Islam, Capitalism and Free Trade

[Viking]

In Europe, the rise of individualism was seen as one of the products of the European Protestant revolution (around the beginning of the 16th century) which they deem led to the rise of capitalism. With the Protestant revolution, it was not necessary for Christians to make confessions or ask for intercessions from the priest; man was held accountable for his own actions.

 

Protestantism also changed the view Europeans had on wealth and the pursuit of it. Protestantism taught that one could acquire wealth without feeling any guilt and the sin of avarice was made morally respectable. Piety was no longer the barometer for success in Europe, but the amount of wealth one had was also seen as a hallmark for success. People were initially taught to make a lot of money but to spend as little as possible, but with time, this changed and people invested more especially as the Industrial Revolution (towards the end of the 18th century) got underway. With the apparent rise of capitalism, the Protestant movement became linked to the rise of modern science.

 

Where does Islam come into all of this? As most of Europe lived in what was referred to as the Dark Ages, science was flourishing in Islamic Spain where the works of the Greek philosophers were translated into Arabic and then [mostly] to Latin and German. Many European scholars traveled to Spain after they heard about this intellectual movement and learnt and took with them a lot of knowledge which was brought forth by the pioneering spirit of Muslims scholars working incorporation with Jewish and Christian scholars in what the Spanish call LA CONVIVENCIA (meaning The Co-existence). This preceded both the Protestant Reformation and Industrial Revolution, so why isn’t it acknowledged as the force that paved way for modern science? If Europe came to know of Aristotle and Plato through the Muslims, why isn’t this acknowledged world-wide?

 

Occidentals today constantly shove terms like “free-trade†down the throats of the rest of the world. They feel that capitalism has been good to them and would like to teach the rest of us (the “Third World†or the “Developing World†as they prefer to often call it). Most of us know that this “free-trade†they vehemently promote is on their terms and benefits them more than it does other parties, but that is a whole chapter, or book, if not volumes of books one needs to cover this topic and there is a lot written about it (both for and against it).

 

But what is the view of Islam on free-trade? Many argue that Islam is socialist because of the amount of control the state is awarded and its welfare system or it is capitalist because it encourages private ownership and free-trade. Was Islam the first “capitalistic†system (as it is commonly defined) or was the European Protestant revolution with its Protestant ethics the force that led to the rise of capitalism in the world (as westerners claim)? Is free-trade a concept that is new to us as Muslims? What did our Noble Prophet PBUH think about such trade?

 

As we all know that our Noble Prophet PBUH started off as a trader working for his wife Khadija RA with trade caravans that traveled to Syria among other places. As a Messenger of God, what was his role in trade and how did he view it and thought it should be regulated?

 

The Prophet Muhammad PBUH always sought to remold the corrupt and morally desperate merchant class of Arabia and confined them to certain moral boundaries. Islam regulated production and consumption, distribution and exchange. He was opposed to price controls, i.e. the setting of a maximum price on products which he deemed unfair to merchants. He believed in an economy in which money and commodities were free to interact without impediments or any sort of external influences. He trusted the forces of supply and demand and wanted them to be the only barometer for prices. He strongly prohibited hoarding which would adversely affect the supply and demand of commodities. He condemned speculation especially of food produce (the Jews often sabotaged Muslims) and the institution of AL-HISBA had the role of checking for foul play (see AL-HISBA FI AL-ISLAM by Ibn Taymiya). The role of the Hisba was [among others] to see to it that merchants were not overcharging for their products.

 

Al-Hisba is a moral and socio-economic institution that ensures morality and protects society from exploitation, fraud, bad workmanship etc. This is naturally based on the Islamic concept of ‘amr bilmacruuf wannahi anil munkar’. The Prophet PBUH also forbade merchants or others gaining an ‘unfair known advantage’, vis-à-vis RIBA.

 

Our Noble Prophet also told merchants to inform consumers about faults in their products, this was a hallmark of a truly honest businessman. This in turn issued consumer protection and ensured that there was fair play. The quality of the component being sold was supposed to determine its marketability and NOT the advertising done by the seller. As it is often today – big companies (i.e. Coca-Cola) that invest millions upon millions in advertising reap huge profits.

 

During the reign of Omar ibn Khattab, Islam spread further beyond Arabia with a larger population and greater prosperity and more opportunities. Slowly the high standards of economic justice that was set by our Noble Prophet declined and regressed as the empire expanded. The empire went forward in terms of ‘culture’, arts, scholarship and as a ‘civilization’. The empire later turned into a kingdom, then smaller and more decentralized fiefdoms. The standards of economic justice declined onwards with time and we can today witness a very fragmented, weakened and downtrodden Ummah that is divided along state lines.

 

We clearly see that Muhammad PBUH believed in free-trade, and the only way to conduct trade (as a Muslim) is to make sure that it is fair to both the seller and the consumer. We can also conclude that Islam is neither right nor left on the political scale, it is neither socialist (despite the welfare state) nor capitalist (although it was the first system to apply capitalistic mentality in trade). The rules of the game are set by the state according to the teachings of Islam. Islam also incorporates both state and private ownership and since our faith is about submission to One True God and subordination to the Laws of the Almighty, secularism and all other -isms westerners shovedown our threats should not be an option for any Muslim indivudal, nation or [future] Islamic state.

