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The Islamic Economic System and Europe

By: Dr. Jan Sammuelsson (Sweden)
A few reflections regarding Iqtisaduna by Ayatullah Sayyid Muhammad Baqir al-Sadr
Muhammad Baqir al-Sadr's work Iqtisaduna ("Our Economics") is constituted by a comparison between different economic systems, namely capitalism, Marxism and Islamic economy in the light of the author's conception of these systems.
Sadr's point of departure in his work can be regarded as ideological, however it is beyond question a scholarly method with footnotes, with a usual account of sources and the text enables the reader to follow the author from his reasoning to the conclusions he draws.
The point of departure that Sadr presents above all is the fact that there is no other framework within which to find solutions to the problems of backwardness in Muslim countries with the exception of the framework of the Islamic economic system. Further reasoning regarding this standpoint constitutes a dominant feature of Iqtisaduna.
Another important element is the reasoning about what the Islamic economic system implies and its position in proportion to economic systems like capitalism and Marxism. Sadr establishes the fact that it is not possible to choose the same methods used by Europeans in the building-up of their modern economy. The Islamic world has tried two economic systems developed by Europeans: market economy based on the capitalistic ideology, and planned economy based on the socialistic ideology. The results weren't encouraging. (The author uses the notion Marxism and socialism alternatively. The distinction between these two notions isn't always clear and, in several cases, they can be understood as synonymous notions). The author points out that it is not possible to just withdraw an economic system from its historical and social context and apply it in a society with totally different conditions. He emphasizes the fact that there are close links between, on the one hand Marxism and capitalism, and on the other hand European traditions and social conditions. These economic systems cannot be applied in societies based on religion. Not even if religion was suddenly abolished in an Islamic society would that be possible since ethics, traditions and institutions were formed by a centuries old Islamic influence.
It is easy to agree with Sadr's opinion about Marxism in that it is an ideology applicable in European conditions in the first place. This becomes obvious when one studies Marxian analyses that were for example carried out by Soviet researchers. It concerns awkward attempts to find "the Asian way of production" in Muslim societies. In view of that, Islam is often presented in deprecating wordings in these studies. (Brattlud, Asa - Samuelsson, Jan: Islam English folkrorelse. Muslimer i Svenskt Samhallsliv. Skelleftea 1991. Page 19).
Sadr presents political and psychological aspects that go against the application of Marxism and capitalism in Muslim societies. The Ummah must base its modern revival on a social organization and culture whose origin is not related to the countries of the colonialists. Why? Well because there is a psychological dislike to methods, ideas and institutions that are directly associated with Europe. This in itself worsens the possibility of applying these methods successfully.
Sadr describes Europe as a unit. Likewise, non-Muslim writers perceive the Muslim world as a unit. Generalizations like "Islam" and "Europe" are of course uncertain in certain contexts. However they can be regarded as being conventional within the frames of scientific literature that concerns these fields. See for instance Bernard Lewis: Islam and the West, New York 1993, as well as other works by Lewis.
When Sadr tries to capture what denotes a typical European human being, he becomes more ideological than scientific. "Europeans always look at the earth, not at heaven". Pious Catholics in Spain for example or Italy would certainly lift their eyebrows before such a description. The author also means that Europeans are freedom-lovers, both in a positive and a negative sense, in that they strive after freedom from moral responsibility. The European has also a tendency of perceiving existence as a struggle situation. This has been expressed in European science and philosophy through Darwinism, the class struggle of Marxism and the struggle between contrasts in the Hegelian viewpoint. But for someone who perceives the presence of God in the creation, that is to say Muslims, the perspective is different. The interest for material advantages is not so dominant. According to Sadr, the interest for individual and moral freedom also gets impaired. Sadr wants to show here that Muslims and Europeans are generally constituted by two different types of human beings without further explaining why so is the case. The reasoning constitutes a link in the author's argumentation that the European way of thinking cannot successfully be applied in Islamic conditions.
