Islam and Capitalism

Casey O’Rourke

History of Arabs

9-28-06

Capitalism and Islamic Economics

Sitting at a train station one evening while biding my time until I could bide some more time on the slow train back west, two Muslim men kneeled down near me to pray. These two men of the Qur’an wore beards and their traditional clothing, a site I had grown accustomed to during my brief stay in Istanbul, but during the middle of their prayers one man stopped to answer and talk on his cell phone for several minutes. I did not mean to pass judgment on the man but I could not help but see the clash of two worlds represented in this man. The differences of nations have become more and more apparent as the many countries of the world grow more and more interdependent on each other. Pushing this globalization forward at the rapid pace we see today are the efforts of capitalism and its insatiable appetite for larger markets. This effort being aggressively pursued has not only brought Coca-Cola and McDonalds to almost every corner of the world, but also the very idea of capitalism and the values inherent in it. Due to this, the confrontations of ideas and values have sharply revealed themselves and one of the most visible of these clashes has occurred in the Middle East. Islam, the dominant religion of the Middle East, prescribes a much more different way of life. Nations already struggling to create an economy that is in harmony with Islamic tenets are now being faced with the external pressure of globalization. All too often this meeting of different cultures has been characterized as a battle, with our respective ways of life hanging in the balance, capitalism versus “Islamo-fascism” or some other misleading titles that limit debate on the real issues. Yet while the two may seem to differ at a fundamental economic level, they also share much in common that is all too often ignored. In examining this clash of cultures we should also search to see where they blend together if we are to take any further steps of finding a solution.

There are few religions that encompass the lives of its followers more than Islam. From its very beginning with Muhammad, Islam was to be more than just a religion existing under the state; it was to be the state. Its’ tenets are to be pervasive in all aspects of life and the ideal society is one that is in harmony with Shari’a or Islamic law. Shari’a is derived primarily from four sources which the major schools of thought in Islam have come to accept: the Qur’an, Sunna (the tradition of the Prophet), Ijma (consensus) and Qiyas (analogous reasoning). The Shi’ites substitute qiyas with aql (reason) [Nomani & Rahnema 2].

Keeping to a simple analysis of these four sources we can come to see the Qur’an and Sunna (referred to as the Hadiths when taken as a whole) are primary sources of Shari’a that are set in stone but the last two (secondary sources) allow for some human discretion. The Qur’an and the Hadiths “safeguard the continuity and permanence of certain immutable principles” while Ijma and Qiyas (Aql for the Shi’ites) “can constitute an endogenous self-adjusting mechanism which enables the legal system to adopt change” [ibid. 19].It is true that different schools of thought in Islam argue over the value of such secondary sources relative to the primary sources, but the very existence of this debate suggests a religion that is searching for ways to meet new challenges whether it is through adjustments or searching for answers in the Qur’an or hadiths.

In Part I of the Qur’an the 21st verse states: “O mankind! Worship your Lord (Allah), Who created you and those who were before you so that you may be Al-Muttaqǔn (the pious)” [:21] This is the basic tenet of any religion, to have the earnest wish to fulfill the will of God. “There exists a consensus among Islamic jurists and social scientists” that social justice is “one of Islam’s distinguishing features” [Nomani & Rahnema 60]. This pursuit for social justice forms part of the foundation for an Islamic economy and its effects can be seen in many modern day Muslim nations and banks. Riba, or usury, is categorically banned under Islam. “O you who believe! Be afraid of Allah and give up what remains (due to you) from Riba (usury) (from now onward), if you are (really) believers” [2:278]. The usage of the word “usury” and its meaning is in itself a source of controversy but it has led to a ban on interest in modern day Islamic banking (although many critics doubt the reality of this ). This ban is meant to protect people from become slaves to debt by prohibiting it to grow.

Zakat is another important aspect of an Islamic economy. One should “give his wealth, in spite of love for it, to the kinsfolk, to the