, the action must be done according to the Sunnah of our prophet Mohammad s.a.w.
It is clear to all that the Ummah of the Muslims is in great difficulty on many fronts, including spiritual, social, political and economic. All Muslim leaders have been concerned with the issue of how these problems can be solved. However, errors in diagnosis have led to the pursuit of the wrong remedies, which have aggravated problems instead of solving them. In fact, our Deen Islam is the greatest gift of Allah to humankind and is complete and perfect. It contains the methods needed for solving our current problems. Unfortunately, some of the core teachings of Islam have been forgotten by Muslims as a whole, and there are no living instances of Islamic societies (with all institutions -- political, economic and social – based on Islamic principles ) currently in existence. Since Islam is a way of life, and not a philosophy or an intellectual enterprise, the prophecy of our prophet Mohammad s.a.w. that “Islam came as a stranger, and will soon become a stranger” has come true. In this course, we will show how the teachings of Islam can solve our economic problems in ways far superior to those that leading experts in Western economics know of, or those contained in contemporary textbooks.
In delivering this lecture, it is my intention to become part of the struggle for the establishment of the Deen of Islam. This has been ordained by Allah as a duty upon all Muslims, and was the main task carried out by our prophet Mohammad s.a.w.. The establishment of the Deen requires co-ordinated action on many fronts, including the spiritual, social, political and economic. By the grace of Allah, many Muslims are actively engaged in this effort in the many dimensions required. Making this intention places the burden of a great responsibility upon me. I must make sure that everything I teach is relevant and significant for this purpose. Not only must I filter out irrelevant information, but I must prioritize so that the most important knowledge relevant to the achievement of this goal is delivered to the student.
I ask my students to make the same intention. Do not sit with the intention of memorizing materials to pass the course requirement for a degree, which will allow us to get a job and make money. Instead, make the intention of using the knowledge acquired in this course to serve the Ummah of our prophet Mohammad s.a.w. Like Ibraheem alaihissalam, say:
قُلْ إِنَّ صَلاَتِي وَنُسُكِي وَمَحْيَايَ وَمَمَاتِي لِلّهِ رَبِّ الْعَالَمِينَ(6:162)
6:162 Say: Lo! my worship and, my sacrifice and my living and my dying are for Allah, Lord of the Worlds.
It is natural for those who do not believe in the hereafter to concentrate on the pleasures of this world. Because they currently dominate the world, the message that life is about accumulating wealth, pursuing power, and enjoying the luxuries of this world, is being spread via powerful media throughout the world, including the Muslim lands. All of the great Muslim leaders throughout the centuries have led simple lives, free of ostentation and luxury. According to a Hadeeth, “No doubt, (true) luxury is the luxury of the Akhirah”. Hazrat Umer r.a. used to eat coarse bread made from unrefined flour. When a guest asked him why, he explained that not everyone among the Muslims could afford refined flour. This feeling of responsibility for all, and of refraining from luxury (Israf or Tabzeer) out of consideration for others, was an important ingredient in the construction of the Ummah, the Muslim community. Revival of this spirit among the Muslims today would go a long way towards solving economic problems which face us. It is also directly opposed to the heart of conventional Western economic theory, which is based on the idea that every man cares only for himself, and would maximize his consumption even if his neighbor is starving. In addition, economic theory suggests that this state of affairs – maximization of individual selfish utilities – leads to optimal economic outcomes for the society as a whole.
Since Allah T’aala has purchased our lives and wealth in return for Jannah, it follows that we are not free to do as we please. Instead, we must devote our lives to Allah, in the way shown by our prophet Mohammad s.a.w. One of the central elements in the character of our prophet Mohammad s.a.w. was compassion and concern for all human beings. The suffering of the believers weighed heavily upon him:
لَقَدْ جَاءكُمْ رَسُولٌ مِّنْ أَنفُسِكُمْ عَزِيزٌ عَلَيْهِ مَا عَنِتُّمْ حَرِيصٌ عَلَيْكُم بِالْمُؤْمِنِينَ رَؤُوفٌ رَّحِيمٌ(9:128)
9:128 INDEED, there has come unto you [O mankind] an Apostle from among yourselves: heavily weighs -upon him [the thought] that you might suffer [in the life to come]; full of concern for you [is he, and] full of compassion and mercy towards the believers.
He was also deeply concerned about the fate of the unbelievers, so much so that Allah T’aala consoled him about this, asking him not to kill himself with sorrow.
فَلَعَلَّكَ بَاخِعٌ نَّفْسَكَ عَلَى آثَارِهِمْ إِن لَّمْ يُؤْمِنُوا بِهَذَا الْحَدِيثِ أَسَفًا(1
18:6 (Asad) But wouldst thou, perhaps, torment thyself to death with grief over them if they are not willing to believe in this message?