A few conclusions can be drawn from Sadr's apprehensions. First of all, it follows from the author's reasoning that the Islamic economic system can barely work in Europe for the same reasons that economic systems like Marxism and capitalism cannot completely work in Islamic conditions. Another question is, in my opinion, whether individual Islamic economic institutions, like the Islamic bank, can work in a non-Islamic context like Europe. One can object to this question by claiming it is not correctly formulated. Europe can simply not be considered as a non-Islamic context. Nowadays, Europe embraces several considerable Islamic minorities even though their influence on the political process is humble. As a matter of fact millions of Muslims live in Europe. More than 300,000 Muslims live in Sweden alone which counts a relatively small population (Samuelsson, Jan: Islam i Sverige, Stockholm, 1999). These Islamic population groups in Europe should be considered as a sufficient basis to establish more Islamic banks in Europe. The question can be asked in a different way. An economic institution like an Islamic bank attract non-Muslims and in addition to that work in a satisfactory way even for non-Islamic customer? If this is the case, one cannot by reason exclude the opposite, at least in principle, namely that individual institutions within the capitalistic or Marxian economic system could work in an Islamic context.
Some debaters within the field of Islamic economy have vindicated that an Islamic bank cannot work well in a non-Islamic economy. In issues in Islamic banking, Leicester 1983, M. N. Siddiqi vindicated that the Islamic bank could only be successful in countries where the interest institution was forbidden and where interest proceedings were a penal action. However, this doesn't seem to be the most common opinion. Most Islamic economists and persons conversant with the legal system in Islam think that it is both possible and recommendable to act even in countries where Islam has little influence. It is also considered that Islamic banks can successfully compete against institutions based on interest and even attract customers who are not Muslims. For instance, the management of A Baraka Turkish Finance House in Istanbul stands for such an opinion. Al Baraka's management think it is possible thanks to the high profitability produced by the bank and because of the fact that even non-Muslims can be attracted by the link between ethics and economy that the bank stands for. (Samuelsson, Jan: Islamisk Ekonomi, Lund 1999, p. 67).
Another observation from Sadr's reasoning is whether other reasons than those mentioned can be at the bottom of his dissociation from Marxism and capitalism as European systems. Such a theological, and perhaps also psychological reason with elements from a magical thinking, is what I would like to call "the conception of the European contagion".
Bernard Lewis points out that the Islamic habit, historically provable in several cases, to define innovation (bidah) as deviation from tradition. Tradition is regarded as being good and as containing God's message to mankind. Therefore, deviating from tradition is a priori something negative.
A particularly repudiable variation of bidah is when one imitates the unfaithful person's habits. A tradition attributed to Prophet Muhammad(S.A.W.) says that "whoever imitates people becomes one of them". It has sometimes been interpreted as follows: whoever enters the unfaithful person's habits and behaviors commits a heretical action and an action of treason towards Islam, in other words one becomes unfaithful himself. (Lewis, Bernard: The Muslim Discovery of Europe, London 1982, p. 224).
This interpretation was done frequently by persons conversant with the Qur'an in the Ottoman Empire in order to stop certain phenomena like scientific innovations, as for instance the apparition of printing technique and new medicines that originated from Europe. The perception that everything that was European was a priori evil, with a few exceptions like weapon technique, contributed undoubtedly to the destruction of the Ottoman Empire. Are we confronted to another case of the European contagion syndrome in Sadr's work Iqtisaduna?
I have to answer no. Sadr's arguments sustaining the difficulty of applying Marxism and capitalism are based on logical reasoning that is well presented. For the Muslim reader, it is however important, in my opinion, not to generalize in the light of Sadr's opinion concerning economic systems and come to the conclusion that anything of European origin is in principle useless in an Islamic context. However, such a conclusion is very probable with regard to the founded distrust that exists towards the western world within considerable Muslim population groups. Crusades and colonialism, together with not the least aggressive American interventions in the Muslim world in modern times, has prepared Muslims to behold what the western world stands for with skepticism.
