Introduction: A few years ago, Ayatollah Seyed Mohammad Javad Alavi Boroujerdi, a lecturer of advanced jurisprudence (fiqh) and its principles (usul) at the Qom Seminary, denied the existence of a school of thought called the Islamic School of Economics, emphasizing that Islam did not design an economic school of thought. In the interim, various opinions in agreement or opposition to this theory were put forth. One of the opponents of this theory is Hujjat al-Islam wal-Muslimin Gholamreza Mesbahi Moqadam, a professor at the Faculty of Economics at Imam Sadiq (AS) University. In an interview with Fars, he explained the differences between the theoretical foundations of capitalist economics and Islamic economics and elucidated the characteristics of the Islamic School of Economics and its difference from the science of economics. The full text of this conversation follows for your review:
Recently, there has been a discussion about Islamic economics and whether it fundamentally exists or not. The points they raise are that the Holy Prophet (PBUH) at the dawn of Islam accepted the market that existed, and then established changes for the market, such as the prohibition of usury (riba) and rulings on some transactions, and that Islam did not create a structure. Thus, we do not have an Islamic economy in that form. They also say that Islam’s recommendations in the economic sphere are mostly directive and advisory, and it is not such that a ruling is consequent upon it and creates a structure. Given your long history in the field of Islamic economics, please tell us your assessment of this view.
When the Holy Prophet (peace and blessings of God be upon him and his progeny) began his mission, he naturally faced a society that had a long history regarding transactions and exchanges, and transactions were current among mankind and rational people. The Prophet endorsed some of these transactions and abrogated some of them, meaning he removed them from circulation, such as mulābasah and munābadhah [types of pre-Islamic sales]. Or, for example, he forbade gambling and usury. He also amended some transactions, meaning that for the way rational people of the world behaved regarding transactions, the foundation of Islam was to amend them, not to completely set them aside and present a new design.
That the Prophet behaved in this manner, and thus its meaning is that we do not have an Islamic economy, seems to me that the evidence is more specific than the claim. This is a term that is well-known among scholars. Yes, the Prophet did not upset all the circumstances, but for this to result in us not having an Islamic economy is not correct. For the claim of the non-existence of a school of Islamic economics, it requires us to enter into a deeper analysis. Both in the verses and narrations and in the practice of the Prophet and the Imams of guidance, and see if the requirement of these verses and narrations is that we can have a separate economic school of thought or not. Another point is that in the West after the Renaissance, a transformation occurred, and that transformation was the setting aside of religion from social relations and the setting aside of God from the position of Lordship. They substituted man for God, and humanism was positioned against the ideology and thought of theism. It is this human being who decides for himself and acts for himself in all dimensions of life, including the economic dimension.
In reality, the theoretical and ideological foundations of the West completely changed after the Renaissance.
Yes. It completely changed the circumstances and altered behaviors in the West. These transformations became a basis for the formation of capitalist economics. What existed before Islam was not capitalism; therefore, we cannot say Islam accepted capitalism and changed it slightly. Historically, from the time of the divine prophets, even in the era of Abraham when law-making emerged, to Moses and Jesus, we see that what was prevalent among the people, a major part of it was the teachings of the prophets, which had become the practice of rational people, and Islam also affirms them.
Islam did not affirm cases that were a deviation from the practice of the prophets. The meaning of this statement is not that what emerged in Europe from the 16th and 17th centuries, which is called the Renaissance, is the same as what existed before Islam and after Islam. This Renaissance brought about a fundamental transformation in the ethics, behavior, thought, and social relations of mankind, and with this definition, we cannot say that we cannot change what has come into being in the ideologies of capitalist economics and that Islam has nothing in this field.
To make the discussion clearer, it would be good to explain the differences between the foundations of capitalist economics and the foundations of Islamic economics.