If we emulate our prophet, and develop concern and compassion for all human beings in our hearts, we will lead lives of service to mankind, instead of lives devoted to fulfillment of personal desires and wants. We will also be in violation of fundamental axioms of economic theory, and living proofs of its failure. Unfortunately, it is not enough to point to our books or our history to show that people can act according to Islamic ideals. It is necessary to implement Islam in our lives to show that this is the case. This is the challenge facing the Muslims: to live up to demands that Islam places upon us. The Quran praises those who give to others while they themselves are poor:
وَالَّذِينَ تَبَوَّؤُوا الدَّارَ وَالْإِيمَانَ مِن قَبْلِهِمْ يُحِبُّونَ مَنْ هَاجَرَ إِلَيْهِمْ وَلَا يَجِدُونَ فِي صُدُورِهِمْ حَاجَةً مِّمَّا أُوتُوا وَيُؤْثِرُونَ عَلَى أَنفُسِهِمْ وَلَوْ كَانَ بِهِمْ خَصَاصَةٌ وَمَن يُوقَ شُحَّ نَفْسِهِ فَأُوْلَئِكَ هُمُ الْمُفْلِحُونَ
59:9 But those who before them, had homes (in Medina) and had adopted the Faith,- show their affection to such as came to them for refuge, and entertain no desire in their hearts for things given to the (latter), but give them preference over themselves, even though poverty was their (own lot). And those saved from the covetousness of their own souls,- they are the ones that achieve prosperity.
Can we give to others, while expecting no compensation from them, and only waiting for our reward from Allah? Islamic Economics is one aspect of the struggle to bring about the inner spiritual transformation required for this purpose in ourselves and in all human beings.
2. A Unique Historical Event:
The most important episode in the history of mankind is the coming of our Prophet Mohammad s.a.w. with the message of Allah for mankind. The historical period during which he arrived is referred to as the “Jahilliyyah” or the “Age of Ignorance” (darkness). Syed Abul Hassan Ali Nadwi has described this period of history in much greater detail in his book “ Briefly, the central characteristic of the age of Ignorance was that the ability to differentiate between good and evil had been lost. The exploitation and oppression of the poor and weak by the rich and powerful was commonplace and accepted as natural by all parties. Cruelty, torture, free sex, drugs, gambling and other behaviors not worthy of human beings, were popular and widespread. The law of the jungle prevailed. Justice was unknown, and the rule was to support your kin, whether he was in the right or in the wrong.
Our prophet Muhammad sallalaho alaihe wassalam brought two things to the world which changed the course of history.
One was the Deen of Islam, which was the message of Allah for mankind.
الْيَوْمَ أَكْمَلْتُ لَكُمْ دِينَكُمْ وَأَتْمَمْتُ عَلَيْكُمْ نِعْمَتِي وَرَضِيتُ لَكُمُ الإِسْلاَمَ دِينًا (5:3)
Today have I perfected your religious law for you, and have bestowed upon you the full measure of My blessings, and willed that self-surrender unto Me shall be your religion.
This was the perfect way of life for all human beings, the greatest gift of God to mankind.
The Second was the method by which this Deen was to be spread, to enter and transform the lives of people. These methods were extremely effective and powerful. People who used to bury their own daughters, kill each other over trivial disputed, and generally behave in ways which showed no mercy or compassion for others, changed drastically. The companions of the Prophet gave help to others, even when they were themselves hungry. They made tremendous personal sacrifices for the welfare of others. They absorbed the message of Islam fully, and also absorbed the methodology required to transmit this message to others. As a result, within a short period of time they changed the course of human history.
It was a unique event in the history of mankind that the Muslims spread over the world and conquered two major empires, not for the sake of power or riches, but solely to bring the benefits of Islam to all human beings.
Thee na kuch taigh zany apni hukumet kay liay
Sar bakaf phirtay thay kya Dahr main doulat kay liay? – Iqbal
We did not bring out our swords for the sake of conquest and government.
Nor did we risk our lives for the sake of acquiring loot and wealth
Hodgson writes that “ Muslims succeeded in building a new form of society, which in time carried with it its own distinctive institutions, its art and literature, its science and scholarship, its political and social forms, as well as its cult and creed, all bearing an unmistakable Islamic impress. In the course of centuries, this new society spread over widely diverse climes, throughout most of the Old World. It came closer than any had ever come to uniting all mankind under its ideals.”
