The Emergence of the Islamic Economy

Reflecting on the terms used in the definition of the Islamic economy-to which we have referred earlier-in terms of wealth, money, monetization, ownership, spending, production, investment, services, savings, and issues concerning richness and poverty, shows that Muslims are among the first to care for and write thousands of books about economic issues.

This leads us to differentiate between two terms:

First: The Islamic Economic Doctrine

It represents the general principles contained in the texts of Sharia (Quran and the Prophetic Sunnah). These principles are immutable and as a whole, they constitute rules governing the economic life with its totalities. It is fit to say that they are the holistic rules for the diverse applications and the detailed particulars of the vocabulary of the Islamic economy.

Second: The Islamic Economic System

It represents the applied aspect with its subdivisions, which vary with time and place, and is the subject of the Ijtihad (process of legal reasoning and hermeneutics through which the jurist-mujtahid derives or rationalizes law based on the Qur'an and the Sunna) of the scholars as well as the consideration of the jurists. In fact, the ruling on emerging issues of Islamic jurisprudence/Fiqh, contemporary issues of financial transactions, and the economy is only one form of the Islamic economic system.

It is therefore fit to say: "The Islamic economy is divine in terms of doctrine and secular in terms of system or application" (see the book entitled "The Subjectivity of Islamic Economic Policy and the Importance of the Islamic Economy " by Dr. Mohammed Shawki Al-Finjri,pp.18).

If we dwell on the Islamic economic doctrine, we realize that Islam is the first to determine the general principles and the holistic rules on which the economic system, with its various applications, is built. 

The rules of justice, the prohibition of Riba (Usury/interest), injustice, grave deception, fraud, even the rules of ownership, consumption, production, distribution, etc., are all found in the Holy Quran, the Prophetic Sunnah, exegesis, Hadith, and Fiqh.

Allah Commands working to earn a livelihood and this represents production in its most obvious form. He, The Almighty Says (What means): "It is He Who has made the earth manageable for you, so traverse ye through its tracts and enjoy of the Sustenance which He furnishes: but unto Him is the Resurrection." {Al-Mulk/15}.

The Holy Sunnah has highlighted the issue of public property. A man of the Companions narrated: I went on an expedition with the Prophet (PBUH) and heard him say, "People are partners in three things: grazing, pasture, water and fire." {Sunan Abi Dawoud}. 

As for private property, verses on inheritance represent a clear case and form of its applications. Abu Hurra ar-Raqashi on his paternal uncle’s authority reported God’s Messenger as saying: “You must not act oppressively, and a man’s property may not be taken except with his goodwill.” {Al-Sunan Al-Kubra of Al-Baihaqhi}. This Hadith clearly reflects the right to private ownership.

The holy Sunnah also addresses the economic balance in society and ways of achieving it by prohibiting monopoly, Riba and injustice. This is also clearly reflected in the following verse: "What God has bestowed on His Apostle (and taken away) from the people of the townships,- belongs to God,- to His Apostle and to kindred and orphans, the needy and the wayfarer; In order that it may not (merely) make a circuit between the wealthy among you." {Al-Hashir/7}. This verse contains several wisdoms behind Zakah (Obligatory charity), spending, operating funds instead of sufficing with saving them, prohibiting monopoly and Riba. In total, these make up the natural economic balance and this is what the Muslim community should be like.

If we examine all the examples taken from the texts of Sharia in clarifying the vocabulary of the Islamic economy, a great deal of time will be needed. Therefore, we will suffice with what has been referred to.

If we look at the Islamic economic system and its practical aspects and partial branches, we will find a number of specialized books in some branches of the Islamic economy, in addition to the scattered economic knowledge in the details of transactions in the different books of Fiqh, Hadith and exegesis.

Rather, we find "The writings of Ibn Khaldoun, Megrezi, Ayeni and Dalji in the late 14th and 15th centuries as the starting point of the scientific school in modern economics" (The Brief in the Islamic Economy by Dr. Mohammed Shawki Finjri, P. 27).

Dr. Zaki Mahmoud Shabana, former deputy of Azhar University, establishes that Ibn Khaldoun's book/ The Muqaddimah (Introduction), which appeared in 784 AH, is similar to the book (Wealth of Nations) by Adam Smith whom some call the Father of Modern Economics. The latter wrote this book in 1776 while Ibn Khaldoun wrote his book five centuries ago. (Wealth of Nations) is even considered a distorted image of Ibn Khaldoun's Muqaddimah and only differs from it environmentally and temporally. (Al-Wajiz by Fanjri, p. 27, and The Islamic Economic System by Dr. Mahmoud Al-Khatib, p. 16).

A closer look at Ibn Khaldoun's book reflects the volume of specialized economic knowledge found in this cultural treasure. It also paves the way for modern and advanced economic theories, such as economic growth, population theory and state economic activity. (Muslims and Economics: Ibn Khaldoun Founder of Economics, by Dr. Shawqi Ahmad Dunya, P.6)

This is in addition to other books about the various vocabularies of Islamic Economics in the early Hijri centuries. For example, Kitab al-Kharaj by Abu Yusuf who died 182 AH, Al-Kharaj by Adam Al-Qurashi who died in 203 AH, and Al-Amwal by Obeid who died in 224 AH, in addition to many other books.

In the second half of the twentieth century, after the emergence of modern secular economic doctrines and development of modern economic systems, Islamic economic studies began to emerge, and the Islamic economy began, as a science and thought, through international conferences. The latter were introduced by the First Conference of Islamic Economics in Makkah in 1976. Afterwards, specialized conferences and seminars were held and Islamic economics was singled out as a specialization in Sharia colleges and departments. Moreover, scholars began writing books on the Islamic Economics. The most notable scholars to write on this field were Prof. Mohammad Baqer al-Sadr, Ali Abdul-Rasoul and Dr. Mohammed Al-Mubarak, Dr. Ahmed Al-Najjar, Dr. Ref`at Al-Awadhi, and many others...