Footnotes

1. For a recent update, see Zaman (2022) “Rebuilding Islamic Economics on New Foundations”, Turkish Journal of Islamic Economics,9(1),1-30

2. For example, Rostow (1978, p.657) writes that “In the end, then, despite the inevitable parochialism of our attachments to national societies and cultures, the change most required is the gradual acceptance of the realities of a common experience, ... all of us are now children of the revolutionary insight of seventeenth century Europe.”

3. For a detailed study of how European conquests have impacted on the European worldview, see Said (1978, Introduction), who writes that “all academic knowledge about India and Egypt is somehow tinged and impressed with, violated by, the gross political fact (of colonization).”

4. Mirowski (1989) documents wholesale imitation of mathematical models from physics by economists. While the mathematical approach nearly extinguished qualitative alternatives in economics, the same battle has had somewhat different outcomes in political science. For example, Monroe (2005) appeals for a ‘live and let live’ approach which would permit qualitative and historical analyses alongside the dominant formal and mathematical ones. It may be noted en passant that ‘Abd al-Rahman b. Muhammad Ibn Khaldun had a great impact on social science studies in the world of Islam and outside. One of his major contributions was to initiate the tradition of looking for sociological patterns in history.

5. Quoted from entry on “Michel Foucault” in Stanford Encyclopedia of Philosophy : https://plato.stanford.edu/archives/fall2003/entries/foucault/

6. Original hadeeth cited in Tirmidhi (850) Kitab al-’Ilm ‘an Rasul Allah, Bab Ma Ja’ al-Dall ‘ala ‘l-Khayr ka Fa’ilih and in Bab Ma Ja’ fi man Da’a il al-Huda fattubi’a aw ila Dalalah

7. As Reuben (1996) documents, these were also the Western views on the unity of knowledge, prior to the fragmentation which occurred due to the emergence of logical positivism.

8. Original hadeeth cited in Tirmidhi (850) Kitab al-Qiyamah, Bab fi ‘l-Qiyamah.

9. Schumpeter (1974) suggests that economic thoughts did not occur to mankind during the five hundred years between the Greeks and the Renaissance—the so-called ‘great gap.’ Mirakhor (1983) fills this gap with the economic thought of Muslims. See also Ahghari (1991) and Ghazanfar (2003). Akram Khan (1983, 1991, 1998) provides many more references to history of Islamic economic thought.

10. There is no doubt that historical circumstances have strongly impacted modern formulations of Islamic economics, as well as political theories. This has led some observers to the mistaken belief that these theories are additions to the corpus of Islamic beliefs — for example, Timur Kuran (1997) writes that “Bringing economics within the purview of religion was, then, central to Mawdudi’s broader goal.” In fact, economics has always been within the purview of Islam, but has never been separated out as a distinct sub-domain or isolated from spiritual and social concerns.

11. This runs counter to the belief that European colonization brought civilization to primitive cultures. The facile assumption that conquest proves superiority runs counter to historical evidence that savage tribes have often over-run more advanced civilizations. Evidence for this point of view is provided by Marglin (2007) and Mitchell (2002). Sayyid Husayn Ahmad Madani (1953) documents the destruction of numerous welfare and educational institutions in India and the spread of corrupt practices among the populace due to British rule.

12. Quoted in Ahmed (1992,p 152).

13. Western hegemony has led some Muslims to accept claims that western institutional structures based on secular and rational thought are ideal forms. This has led them to argue that democracy is Islamic, or compatible with Islam.This is obviously wrong, since unanimous agreement of entire society cannot override Shari’a regulations, contrary to the central tenets of democracy.

14. While most Muslim authors argue for a distinct Islamic economic system, some have gone against this current. For example, Sibai (1982) argues that Islam is a variant of socialism, and advocates nationalization and other socialist economic strategies. See Mintjes (1978) for a survey of the discussions about Islamic socialism. Weber (1905) and his followers argued that Islam is fundamentally incompatible with capitalism. Rodinson (1966) argued against this view, suggesting that by creative adaptation and interpretation of Islamic law Muslims could choose freely among economic systems.

15. Muqorobin (2008) categorizes by language 5,000 publications available at the International Islamic University of Malaysia; this provides some idea of the relative quantity of publications in different languages. Many Arabic publications and guides to the literature are available from the website of the Islamic Economics Research Center of King Abdul Aziz University.