Political vigilance towards the West is one thing. From an Islamic perspective, it is well founded and essential. If this skepticism influenced the will to acquire special knowledge from West within the scientific fields, the price would be high from an economic point of view.
For economic and political reasons various writers have often taken pains to find similarities or differences (from separate motives, often of a political nature) between the Islamic economic system and certain other economic systems.
Comparisons have been made with systems based on market economy and planned economy. Political leaders, like the former president Nasser in Egypt, have tried to point out certain similarities between socialism/communism and Islam while the leadership in Saudi Arabia has tried to point out the differences between these systems. The destruction of the Soviet Empire has made certain leaders in the Islamic world less prone to emphasize similarities between socialism and Islam. If there is any tendency today, in the Islamic world, regarding comparisons between Islamic economy and other economic systems, it is in my opinion that the Islamic economy tends to be described, either as a unique system independent from capitalism and socialism, or as the golden mean between the two extremes/poles capitalism and socialism.
How does Sadr describe the Islamic economic system in Iqtisaduna
Although Sadr obviously perceives the Islamic economic system as a unique system, the argumentation itself often tends to follow the fact that this system constitutes what one can call the golden mean. Communism and capitalism are perceived as two antipodes with Islam between them. Islam gets characterized as the rational mean between two irrational extremes. Here are a few examples: When it comes to ownership, the pole socialism stands for collective owning only while the pole capitalism stands for private ownership. As the rational mean, Islam stands for both collective and private ownership. When it comes to economic freedom, the pole socialism stands for no economic freedom while capitalism stands for total economic freedom. According to Sadr, Islam here stands for economic freedom but with limitations. "Islam took a middle stand, banning some kinds of profit like the usurious and permitting some others like the commercial profit." (Sadr: Our Economics, volume one, part two, page 129).
Moderation, balance, adequate are notions that have been applied and experienced as ideals in several Islamic contexts. This is quite obvious in the Islamic medical history. The good life leading to physical and spiritual health is characterized by adequate sleep, adequate food, adequate sexuality, adequate work and adequate prayers. Take for example Prophet Muhammad's attitude against exaggerated praying at the expense of social life. In his description of the Islamic economic system, Sadr can be seen as referring to this traditional adequate/moderation/balance - notion.
The author thinks that the Islamic economy is distinguished by social balance. With its way of thinking turned towards partnership, the Islamic bank confirms the conception that groups within the Islamic society aren't in opposition to one another as are for instance loan takers and loan givers or employees and employers in European societies.
Sadr's perception of Islamic economy can be compared to what Muhammad Umar Chapra has expressed. He thinks that what capitalism and socialism lacks, and Islam offers, is the synopsis between spiritual and material values - the capitalistic and socialistic systems have neglected people's spiritual needs. Every attempt to point out similarities between these systems and Islam shows the lack of understanding for what capitalism and socialism are, namely materialistic systems, Chapra says and, with that, describes Islam more as a unique system rather than a mean (Chapra, M.U.: Objectives of the Islamic Economic Order. Leicester, 1996, pp. 21-27).
In the article Zakat and Social Justice, M.A.Z. Badawi claims that Islam constitutes the right point of balance between the two extremes, capitalism and socialism. He seems thereby to perceive Islam more as the mean (Badawi: Zakat and Social Justice, in The Muslim World and the Future Economic Order. London: 1979).
Muslim writers usually claim that Islamic economy can be seen both as a unique system and the golden mean between capitalism and socialism although one of these two standpoints is emphasized more than the other.
It is, from a logical philosophical point of view important to emphasize the fact that there is a big difference between these two ways of describing Islamic economy. The standpoint that the Islamic economy is a totally unique system implies that the difference between Islamic economy and the capitalistic and socialistic system is basically of a qualitative nature. The standpoint that the Islamic economy constitutes the golden mean implies that the differences in comparison to socialism and capitalism are in the first place quantitative (more collective ownership - less collective ownership, more individual freedom less individual freedom, etc.).