I will mention some points as the foundations of capitalist thought, which for the defenders of the capitalist system are self-evident and accepted. One is individualism. The primacy of the individual in opposition to the thought of socialism, which is the primacy of the community. Second is utilitarianism or the primacy of pleasure, in accordance with the theory of Jeremy Bentham. Third is individual profit-seeking in opposition to seeking benefit for society. Fourth is worldliness or, in other words, being content with the world in opposition to seeking the Hereafter. They created a dichotomy between worldliness and seeking the Hereafter. It is clear that capitalist thought chooses worldliness and has no regard for the معاد (Resurrection). Scientism in opposition to philosophism and religiosity. The dichotomy of science and religion. Rationalism or self-founding reason in opposition to belief in revelation, and self-founding reason pays no heed to revelation. Some economists have a formula called the formula of happiness. They say happiness is equal to maximizing consumption. In capitalist ethics, we witness greed, avarice, stinginess, and covetousness, competition in consumption, and the setting aside of qualities such as mercy, fairness, generosity, self-sacrifice, benevolence, and cooperation.
The question is, are these foundations of capitalism acceptable from a human perspective? Can we say that in Islam, man is in pursuit of maximizing personal pleasure and benefit? In opposition to individualism, Islam has considered the primacy of the individual and the primacy of society simultaneously.
Or scientism, which is in opposition to religiosity. We accept science, but we believe science must take shape in the context of monotheism (Tawhid), and what exists of the sciences is the discovery of realities whose secret and mystery God has placed in creation, and the job of the scholar and scientist is to discover these realities. It cannot be contrary to monotheism. If we accept that these are not acceptable, we cannot say we do not have an Islamic economy. Because when we consider the fundamental basis of Islam to be monotheism and justice, and in capitalist thought justice does not exist—and they believe you can establish justice with the two elements of personal interest and competition in the market—then the economic thought of Islam is different from capitalism.
The issue is that in the thought of capitalist economics, man is fundamentally assumed to be this way, and they say that with the rules of competition and the free market, this severe pursuit of self-interest is transformed into individual and social benefit. Capitalism claims that with these rules and tools, we transform the personal self-interest seeking of humans into personal and social benefit.
I am well-acquainted with the theory of capitalism. But the question is, does this theory materialize in the real world? If you can maintain parity in competition, you can say a competition of equals is the achievement of the goal by a group of equals, and ultimately, a sharing of the goal happens among them. But if they cannot maintain this parity, the result of such a competition is the emergence of trusts and cartels. When the monopolist’s bargaining power increases, it no longer considers anything. Here, if there is no ethics, the monopolist runs rampant and one-sidedly secures its own interests.
The experience of 18th and 19th century Europe shows this, or that they acted in such a way that the workers of Europe were driven to desperation, and labor movements and unions were formed to demand their rights against cartels and trusts. So we see that justice is not in capitalism, and the foundation of Islam is justice, and the world is founded on justice.
In 18th and 19th century Europe, the conditions were such that workers had to work 14 hours a day. Women worked the same number of hours for a wage equivalent to half that of men. In addition, children also had to work for a quarter of the wages. Humans were being destroyed under the cogs of machines. This was the requirement of the capitalist system. But Islamic economics attributes wealth to God. God, in Surah al-Qasas, verse 77, from the words of the believers of Moses to Qarun, says, “With the wealth that God has given you, seek the Hereafter. God has been benevolent to you, and you were not deserving of such wealth. You too be benevolent. Do not seek to cause corruption on the earth.” This means wealth has the capacity to create corruption on the earth, and you should not be in pursuit of corruption.
You see, there are four guidelines, all of which are based on this, that this is a blessing from God. What was the basis of Qarun’s thought? In verse 78 of Surah al-Qasas, Qarun’s response to the people of Moses is given. Qarun said in response to them, “I obtained this wealth through my own knowledge.” This thought is also dominant in capitalism. So, the capitalist thought about wealth is in direct opposition to Islam.
And we can even say that capitalist thought is in opposition to religious thought…
Yes. In Islamic economics, the foundation of society is based on justice. “Justice is the foundation of Islam.” There is no such thing in capitalist thought. God says in Surah al-Hadid: “We have sent Our messengers… so that people may rise up for justice.” There is no such thing in capitalist thought. In Islamic economics, divine guidance is present in production, distribution, and consumption. That is, obedience to the commands of God. God has ruled what you should consume and what you should not consume, and what you should produce. Does production have no limits? God says you do not have the right to produce wine. You do not have the right to raise pigs or produce gambling tools. You do not have the right to produce what causes difficulty in people’s lives. In opposition to this thought is the thought of those who said to the divine prophets, “Does this prayer that you perform command you to ask us to abandon our gods or not to do whatever we want with our properties?” In capitalist thought, this very issue exists, that man can do whatever he wants with his property. But this does not conform to the teachings of the prophets.