 

The conclusion that we naturally ought to come to is that we urgently need to go BACK TO BASICS. I know we have heard this phrase many a times, but whenever this is said, westerners (and alas some Muslims) often see this as regressing, but we know it is definitely not the case. Islam champions justice, fair dealings and the seeking of knowledge, it is about time we really practiced our Deen in the manner our noble Prophet Muhammad PBUH wanted us to practise.

[Castro]

Timely article indeed. Don't you think it's a little on the wishful thinking part? Here's what I gathered from it. To get back to the glory of the early Islamic renaissance, Muslims should:

 

1) Dismantle these fictitious and colonial borders to become one nation.

 

2) Apply the Sharia law to matters of governance, trade, finance and basically every aspect of life.

 

3) Deal with external entities (the West, Asia, etc..) with the fairnes our prophet (pbuh) did in his years as a trader.

 

Among other things.

 

This is a collosal undertaking saaxib. I'm not even sure it's remotely feasible. A few (major) wars (internally and externally) will have to occur before any of that comes about. Don't you think?

[ElPunto]

Very interesting stuff Viking. Did not come to the same conclusions Castro. Especially on Point number 1 that you have(we can barely keep our homeland together - imagine having 200 million Indonesians to contend with!). What would be informative is a discussion of what 'back to basics' means in the fullest sense given the world we live in today? I think that some(well-intentioned) Muslims use this phrase without having a framework with which to really begin to apply it. Don't get me wrong - I think the theory of it is definitely correct but the practice of it has yet to be laid out by anyone that I've seen.

[Sniper]

A very enriching read indeed.

But to say few words, I think, though Muslims are in charge and responsible for learning and practicing the Deen in accordance to Allah’s Qur’an, Allah remains the ultimate decision maker. What I want to mention is that when the time is ripe for this chaos Muslim world to be run by the laws of Islam Allah will initiate the steps to get there. When the prophet was to be risen Allah sent the angel Gabriel and when the Muslims were ready to move and establish their own city Allah ordered them to go to the Medina, when the time comes Muslims will go back to the practice and the basics.

[Viking]

Castro,

There is no need of dismantling the borders as long as they still exist in our psyche. Before WWI, the Brits played with the minds of the Arabs and then stabbed them in the back. They spurred Arab pride (something that was erased by our Noble Prophet PBUH) and the new found pride heled kick the Ottomans out. After this hapenned, the Arabs were not 'given' the freedom they aimed to achieve but instead borders were drawn and the territories were divided between the French and the English. Jews were rewarded with parts of Palestine after the powerful Jewish lobby in America managed to drag them into the war.

 

The British did the same to Africa, they managed to divide Somalis into five territories and the divisions are still present in our pscyhe. People of Djibouti are very Francophone in every sense of the word, Somalis in Kenya are very "Anglosized" etc. We don't need to (and are not able) erase the borders yet, what we need is a common asabiya, a group feeling and solidarity that we share with fellow Muslims (first Somalis from other regions in our case) and that would inshaAllah lead to greater things.

 

The same applies to Shari'a Law. It has proved difficult for countries to adopt it even if they are a relatively stable nation. This was the case in Algeria when the Islamic party won the elections by a landslide. The French and other western countries refused to accept an Islamic led govt in Algeria, they undermined the choice of the people and supported the outgoing govt. The result was a civil war that led to deaths of hundreds of thousands of innocent civilians.

 

As for fair dealings, we need first to educate ourselves and understand how the current world of economics works. Capitalism is dominant and it does not favour poor people because of the way trade is conducted. Institutions like the IMF and WB act as phalangs to the US Treasury Department. The subsidies given to EU farmers devastate agriculture in poorer countries too (cow in the EU is allocated more money than the average human is in poorer nations). There seems to be small changes going on in the WTO to try and balance the situation in favour of people in poorer countries.

 

We don't need internal wars in order to achieve peace. Europe went through turmoil before the Eu was formed (they were slaughtering each others en masse just 60 years ago). If they can achieve peace and unity then so can we, hopefully without the bloodshed.

 

The Point,

As I said, back to basics can start with viewing your fellow Muslims in neighbouring countries as brethren. Share in their grief, help them when in need etc. Somalis would benefit immensely if the govts in the Middle East took intitative to help rebuild Somalia after the Americans left. But they don't care and until Muslims start caring for each other, unity can not be achieved. Our Shi'a brothers are showing that kind of unity. Iran supports Hisbullah and Hamas against the Zionist nation, this has been of great help to the Lebanese and Palestinian people. One has to start at grassroots level and change the mentality of the youth, get them to really understand what it means to be a Muslim, as the Prophet PBUH wanted us to and taught us.

 

Sniper,

With all due respect sxb, that is a very defeatist attitude. Allah SWT helps those who help themselves, we all know that Islam will prevail, but that might be in ten or a hundred generations to come. We can not just sit back and expect the prophecy to be fulfilled. Although we believe in Qadr as Muslims, we also believe that our destiny is in our own hands, otherwise what would be purpose of The Day of Reckonning?

[Castro]

Originally posted by Viking:

[QB]If they can achieve peace and unity then so can we, hopefully without the bloodshed.

Accurate description of the status quo, good Viking. And though I'll return to give you a more detailed response, let me leave you with this (paraphrased) idea from Che: a revolution (which is what we need) without gun powder would never work.

[Viking]

Che might not be right...the Islamic revolution of Iran and the Orange revolution of Ukraine are two examples of modern bloodless revolutions.