Muslim writers usually claim that Islamic economy can be seen both as a unique system and the golden mean between capitalism and socialism although one of these two standpoints is emphasized more than the other.
It is, from a logical philosophical point of view to emphasize the fact that there is a big difference between these two ways of describing Islamic economy. The standpoint that the Islamic economy is a totally unique system implies that the differences between Islamic economy and the capitalistic and socialistic system are basically of a qualitative nature. The standpoint that the Islamic economy constitutes the golden mean implies that the differences in comparison to socialism and capitalism are in the first place quantitative (more collective ownership - less collective ownership, more individual freedom - less individual freedom, etc.).
According to Sadr, Islam denies the fact that the form of production in a society forms this society's social organization in a decisive way. It is still possible to retain a certain social system even though the form of production changes with time. Sadr asserts here the principle that there is no demanding connection between a social system and a form production. The fundamental postulate of the materialistic historical perception, concerning the significance of the forms of production is brilliantly rejected by Sadr by means of the best conceivable example: The origin of the Islamic civilization. It wasn't the result of a new form of production or of important changes in the prevailing form of production. The most recent revolutionary experiment constituted by Islam can hardly be explained in the light of the socialistic perception of history, the author claims and it is hard not to agree with that. According to Marxism, the idea that men are equal and have fundamental rights is developed with the growing bourgeoisie in Europe and is encouraged by the industrial revolution. However, similar ideas existed in the Arabian Peninsula in Makkah more than 1,000 years before the bourgeoisie revolution in Europe. What was there in this society living on agriculture and commerce (commerce being limited compared to other Arabic societies during the same period), leading to the perception of human equality? To Sadr, the answer is the one of the believer. In my opinion, non-Muslims haven't yet received any satisfactory answer regarding this question.
The politics of equalizing economic conditions among members of the Islamic society (first of all with the help of zakat) that arose in Islam during the 7th century cannot be described as a result of the fairly unsophisticated economic activity that took place in this region during that period. The fact that the trade - development in Makkah required a more organized society cannot explain the origin of the Islamic civilization, a phenomenon that changed the history of the world. Makkah's situation between Yemen and Syria was not unique. The city of Petra had a much more flourishing economy. Another flourishing city with as good of chances as Makkah was Palmyra. Even other cities can be named in this context. "No," Sadr sums up in his reasoning; the Islamic revolution wasn't the result of certain material conditions and commercial circumstances in the region of Makkah.
It is obvious that Sadr approaches the question at issue, with his arguments, in a scientific way. Yet, the reasoning is also ideologically attractive from an Islamic perspective since it leads to the opinion that Islam could be maintained as a social form/system irrespective of the social form of production.
The conclusion is extensive:
Islam can survive or be introduced irrespective of the material conditions existing in a society.
Al-Sadr, Muhammad Baqir, Iqtisaduna (Our Economics), English translation from the Arabic, Volume One and Two, Tehran: 1994.
Brattlund, Asa - Samuelsson, Jan, Islam - English folkrorelse, Muslimer i Svenskt Samhallsiv, Skelleftea: 1991. (In Swedish).
Badawi, M.A.Z., Zakat and Social Justice, "The Muslim World and the Future Economic Order", London: 1979.
Chapra, Muhammad Umar, Objectives of the Islamic Economic Order, Leicester: 1996.
Lewis, Bernard, Islam and the West, New York: 1993. Lewis, Bernard, The Muslim Discovery of Europe, London: 1982.
Samuelsson, Jan, Islam i Sverige, Stockholm: 1999. (In Swedish).
Samuelsson, Jan, Islamisk Ekonomi, Lund: 2000. (In Swedish).
Siddiqi, M. Nejatullah, Issues in Islamic Banking, Leicester:

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