Introduction to Islamic Economics. Mirakhor Abbas

The difference between individual and societal goals in Islam.

      3. The importance of rules (i.e., institutions) and rule compliance in Islam.

      4. Why justice is so important in Islam.

      5. The role of Shariah in Islamic economics and finance.

      6. The meaning of maqasid-al-Shariah (objectives of Shariah).

      7. The foundational elements of Islamic teachings.

      8. The importance of agent-trustee in Islam and in preserving the rights of all generations.

      Four fundamental concepts support the rules-based religion that is Islam. First is walayahh, the unconditional, dynamic, active, ever-present love of the Supreme Creator for His creation, which is manifested through the act of creation and the provision of sustenance for all humans. This involves providing sufficient resources to sustain life and divine rules to sustain and flourish on this earth. Humans reciprocate His love by extending their love to other humans and to the rest of creation. Second is the concept of karamah, human dignity. The Quran considers humans to be the crowning achievement of His creation for whose personal and collective development everything else has been created. Indeed, humans are the purpose of creation. The third concept is the meethaq, the covenant in which all humans were called before their Supreme Creator and asked to testify that they recognize in Him the One and Only Creator and Sustainer of the entire creation and all other implications flowing from this testimony.24

      The concept of meethaq, in turn, unfolds into three basic principles:

      1. Tawheed, the One-and-Onlyness of the Creator, which unfolds into the one-and-onlyness of the created and its unity, including above all the unity of humankind

      2. Nubbowah, the continuous chain of humans (prophets) appointed by the Creator to remind, warn, cleanse, teach, and induce humans to bring about and uphold justice within the created order through their position of agency-trustee assigned and empowered by the Supreme Creator

      3. Maád, the return of creation to its origin and the accountability of humanity (individually and collectively) for acts of commission and omission – success and failure in achieving, establishing, and upholding justice toward their selves, toward others of their kind, and toward the rest of creation

      The fourth concept is that of khilafa, agent-trustee relationship. Khilafah is the empowerment of humans by their Creator as agent-trustee to extend His love and compassion to one another, materially through the resources provided to them by the Creator and nonmaterially through the manifestation of unconditional love for their own kind as well as for the rest of creation.

      A number of verses of the Quran affirm and confirm the unity of humankind. These verses, plus those recounting the provision of physical-material as well as nonphysical faculties and facilities created for all humans that empower them economically and spiritually, form the cornerstone of the legislative framework of rules (institutions) for the socioeconomic-political behavior of humans. Resources are created for all humans of all generations, who compose one humanity. Their diversity does not and should not mean their disunity. By the primordial covenant, not only do all humans recognize their own unity, they also have full cognition of their responsibility to maintain the unity and integrity of the rest of creation through their service to humanity and to the rest of creation.

      Unity operates at two levels, societal and individual. On the social plane, unity expresses itself in the integration of human society. Islam refuses to accept as the ultimate unit of body politic anything less than the totality of Islamic community, or the ummah. It is a responsibility of this collectivity to ensure that all obstacles are removed from the individual's path to Allah (swt). Whether the individual will choose this path for this ultimate happiness is then his or her own personal choice. There is only one Muslim people, no matter how scattered and far removed its members may be. Only the complete ummah comprises that circle which is Islam, and no segment of the Muslim community has a right to be the ummah any more than a segment of a circle could claim circularity. On the personal level, unity is manifested in one's actions. It is the appropriation to one's self as well as the proclamation in implementation and living a life that has integrity. The concept of Islamic community cannot be overemphasized.

      Meta-Framework and Archetype of Economic Rules

      The fountainhead of all Islamic paradigms is the Quran. It provides the framework within which all relevant envisioned conceptions of reality find their source. This eternal source specifies rules of behavior (institutions) applicable to all societies at all times. These rules are immutable temporally and spatially. The meta-framework specifies the immutable, abstract rules. The archetype model articulates the operational form of these rules and demonstrates how these rules are operationalized in a human community. The abstract became operational in the hands of the one human being who was the one and only direct recipient of the source of the meta-framework, the Quran. Through the words and actions of this perfect human, the meta-framework given by the Creator in the Quran was interpreted, articulated, and applied to the immediate human community of his time. The meta-framework specifies general universal laws, rules of behavior. The archetype model provides universal-specific rules of behavior and the institutional structure needed for organizing a human society based on the immutable rules of the meta-framework.

      No one understood the Quran better than the Messenger (sawa), appointed to deliver it to humankind. During his blessed life on this plane of existence, he was both the spiritual and temporal authority for his followers. In his capacity as the spiritual authority, he expounded, interpreted, and explained the content of the Quran. In his capacity as the temporal authority, he operationalized the rules (institutions) specified in the Quran in the town of Medina. The economic system, which he established in Medina, is the archetype of Islamic economic systems. This archetype contains a core institutional structure that is immutable because it is firmly established based on the Messenger's (sawa) authoritative operationalization of the rules prescribed by the Creator in the Quran.

      A typical example is the institution of inheritance. The specific procedure on how the inheritance is to be distributed is described in the Quran. There are also institutions that the Messenger (sawa) established which, while not explicitly stated in the Quran, are based on his understanding of the Quran as its highest interpretive authority. An example of this type of institution is the rules of market behavior. These two types of rules are immutable: Any conception of how an Islamic economy works will have to take these two elements of the archetype model as given. A third type of institutions at the periphery of the archetype model are temporally and spatially specific to the time and the place in which the archetype model was implemented. For example, the Messenger (sawa) instituted rules of noninterference with market forces and the need for unhindered flow of information in the market. This rule is of and itself an immutable rule of the archetype model, but forces that would interfere with market functioning may vary and are time and place dependent. For instance, before Islam, one acceptable method of interfering with market forces in Arabia was that middlemen would meet caravans bringing supplies some distance outside of the cities and purchase the supplies for resale in the cities. The Messenger (sawa) prohibited this procedure. Clearly, the principle of noninterference with the market forces is unchanged, but this particular procedure is no longer relevant. The economic hermeneutics of this rule and its application to a particular time, place, and market is part and parcel of what an Islamic economic paradigm would seek to address.

      The meta-framework envisions an ideal society as one composed of believers committed to rule compliance. The individual members are aware of their “oneness” and conscious of the fact that their own self-interest is served by seeing “others as themselves.” Such a society is one of the “Golden Mean” that avoids extremes and is so rule compliant that it serves as a benchmark for and a witness to humanity (Quran 2:143). This is a society that actively encourages cooperation in socially beneficial activities and prohibits cooperation in harmful ones (Quran 3:104, 110, 114; 9:71). Moreover, in this society, consultation, both at the level of individual as well as the collectivity,

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They were collectively asked to testify to the Oneness and Uniqueness of the Creator as the One and the Only Cherisher Lord (Rabb) of all creation and everything else that this declaration implies, including the necessity of complying with rules of behavior, which their Lord Creator has ordained and prescribed for a life of felicity on earth. All members of this cycle of humanity, that is, all the progeny of Adam, testified so (Quran 7:172).