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Islam and «Scientific» Economics

In the Pursuit of a New Paradigm

Hasan Gürak

In an Islamic society, it is ethics that dominates and determines all behavior, including economic behavior. The Holy Koran emerges as the main source of all economic behavior and practices which are subject to the commands of Allah as stated in the Koran. Since Islam is a universal religion, the Islamic economic paradigm with its «scientific» Islamic economic theories has to be comprehensive as well as perfect in the sense of fairness, ethical values and fruitfulness. A universal Islamic economic system ought to have universally applicable economic laws acceptable by both, the Muslim and the non-Muslim world – meaning that when the word Islamic is taken out of the equation; it should appeal to all societies and countries equally, regardless of their religious persuasion. The question now is; do Islamic economics offer such «scientific» economic theories? Surprisingly, there were no such theories at all. In fact, there was not even a theory of interest, the most frequently referred to subject in Islamic economics. This appeared to be a serious omission. The Holy sources may be more than sufficient for Muslims, but what about non-Muslims? Isn’t it justified to expect Islamic «scientific» economic models and theories that are applicable to or able to guide non-Muslims?
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Chapter-5 On the Islamic Theory of Trade

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According to Islam, “honest” tradesmen are, in a way, a blessed group of businessmen. The Prophet Muhammad was a successful tradesman until the age of about forty. The Caliphs Abu Bakr, Omar and Utman were also tradesmen and belonged to the distinguished families of Mecca. Thus, trading and trade related economic activities dominated the economic life of Mecca, the city of pilgrimage placed at the crossroads of the trade routes. Other types of economic activities such as craftsmanship and farming were practiced but did not have much chance to progress in the desert.

“The essence of commerce is sincerity, safety, well comprehension of the age and utmost kindness and utmost decency shown towards customers. One who lacks one of them actually causes damage to the essence of commerce and thus blocks his own livelihood.” (http-9).

All parties involved in an exchange transaction have to agree on the exchange terms and nobody should be left discontented. The Koranic verse entitled “Nisa”, says:

“O ye who believe! Eat not up your property among yourselves in vanities: But let there be amongst you traffic and trade by mutual good-will” (Women 4/29).

It clearly states that, there must be some form of mutual good-will among the parties involved in the exchange relationship. However, it is important to note that the “mutual good-will” does not make an “unfair” exchange permissible. Cheating or earning impermissible income is forbidden (Haram) and considered an atrocity.

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