1st Generation Islamic Economics = Justice + Equity
By the early 20th Century, almost 90% of Islamic lands were under the domination and control of European powers. It is important to note that colonization leads to the conquest of minds, where the ways of thinking of the colonized population are shaped by the colonizers worldviews. All freedom struggles are based on ideologies, which promise a better future in return for the sacrifices involved in making a revolution. The founding fathers of Islamic Economics opposed the dominant materialistic religions of Capitalism and Communism, and theorized that the Islamic Economic system offered a revolutionary alternative to both. Islamic Economics would bring justice, and equity, and create a society which would take care of the needs of all of the population.
2nd Generation Islamic Economics = Capitalism + Zakat – Interest
Unfortunately, the revolutionary visions of first-generation economists from the post WW2 era were not realized. Although nearly all of the Muslim lands achieved freedom, the political, economic, and social structures did not change very much from the colonial period. Efforts of the Islamic leadership changed to achieving political control, so as to be able to implement the laws of the Shari’a and create an Islamic State. However, these efforts failed nearly everywhere. It was in recognition of this failure that 2nd Generation Islamic Economics was born. It is convenient to date this to the First International Conference on Islamic Economics held in Mecca in 1976. Realizing the revolution was not likely, thought leaders in the field changed their goals. They decided to work within the capitalist economic system, and to gradually transform it towards an Islamic System.
When we remove the elements in conflict with Islam from Western knowledge, and accept those elements which are in harmony with Islam. This is called the “Islamization of Western Knowledge”. Given the distinct subject matter, methodology, presentation of Islamic Economics in 20th Century, with no precedents in Islamic intellectual tradition, how CAN this subject be ISLAMIC?
3rd Generation Islamic Economics = Generosity, cooperation, brotherhood, and social responsibility
Modern economics is built on a myth that every acting selfishly to maximize personal pleasure in a jungle of ferocious competition will somehow produce the best society, via an invisible hand. Solutions require rebuilding society on radically different foundations, based on generosity, cooperation, brotherhood, and social responsibility. Today the world has forgotten these fundamentals, which is why conditions resemble the pre-Islamic age of ignorance (Jahilliya).
- Material Progress => Human Development
- Greed => Generosity
- Competition => Cooperation
- Individualism + Hedonism => Social Responsibility
Pragmatic Objections
- Objective/Subjective
- A deception of Modern Economics that it is objective. In fact, Economics is built on concealed subjective foundations. Islamic Economics is not so much objective as transformative: it posits ideals and then asks us to struggle to achieve these ideals.
- Materialist Means before Spiritual Goals
- Achievement of material goals – eradication of poverty, achievement of literacy, fulfillment of basic needs – FIRST, before we tend to the loftier and spiritual visions of Islam. This has not match to the strategy actually used by our Prophet Mohammad SAW in launching the revolution of Islam 14.5 Centuries ago. The key to the Islamic revolution is the realization that the human being is the best of creations, and has infinite potential. Working on the hearts of human beings to enable them to achieve and realize this potential is the most powerful revolutionary strategy. Islamic teachings recommend the opposite strategy: we should use our engagement with the material world as a means for achieving spiritual progress.
- Utopian Ideals, Unrealistic & Impractical
- This objection can be answered by looking at the Jahilliya – the pre-Islamic age of ignorance and superstition. History bears testimony that the ignorant, illiterate and semi-barbaric Arabs created a civilization which dominated the world for a thousand years. The conditions today bear a strong resemblance to the conditions of the Jahilliya. The question is: DO the teachings of Islam have the same power today, as they did 14 centuries ago. The biggest obstacle to launching an Islamic Revolution today is our Modern Mu’tazila, who think that the solutions to our problems lie in the teachings of Western intellectuals, rather than in the wisdom of the Quran and the Sunnah.
- Fourteen Centuries ago, the teachings of Islam transformed the world, leading backwards and ignorant Bedouin to world leadership. These teachings have the same potential today. The revolution of Islam was a “knowledge” revolution. As stated in Surah Alaq (96:4,5) Allah T’aala “taught by the pen, taught man that which he knew not”. This knowledge is just as revolutionary today, and provides us with the basis to build all of the social sciences, including economics, on radically different foundations.