16. For example, Sitara Chemicals: http://sitara.com.pk .

17. The goals of the International Islamic University of Islamabad include “To re-construct human thought in all its forms on the foundations of Islam,” while the International Islamic University of Malaysia aims to “Integrate Islamic revealed knowledge and values in all academic disciplines and educational activities.”

18. The Arabs rose from a near savage state wherein they buried their infant daughters alive and killed each other for trivialities, to become models of civilized behaviour. Michael Hart (2000) ranks the Prophet as the single most influential man in all of human history.

19. See, for the text of the saying of the Prophet Muhammad (peace be on him) in this regard, Muhammad b. Isma’il al-Bukhari, Sahih al-Bukhari, Kitab al-Qadar, Bab Allah A’lam bima kanu ‘Amilin.

20. Similar ideas also occur in other religious traditions; see Andrew Wilson, ed. World Scripture: A Comparative Anthology of Sacred Texts (New York: International Religious Foundation, 1991), available at: <http://www.unification.net/ws/> (accessed August 22, 2007). For example, the Bhagavad Gita compares a man controlled by his desires to a carriage controlled by the horses instead of the driver. A secular version of this critique was formulated by Galbraith (1966), who argued that powerful corporations overproduce, and use advertising to create the consumer demand to sell their products.

21. Many well-known economists have wrestled with the conflict between the dominant views and the value of social interests, community and coopera-tion. For example, see Khan (2004) and Bowles and Gintis (2002)

22. See Zarqa (1995), Hasanuzzaman (1981) and Mortazavi (2004).

23. The new field of “happiness studies” has challenged conventional views, by showing that greater consumption does not lead to greater happiness. See Anielski (2007), Bruni & Porta (2005), and Easterlin et. al. (2011). Nonetheless, many economists have ignored these findings, arguing that they belong to the domain of psychology and not economics.

24. Cold means that emotions like anger, gratitude, revenge, compassion do not play a role. Calculating refers to maximization to the last penny (instead of satisfying). Callous means that consumers are indifferent to welfare of others. All these assumptions of neoclassical economics have been proven wrong by behavioral economists; see Karacuka and Zaman (2012).

25. An important utopian was Karl Marx (d. 1883), whose vision of a classless society where everybody would receive what he or she needed from a benevolent state, and laborers would receive dignity and respect, motivated and changed the lives of millions in the last century. Ironically, this provides a powerful illustration of the power of ideas, visions, and philosophies to dramatically change the material world, contrary to one of his own central theses.

26. “The [true] mujahid is he who wages a struggle against his own self (nafs).” See, Abu ‘isa al-Tirmidhi, Sunan al-Tirmidhi, Kitab Fadha’il al-Jihad, Bab Ma ja’ fi Fadhl man Mat Murabitan. Ed.]

27. See, for instance, “And nothing is the life of this world but a play and a passing delight; and the life in the hereafter is by far the better for all who are conscious of God.” (Qur’an 6: 32), and “This because they love the life of this world better than the Hereafter: and Allah will not guide those who reject Faith.” (Qur’an 16: 107 and other similar verses).

28. Abu ‘l-Baqa’, Kulliyyat (Bulaq: 1253 AH), 203; see also Muhammad ibn A’la al-Tahanawi, Kashshaf Istilahat al-Funun (Calcutta: 1862), 703 ff.

29. Masud (1995, p. 240-246) has described, inter alia, the conflict between the Sufis and the ‘ulama’ in Islamic Spain.

30. Property rights do not receive much attention in conventional economic literature, since the idea of private property is accepted by all. See, however, Coase (1960) and the related literature. See, also, de Soto (2000), who argues that property rights are the key to the success of capitalism.

31. The theory of property rights in Islamic law is substantially different from modern Western theories. Kogl (2005) and Tawney (1926) describe “enclosures” in England as a revolution of the rich against the poor. Their success led to the abandonment of earlier theories of property which specified the responsibilities of owners of property, and required sharing of various kinds. These now forgotten theories of property resemble Islamic theories.

32. For example, the Qur’an describes people whose garden was destroyed because they wanted to avoid giving from it to the poor. See, Qur’an 68: 17–27.

33. Zamir Iqbal and Abbas Mirakhor, in “The Stakeholders’ Model of Governance in An Islamic Economic System” in Munawar Iqbal, ed. Islamic Perspectives on Sustainable Development (Basingstoke: Palgrave Macmillan, 2005), have argued that the Islamic idea that the right to property derives from making it useful leads naturally to a stakeholder model of the firm.

34. Hamid Hosseini, “Notions of Private Property in Islamic Economics in Contemporary Iran: A Review of Literature,” International Journal of Social Economics, vol. 15, no. 9 (1988), 51–61.

