Posted: March 18th, 2022

Capitalism in the Islamic World

Capitalism in the Islamic World
The tendency in the West is to place the underpinnings of the capitalist economic philosophy securely under the aegis of Protestantism, particularly the 16th century Calvinist movement. The movement, promoted by Swiss religious leader, John Calvin, promoted the notion of engaging in work, accruing wealth, and investing that wealth for further gain. The Protestant Ethic, those who work hard succeed in life; those who do not, do not, is credited as the owner in a sense of the economic philosophy. In researching the topic, however, it is clear that the philosophy is not exclusive to western culture and Protestantism, but that the practice of capitalism was firmly supported and entrench early on in Islamic society. Ghazanfar citing Pribrams’s exploration of contributions of مساعدة التعيين – خدمة كتابة المقالات من قبل كبار الكتاب العرب, Arab Islamic society to the West as far back as medieval times “provide[s] evidence as to the prevailing market-oriented, capitalistic economic environment of the early Islamic world.
While capitalism in terms of trade and business dealings were accepted as part of daily life in مساعدة التعيين – خدمة كتابة المقالات من قبل كبار الكتاب العرب, Arab countries, it is interesting to note that certain practices, including usury, were forbidden by religious conviction along with ‘illegal” business dealings. (Labib, 79) In the same period in Europe allowable interest rates fluctuated based on trade convenience and who was in power at the time, with little to no connection to religious or social principles. Our present
“dominant neoliberal capitalistic set-up” in the West appears in stark contrast to capitalism in Islamic societies “geared to socioeconomic equity for the common good” rather than individual gain. (Setia, 177) So what appears then is that the invention of capitalism and its practice is not the exclusive providence of the West. The differences lie in the religious and social restraints, or in the case of the modern West and the U.S. in particular, the lack of them—the western version being focused more on individual gain; the Islamic version more on promoting business as a valid occupation meant to serve the community.

Bringing the discussion into the practices of modern capitalism, some economists suggest that the model of current sustainable development in relationship to capitalistic practices can be positively affected and achieved by a paradigm shift more consciously driven by the “altruistic point of view of Islamic economics, instead of the self-interest driven, rational economic agent (homo-economicus) theory [prevalent in the West].” (Astrom, 78) Essentially, where classic capitalistic market driven paradigms rely heavily on profit, the positive contribution of the more “non-absolutist” Islamic point of view seems welcome with its considerations of all economic aspects social, political, economic and environmental. Non-absolutist point of view refers to the acceptance of not having absolute freedom and ownership. (Astrom, 80)

Based upon the readings I would not say that nations of Islam have a stronger foundation in the capitalist tradition, but rather a different perspective and interpretation on the nature of business, marketing and the constraints of profit motive versus that which does not take into account the general good. Yet, some scholars, including Setia are concerned that the predominance of Western European “hegemony” is forcing Islamic states away from its original perception and practice of its own brand of capitalism and toward a more westernized “individualistic” view of profit and its purpose—profit for profit’s sake. (180-181) In the instance of such human considerations as sustainable development eschewed by western capitalism, the “normative approach” of Islamic economics to counter the “value-free science” of the western paradigm is suggested as a solution. (Astrom,77) Regarding whether Islam owns the concept of capitalism over its Protestant beginnings is a mute question. How much of the theory was borrow from one or the other is also unknown. Yet Ghazanfar declares without question that “the capitalistic system indeed was the prevailing mode of economic activities in the early Islamic civilization.”

References
Astrom, Z. Hafsa Orhan. (2011) “Paradigm Shift for Sustainable Development: The Contribution
of Islamic Economics”. Journal of Economic and Social Studies, Vol 1:1, 73-82. Print
Ghazanfar, Shaikh M. “Capitalist Traditions in Early مساعدة التعيين – خدمة كتابة المقالات من قبل كبار الكتاب العرب, Arab/Islamic Civilizations” Muslim
Heritage Website. http://www.muslimheritage.com/article/capitalist-traditions-early-arab-islamic-civilization
Labib, Subhi Y. “Capitalism in Medieval Islam.” The Journal of Economic History, Vol. 29:1,
79-96. Reprint Cambridge University Press.
Setia, Adi. “WAQF and the Civic Economy.” Islamic Sciences, Vol. 12 (Winter 2014) No. 2.

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