In Islamic economics, wealth is a divine trust. God says in the Quran, “God has made you His vicegerents over this wealth,” act according to the requirements of vicegerency. In capitalist thought, wealth is for the person himself and is not a divine trust. We have in a narration (from Imam Sadiq (AS)) that, “Wealth is God’s wealth; He places it as a trust with a man… that they should eat with moderation, dress with moderation, marry with it with moderation, and ride with it with moderation, but the rest of it they should spend in charity.” Where in capitalist thought does such a view exist?
Just because Islamic philosophy is not in the Quran, can we say that we do not have an Islamic philosophy?
These points, in addition to many other points in the verses, narrations, and the practice of the Prophet and the Imams, inspire us that Islamic economics is different from capitalist economics, and this dictates to us that Islamic economics, as a school of thought, is distinct from capitalist economics and socialist economics. So, Islamic economics becomes the third way. This is not a strange thing. When we were able to specify and present this school of thought by explaining its foundations, pillars, goals, and mechanism, it can be said that we have an Islamic School of Economics.
Yes, Islam has not presented it to us in a unified form in the verses and narrations, but this is the job of the scholars of Islam, and Shahid al-Sadr did this work. It is just like saying Islam does not have a philosophy. Philosophy is from Greece. Some people say this. They say Islam is even opposed to philosophy. Yes, Islam is opposed to some teachings of Greek philosophy, but in the end, in the history of Islamic thought, did Muslim scholars philosophize and shape Islamic philosophy or not? Was Ibn Sina an Islamic philosopher or not? Was al-Farabi or not? Was Allamah Tabataba’i a philosopher or not? Today, are Ayatollah Javadi Amoli and Ayatollah Mesbah philosophers or not? They are teaching Islamic philosophy, but we do not have Islamic philosophy in any surah of the Quran. We do not have a set of interconnected narrations about Islamic philosophy. Islamic philosophy was prepared by Islamic scholars, and Islamic economics has also been prepared by Islamic scholars, and they have truly toiled.
In addition to these points you made, we know that at the dawn of Islam, Islam gained sovereignty and many of the jurisprudential rulings of Islam in the economic sphere were implemented in that era.
Yes. Historically, we have a history of the dawn of Islam and a history of economic developments at the dawn of Islam. After all, the Prophet, during his 23 years of prophethood, laid a new foundation in Medina. In this new foundation, usury no longer exists; loans and endowments (waqf) exist. People have the right of ownership, and they exercise this right of ownership. In this new foundation, we have khums and zakat. Are these not issues of Islamic economics? So the Prophet designed a system that was different from the system of the Age of Ignorance. A huge portion of Arab wealth in the Age of Ignorance was the result of usury. The Prophet forbade usury, and some people felt threatened and said to the Prophet, “Let us both pray and practice usury.” The Prophet said, “No, these two cannot be combined,” and the first usury that the Prophet set aside was the usury of his own uncle, Abbas ibn Abd al-Muttalib. You see, he deals decisively and sets it aside. This shows that we had an economic system at the dawn of Islam. So we can say the economic system of the dawn of Islam was different from the economic system of the Age of Ignorance, was different from the economic system of Rome, was different from the economic system of Persia in the same period. So we can have an Islamic economic system. This system is the external realization and result of the economic school of thought; the economic school of thought has a theoretical aspect, and the economic system has an external and realized aspect.
The Difference Between the Science of Economics and the School of Economics
What some gentlemen have put forth, that in Islam we have no discussion about inflation and economic growth, these are issues related to the science of economics. In economics, we have at least two spheres of thought. One is normative economics, which is value-based and is the same as the economic school of thought, and one is positive economics, whose concept is the science of economics.
The science of economics is not an a priori science, and it is not that economic thinkers have sat down and designed theories like supply and demand, demand elasticity, inflation, and employment. No. Unlike the sciences of physics and chemistry, which are the discovery of the realities of nature, the science of economics is the discovery of human behavior. But specific behavior, such as productive behavior, distributive and exchange behavior, and consumptive behavior.
The science of economics studies these three behaviors. People in cities and villages do their own work and engage in exchange, and the economic scholar studies these behaviors, and from here, economic relationships are obtained. He analyzes what has happened in the objectivity of society, and these studies become the theory of the producer, the theory of the consumer, the theory of distribution. These theories have built the science of economics.
Are the behaviors of humans in an Islamic society 100 percent similar to the behaviors in a capitalist society, or are they different? In the coronavirus event, we saw that in the West, people rushed to the stores and emptied the stores, but this did not happen in the Islamic Republic of Iran. People rushed to the mosques and delivered the needed goods for some segments of society to the mosques. This movement that occurred among the nation, where was it seen in the West?
One of the Americans who could not leave Iran during the coronavirus time had given an interview and said, “I was very happy that I could not go because here I am observing things that I could not see in the West.” So we have two societies. In an Islamic society, the behaviors of humans in the spheres of production, distribution, and consumption are very different from the behaviors of humans in the West. When Western thinkers have theorized the science of capitalist economics by studying the economic behavior of people in the West, economic scholars can shape the science of Islamic economics by analyzing the state of people’s behaviors in an Islamic society.
Of course, our society is half-hearted in terms of being Islamic, and we have a long way to go to reach the desired state, and I must say with regret that those who managed our economy did not believe in Islamic economics, for us now to want to study this situation. Those examples that we see of the economic behavior of a Muslim are the result of the people’s belief and faith, and we are one step ahead for the implementation of Islamic economics. But our banking and our market are very far from Islamic economics. We must study the behavior of a Muslim person in the market, and there the science of Islamic economics will take shape. There it will become clear whether we have inflation or not and how much our economic growth will be. These are not the direct teachings of religion; these are the result of the functioning of these religious teachings in people’s behavior and people’s lifestyle.
Can we say that the Islamic School of Economics exists, but we have not yet reached the science of Islamic economics?
Yes. Therefore, those who deny Islamic economics, first, their denial is in light of the science of economics. Second, many issues have been neglected. One of the professors at the University of Tehran had written a book in the field of microeconomics. The late Ayatollah Dr. Ahmad Ahmadi published the book and had sent it to me. In the introduction of this book, he had written that the Iranian market acts like the market of capitalist countries. I sent him a note that, “Your honor, are you saying this based on conjecture and guesswork, or have you studied it?” It is true that our market has been influenced by the markets of Western economies, and this is not for today or yesterday. Since capitalism was able to gain dominance over the world, our market has also been influenced by capitalism. But whether we can conclude that our market also acts in accordance with them or not requires field study.
The Seven Fields of Study in Islamic Economics
Islamic economics can be examined and studied in seven fields. We have Islamic economics under the title of the philosophy of Islamic economics. Islamic economics exists under the title of economic jurisprudence (Fiqh al-Iqtisad). But it is jurisprudence, not economics. In reality, it is the statement of the rulings on the economic behaviors of the people, the government, and the people. This becomes economic jurisprudence. The third field is the economic school of thought, the fourth field is the economic system, and the fifth field is the science of economics, which at Imam Sadiq University, the Imam Khomeini Institute in Qom, the Islamic Culture and Thought Research Institute, and the Seminary and University Research Institute, they are striving to work on this unworked part, and numerous works have been authored in this section.
A sixth subject that can be discussed in economics is the history of economic thought. Our thinkers from al-Farabi to Ibn Sina, Ibn Miskawayh, Sheikh Tusi, and others have had economic thoughts. One of the lessons we have in the field of economics is the opinions of economic thinkers. So one field of study is the field of Muslim economic thinkers. Ibn Khaldun in the introduction to his book is truly a social and economic theorist. It is said that the theory of value was proposed by Ibn Khaldun several centuries before Adam Smith. There is also a seventh field, and that is the history of the economic developments of Islamic societies. For example, to write the economic history of the Safavid era, just as Dr. Kazem Sadr has written the economic history of the dawn of Islam. So, there are seven fields of study in the domain of Islamic economics.
Source: Fars.