35. Mufti Muhammad Shafi’, Islam ka Nizam-i Arazi (Karachi: Idarat al-Ma’arif, 1979).

36. Siddiqi, “Muslim Economic Thinking: A Survey of Contemporary Literature.”

37. He also lists 18 references, see, ibid., reference nos. 224 to 242.

38. Siraj Sait and Hilary Lim, Islamic Land and Property Research Series, Series of Eight Position Papers. 2: “Islamic Land Tenure and Reforms” (Nairobi: UN-Habitat, 2005), 8.

39. Mushtaq Ahmad, Business Ethics in Islam (Islamabad: IIIT and IRI, 1995).

40. Felix Pomeranz, “Business Ethics: The Perspective of Islam,” The American Journal of Islamic Social Sciences, vol. 12, no. 3 (1995), 400–404.

41. See, Maulana Mohammad Zakariya Kandhalvi, Virtues of Halal Earning and Trade (Transvaal: Ilmi Publications, 1993).

42. Mohammad Asad provides a cogent defense of this translation against the more conventional “ – Except by way of trade”.

43. See, for the saying of the Prophet (peace be on him) in this regard, Muhammad b. Isma’il al-Bukhari, Sahih al-Bukhari, Kitab Bad’u ‘l-Wahyy, Bab Kayf Kan Bad’u ‘l-Wahyy ila Rasul Allah Salla Allah ‘alayh wa Sallam.

44. See, for the original text of this hadeeth, Muslim b. al-Hajjaj, Sahih Muslim, Kitab al-Imarah, Bab Man Qatala li ‘l-Riya’ wa ‘l-Sum’ah.

45. Such sales led to the coining of the term ‘winner’s curse.’ See Kagel and Roth (1995, chapter 7) for a survey.

46. For this same discussion in the historical context of the widespread adoption of interest in Christian societies, see Nelson (1969).

47. See, Abu ‘l-Walid Muhammad b. Ahmad Ibn Rushd al-Qurtubi, Bidayat al-Mujtahid wa Nihayat ‘l-Muqtasid (Cairo: Mustafa al-Babi al-Halabi, 1395/1975), 2: 54; Abu ‘Abd Allah Muhammad b. Ahmad al-Qurtubi, al-Jami’ li Ahkam al-Qur’an, ed. Hisham Samir al-Bukhari (Riyadh: Dar ‘Alam al-Kutub, 1423/2003), 3: 154. See, for a variant view, Muhammad b. Abi Bakr Ibn Qayyim al-Jawziyyah, Zad al-Ma’ad fi Hady Khayr al-’Ibad, 5 vols., 27th edn. (Beirut: Mu’assasat al-Risalah, 1415/1994), 5: 186–189.

48. This contrasts with modern European conceptions, according to which a government is responsible for creating and enforcing a ‘social contract,’ which may consist of any set of mutually agreed upon rules. Hegel, building on political theories initiated by Machiavelli, argued that since a government is responsible for creating and maintaining the law, it is outside the law and not subject to it; see Manicas (1987, p. 93). Such a rationale for political authority was responsible for the extraordinary cruelty of the fascist states.

49. See, for a clear directive of the Prophet (peace be on him) in this regard, al-Tirmidhi (850) Sunan al-Tirmidhi, Kitab al-Jihad, Bab Ma ja’ la ta’ah li makhluq fi ma’siyat ‘l-Khaliq. Note the implication that in an Islamic state, no one is justified in implementing a cruel and unjust policy (such as burning of the Jews) on the grounds that ‘I was just carrying out orders’. For the full import of this, see Arendt (2006) and Baumann (2001), who find that extraordinarily evil acts are carried out by normal men just carrying out orders.

50. Rulings by Islamic scholars on the legitimacy of governments have played an important role in Islamic history. For example, rulings in favor of British rule in India helped legitimize it, and rulings against the British supported the War of Independence in 1857. Many British policies in the Middle East were formulated in response to their fear that a ruling by the Ottoman Empire saying that Islamic law requires Muslims to act against the British could lead to widespread revolt in their Muslim colonies; see Fromkin (1991).

51. See, Abu Dawud Sulayman b. Ash’ath al-Sijistani, Sunan Abi Dawud, Kitab al-Jihad, Bab Fi ‘l-Imam Yakun baynahu wa bayn al-’Aduww ‘Ahd fa Yasir ilayh; Abu ‘isa Muhammad b. ‘isa al-Tirmidhi, Sunan al-Tirmidhi, Kitab al-Siyar ‘an Rasul Allah Salla Allah ‘alayh wa Sallam, Bab Ma ja’ fi al-Ghadr.