QUESTIONS:
- What were the characteristics of Jahilliyyah? Also, what were the characteristics of Rome, Persia and China at the time of the coming of our Prophet s.a.w.? For a detailed answer on how all of these civilizations were enveloped in darkness, see the book by Syed Abul Hassan Ali Nadvi entitled:
- List some of the changes that occurred among the people who accepted Islam, in terms of personal character.
- List some major differences between pre-Islamic Arabian society, and post-Islam Muslim society that emerged after the teachings of prophet s.a.w. Had been absorbed by the Muslims.
- List some the characteristics of the Prophet s.a.w. which were crucial to the success of his mission to change the people and through them the world.
- List some of the methods used by the prophet which were used to bring about the tremendous social transformation that occurred as a result of his mission.
3.An Important Current Debate Among Muslims
An extremely important question to ponder is: What was there in the message of Islam which changed the course of human history? Does this message have the same power, relevance and importance today as it did fourteen centuries ago?
As we have seen, non-Muslim historians acknowledge the power of the message of Islam, in its historical context[1]. However, they believe that this power was available in simpler times, and is no longer relevant to the complex modern world. The simple message of Islam no longer has the power to radically transform human lives and living experience, and to change the course of history.
Sadly and unfortunately most Muslims have also come to agree with this western analysis. They believe that progress of Muslims today depends on mastering Chemistry, Biology, and Physics, and on acquiring democratic governance, industrializing, and generally imitating developments in Europe over the past three centuries or so. It would be useful to formulate these two positions as opposing points of view in a debate:
Majority Position: An inclination towards monasticism (rehbaniyat) forbidden in the Quran but encouraged by Sufis led the Muslims to ignore worldly progress. In the meantime, the unbelievers made spectacular progress in learning the worldly sciences, and left us far behind. The only way to reverse this is for Muslims to acquire these worldly sciences, which is also strongly recommended and encouraged by our Deen,
Minority Opposition: The message of Islam has the same power to revolutionize the world as it did fourteen centuries ago. The core teachings of Islam deal with spiritual development, and it is this spiritual development which is the greatest need of the Muslims today. If Muslims could learn the lessons of Faith (eeman), Trust (Tawakkul), Courage, Generosity, Compassion and Concern for others, Character (Ahklaq) and community (becoming one body: the Ummah), which are contained in the Quran and Hadeeth, we could change the world as we did in earlier times.
The Majority Position leads to the following formulation of the problem of “Islamization of Knowlege”:
- Progress of Muslims depends on acquisition of European knowledge.
- There are many areas where European knowledge conflicts with Islamic views.
- Resolving these conflicts will enable us to assimilate the European ideas without abandoning Islam, and allow for progress.
This then, is one set of motives for the project of Islamization of knowledge.
The Minority Opposition considers the over-valuation of Western knowledge as part of disease. The Quran asks us to rejoice in what has been given to us of the Deen in the form of the Quran and the Hadeeth, and consider it as superior to the wealth of unbelievers:
قُلْ بِفَضْلِ اللّهِ وَبِرَحْمَتِهِ فَبِذَلِكَ فَلْيَفْرَحُواْ هُوَ خَيْرٌ مِّمَّا يَجْمَعُونَ
Q10:58 Say: "In this bounty of God and in His grace (that is, the Quran), then, let them rejoice: it is better than all that they may amass!"
The same idea is expressed in a Hadeeth narrated by Sa`eed ibn Sulaym radiyal-laahu `anhu: "If a person who has acquired knowledge of the Quran considers another person who has been gifted with something else to be more fortunate than himself, he has shown disrespect to the blessings of Allah ta`aalaa bestowed on him on account of his learning of the Quran." The problem of Islamization of Knowledge from this point of view is that of putting Western knowledge in its proper place as useful, but not central to human pursuits. Accomplishing this task still requires a mastery, and even a going beyond mastery of the Western knowledge.
The minority position will be clarified and considered in greater detail in a subsequent lecture. In todays lecture, we will consider some arguments for and against the Majority Position.
There are many reasons why Muslims have come to believe that Islam by itself is not sufficient for their needs in the current times, and that we must make serious efforts to acquire contemporary Western knowledge in order to progress. We will now list these reasons, and explain why these are wrong.
3.1 Is Progress the Acquisition of Worldly Goods?
OBJECTION (to the idea that Islam is the answer to our current problems)
Manifestly, the West is far ahead of us both in terms power and in terms of possession of material goods. To compete with them, we need to learn how they came to dominate the world and to follow their strategies, which have proven successful.
ANSWER:
Allah T'aala has said in the Holy Quran:
لاَ يَغُرَّنَّكَ تَقَلُّبُ الَّذِينَ كَفَرُواْ فِي الْبِلاَ
3:196 LET IT NOT deceive thee that those who are bent on denying the truth seem to be able to do as they please on earth: