THE ESSENCE OF ECONOMIC POLICY AND THE IMPORTANCE OF ISLAMIC ECONOMICS

THE ESSENCE OF ECONOMIC POLICY AND THE IMPORTANCE OF ISLAMIC ECONOMICS

By Mohammed Shawky Al-Fanjari

Ex. Vice President of Egyptian State Council Professor of Islamic Economy at Al-Azhar and Riyadeh Universities

Cairo 1413-1993

DEDICATION

To those who have come to realize that every great nation has a message to give, and that the greatest nation of all is that which carries the best of messages which presents the optimum way of life. Islam has provided us with a message to share with the world. I do not know what we can give humanity as Arabs if we cannot share with it the message of Islam which Allah has required us to do.

To those who have come to realize that Jihad for the sake of Allah is a Jihad for material and spiritual progress, for the establishment of a society of believers, a society of faith and of increasing production. To those who have come to realize that the best way to happiness and success in both worlds is to free people from fear, ignorance, poverty, sickness and injustice so that, in the end, we could execute the will of Allah to spread love among people and peace on earth.

FORWORD

One of the major manifestations of the current revival of the Islamic world has been the emergence of a scientific movement which advocates the return to the sources of the Islamic thought in an attempt to derive the substance which will help devise a new approach to all aspects and applications of mental life a d intellectual endeavor. The aim is not only to tackle the problems of today's society in the light of Islamic values and prescriptions but also to open up new prospects by breaking the current monopoly of the Western positivist approach.

The movement has given rise  to new intellectual trends which investigate vital issues in the life of Muslims, including the economic issue which is a determining factor in Man's effort to improve his material condition and to be able to lead a decent life.

A new approach was therefore developed in economic analyses and studies with an increased awareness of the need to curb the pressure exerted by the foreign materialistic philosophy. The search for new economic rules based on Islamic material and spiritual values led to the recognition of the distinct features of an Islamic economic order which is clearly different from other economic systems, especially the positivist one, if only because it is based on fixed principles which are set in the holy Qur'an and in the Sunna and which provide for the dignity of man and for social justice.

The aim of this book, published by the Islamic Educational, Scientific and Cultural Organization-ISESCO- is to shed light on the basic economic principles in Islam and express them in modern language. It is, thus, an attempt to see how those fundamentals apply in different economic situations and offer an answer to contemporary economic problems.

In publishing Dr.Muhammed Shawky Al Fanjari's "The Essence of Economic Policy in Islam and the Importance of Islamic Economy", the Islamic Organization –ISESCO- seeks to emphasize a particular aspect of the comprehensiveness and richness of Islamic thought, a task which is in line with the provisions of its Charter calling for the dissemination of Islamic thought and cultural values. ISESCO is thus doing its best to make this part of the Islamic heritage accessible to the public so that they may comprehend the true nature of Islam, the greatness of its principles and the serenity of its message. This is indeed one of the major tasks assigned to this Organization which seeks to foster an adequate environment for strengthening the bonds of solidarity among Muslims and enhancing their position in the world.

We hope this book will encourage the reader to give further thought to the issue of Islamic economic policy which reflects one of the aspects of the independent and comprehensive nature of the Islamic methodology.

Abdelhadi BOUTALEB

Director General,

Islamic Educational, Scientific and Cultural Organization

PART ONE

THE ESSENCE OF ECONOMIC POLICY IN Islam

It is necessary to explain the economic policy in Islam for various reasons, the most important of which are:

• To ascertain the point of view of Islam concerning the various economic questions.
• To understand the point of view of Islam concerning the various doctrines and systems.
• To evaluate any system in the modern world-wherever its nature- as to whether it comes close to or depart away from the true application of Islam; and
• To be thoroughly acquainted with the nature and main characteristics of Islamic economics.

The economic policy in Islam presents three major characteristics:

• Ti accommodates what is stable and what is not. This is the characteristic of the doctrine and the system.
• It accommodates public and private interests. This is the characteristic of the harmony of conflicting interests.
• It accommodates material interests and spiritual needs. This is the characteristic of the belief in fear of Allah in every commercial transaction.

We shall deal with each of these three points separately

CHAPTER ONE

THE ACCOMODATION OF WHAT IS STABLE AND WHAT IS NOT

THE DOTRINE AND THE SYSTEM

The economic policy in Islam is divine in its source and positivist in its practice. Thus, it is a stable and developing policy at the same time.

It is a stable policy that cannot be changed in the sense that its economic foundations are found in the Koran and the Sunna. Muslims everywhere submit to it all the time, irrespective of the degree of development of their society. This is what we means by the expression "the doctrine of Islamic economics".

It is also a developing policy in the sense that its principles can be applied to any situation any time. This explains the different ways these principles are applied in different societies. We shall refer to this characteristic by the expression "the economic system (or systems) in Islam":

From what has preceded, we can derive the following three basic ideas:

• Islamic economics is divine in its doctrine and positivist as far as the system and application are concerned.
• The Islamic economic doctrine is valid anytime, anywhere. It is not bound to any specific period.
• The Islamic economic system varies in time and space and, hence, does not present a singular way for its implementation.
• ISLAMIC ECONOMICS IS DIVINE IN ITS DOCTRINE AND POSITIVIST IN ITS SYSTEM

The source of Islamic economics is Allah, the Almighty. This is shown in the basic economic doctrine and principles found in the Koran on the one hand, and in the application of these principles on the other.

• With respect to the economic doctrine, the Koran states: "And eat not up your

property among yourselves in vanity" (The Cow 188). "That it become not a commodity between the rich among you" (Exile  7). "And bestow upon them of the wealth of Allah which He hath bestowed upon you"(Light 33). "And in their wealth the beggar and the outcast had due share" (The Winnowing Winds 19). "And they ask thee what they ought to spend. Say: that which is superfluous"(The Cow 219).

   The Prophet, Peace be upon Him, has likewise declared:

"How appropriate the right fortune is to the virtuous man"(Imam Ahmed and Attabari). "Taken away from the rich and bestowed upon the poor" (Al Bukhari and Muslim). "He who has got more food has to bestow some on the one who has none"(Muslim). "People are associate in three: Water, food and fire; and also salt or its value" (Ahmed, Abu Daoud and Ibn Majah). "He who rive a dead land owns it, and no heir has the right to get it back after three years" (Yahya Ibn Adam). These  economic principles and foundations that appear in the Koran and the Sunna are both general and specific. Islam has, therefore, required the use of Ijtihad, i.e. interpretation, in their application at different moments in time and space.

• With respect to the application of Islamic teachings and economic principles, we

realize that even if the latter are positivist due to the fact that they are open to interpretation, their source and initiator however is Allah the Almighty. Research in Islamic economics is like any other research in Islam: it is applied and not fundamental. The researcher here does not invent or pronounce judgments, but rather discloses and reveals the decision of Allah concerning a given problem in accordance with his belief and thinking, in accordance with Truth which is known only to Allah the Almighty.

Here are some examples to make this point clear:

• The refusal of Khalifa Omar Ibn Al-Khattab to consider conquered lands in Irak and Syria the property of the conqueror alone, but rather public property (Abdel Jawad 1391 AH).
• The opposition of the Prophet's Companion Abu Dhar Al-Ghefari to the appropriation by a minority of the wealth of society, and his insistence that a Muslim should not own more than he needs (Sahhar).
• The belief of Imam Malik that one should ransom his captives even if he has to use up all his wealth (Al-Qortobi).
• The belief of Imam Ibn Hazm that land belongs to those who cultivate it, and that it should not be rented in any way, for its produce belongs to those who work on it or those who share it as a spoil. In his own words: "renting land is not permitted whether it is for cultivating, planting, building or whatever it is for a short or long period, whether it is for money or anything else"(Abu Zahra 1964).
• The verdict of Imam Ibn Hazm and other Ulema that, in case a man dies of hunger in a country, its inhabitants will be considered murderers and will have to pay for their murder (Al-Ghazali 1952: 120).
• The verdict of Imam Shatibi that in case the treasury cannot satisfy the needs of the army, the Imam- if just- should levy taxes on the rich till there is enough money. If he does not do that, he loses his power and the homes of the Muslims will then be at the mercy of the infidels. (Shatibi 1332 A.H. :295).
• The verdict of Imam Al-Ezz Ibn Abdeslam when Sultan Kutuz solicited the Qadis and Ulema of Egypt for their approval to take money from the people to help him in his Jihad against the Tartars. These Qadis and Ulema reiterated the decision of Imam Ibn Abdeslam that money could be taken from people only when golden and expensive jewelry was taken from the Emirs first, and when soldiers had nothing more than their weapons and their horses left (Al Wahibi 1979).
• The recommendations of the First Congress of the Muslim Ulema held in Cairo in 1974 under the sponsorship of the Congress of Islamic Research at Al-Azhar: 1) that rulers must levy taxes on personal wealth so as to enable the realization of what is in the public interest; 2) that rulers in every country must limit private ownership to the degree that guarantees the warding off of moral deteroration, and the realization of the preponderant good. Evaluation of what is in the public interest is in the hand rulers, but Muslims are required to advise them in case they do not see eye eo eye with their decisions (Cf. Proceeding of the First Congress on Islamic Research 1964: 394, 398).
• The recommendations of the Second Congress of the Muslim Ulema held in Cairo in 1975 under the sponsorship of the Congress of Islamic Research at Al-Azhar: 1) that interest on loans whether for consumption or production- Riba, and Riba whether great or small – is forbidden. Lending money with interest is not necessary and is, therefore, prohibited. Borrowing money with interest is also prohibited, except in case of extreme necessity. Every one, of course, is left to determine his own needs. 2) that banking services such as current accounts, payment of cheques, promissory notes and other similar services that take place between businessmen and banks are permitted. Money paid for such services is not Riba. (Cf. Proceedings of the Second Congress on Islamic Research 1975: 401-402).
• The recommendations of the First International Congress on Islamic Economics held in Mecca in 1976 under the sponsorship of the Faculty of Economics and Administration at King Abdel Aziz University in Jeddah: 1) that commercial insurance as practiced by professional companies nowadays does not provide the legal form for cooperation and solidarity because it does not include the legal conditions to make it lawful. 2) that a specialized commission be formed of Ulema and Muslim economists to suggest a form of insurance that is void of Riba and that could contribute to the realization of a much needed legal cooperation. (CF. Al-Fanjari 1979).

   It is true that some legal interpretations de not succeed. To invalidate them, in this case, one should not criticize or abuse those who come up with them, but to fight them back with proofs from the Koran and the Sunna. It is necessary to show their invalidity by legal ways of measure, approved and appreciation. What is to be right, and corrected if wrong.

   The conclusion from what has preceded is that economic policy in Islam is divine in its foundations and positivist in its practice. In other words, Islamic economics is divine from the point of view of the doctrine and positivist from the point of view of practice. Since a doctrine can survive only in practice. Islam has urged its followers to use the sense of interpretation (Ijtihad) and has rewarded this activity whether the person making it succeeds in it or not. In the latter case, one is rewarded for his effort. Islam has gone even further and considered interpretation its second source after the Koran and the Sunna.

   There is no doubt that the worst blow that Muslims themselves ever gave Islam, was to close the door of Ijtihad at the end of the fourth century A. H. Since then, there has been no progress in Islamic studies. The application of Islamic law froze at that time and gave birth to the false pretension that Islamic economics is primitive, not suitable for the 20^th century and an obstacle to progress. This pretence is done to our neglect of Ijtihad and to that of the application of economic principles that appear in the Koran and the Sunna to what is suitable for a specific time and place.

• THE DOCTRINE OF ISLAMIC ECONOMICS IS NOT TIME-SPECIFIC
• Islam appeared fourteen centuries ago is a primitive period, an era of slavery and underdevelopment as far as economics is concerned. It goes without saying that the doctrine of economics at the time reflected that period. But Islam, as a divine economic legislation, whose principles go far beyond this primitive era, is valid for all times and all places. Islam established- from the very beginning- true equality and guaranteed the limit of wealth to every citizen. It determined an economic balance among members of society and confirmed the principle of dual ownership (i.e. private, free economics, and the interference of the State in the economy. (Al Fanjari 1981: 94ff).
•   None of this was established under material or economic pressure in the Arab peninsula or the rest of the world at that time. Besides, production was not in such a development so as to warrant these principles.
• Concepts in Perspective

       To be confined to principles brought up by Islam fourteen years ago does not mean, as some people have suggested, that Islamic economics is valid only for the specific primitive era in which it appeared, and that it cannot be valid for the era of the atom and space discovery. Nor does it mean, as some others have suggested, that being confined to these principles is confining the mind and limiting its field of action. This is not so for two reasons:

• These economic principles are quite few and limited. They are general principles and, hence, are valid anytime, anywhere. Islam, being the final religion, has established these principles to guide humanity in its progress towards its goals. These principles are, therefore, no more than a light to help the mind in its thinking. They are no more than stepping stones and broad lines to help the individual and society at large to reach happiness in this world and the Hereafter.
• These economic principles concern only what is essential and necessary to all individual and societies whatever the degree of their economic development or the nature of their means of production may be.
• The Doctrine of Islamic Economics and Marxism

    The doctrine of Islamic economics is not tied to a specific period in time or a specific means of production. As some authors claim, "this is a major area of controversy between Islamic and Marxist economics" (Sadr  1969 ;296). Indeed, Marxism claims that there is a necessary relationship between the degree of development of the means of production and the social system and that it is impossible for a social system to live forever or to be of use to humanity at different stages. Marxism, therefore, sees the idea of equality applicable to the industrial world only. Slavery and bondage, then, would be natural in a society that lives on man's manual production. This is not acceptable in Islam.

The Islamic reality that Humanity lived in its glorious times defined the historical logic of Marxism and its material calculation. Indeed, "this revolutionary fact that created an Umma, established a civilization and changed the course of history… was not the fruit of a new means of production or a change in its form" (Sadr 1969 ; 3-1). (See also Larbi 1969 ; 278).

•         THE ECONOMIC SYSTEM IN ISLAM IS NOT LIMITED TO ONE PARTICULAR WAY IN APPLICATION

The economic system in Islam is bound from the very beginning to economic principles that are valid anytime anywhere. Nevertheless, it does leave the door open for Ijtihad on these principles on these principles so that each Muslim nation can choose what goes best with its interests.

In this sense, a Muslim nation can choose the system advocating public interest while another can opt for the opposite system. Economy in either case will remain Muslim as long as it abides by the idea of public and private dichotomy, since the difference between the two is a difference in their application depending on the time and the place.   

• Variety of Economic Systems in Islam
• I Islam, there is not just one single economic system which every Muslim nation should follow. On the contrary, the economic application in Muslim countries should be varied but within the framework of the economic principles and foundations of Islam.
• This is at the origin of the error made by many when they advocate a return to the economic system of the period of the Califs. The reason for the mistake is that this system is viewed as the Muslim economic system while it is merely an example of application. It is perhaps true that the implementation of Islamic principles and economic foundations. It is, however, an exemplary application of these principles in the context of the conditions of that time. Now that economic practices have changed and increased, and that social life has become more complicated, this system may not be applicable today. Muslim economics are then required to always find out the proper way to apply economic principles within a particular society.
• Another error is made by some Muslim societies when they claim that the economic system they follow is the only true application of Islam. Variety of economic implementation is part of the nature of Islam itself precisely because societies are different from each other. Moreover, to make judgements that an economic implementation is Islamic in precept or not should be based on how far it abides by the economic principles of Islam and on how far it guarantees the interests of the majority in each society. This is the true aim of Islam.
• The nature of the Difference between Economic Systems in Islam
• The difference between the various economic models in Islam is a difference in the details and not in the basic principles, for all models find their source in the Koran and the Sunna. It has been said, in this sense, that "ruling differ with time and space", that "a difference in time and space is not a difference in proof and demonstration", and that "a difference in kind is not a difference in opposition."
•         CONCLUSION
• Three major conclusions can be drawn from this study so far:
• The economic policy in Islam is stable and permanent, for its principles do not apply to a specific time or place or to a particular system of production. This is what we mean when we say that the doctrine of Islamic economics is valid anytime, anywhere. Its principles can be applied in different societies according to their specific needs. Indeed, economic models and implementations may vary, but they do so within the principles and doctrine of Islamic economics.
• Economics in Islam groups what is stable and what is developing. Indeed, when Islam acknowledges development and differences in life, it does not deny or disclaim one at the expense of the other as other doctrine and systems do.

CHAPTER TWO

THE ACCOMMODATION OF COMMON AND PRIVATE INTERESTS OR THE HARMONY OF CONFLICTING INTERESTS

Every social or economic system, including Islam, aims at the realization of welfare by attracting the good and repelling the harmful. But welfare can be public or individual, and these two can be in conflict with each other.

Economic and social systems differ in their view of these conflicting interests. Individualistic systems as those of Western Europe, for example, advocate the interest of the individual first, and put his goals before those of society as a whole. Similarly, socialistic systems, as those of Eastern Europe, advocate the interest of society first and put its goals before those of the individual.

On the contrary, economic policy in Islam is characterized by its harmony and concord of the interests of both the individual and society. This is the policy of the golden mean in the Koran: "Thus we have appointed you a middle nation" (The Cow 143), or the Hadith: "Beware of excess. It destroyed your forefathers" (Imam Ahmed).

It is important to point out at this stage that this golden mean, which implies moderation and harmony, is not a mathematical mean but a social, relative one. Moderation, which is a characteristic of Islam in every aspect of life, cannot be put in a mould. It is, rather relative and varies with time and place.

In extraordinary situations such as in periods of war or famine when it becomes difficult to accommodate common and private interests it is agreed that the individual must sacrifice his interests for the well0being of society. This is the right of Allah which is above all rights. In these situations, the implementation of Islamic economics goes well beyond many socialistic systems.

Three conclusions can be drawn here:

• Islamic  economics aims at establishing welfare.
• Islamic economics tries to accommodate individual and common interests in case of conflict between the two.
• Islam favours common interests in case it is not possible to accommodate the two.

2.1.WELFARE IS THE AIM OF ISLAMIC ECONOMICS

2.1.1.   Economic Legidlation in Islam

Welfare is the aim of Islamic economics, as well as that of Islam itself.

• When the Koran forbids the eating of dead animals, blood, and pork- "He hath forbidden you carrion, and blood, and swine flesh" (The Cow 173)- it does that for well-being of man. When it allows, in the same text, their eating, it does so for the well being of man as well. For Allah continues: "But he who is driven by necessity, neither craving nor transgressing, is no sin for him" (The Cow 173).
• When the Prophet, Peace be upon Him, forbids the sale of what is not available during the transaction in his saying: "do not sell what you do not have", he does that for the well-being of man. When he allows Salam transactions, he does that in man's interest as well.
• When the Prophet, Peace be upon Him, recommended land owners to cultivate their land or give it to their brothers to cultivate, it was because wealth in Al-Madina at the time was mainly in the possession of agricultural land which was in the hands of the Prophet's followers alone. Some of these owned more land than they needed and rented what they could not cultivate. The Prophet, Peace be upon Him, then stipulated that for sake of common interest, land should not be rented. These who owned more than they needed, should give their brothers what they could not cultivate without asking for anything in return. This had the advantage of allowing the refugees to find work to live. When things changed and the poor were working again, the Prophet, Peace be upon Him, allowed land owners to rent land as they were doing before His arrival. (Al-Khafif 1964 ; 128).
• Common interest is also what pushed Calif Omar Ibn Al-Khattab to put an end to theft but hold judgement in time of famine (Khallaf 1947 ; 91).
• The foundation of Islamic legislation is the well-being of people. Hence, the statement "where there is the well-being of ,man, there is the law of Sunna". In this respect, Imam Ibn Al-Kaim Al-Jouzia argues that "the foundations and ground work of sharia are justice and the realization of man's welfare in his livelihood and destination. Sharia is all justice, all mercy, all welfare, all wisdom. Whatever dissents from justice to injustice, from mercy to unforgiveness from good to bad and from wisdom to play is not Sharia and there is no way to interpret it otherwise". (Al-Jouzia).
• Cheikh Abdelwahed Khallaf, likewise, argues that "all acts of law are bound to be beneficial to man. The reason for their being is to bring what is good and repel what is harmful. This is why the Prophet, Peace be upon Him, used to forbid whatever needed prohibition then allows it if things changed. The reason for the existence of law, then, is to benefit man. The way to achieve this when there is no statement in the Koran or the Sunna is to use our sense of interpretation or Ijtihad (Khallaf 1350H ; 6-7).

2.1.2.Interests vary with the situations

     Interests vary with the situations. What is considered beneficial in one situation may not be considered so in another. Imam Shatibi says in this respect:

"It is the case that most of what we consider good or bad is relative and not absolute. Things are good or harmful in one situation but not in another, to one person but not to someone else. They are so at one given time, but not at another." (Shatibi).

Perhaps this is why some Ulema believe that interest given on deposit accounts, government bonds and investment certificates is not riba (Cf.Sheltout 1969 ;303, and Khallaf and Abou Zahra 1951).

2.1.3.Interests and their Priority

      Interests as seen by the legislator are arranged in order of priority. Thus, interests that are imperative come before those that are necessary, which in turn come before those that are cosmetic. Of course, not all imperative interests are in the same order of priority. The same is true with what is necessary or cosmetic. To give an example, alcohol is permitted if drinking it saves life because the latter is more important than the mind. Likewise, nakedness would be permitted during a medical operation because this is necessary. This may be the reason why Islam does not like a life of extreme comfort, especially when some people cannot afford the basic necessities. This is what Calif Omar Ibn Al- Khattab always believed when he repeated the words of Allah: "and (how many) a deserted well and a lofty tower" (The Pilgrimage 45).

2.2.ACCOMMODATING PRIVATE AND COMMON INTERESTS IN CASE OF CONFLICT BETWEEN THE TWO

2.2.1.   Economics in the Capitalist System

    Capitalism aims at fulfilling the interests of the individual first, interests which come before those of the group. Hence, capitalism allows total freedom to the individual in the areas of economy and ownership. The reason behind this is that when the interests of the individual are secured, those of the group are automatically secured as well, for society is but a group of individuals.

      This capitalist policy has several advantages. It encourages individual motivation and enterprise. It induces people to work for profit and to start new economic activities. It also encourages the priority of the economy in general. This policy does present, however, several disadvantages.  The most important of these is the raison d'être of the capitalist economy, i.e., to make as much profit as possible irrespective of the necessary needs of society and the spread of unemployment and economic crises. Moreover, individuals in a given society have different levels of wealth, intelligence, and capability, a fact which leads to the domination by the strong and the appropriation of the wealth of society by a minority. The result of this is bad distribution of wealth and income and the aggravation of the gap between different classes.  This, to my mind, is the seed for all evil since it spreads hatred, encourages division and conflict and destroys the unity of society.

2.2.2.    Economics in the Socialist System

      Socialism aims at fulfilling the interests of society first, interests which come before those of the individual. Hence, the State intervenes in every economic activity and forbids private ownership of the means of production. The reason behind this is that when the interests of society are secured, those of the individuals are automatically secured as well. The individual, after all, cannot live outside society. His value, his prosperity and his talents can only flourish to the degree of the prosperity of his own society.

     The socialist policy has several advantages. The most important of these are the satisfaction of the needs of the group in general, the rationalization of production and the avoidance of unemployment and economic crises. This policy secures the interests of the majority, remedies the bad distribution of wealth, and does away with class differences. It does present, however, some disadvantages such as the weakening of personal stimulus, individual effort, and the motives for economic advancement. Add to this the many kinds of pressure, the bureaucratic complications and red-tape, the dictatorship and lack of freedom, and the feeling of insecurity.

2.2.3.    Economics in Islam

   Islam, however has had from the very beginning a district policy that does not rely solely on the individual as is the case with individualistic systems, nor solely on society, as is the case with socialism. In fact, it takes care of the two interests and tries to bring them into harmony. The reason behind this ia that the individual and society complement each other. By protecting one, we are also protecting the other. Islam, hence, guarantees the existence of both common and private interests. It secures the protection of their good qualities and the elimination of the bad in either of them.

      The strength of economic policy in Islam lies in keeping a good balance between the interests of the individual and those of society. This is expressed in the following Koranic verses: "wrong not, and ye shall not be wronged" (The Cow 279), "and wrong not mankind in their good" (The Heights 85). It is also expressed in the following Hadith: "there should be neither harming nor reciprocation harm"., "never forbid Muslims their rights, otherwise you will encourage them to go astray" (Assayuti). The Prophet, Peace be upon Him, has also shown us a simple but meaningful way to bring individual and common interests into harmony when he said: "If people are travelling on a ship and each person takes a seat, when one of the passengers digs into his seat with an axe claiming that it was his and that he could do whatever he wanted with it, everybody will be saved if the passengers is stopped. But everybody will be drowned if they let him dig" (Al-Bukhari and Attirmidi).

2.2.3.1. The domain of free enterprise and the State intervention in the economy

1.    Capitalism:

     In Capitalism, the essence of the economic system lies in the freedom of the individual to practice his commercial activities as he sees fit. The State, however, may intervene whenever it deems it necessary.

    Undoubtedly, the evaluation of this necessity to enable the intervention of the State is bound to the conditions of time and place. The economy, however, remains a capitalist economy as long as the exception does not become the rule.

• Socialism:

 The essence of the economic system in socialism is the sole intervention of the State at all levels of the economy. Exceptionally, the individual is let free to practice some economic activities. The exception may be large or small, depending on the conditions of time and place. But the economy remains socialistic in nature as long as the exception does not become the rule.

• Islam:

   Freedom of the individual to practice economic activities and the intervention of State in some sections of the economy and its monopoly of other sectors go hand in hand. Islam acknowledges either practice as a general principle and not as exception. Each practice has its own domain and the two complement each other. They are both restricted  and not absolute. To clarify:

• Islam does advocate freedom of the individual in economic activities but with various  restrictions. It is not lawful, for example, to produce alcohol or to do business with riba or to forestall the market. It is not lawful to stop money from producing, or to use it on what is not needed, or to harm the rights of others or to increase prices.
• Islam, however, does not advocate this by faith alone. To this end, it created a system of hisba, a system of accounting and price control which is one of the ways the State can control the soundness of the economic activity.
• Individuals are required to perform all kinds of activities in the economic sector which can be of benefit to society. However, the State has to intervene if individuals cannot perform some of these activities, such as constructing railway lines or starting factories for the heavy industry. It has to intervene if individuals refrain from carrying unprofitable activities such as creating housing projects in the desert, or if they do not practice certain activities properly, such as running schools and private hospitals.
• The intervention of the State is also needed because Islam guarantees a good standard of living and not just the basic minimum to every individual. For this purpose, Islam created, fourteen centuries ago, the institution of Zakat which in modern terminology is synonymous to that of social security (Al-Fanjari 1982).
• Islam endeavors to secure the economic balance in society and rejects the appropriation of the national wealth by a minority. Witness the words of Allaah: "(It is for Allah and the Messenger and for the near of him and the orphans and the needy and the wayfarer) that it become not a commodity between the rich among you" (Exile 7). This demands that the State intervene to re-establish the balance in the distribution of wealth when needed. This is what Allah's Messenger, Peace be upon Him, has achieved when he prohibited, in certain conditions, the rent of agricultural land.

2.2.3.2. The domain of ownership

     1.  Capitalism:           

Economy in the capitalist system is based on private ownership but, exceptionally, it allows that of the public. If required, the State can intervene in given economic sectors.

   Private ownership in this system is safeguarded for it is considered the catalyst and the essence of life itself.

      2.Socialosm:

   The rule in the socialist economy is public ownership, the exception being private ownership of some of the means of production which the State recognizes for a given social necessity.

    Private ownership in socialism is not safeguarded because it is, in the eyes of the system, at the root of all social problems.

    3.Islam

   Islam recognizes both private and public ownership at the same time, each as a principle and not as an exception. Both practices, however, are restricted by public interest. They are not absolute.

   Private ownership is protected. It is not absolute, however, but is restricted in its acquisition, its domain, and its use. (Al-Fanjari, 1968). That this is a social service is seen in the fact that the real owner of property in Islam is Allah the Almighty and that people are only inheritors. As such, they should deal in what they have been left with according to the law, otherwise the State is allowed to intervene and place the property under an interdict.

   Public ownership has also been acknowledged as a principle. As we saw earlier, this is the case with protected land, endowment funds and mosques. It is also the case with the expropriation of property in order to enlarge it, or the State ownership of land minerals and of conquered lands. It goes without saying that if public ownership was not developed in the early period of Islam, it is because the economic condition of the time did not require it, (Cf.Al-Fanjari 19681 ;155)

2.2.3.3.The domain of distribution

   1. Capitalism:

   The basis of distribution in the capitalist system is private ownership. This results in the wide gap between individuals in the property they on, their income and their inheritance.

   2.Socialism:

   The basis of distribution in the socialist system is work, for property is the fruit of one's work. In this economic system, incomes vary not because of ownership but because of the difference in people's capabilities and talents. The resulting difference, in this case, may reach large propositions.

    In communist economics, need is the basis for distribution in the sense of providing people with plenty of whatever satisfies their basic needs such as air and water. The system believes that, in this way, the phenomenon of differences in income would disappear and a classless society will then come into existence.

    3.Islam:

   Need, in the sense of seeking a minimum but sufficiently good standard of living is the first basis of distribution of wealth in Islam. Then, come work and ownership. Everybody must first have this minimum but good standard of living which the Ulema call the "limit of sufficiency" to differentiate it from the "limit of pittance". Islam recognizes this as a person's right which society or the State should provide him with irrespective of his nationality or religion. For the Lord says: "Give the kinsman his due, and the needy, and the wayfarer" (The children of Israel 26). "And in whose wealth there is a right acknowledged for the beggar and the destitute" (The Ascending Stairways 24. 35). After which, to each according to his work and what he possess, for Allah says: "Unto men a fortune from that which they have earned, and unto women a fortune from that which they have earned" (Women 32). He also says: "And for all there will be ranks from what they do, that he may pay them for their deeds and they will not be wronged". (The Wind-Curved Sandhills 19).

   In this economic system, a hungry or needy person cannot exist. Income may vary due to private property but not to work. This difference should not be great, for Allah the Almighty says: "That it become not a commodity between the rich among you" (Exile 7).

2.3.  PRIORITY OF COMMON OVER INDIVIDUAL INTERSET IN CASE IT IS IMPOSSIBLE TO ACCOMMODATE THE TWO

A basic feature of economics in Islam is the accommodation of common and individual interests. In case this harmony is not possible as in times of war, famine, or disaster, it is then agreed that individual interest is sacrificed for the benefit of common interest. This is the right of Allah which is above all rights. It is also expressed in statements such as "Harm to individual can be endured for the sake of warding off harm done to the community", or "Law harm can be endured to ward off a higher one", or "In the presenter of two evils, the less harmful should be chosen".

2.3.1. The Recognition of Extremist Socialist Doctrines by Islam

In extraordinary situations such as in time of war, famine or disaster, the application of Islamic economics surpasses that of the most extremist socialist doctrines. In a deprived society, it is not possible for a Muslim to own more than what he needs. It is the responsibility of the State, in this case, to intervene to take from the rich and bestow on the poor to satisfy everybody's needs. When this is guaranteed, there is no limit to what an individual may earn, for the Hadith says: "There is no objection to the rich, provided he is pious". (Al-Hakim).

It is in this sense that the Koran says: "And they ask thee what they ought to spend. Say: that which is superfluous" (The Cow 219). Likewise, the Prophet peace be upon Him, while on a voyage, declared: "He who has got more food has to donate some to the one who has none" (Muslim). As for the Calif Omar Ibn Al-Khattab, he said during a year of famine: "If I cannot find what is enough for people, I would take them in homes where they share the owners'food till Allah brings the rains. People will not die with half stomach" (Ibn Al-Jouzi, p. 101).

2.4. CONCLUSION

Three conclusions can be drawn from the preceding discussion:

• The purpose of economic legislation in Islam is to satisfy man's interests. These, however. Vary with time and place, and should be given priority according to their importance. Muslim rulers should not allow the construction of palaces and spending on luxuries while the needs of society are not satisfied and services are idle. This is not allowed in Islam, for Allah says: "How many a township have we destroyed while it was sinful, so that it lieth (to this day) in ruins, and how many a deserted well and lofty tower" (The Pilgrimage 45).
• Economic policy in Islam is based on the principle of accommodating individual and common interests. A solution to any economic problem is Muslim in nature as long as it accommodates these two interests and finds the right balance between them. It would be a great mistake to connect Islamic economics to either the capitalist or socialist systems, or to understand it as if it were a mixture of the two. Islamic economics is unique in its nature, as it is based on principles that differ from those of capitalism and socialism. If there is a certain individualism in Islamic economics, it is certainly different from that of capitalism, for it does not advocate absolute freedom of the individual in economic activities and ownership. Similarly, if there is a certain social policy in Islamic economics, it is certainly different from that of socialism. Indeed, it does not allow the total intervention of the State in economic affairs or the total abolition of private property.
• Penetrability and agreement between Islam and other economic doctrines is merely accidental. It occurs in the details but not in the basics. Economics in Islam, then, is different from other economic systems by unique solutions to economic problems.
• In the situation where the distribution of wealth is defective and not everyone has a decent standard of living, private ownership is not respected but is sacrificed for the sake of common interest. This is the right of Allah which is above all rights.

CHAPTER THREE

THE ACCOMMODATION OF MATERIAL INTERSESTS AND SPIRITUAL NEEDS OR THE FEAR OF ALLAH IN ONE'S ACTIONS

The sole aim of economic activities in positivist doctrines, whether individualist or socialist, is to guarantee material interests. These may have as objective the guarantee of the maximum profit as in the case of capitalism, or the satisfaction of public needs as in the case of socialism.

Economic activities in these two systems, different as they are, are purely materialistic.

In Islam, however, even though economic activities are materialistic in nature, they, nevertheless present a religious or spiritual character. The latter is based on experience of Allah the Almighty, His fear and the desire to be in His presence.

This is so because in Islam people do not only deal with each other, but they basically deal with Allah the Almighty.

If then other economic systems are based on materialism as the only way that regulates people's dealings with each other, the source of economics in Islam is Allah the Almighty. In Islam, it is the fear of the Lord, the desire to act according to his command and to win His grace which regulate people's dealings with each other.

As corollary to this, Economics in Islam shows various characteristic which make it a unique system. We shall deal with three of these:

• The element of faith and spiritual conviction in economic activities.
• Duality and scope of control.
• Exaltation of the aim of economic activities.
• THE ELEMENT OF FAITH AND SPIRITUAL CONVICTION IN ECONOMIC ACTIVITIES
• Positivist Economic Systems in Perspective
• Materialism is the basis of all positivist economic systems. These have mistakenly considered men as matter only. The reality of the world is seen as purely materialistic. Income and material sufficiency are the only reason for man's life. There is no wonder, then, if we witness this spiritual emptiness and personal failure in materialistic societies.
• This has resulted in much harm as well as in the corruption of so many people who sought material benefits by all means. It also resulted in the enslavement to money.
•  Marxist societies, on the other hand, have not succeeded in elevating their socialist policy to the level of religion in spite of their continuous effort to achieve this. Belief in socialism remains materialistic. It does not satisfy the spiritual hunger or the religious needs of its people. These societies have been, thus, led to lighten their attacks on religion and to allow some religious activities. Aware of the need of religious beliefs in economic affairs, some States, such as East German, Poland and Hungary, have gone further and allowed funds in their budgets for religious activities.
• The Spirituality in Islamic Economics
• Even though Islam acknowledges the material element and material profit in economic activities, it does not neglect, however, the spiritual side in man. In his commercial transaction, a man is required to seek the Lord in order to gain His grace. For Allah says: "And each one hath a goal toward which he turned" (The Cow 148), "And strive to please thy Lord" (Solace 8), "And be not ye as those who forgot Allah, therefore He caused them to forget their souls"(Exile 19).
• Undoubtedly, seeking the Lord in one's commercial activities is one an end in itself, for Allah the Almighty is neither served nor harmed by whether people seek Him or Not. "Allah is altogether independent of His creatures" (The Spider 6). Seeking the Lord in this case finds its value in protecting man against himself, for Allah says: "Lo! As for those who believe not in the Hereafter, We have made their works far-seeming unto them so that they are all astray" (The Ant 4). "O mankind! Ye are the poor in your relation to Allah! He is the Absolute, the Owner, the Owner of Praise" (The Angels 15)
• The Relation of the Material and the Spirituality in Islam
• It is simply not true that there is a conflict between religion and worldly life, or that there is one domain for activities in this life and another for those in the Hereafter. It is said that some Prophet's companions, then exclaimed: "How if this hurry were in the Way of Allah! "The Prophet, then, answered: "Do not say that. If he is out in search of his child's food, then he is acting in the Way of the Lord. If he is out to seek food for his elderly parents, then acting in the Way of the Lord. If he is out to find his own food, then he is acting in the Way of the Lord. But if he is out seeking dissimulation or glory, then he is acting for Satan's sake" (Assayuti).
• Moreover, the true sign of faith in Islam is doing good deeds and producing what is useful to society. Allah the Almighty says in this respect: "And say unto them: Act! Allah will behold your actions, and so will His messenger and the believers (Repentance 105). "There is good in much of their secret conferences save in him who enjoineth alms-giving and kindness and peace-making among the people"(Women 114).
• Faith in Islam is not absolute, but concrete. It bears relationship to work and production, to justice and right redistribution, to correct dealing and to helping others. Its final objective is to serve society.
• Spirituality in Islam is doing good deeds to seek the Lord. The Calif Omar Ibn Al-Khattab, may the Mercy of Allah be upon him, has a point when he would then deserve Mohammad better than we do in the day of judgement." May the Mercy of Allah be also upon the Muslim thinker Jamal Ed-Dine Al-Afghani who declared: "I do not understand what they mean by dying for Allah. Perseverance should be for the creatures of Allah to educate them and raise their consciousness of the means to their happiness and their well-being" (Ar-Rafii).

• DUALITY AND SCOPE OF CONTROL
• Control in the Positivist
• This is anoutside control in economic activities that is based on law. It is, therefore, limited and ineffective.
• Control in Islamic Economics
• Economics in Islam is controlled by the law and the Sharia, but at the same time it is also controlled by a subjective notion of faith in Allah and in the day of judgement. There is no doubt that this presents a strong guarantee for the soundness of social behavior and the lawfulness of economic activities. Indeed, the believer feels that if he can avoid control of the law, he certainly cannot escape that of Allah the Almighty. The Hadith says in this respect: "Worship Allah as if you could see Him, for if you cannot see Him> He surely sees you" (Ibn Hanbal).
• Religious Restraint and its Effect
• The restraint is a feeling of the Muslim that he is under the Lord's control in every transaction that he carries out, and that he is responsible before Allah. The system of economics in Islam, hence, encourages this religious feeling, for the Muslim abides by the rules of Islamic law spontaneously and out of his deep faith. There is no need in this case for the State to intervene.
• Positivist systems on the other hand, are different since they do not take into consideration- and some of these systems even refute- the religious constraints in shaping economic activities. The effect of this can be seen in the fact that so many people in these systems try to avoid their responsibilities or cheat in their commercial transactions every time the State and its machinery cannot, for one reason or another, keep them under control.
• EXALTATION OF THE AIM OF ECONOMIC ACTIVITIES

3.3.1. Material Interest and Islamic Economics

 Even though material interest is an aim in Islamic economics, it is not an aim in itself. Rather, it is a means to guarantee the success and happiness of humanity. Islam views this life as a preparatory step to the Hereafter, and man as the replacement of the Lord on this earth, for Allah says: "Lo! I am about to place a viceroy in the earth" (The Cow 30).

The Lord also said: "He is who hath placed you as viceroys on the earth and hath exacted some of you in rank above others, that He may try you by the test so that which He hath given you" (Cattle 166).

The Prophet peace be upon Him, likewise says: "Wretched is he who is enslaved by money"

Money in Islam is sought to worship the Lord and appreciate His Generosity: "Seek of Allah's bounty and remember Allah much, that ye may be successful" (Congregation 10), "But seek the abode of the Hereafter in that which Allah had given thee" (The story 77). Similarly, the Prophet, peace be upon Him says: "How appropriate the right fortune is to the virtuous man" (Imam Ahmed; Attabrani), and "There is no objection to the rich, provided he is pious" (Al-Hakim).

• The Aim of Economic Activities

Another major characteristic of economics in Islam is that the aim of economic activities is to vitalize the world and live comfortably in it. The aim is not economic restraint and dominance, or the appropriation by one group of people or by the State itself of the wealth of society as is the case with positivist economic systems.

There is no wonder, then why world cries have always had their origin in losing track of this aim. This would also explain the old killing and the continuous conflict between tribes, then nations about nature's resources. Trying to dominate other nations and appropriate their resources instead of helping and complementing each other. Hence, this turmoil and disturbance that the world is witnessing today, and this waste and splitting that the present generations are struggling with in bitterness.

Islam considers man a replacement of Allah on earth, and man is required to live up to this situation by populating the world and managing its resources for the benefit of future generations.

The Prophet, peace be upon Him, aware of the importance of productivity in Islam has gone so far as to say: "If it were the end of the world and someone happened to have a palm seeding and succeeded in planting it, he would be rewarded in the Hereafter" (Al-Aini).

The Lord has chosen that the riches of the world he spread in its various parts and divided among its nations, so that what one nation lacks, another possesses. This is done with the purpose of realizing complement between nations, and not to encourage conflict and killing.

• CONCLUSION
• Three major conclusions can be drawn from this analysis so far:
• Economic policy in Islam is not restricted to material benefits, but accommodates them with the spirituality. This policy is based on the belief in Allah the Almighty, and on one's responsibility before Him. This is what gives Islamic economics its characteristic of belief and spirituality purposed by the need to be in the presence of Allah in all commercial transactions.
• The control of the economy in Islam is dual in its nature, in the sense that it is not based on Sharia only, but on the belief in Allah and the last say of judgement.
• The exaltation of the aim of Islamic economics can be seen in the fact that the material is not sought for its own sake, but for the prosperity of mankind. The aim of the redistribution of natural resources is the realization of complement between different peoples and nations, and not the encouragement of conflict and killing.
• There is no doubt that Islamic economics contributes effectively to putting an end to exploitation and corruption. It contributes to

Doing away with dominance and conflict and to solving the problems of war and killings, with the hope that in the end the world live in peace, love and cooperation.

• PART TWO
• THE IMPORTANCE OF ISLAMIC ECONOMICS
• The study of Islamic economics is perhaps among the most important economic studies at the moment. This is simply due to our relation to Islam, but to our sincere belief that Islamic economics can play an important role both locally with respect to our prevailing underdevelopment and internationally with respect to the state of conflict which is threatening the world.
• Islamic economics failed to play its role partly because of our lack of awareness of its importance. It also failed because our Ulema did not convey the foundations and policy of Islamic economics n the language of today, nor did they relate foundations and policy to what is taking place in our economic life today.
• These ideas will be dealt with in the following three chapters:
•  Chapter 1: The importance of economic studies
• Chapter 2: The role of Islamic economics
• Chapter 3: The teaching of Islamic economics
• CHAPTER ONE
• THE IMPORTANCE OF ECONOMIC STUDIES
• Economic studies are important in many respects:
• Economic activity in man's predominant and essential activity.
• The laws of every society are the result of its economic conditions and development.
• People's customs and the way of thinking in every society are the product of their economic conditions and development.
• Man's material and spiritual progress is dependent on his economic conditions.
• ECONOMIC ACTIVITY IS MAN'S PREDOMINANT AND ESSENTIAL ACTIVITY
• The importance of economic studies is due to the fact that man's essential and predominant activity is economic.
• Although we believe that the material factor is crucial in life and that economics is essential in the orientation of the action of history, we are, however, strongly opposed to the idea which claims that material interests alone determine people's behavior, and that economics is the key to history. There exist other interests and factors, e.g. moral, religious, psychological, etc. Man does not live on bread alone. (Al-Fanjari 1982: 37ff).
• The importance of economic studies has increased following the evolution and development of production strategies, and the expansion of economic activity. The conflict between East and West is purely economic. The present world problems are caused by the emergence of Europe, Japan, and China as world economic powers. The major problem of the Third World, represented by Asia, Africa and Latin Americas, is underdevelopment. The world's main concern today remains economic development. (Cf. Namiq 1968; Nasr 1965).
• JURISPRUDENCE IN ANY SOCIETY IS A PRODUCT OF ITS ECONOMIC CIRCUMSTANCES AND DEVELOPMENT
• The slavery and aristocracy systems which prevailed in the past were no more than an expression of the dominant economic conditions in those days. Also, the emergence of socialist systems and their triumph in the modern world is not simply the result of coincidence or of preference of one ruler over another but it was the natural consequence of a particular stage in the economic development of the world. We agree, in this respect, with those who say that, instead of sheer insults and invective, the best critique of feudalisms or capitalism should be launched on the grounds of their inability, at a certain period in the economic development of the world, to cope with the needs of the community and their failure to meet the requirements of growth and progress (See Zakaria, 1065 pp. 4 and 337).
• However, although we take for granted the effect of economic circunstances and development is determining legislative systems, we do not accept it as the unique or predominant influencing factor, since, undoubtedly, each people's readiness and religious commitments, its ideals and aspirations as well as its conception of Justice contribute effectively with other elements to differentiate between legislative systems regardless of economic circumstances and situations. Perhaps, the best illustration of this is the Muslim society in the early days of Islam; for it is not surprising to see science and civilization flourish in an environment where both the means of knowledge and the elements of growth abound; but that they should prosper in an arid land not suitable for crops is indeed a phenomenon that calls for serious thought.
• Moreover, the relationship between law and economics has increased nowadays according to economic activity and its expansion so that if economy is the essence, law is the form which is worked out to organize and maintain that essence. Thus, with the expansion of the field of economic activity and its increasing threat, a new discipline, ""Economic Law", has seen the day. (Cf. De Loubadir 1971, Atia 1972).
• THE CHARACTER OF PEOPLE AND THEIR THINKING ARE THE PRODUCT OF THE ECONOMIC CONDITIONS AND CIRCUMSTANCES OF SOCIETY
• It is a fact that the basic difference degree of economic growth and development.
• However, although we take for granted the effect of economic growth and development in shaping the lives of people and their ways of thinking, we do not accept them as the unique or the predominant factor.
• There is no doubt that the prevailing creeds in society, whether divine or secular, play a vital role in moulding the character of people and their way of thinking. Perhaps, the best evidence for this Islam, which in a very short span of time, has turned lost and backward peasants into masters of, and guides to mankind who changed history and enriched and gave a profound meaning to life.
• Maximum, on the other hand, attributes all changes and development to the means of production and to the material conditions of society and claims that it is these elements only that guide mankind and shape society, affirming that it is not people's perceptions of the  world which define or determine their living but their material status.
• Islam refutes this altogether by highlighting man's role and his faith as the effective and crucial elements in change. Thus, from the viewpoint of Islam, rather than matter, it is man who changes and guides development and only he can change and modify the modes and relations of production. Hence the words of the supreme Being: "Lo! Allah changeth not the condition of a folk until they (first) change that which is in their hearts" (The Thunder 11), and also His words: "That is because Allah never changeth the grace He hath bestowed on any people until they first change that which is in their hearts; and there is) because Allah is Hearer, Knower." (Spoils of War 53). Undoubtedly, material conditions have their part to play since man cannot detach himself from his environment; and it would be a sterile and unfair attempt to judge an individual or a nation irrespective of their material possibilities or economic circumstances.
• That is the point of departure since it is altruism that individuals and nations can only exist with good morals and human relationships and not with wealth. Social status, or material progress. The exact conception of Islam stems from its concern, on the one hand, with the education of man and, on the other, with the betterment of his living since these affect, and complement, each other to the extent that humanity cannot further its progress it it neglects either of their aspects: the will of man and the conditions of the environment.
• MAN'S MATERIAL AND SPIRITUAL BETTERMENT IS CONDITIONED BY THE IMPROVEMENT OF HIS ECONOMIC SITUATION
• Material underdevelopment cannot lead to civilization. Similarly, we cannot expect high moral standards and good behavior from the hungry and the deprived.
• It is from this perspective that we understand the balanced concern of Islam with Sharia as well as with faith; and how, being the ultimate religion, it is concerned with both the spiritual and secular aspects of life. This is because unless people are comforted in their living, and unless they feel that society is ready to help and secure them in dire need, their faith cannot be expected to be incorruptible nor their morals develop.
• From this stance, the priority of Islamic economics is, according to what we have mentioned above, the securing to all citizens of a good standard of living (Kifaya) and not just the satisfying of their basic needs (Al Kafaf) and that private property, difference in wealth and riches should not be allowed until right is guaranteed to all.
• Although we take for granted the importance of the material aspect we do not agree that it is only is abundance that brings about welfare to human communities. This material welfare must be twinned with faith, otherwise it will turn into threat, the effects of which we clearly see in the U. S. A. and in the Scandinavia countries in the increasing suicide incidents and immoral behavior.
• Economy has become so important in modern times that the issue of human development and progress has become the issue of economic development or underdevelopment.
• It is necessary for progress to be complete with both its material and spiritual aspects, i.e., its economic religious facets. Concern with one aspect at the expense of the other will lead to disequilibrium and disorder in the lives of individuals and of society.
• CHAPTER TWO
• THE ROLE OF ISLAMIC ECONOMICS
• The importance of Islamic economics is three-fold. It has to do with:
• The struggle against underdevelopment through economic growth
• The Islamic world in particular
• The world at large
• THE ROLE OF ISLAMIC ECONOMICS AND THE STRUGGLE AGAINST UNDERDEVELOPMENT THROUGH ECONOMIC GROWTH
• The importance of Economic Growth in Society
• The economic struggle today is one of eliminating underdevelopment through economic growth. In this case, the importance of economic projects should be clear to all citizens who would then act in the most effective way. The fact that each citizen is aware of his clearly defined responsibility within the overall plan of action means that independent action will succeed. Moreover, when citizens share a common responsibility within the framework of the national plan, the probability of success is reinforced. This procedure establishes, on the one hand, the relationship between the individual in his daily struggle for existence, and the united action of society as a whole. On the other hand, it integrates the individual within the concept of development and simultaneously influences events in the long term.
• Hence, action has focused on the necessity of the participation of the population at all events, not only in the discussion of developing projects but also in the evaluation of the results. There is no doubt that the indifference exhibited by the Islamic world in general, and the Arab world in particular, are a consequence of the citizen's lack of awareness and confidence in the process of their participation in the establishment and realization of economic objectives. It goes without saying that whenever an individual or society achieves success and progress, it is because of a strong belief in the objectives and a firm commitment to ensure their realization. The outcome of this is benefit and profit for the individual and society.
• Economic development and the Sacred Jihad
• Jamal Ed-dine Al-Afghani has succeeded in connecting the ideas of the sacred Jihad and that of liberation from the bond of colonialism. Furthermore, because of the force and clarity of Islamic guidelines regarding dignity and liberty, Islamic societies have courageously fought for their independence. Many nations such as Indonesia, Pakistan, Syria, Libya, Morocco and Algeria would not have been able to willingly accept the sacrifice made by millions of martyrs without the impetus of Islam. This is because a basic tenet of Islam is to enjoin people to do good deeds and to forbid them from doing evil. As the Lord says: "Ye are the best community that hath been raised up for mankind. Ye enjoined right conduct and forbid indecency". (The Family of Imran 110). Accordingly, to "enjoin right conduct" implies in this case the struggle to achieve economic development. To "forbid indecency" would then mean the abolition of underdevelopment which always leads to various negative social conditions and moral failings.
• Life is a continuous struggle between right and wrong, and between what exists and what should exist. So, Jihad which is the goal and raison d'être of Islam, and whether it is carried out in war or in peace, aims principally at warding off injustice and establishing a God fearing society. This society is one that enjoins right conduct and development, and forbids evil and backwardness.
• The Reality of the Israeli Challenge
• Islamic economics and the role it plays in the struggle against underdevelopment are quite important, especially for the Arab world. Thus, the Israeli challenge is not one of military power only, but is rather, and more importantly, an economic challenge. In reality, Israel's objective is to gain economic control of the Arab world. So, our struggle with Israel is not simply limited to eliminating Israeli aggression, but should also reflect the need to combat underdevelopment and to promote rapid development. The latter requires the mobilization of all available resources and the exploitation of all Arab potential.
• The danger that we face today is not Israel's power, but rather the Arab world's disunity and underdevelopment (especially in the economic field), and this in spite of the available human and economic resources.
• Thus, we realize the necessity for Arab unity. This sacred unity is required not simply for the sake of history but first and foremost for our future generations. We live in an era where there is no place for small entities and when the requirements for economic development surpass the resources of any single country. Some Arab countries such as Saudi Arabia, Libya, Kuwait and Abu Dhabi, for example, have the necessary capital to enable them achieve economic development, but they lack the workforce and technological skills. Other countries such as Egypt have abundant labour force and technological skills, but lack the capital. If these countries pool their resources together, they can complement each other. Development can thus be secured and underdevelopment eliminated. With the elimination of underdevelopment- which is, in fact, the central issue in our struggle with Israel- neither Israel, nor its supporters will represent any danger to us. We would, ultimately, be strong enough to withstand the enemy and emerge triumphant.
• In order to achieve this objective, we must be totally aware that it is not possible to impose overall Arab unity by slogans and speeches which stir emotions. It cannot be achieved through politics and constitutions, but only through unified economic action. (See Al-Kasibi 1978 :5- 15). The unity of the German States was possible only because the latter were linked by railway and custom systems (Zollverein). European economic unity was made possible only after the Benelux agreement between the Netherlands, Belgium and Luxembourg. European political unity, likewise, is now taking place through the European Economic Community. Similarly, the rise of Japan following its defeat in the Second World War, its present economic challenge to the USA as well as the impact it has left on the world nations are the clear result of its new and rational policy. The latter is based on the principle of "politics for the benefit of the economy", and not the reverse.
• In any case, we must declare Jihad against Israeli injustice and our economic backwardness. In order to eliminate all traces of this injustice and to ensure economic development, our fight must be linked to the concept of Jihad. Similarly, Arab countries must be economically united first, as this is the surest and shortest way to political unity.
• THE ROLE OF Islamic ECONOMICS IN THE ISLAMIC WORLD
• Islamic Economics is what Works Best for the Islamic Countries
• The Islamic world embraces more than one billion Muslims (150 millions of which are Arabs), that is about 15% of the world's population. In other words, one person in every six or seven people professes Islam.
• These Islamic countries are closely bound to Islamic law in faith, mind and feeling, as well as politically and economically. It follows that Islam remains the best way to urge these communities to act and to obtain a quick response from them. It should be remembered that during the Bolshevik Revolution there was strong resistance from the Muslim majority such as those of the Caucasus and the Tartars. The Soviet leaders could only penetrate those areas when they pretended to go there in order to apply Islamic law, such as eliminating monopolies and exploitation or establishing equality and democracy and building an economy devoid of riba. (Cf. Al-Fanjari 1970: 148 ff and 1971.)
• It is certain that when we choose a strategy of reform, we must take into consideration the specific conditions of each nation as well as its historical and social contexts. We must also keep in mind that changes in the Islamic world take place when Islam supports them, or at least when it does not object to them.
• Islamic Economics is the Most Effective Economic System
• The fact that Islamic economics is bound to religious faith, undoubtedly, paves the way to, and creates the right circumstances for the acceptance and execution of its legislation. And if the only way to achieve social and economic change or betterment is first to impregnate the population with ideas and principles to be put into action, then we should benefit from the Islamic religious faith for this is a religion of change, growth and common interests. (Cf. Al-Fanjari 1968; 1971.) In this kind of faith, belief – as mentioned earlier- is not abstract or metaphysical, but is rather a specific belief linked to action and production, for the Lord says: "(And) Lo1 those who believe and do good works are the best of created beings". The worst denial of religion is to let individuals suffer from perdition and deprivation. The Lord says: "Hast thou observed him who denielth needy" (Small kindness 1, 2, 3). We must establish , therefore, our economy on the basis of Islamic guidelines to assure effectiveness and execution.  This is the purpose of any economic strategy meant to be successful and permanent.
• The significance and role of Islamic economics in the Islamic world are thus made clear. They constitute the economic path followed faithfully by Islamic population for its effectiveness and its power of execution.
• Islamic Economics is a Strategy which Assures Unity and Harmony
• Actually, most constitutions in the Islamic countries assume that Islam is the official religion of their country as the Islamic Sharia is the main source of legislation. However, these assumptions will remain mere insignificant slogans as long as jurists do not make the social, political and economic Islamic guidelines clear, and as long as they do not show how these can be implemented in different places at different times. This will also remains true as long as the rulers do not put these guidelines into practice allowing for counsel and freedom of expression, and for self sufficiency and economic balance between all the people. (Cf. Al-Fanjari 1967, 1981.)
• Hence the importance of Islamic economics and its function in the Islamic world since it is an economic strategy which can achieve unity and harmony between the material and the spiritual life of the people.
• The inevitability of the Islamic Solution
• A logical conclusion of what has preceded is "the inevitability of the Islamic solution". We do not use this expression here as mere rhetoric like those in the Muslim world in general or in the Arab world in particular who talk of the "inevitability of the socialist solution" or "the inevitability of free market." We use this expression to refer to the circumstances, events and conjunctures in our Arab world and our Muslim world that will inevitably lead to this Islamic solution, especially after the failure of all imposed solutions and the decay of all artificial systems. (Cf. Al-Kasraoui 1971: 5 ff.).
• THE ROLE OF ISLAMIC ECONOMICS IN THE WORLD AT LARGE
• The Essence of Islamic Economics
• A static and developing policy at the same time. It is static in its principles and foundations, and in its assurance, from the very beginning, of the basic needs of both the individual and society regardless of its degree of development or the prevailing means of production. It is also a developing policy because its basic tenets are susceptible to different methods of application in time and place;
•  A policy which serves both the individual and common interests. It does not ignore the interest of the community as is the case with the individualist system, nor does it ignore that of the individual as the socialist system does. The Islamic economic policy is rather, from the start, concerned with both interests as it permanently tries to maintain them in balance.
• However, if this harmony or equilibrium is not possible such as in the exceptional circumstances of war, epidemics or famine, then common interest should prevail at the expense of the interest of the individual. In such circumstances prevail at the expense of the interest of the individual. In such circumstances, the Islamic solution, compared with all other systems, allows for the most extreme measures to be taken and solves the most difficult problems just as the Prophet's companion Abu Dhar El-Ghefari once did,
• A policy that serves material wefare as well as spiritual needs, it considers the individual in his economic activity pious as long as his activity has been planned and oriented for the cause of Allah the Almighty. Moreover, the individual is gratified and rewarded to the extent that his activity is thorough and beneficial to the majority of the Muslim community.
• In Islam there is no conflict between matter and soul as there is no separation between economy and religion. There is rather a strong bond between the two, a fact which guarantees success in this world and in the Hereafter. After all, this world is a field for the next. Man is the "viceroy of Allah on His earth", and the purpose of Islamic economics is to construct the world and endow it with life.
• The Dialectic of Islamic Economic Policy
• The dialecticism is special in its own way, for Islam recognizes the social contradiction that are inherent in life, viz., the static versus the developing individual versus common interest; material versus spiritual needs. However, the major point of difference between Islam and other systems resides, as we saw earlier, in the fact that these social contradiction are seen in Islam as the basis for cooperation and complementarily, not for conflict and killing. Islam, therefore, contrary to all other systems, makes sure these contradictions exist and accommodates them all without jeopardizing any.  
• If Islamic economics, as we have just seen, accommodates conflicting interests in order to secure the interest of all, to solve economic problems and hence those of war and peace, it is advisable that this Islamic economics contributes to solving world problems as well.
• Hence, if the importance of the role of Islamic economics for the world has not been fully appreciated, it is because our Muslim Ulema have not exhibited the characteristics, value, essence and superiority of Islamic economics.
• Islamic Economics Seen by Non-Muslim Scholars
• In spite of the little efforts done to show the value of Islamic economics, we have been hearing lately of Non-Muslim scholars advocating this system. These scholars have argued in favour of Islamic economics simply because some aspect or other has become clear to them, e. g., the accommodation of individual and common interests, that of material and spiritual needs or that of the stable and the ever developing.
• The French Economist Jacques Astray weote in 1961 in his book: Islam and Economic Development that the way to development is not restricted to the capitalist or socialist systems but is apparent in a third one which is Islamic economics. The latter, in his view, will dominate the world in the future because it is a global way of life that guarantees success and avoids evil.
• The French scholar Raymond Charles (1969), argues that Islam shows an advantageous way to development. In the production domain, it glorifies work and forbids all aspects of exploitation. In the domain of redistribution, it first guarantees the basic minimum to everybody and then advocates the systems of "to each according to his work" irrespective of his religion or nationality. As the Hadith says: "There is no objection to the rich, provided he is pious". In any case, Islam allows wealth and riches only after poverty and deprivation have been eliminated. It does not allow extravagance and secures the economic balance between individuals.
• This is a clear proof that many Orientalists argue for the need to go back to Islam and to study its strength especially in the political, social, and economic domains. (See Gardet 1969.)

CHAPTER THREE

TEACHING ISLAMIC ECONOMICS

The first leading university in the area of teaching Islamic economics as an academic subject is Al-Azhar University. This teaching is administered in two faculties: The Faculty of Commerce (Within the curriculum of the fourth level of the Bachelor's programme), and the faculty of Sharia (within the curriculum of the Legal Politics degree in the graduate programme).

3.1.THE NOVELTY OF ISLAMIC ECONOMICS

3.1.1. Islamic Economics is as Old as Islam itsef

Islam was not revealed to man for spiritual guidance, as was Christianity which advocates the principle of "Give to Caesar what belongs to Caesar and to God what belongs to God". Instead, Islam came in order to organize man's life in all its aspects, whether they are political, social or economic. The Messenger Mohammad, may Allah's prayer and peace be upon Him, was not only a Prophet but also an executive judge.

Thus, Islamic economics is as old as Islam itself.

3.1.2.The Novelty of Islamic Economics as a Subject Matter

Although Islamic economics dates back to the emergence of Islam fourteen centuries ago, its introduction into teaching curricula as a separate subject is a new development. Besides, the research and the areas of study pertaining to this subject are still limited.

The study of Islamic economics declined following the cessation of the Ijtihad in the fourth century (Islamic calendar). Since that time, there has been almost no research on Islamic law and, consequently, the studies on Islamic economics have ceased to face the changing needs of society.

This state of affairs has caused the study of Islamic economics to lag behind to such an extent that the content of this subject matter has been forgotten even by the Muslims themselves and faded out of the minds of their own theologists. Several intellectuals still do not imagine the society and compare favorably with the two dominant economic systems of capitalism and socialism.

3.1.3.Type of Effect Required in the Subject Matter of Islamic Economics

There may now be strong calls for going back to Islam, with the view of applying its economic principles and involving it in the solution of the world problems. However, before doing so, we need to clearly show these economic foundations and the manner in which they can be applied for the benefit of each society and in accordance with the conditions of time and space.

The true enthusiasm and the sincere calls in favour of Islamic economics will be washed if no efforts are made to highlight the political, social and economic precepts of Islam in the language of modern times, and if no explanations are given as to how these precepts can be applied in such a way as to further the changing interests of society. If such conditions are met, instead of seeking the adoption of the Islamic precepts through mere talk and dogmatism, these godly precepts will impose themselves, not only to the Islamic countries, but to the whole world, for it is in all times and places the road to the salvation, peace and happiness for all humanity.

3.2.NEGLECTING THE TEACHING OF ISLAMIC ECONOMY

3.2.1.World's Aspiration Towards Islamic Economics

As it has been indicated earlier, Islamic economics is an independent system which enjoys a separate identity. It is a self-contained system with its own economic policy which encompasses all the different interests- (whether private or public, material or spiritual)-, takes into consideration the variations in time and space and, in the final analysis, achieves all the advantageous results and avoids all the inconveniences.

Several foreign and international voices cry out in order to stress the fact that Islamic economics is the hope for the salvation of humanity from the extremist positions adopted by each of the two dominant economic systems: capitalism and socialism.

3.2.2.Islamic Universities' Neglect of Teaching Islamic Economics

In spite of all that, the majority of the universities in the Islamic world itself provide courses on the capitalist and socialist economic systems but not on the Islamic one.

As was indicated earlier, Al-Azhar University, especially its Commerce and Sharia faculties, is the first leading university in the teaching of Islamic economics as an independent and scientific subject. The Seventh Conference of Muslim Ulema held in Cairo in September 1972, issued a resolution on the necessity to teach Islamic economics in the different institutes and universities of the Islamic world. Unfortunately, this resolution has not found its way to application until after the First World Conference on Islamic economics which was held in Holy Mecca in February 1976.

Today, Islamic economics has almost become one of the prescribed subjects in several institutes and universities of the Islamic World, especially in the Kingdom of Saudi Arabia, although it has been harmed by some faculties by including it within the subject of Islamic culture.

3.2.3.The Muslim to be Accomplished by the Leaders of Islamic Economics

When department and chairs are created for Islamic economics, occupants will have numerous difficult responsibilities, especially the following:

• Preparing studies on Koran and Sunna texts that relate to Islamic economics, showing how these texts can be implemented in ways that are consistent with the conditions of time and space, and suggesting Islamic solutions for the different economic problems o the time.
• Conducting comparative studies between the Islamic and other economic systems showing the extent to which the differences in their respective applications are a result of differences in the systems themselves, and providing an evaluation of each system.
• Consulting the volumes written by the experts on Islamic Sharia, extracting their detailed opinions on questions of economics and expressing them in terms used in the current economic literature, along with the presentation of relevant commentaries.
• Keeping abreast of the developments in the economic thought among the Islamic thinkers throughout the different Islamic eras and countries, identifying the differences among them, and determining the bases of each opinion and presenting an evaluation of it.
• Supervising the setting up of a scientific liberty which contains the volumes, research studies, dissertations and specialized journals that deal with economics in Islam.
• Encouraging the writing of master's and dissertations in Islamic economics and providing for the training of young researchers who combine the two cultures, the first being one of Islam and Fiqh (Islamic jurisprudence) and the second is being one of technical economics.
• Studying the economic situations in the Islamic world, investigating the underdevelopment that it suffers from, and drawing plans for the setting up of Islamic economics structures which will ensure cooperation among Islamic countries and their complementarily, and will benefit humanity.
• Economy is the vital context which reveals the material and spiritual strength of Islam and through which the Islamic Ulemmah can achieve its cohesion, strength and universal mission.

3.3.NEGLECTING THE APPLICATION OF ISLAMIC ECONOMICS

3.3.1.Gap between Belief and Reality

Several voices are calling for the application of the foundations and the principles of Islamic economics.  Sometimes, these voices find attentive ears and a strong echo among the people in charge as well as a sincere response and a confirmed interest on the part of the people and their leaders.

3.3.2.The Reasons for not Applying the Principle of Islamic Economics

The reason for not applying the principles of Islamic economics is that the solutions which are presented in the name of Islam for the problems of our modern times (and they are complex economic problems) are simplistic and unpractical. In fact, these solutions are suggested by some men of religion who are not specialized in economic matters, - relying in doing so on some old time religions leaders or theologists. In doing so, they ignore some important matters which are as follows:

• Islam does not have a place for men of religion. However, it does have a status for men of knowledge. Nowadays, it is not enough for a person to be educated in the large domain of Fiqh in order to be able to formulate legal opinions about modern complex economic matters.
• The judgements by Ijtihad made by the old time Islamic leaders and theologists, in spite of their great importance, cannot be taken in their absolute meanings, since they are essentially opinions. Added to this is the fact that most of those judgements were formulated in a period and in conditions which are not ours and on problems which are not ours.
• Several writers on Islamic economics limit their studies to subjects that are relate essentially to the questions of ribs and the prohibiting of interest, insurance companies, banking transactions, as if Islamic economics were limited to these questions. Most of these writers do not present to us a detailed study on the practical alternative to what they prohibit. This ends up in cutting short the investigation fot the required solution.
• Some people make the confusion between Islamic economics and Islamic financing science. They entitle their works Islamic economics and, inside, they deal with the topics of the "fifth" (Khums), the "tenth" part (aouchour) , land or poll-tax (kharaj) body and face partnerships (sharikat al'abdan and sharikat wujuh). Although the mahority of these topics have acquired historical importance, they nevertheless present no serious studies that can reliably related to the reality of our modern world.
• 3.3.3.The Cause of the Problem and its Solution
• In the final analysis, the cause of the problem is that we do not have enough specialists in Islamic economics.
• There lies, in my opinion, the ill that we are suffering from and there lies, too, the missing link.
• Modern economics lack the thorough knowledge of Islam, and therefore they spontaneously get weary of studying the economic foundations for the economic problems of our time. On the other hand, our theologists lack training in modern economics,  fact that makes them unable to do well in revealing the economic foundations of Islam and using them in ways that we are consistent with the requirements of our time and with the reality of our current complex economic world.
• This state of affairs has led the Muslims of today, common people and leaders alike, to turn in a vicious circle, aspiring to Islamic economics and calling for Islamic solutions to their problems while, at the same time, dividing themselves between the capitalist and socialist systems and applying the solutions of this or that system about which they do not feel comfortable or secure.
• The only choice for the solution of this problem or the escape from this vicious circle is to train specialists in Islamic economics, who combine "the rich culture" and "the contemporary modern economic culture".
• This will be achieved not through call for determination and appeals to theologists for seeking specialization, but through the creation of departments and chairs for this subject matter in the Islamic universities, administration institutes, faculties of commerce and law, etc. This will lead to the constitution of a specialized student body for this subject matter.
• Through this systematic approach, we will highlight the economic foundations of Islam with the spirit of contemporary life, and show the possibility of applying them in a way that is consistent with the changing needs of society. It is only with this approach that we will be able to put an end to all kinds of blind fanaticism and empty appeals, and that we will enable Islamic economics to develop and flourish, and thus contribute to the solution of world problems and the fostering of world peace.