52. Traditional conceptions of the state are based on the idea of a natural community with a common ethos and shared goals. Modern conceptions of the state, in contrast, are based on a ‘social contract,’ agreement to a set of rules for resolving conflicting interests. Manicas (1987, p. 28) writes that “the only thing which people have in common is ‘the government’ and, paradoxically, their private interests!” and describes the history of the transition from the traditional polis to the modern form of political organisation in Europe. Islamic principles of government are based on the traditional form, but make explicit allowance for minorities which may not share the same goals as the main community, permitting them far more liberty to self-regulate (through personal law) than is allowed in many modern states.

53. There is a striking resemblance between these traditional methods for generation of revenue in an Islamic state, and the classic, controversial, and now almost forgotten tax proposals of Henry George (1879).

54. This is the purpose for which zakah has been mandated. See, Muhammad b. Isma’il al-Bukhari, Sahih al-Bukhari, Kitab al-Zakah, Bab Wujub al-Zakah.

55. For example, the fire-bombing of Dresden and the British blockade of food to Germany, which led to the death by starvation of an estimated 800,000 civilians, were ignored, while much lesser crimes by Germans were prosecuted; see Jonathan Glover (2001, p. 66).

56. See, Stanford Magzine (Fall 1983), 38–43.

57. See, Taqi Usmani (1999) for a rebuttal of all the main arguments.

58. see Muhammad Akram Khan (1983, 1991, 1998) for comprehensive annotated bibliographies, which provide a guide to this literature.

59. For example, Max Weber (1930, Chapter 2) writes that the “spirit of capitalism,” is pursuit of wealth as an end in itself, to the point of being “absolutely irrational.”

60. See, Muhammad b. Isma’il al-Bukhari, Sahih al-Bukhari, Kitab al-Adab, Bab Ikram al-Dayf wa Khidmatih Iyyah.

61. When I wrote this about fifteen years ago, I was unaware of Modern Monetary Theory, which teaches us that money is created by fiat. This affects the arguments presented here in complex ways, which have been discussed in later writings. Subscribe to the Transforming Knowledge newsletter for updated references: http://bit.ly/AZTrans

62. Nelson’s (1969) The Idea of Usury: From Universal Brotherhood to Universal Otherhood, describes the European experience.

63. We illustrate the difference by the example of murabahah. Business purchases goods on credit, planning to repay after the goods are sold at a profit. The bank extends credit (using the goods as security) and requires a fixed repayment. The bank’s transaction is purely financial — it gives the loan to the business and gets back the principal plus interest at a later date. The Islamic alternative is for the bank to buy the goods and resell them to the business at a profit, with deferred payment due upon sale. In appearance this transaction is quite similar, but it means that the bank bears some extra risks associated with the real part of the transaction, which would not be present in a purely financial transaction. There is a corresponding reduction in the risk to the business. If banks are large and businesses small, such a re-allocation of risks may actually promote economic efficiency. More important, taking risks is a business activity which legitimizes earning a return in Islamic law, unlike ownership of money and loans.

64. Lopez (1976) documents the commercial revolution created by Muslims which enabled global trade based on Islamic law.

65. If the insurance company actually transports goods, and provides guarantee of safe delivery, this may provide Islamically valid justification for an insurance payment upon loss.

66. For more information on German Health Insurance System, see, “Health in Germany,” available at: <http://en.wikipedia.org/wiki/Health in Germany>. The article mentions that insurance is offered at three levels, personal/private, then by the employing firm and then by the Government.

67. For example, the Qur’an (2:219) states: …They ask thee how much they are to spend; Say: “What is beyond your needs.”

68. For example, a leading economics textbook mentions poverty only tangentially, and states that economists should study how to help the poor without harming production efficiency; see P.A. Samuelson and W. Nordhaus, Economics (New York: McGraw-Hill, 1985). In the Reagan era in the USA, tax cuts for the rich were justified on the grounds that they would invest and create more wealth, while the poor would only consume the tax cuts. Theories of “human capital” view humans as inputs to production of wealth, rather than wealth as an input to human welfare. Nobel Laureate Milton Friedman (2005) argues that it is the responsibility of firms to pursue wealth, not social goals.

