- Islamic economics balances between self-interest and societal welfare, material and spiritual needs, as a way of succession.
- Money is viewed objectively as a necessity of life, making its ownership a usufruct considered as succession.
- Capitalism magnified the material benefit for consumers while neglecting the spiritual benefit, limiting consumption to sensual pleasure.
When economics is mentioned along with values, memory takes us back to the fierce war on values adopted by the capitalist economic system through its focus on material needs, neglecting spiritual ones. It sanctified reason and left revelation, treating Allah the Almighty as the creator who made the universe but then leaving it to run without further intervention according to its own laws, believing that God created but their system ordered. Conversely, the socialist economic system viewed the universe as godless and life as materialistic and considered religion the opium of the masses, believing it to be both the creator and commander together.
The Enlightenment movement in the West in the seventeenth and eighteenth centuries came with a secular, materialistic view, denying revelation in managing human affairs. Instead, it attributed everything to reason and the power of logic, believing in its ability to distinguish right from wrong and to organize human life in a way that ensures human welfare. This stripped ethical values of any sanctity bestowed by religion, making them relative and subjective to personal estimation, paving the way for the emergence of non-value philosophies in economics and other social sciences, represented in social Darwinism, materialism, determinism, and existentialism.
Social Darwinism replaced brotherhood among humans with the principle of survival of the fittest, placing full responsibility on the poor for their poverty and misery. Materialistic philosophy made the individual's concern the increase of their wealth and the satisfaction of their physical pleasures, laying the groundwork for a culture of consumption and the consequent multiplication of human needs beyond the capacity of currently available resources to meet them.
Deterministic philosophy denied individuals' ethical and moral responsibility for their actions, considering humans incapable of controlling their behaviors and regarding them as governed by automatic, mechanistic responses to external stimuli, similar to animals according to the views of Watson and Skinner, by unconscious mental states over which the individual's consciousness has no control, according to Freud's views, and by social and economic conflict factors according to Marx's views.
Existentialist philosophy adopted absolute human freedom and rejected any justification for commonly agreed-upon values or imposing restrictions on personal freedom, thereby opening the door wide to the satisfaction of sensual pleasures and the policy of non-intervention. As a result of neglecting values, Western society deteriorated morally and spiritually, despite its material progress. Families disintegrated, while homosexuality, prohibited sexual relations, and suicide spread, completely losing any signs of individuals' psychological stability.
Islamic economy
When the term Islamic economics emerged in the second half of the twentieth century, it restored the status of economic values and balanced self-interest and societal welfare, along with material and spiritual needs, because of religious succession. It linked faith in Allah and righteous deeds—in economics and elsewhere—to the Day of Judgment and revealed to every rational person that there is no contradiction between reason and revelation. Allah is the one who created the intellect and the one who revealed revelation to guide it.
This paved the way for fair-minded economists in the West to advocate for the adoption of normative economic theory (that specializes in what needs to happen) alongside positive economic theory (that specializes in what already is happening), warning against the domination of desires' values over true values.
Here's what French writer Jack Ostroy says, in his book “Islam and Economic Development”: “Islam is a system of practical life and high moral ideals together, and these two aspects are inseparable. Therefore, it can be said: Muslims do not accept a secular economy, and an economy derived from the inspiration of the Qur'an necessarily becomes an ethical economy. These ethics can give a new meaning to the concept of value and fill the intellectual void that is about to appear as a result of the mechanization process.”
Through a fair analytical perspective on the mechanisms of economic activity, including production, consumption, and distribution, and admitting that Allah has creation and command over all, the governing values of these mechanisms become evident. In the Islamic economic system, production stems from a religious concept, which is succession. “And [mention, O Muhammad], when your Lord said to the angels, 'Indeed, I will make upon the earth a successive authority.'” (Al-Baqarah: 30) Its aim is to achieve worship of Allah, the Lord of all worlds. “And I did not create the jinn and mankind except to worship Me.” (Adh-Dhariyat: 56), and there is no worship without development: “He has produced you from the earth and settled you in it.” (Hud: 61), and no development without production that ensures sufficiency for individuals and nations, combining both worldly and the Hereafter goodness, with balanced natural incentives like the love of ownership and the drive for profitability, without domination as in capitalism or deprivation as in socialism.
Elements of Production in Islam
In the Islamic economic system, the elements of production consist of labor, representing human effort with their hand and mind, and money, which is formed from this effort from the earth, where the mingling of labor with common resources turns them from permissible goods into economic goods with a market price.
Labor has its rights; it must be permissible in the things that Allah has allowed, beneficial to its owner and society, and done with excellence, for Allah has prescribed excellence in everything, and He loves that when anyone performs an action, they do it with excellence.
In order to achieve this, the Islamic economic system emphasized that workers should be strong, understand the nature of their work, and be trustworthy in their practice. “Indeed, the best one you can hire is the strong and the trustworthy.” (Al-Qasas: 26), “I will be a knowing guardian.” (Yusuf: 55) It also emphasized kindness in dealing with workers, fulfilling their rights, and avoiding exploitation. It opens the door for excellence, achieving competencies, specialization, and division of labor according to abilities and talents, so that people could exchange benefits. Each person is assigned according to their profession, based on the needs of one to another, and thus, the diversity of professions is a mercy. “And have raised some of them above others in degrees [of rank] that they may make use of one another for service.” (Az-Zukhruf: 32).
If capitalism established class divisions, Islam does not recognize such repugnant class distinctions, but it does establish degrees, meaning that everyone is elevated in something and elevated over another in something else. One is elevated in what they excel in, and elevated over in what they do not excel in. Through this, people are utilized for each other's needs, leading to integration and harmony, through which the world system is regulated.
Money
Moreover, the Islamic economic system regards wealth objectively as a necessity of life, making its ownership a usufruct considered a succession. Therefore, the permissible is its only method: earned, spent, and invested. There is no place in it for a Muslim to be enslaved, as wealth is in their hands, not in their hearts. There is no room for consuming it unlawfully through usury, deceit, gambling, fraud, deception, or similar actions, as they involve injustice and aggression, undermining the pillars of harmony within society.
Evident Governing Values
Through a fair analytical perspective on consumption in the Islamic economic system, its governing values are evident in its regulation to be lawful and to avoid excess, extravagance, and luxury. It does not follow the capitalist system's pursuit of maximizing material benefits for the consumer while neglecting spiritual benefits and limiting consumption to sensual pleasures, turning it into a culture and lifestyle in a world of deceptive advertising and destructive globalization, far from values and ethics. On the other hand, the socialist system deprived the consumer of determining their consumption needs, making them prisoners of outdated goods and obscured values.
Furthermore, distribution in the Islamic economic system is not limited to functional distribution, where income is distributed among the factors of production involved, although this distribution does not recognize capital gains from interest as a forbidden usury. It considers what the contributors to the production process have offered, each according to their effort. At the same time, it regulates a distributive enslaving relationship between the contributors and society in a way that achieves justice, brotherhood, mercy, and eliminates selfishness. This is achieved through personal distribution and redistribution through various means such as inheritance, zakat, charity, endowments (waqf), land taxes (kharaaj), and similar methods, ensuring social solidarity between regions and generations.
Thus, the Islamic economic system surpasses both the capitalist and socialist economic systems. Capitalism only allows wealth or income to be deserved by the factors of production, driven by market forces influenced by monopolies and the logic of power. This system divides society into a floating affluent class and a submerged poor class. In contrast, socialism, which claimed to fight against class division, divided society into a floating affluent class represented by the ruling elite and a submerged poor class, which are the masses turned by their promised socialism into a socialism of poverty.
