Eversince the industrial revolution stunned the world about two centuries ago, Muslim scholarship has been trying to frame and formulate the economic teachings of Islam and to present the view of Islam on various issues which have emerged after the revolution. In particular, the last half-century has witnessed a phenomenal amount of work being done in this regard. Muslim scholars all over the world have bravely accepted the challenge and have set about with all force to counter the onslaught on various fronts.

Without taking anything away from this endeavour, we believe that it could have been more fruitful and productive had it not been marred by two grave flaws:

First, it was understood that Islam has given a complete economic system and the only thing needed is its implementation in favourable circumstances.

Second, it was maintained that by merely amending a few concepts and terms of Capitalism---the dominant creed since the past four centuries---the required economic system can be obtained.

Inspite of the tremendous amount of work and dedication, unfortunately, Muslim scholarship today appears in shambles because of these flaws. It has been unable to come to grips with this challenge, which still spitefully stares at them. These two flaws, in our opinion, can only be overcome if the approach to the whole issue is completely reviewed in the light of the Qur’ān and Sunnah.

O

According to the Qur’ān , there are two broad spheres of relationship: In the first sphere, there exists a relationship between God and man, while in the second sphere, this relationship is between man and man. It is evident that in the first sphere, reason and intellect are unable to carve out the norms of this relationship; therefore, a detailed system of directives has been revealed to guide mankind. On the other hand, it is apparent that in the second sphere human intellect and reason are far more equipped to decide for themselves the correct course of action. Consequently, in this sphere, no detailed system of directives has been revealed; only a broad outline has been given in the form of a set of rules and regulations which must be adhered to. In the light of these, intellect and reason must evolve a system suited to the requirements and needs of a society. Since these requirements vary with time and place, the resulting systems will also vary accordingly. However, these systems shall be based on the same set of rules and regulations. In other words, in this sphere, the law, ie, the set of rules and regulations is divine and, therefore, eternal, but the system evolved upon this law is a human inference and, therefore, flexible. This flexibility, obviously, has been left to accommodate changing circumstances and evolutionary developments of human societies.

It is clear that the field of economics belongs to this second sphere and, consequently, should be viewed in the above perspective. Therefore, in our opinion, instead of extracting an economic system from the Qur’ān and Sunnah which, of course, is nowhere there, all out efforts should be made by Muslim scholars to derive the economic law of Islam. The task of formulating a system on its basis should be left to the economists and those who understand the intricacies of this field.

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The second flaw, we are afraid has actually sprung from the first and, to some extent, has a lot to do with the apologetic mentality of many Muslim economists. We believe that Islam has its own set of concepts about economics which are in direct conflict with the capitalist creed. It is evident that the two pillars which support the framework of a typical capitalist economy are the institutions of Interest and Taxation. On the other hand, while totally forbidding Interest, Islam has its own concept of Taxation. Therefore, no amount of patchwork can achieve the required goal. Only a complete change is the answer.

By prohibiting Interest, Islam actually wants to eliminate all debt-based economies which have been created by Banking and Insurance. It insists that all such frameworks are exploitative in nature and severely hamper the progress of a nation: whilst breeding evil in individuals, they make developing countries a slave to a few rich countries, which virtually dictate their destiny. It is unfortunate that our scholars have spent a greater part of their intelligence in Islamizing the institution of Banking by providing an alternative basis other than Interest to it. We are afraid that this effort is like trying to keep a person alive after cutting his life-vein. A Bank operating on some other basis than Interest is nothing more than wishful thinking. Consequently, the expression ‘Interest-free Banking’ is a contradiction in terms. In this regard also, the correct approach, in our view, is that all efforts should be directed in finding an alternative to Banking and all similar institutions that are based on Interest and are all responsible for the creation of debt-based economies.

As far as Taxation is concerned, Islam acknowledges it as the most natural agency to run a state. However, it has taken away the right to impose Taxes from man and divinely ordained the statutes of this institution, ending once and for all the rift between the rulers and the ruled. It has laid down in bold the principles of Taxation because they are actually beyond the reach of human intellect, as can been seen through even a cursory look at the havoc caused by this institution. Zakat is the only tax which Islam has imposed on the Muslims. Furthermore, it has made its institution of Taxation, an obligatory act of worship, thereby completely transforming the attitude of the people towards it: Instead of being considered as a burden it has become a wholeheartedly acknowledged religious obligation. Therefore, in this regard, our economists instead of falling prey to the exploitative western concepts of Taxation must realize that the Islamic concept of Taxation is completely different and is far more superior to the one they have ‘given their hearts to’.

O

I take this opportunity to introduce our readers to a humble effort undertaken in this regard by my mentor, Mr Javed Ahmad Ghāmidī. Working on the above lines, he has derived the Economic Law of Islam from the Qur’ān and Sunnah and has also tried to present a viable alternative to the debt-based economy of Capitalism. During the course of his research article, Mr Ghamidi has demonstrated that the issue of Ribal-Fadhl (‘Interest in transactions concluded on the spot’) is a case of misinterpretation and has arisen in our Fiqh because the narrators have mixed up the words of certain traditions. Furthermore, he has revived the true concept of zakat and has conclusively proved that the system of zakat envisaged by the Qur’ān and Sunnah totally meets the requirements of running a welfare state.

This effort is by no means the ultimate solution in this regard: it is merely the first rung of the ladder which has the potential to scale the hitherto unsurmountable fort of one of the greatest challenges of current times---Capitalism.

For the benefit of our readers who are not familiar with their mother-tongue, Urdu, I have translated Mr Ghāmidī’s research article. I hope that all our readers will give it a sincere reading.