69. The gradual abdication of social responsibilities to the state has led to major problems for welfare systems. The state cannot efficiently assess local needs and provide for them. Moreover, taxes to finance needs are often viewed as unjust and unfair, since they are often not targeted to the social needs perceived as the most urgent by those being taxed. In this context, it is interesting to note that an attempt was made by the Reagan administration in the USA to put the responsibility for old age parental care back on children. However, changes in social norms are hard to reverse.

70. Subsequently, Kuran (2011) has extended his critique to blame Islamic Law for the current poverty prevalent in Islamic countries. Inconsistencies, theoretical and historical errors in this orientalist analysis have been pointed out by Arshad Zaman (2010), Murat Cizakca (2011) and many others.

71. See, for example, Birvndhavaradarajan (1992), Foltz et. al. (2003), and Sidek (1989).

72. See, for example, Muhammad b. Isma’il al-Bukhari, Sahih al-Bukhari, Kitab al-Wudu’, Bab al-Bawl fi ‘l-Ma’ al-Da’im; Bab al-Istijmar Witran; see also, Hafiz Nur al-Din ‘Ali b. Abi Bakr al-Haythmi, Majma’ al-Zawa’id wa Manba’ al-Fawa’id (Beirut: Dar al-Fikr, 1412/1992), 1: 251.

73. See, Muhammad Amin Ibn ‘Abidin, Radd al-Muhtar ‘ala ‘l-Durr al-Mukhtar al-Ma’ruf bi Hashiyat Ibn ‘Abidin (Beirut: Dar al-Fikr, 1405/1995), 1: 243.

74. See, Muhammad b. Isma’il al-Bukhari, Sahih al-Bukhari, Kitab al-Muzara’ah, Bab man Ahya Arzan Mawatan.

75. See, Abu ‘Abd Allah Muhammad b. Yazid al-Qizwini Ibn Majah, Sunan Ibn Majah, Kitab al-taharah wa Sunaniha, Bab Ma Ja’ fi ‘l-Qasd fi ‘l-Wadu’ wa Karahiyat al-Ta’addi fih.

76. See, Malik b. Anas, Muwatta’, Kitab al-Jihad, Bab al-Nahyy ‘an Qatl al-Nisa’ wa ‘l-Wildan fi ‘l-Ghazw.

77. See, Muhammad b. Isma’il al-Bukhari, Sahih al-Bukhari, Kitab al-Muzara’ah, Bab Fazl al-Zar’ wa ‘l-Ghars idha Ukil minh.

78. See Bukhari (1409/1989), Bab Istina’ al-Mal, 1: 168.

79. See, Muslim b. al-Hajjaj, Sahih Muslim, Kitab al-Sayd wa ‘l-Dhaba’ih, Bab al-Nahy ‘an Sabr al-Baha’im.

80. See, for example, Muhammad b. Isma’il al-Bukhari, Sahih al-Bukhari, Kitab al-Adab, Bab Rahmat al-Nas wa ‘l-Baha’im.

81. See, Muhammad Akram Khan (1989, p 18-20).

82. See Lane (2001) and Layard (2005).

83. This book could be offered as an answer to Macaulay (1835). We would search the libraries of Europe and America in vain for an 800 page volume urging spending on others for the love of God, and designed to inculcate generosity, compassion and concern for others in the reader.

84. See Abu ‘l-Qasim Sulyman b. Ahmad al-Tabarani, al-Mu’jim al-Awsat, eds. Tariq b. ‘Iwadh Allah b. Muhammad and ‘Abd al-Muhsin b. Ibrahim al-Husayni (Cairo: Dar al-Haramayn, 1415 AH), 5: 357.

85. See, for instance, Qur’an 2: 215; 2: 261–265; 2: 274; 3: 134.

86. See, Muhammad b. Isma’il al-Bukhari, Sahih al-Bukhari, Kitab al-Nikah, Bab al-Akfa’ fi ‘l-Din.

87. Sahih Muslim, Kitab al-Zuhd wa ‘l-Raqa’iq, Bab Hadith Jabir al-Tawil wa Qissah Abi ‘l-Yusr.

88. Sahih Muslim, Kitab al-Zuhd wa ‘l-Raqa’iq, Bab 1.

89. Sahih al-Bukhari, Kitab al-Riqaq, Bab al-Ghina Ghina ‘l-Nafs.

90. Sahih al-Bukhari, Kitab al-Riqaq, Bab ma Yuttaqa min Fitnat al-Mal.

91. Some secular traditions also provide strong support for this idea of spending excess wealth on others in need. See Singer (1972), for a powerful argument, based on utilitarian ethics, which has been very influential.