Non-Muslims, possibly even a number of Muslims as well, see Islam as a religion that has bred oppressive rule, intolerance, underdevelopment, corruption, and inequity with opulence alongside poverty. While this broad depiction would appear to apply to most Muslim countries, it has little to do with Islamic teachings of the Koran (the indisputable guide for all Muslims) and the generally accepted interpretations of Koranic teachings offered by the Prophet Mohammad.
The dismal state of most Muslim countries is, in our opinion, the result of oppressive and unjust rule that has preempted effective institutions and governance.
There is the well-known Prophetic saying that on the Day of Reckoning the oppressor, the oppressed, and the person(s) who stood by and observed the oppression will be called upon to answer: the oppressor for oppression, the oppressed for not resisting the oppression, and the bystander for not assisting the oppressed. Any injustice perpetrated by individuals against other humans and against the rest of creation is ultimately an injustice to the self.
Islam is a rules-based system with a prescribed method for humans and society to achieve material and non-material progress and development grounded in rule-compliance and effective institutions. The foundations of the Islamic economic system were laid down centuries ago in the Koran and practiced by the Prophet Mohammad in Medina during his brief time on this plane of existence. These rules that were laid down by the Almighty are at the foundation of the Islamic system and provide the required effective institutions.
The institutional scaffolding of the Islamic economic system is thus formed by the rules of behavior defined by the Koran. As a result, the content and blueprint of Islamic economics is derived by: (1) extracting these rules and their economic implications from the Koran and the Sunnah – the way of life prescribed as normative for Muslims on the basis of the teachings and practices of the Prophet Mohammad – that define an Ideal Islamic Economy; (2) studying these institutions in the contemporary economy and determine the degree and extent of deviation between its institutional scaffolding and that of the Ideal Islamic Economy; and (3) prescribing policy recommendations to bridge the gap between the two.
The Islamic economic system is a market-based system, where markets are seen as the best and most efficient mechanism for resource allocation (production and consumption). But efficiency of the market system must not be confused with markets as an ideology, whereby unfettered markets are seen as philosophy or the basis of the economic system, something to be revered, untouched and placed on a pedestal. To be efficient, markets must have rules (such as information disclosure) to protect market participants (workers, producers, investors and consumers) and must be supervised with strict rule enforcement.
Private property that is legally acquired is held sacred in Islam, and property rights are fully protected. But Allah is the Creator of all things on this earth and His Creation has been given to humans of all generations in trust. Humankind acts as regents on this earth, preserving the rights of this and all generations to what Allah has provided.
Thus land and other natural resources (such as oil) must be developed in ways that benefit all humans of all generations equitably. It is imperative that the rights of the disabled and those of future generations are fully honored.
A major feature of The Almighty’s rules, conveyed in the Koran and practiced by the Prophet, is justice. Thus the Islamic institutional scaffolding and the Ideal Islamic Economy exude justice, and as a result the promotion of social and human development on this plane of existence is founded on rules that promote justice. As a result, the Prophet understood the essential objective of the message to encourage and insert justice in human societies, as emphasized in the Koran.
The Prophet taught the responsibility of the individual, the collectivity, and the state. He particularly emphasized the equality of individuals before the law, and that all rules that are incumbent on individuals and their collectivity must be more strictly observed by those in positions of authority. Thence his famous saying: “Authority may survive disbelief but not injustice.”
Insistence on justice became the hallmark of the institutional scaffolding of governance, a structure with full transparency and accountability. Rule-compliance that embraces the pursuit of social justice is a requirement of each and every Muslim during every day his or her life on this earth. Justice is essential in all endeavors as the pursuit of justice leads to spiritual fulfillment and brings humans closer to their Creator.
Rule-compliance and justice cannot be compromised, and in Islam social and human development are multidimensional and go well beyond the highest level of GDP and GDP per capita. Human spiritual pursuits on this earth cannot be compromised for material ends.
In Islam, conventionally measured GDP per capita and GDP growth are not society’s only economic goals. There are overriding spiritual, moral and human dimensions to all economic endeavors. Humans need bread to live but do not live by bread alone. The goal of progress and development is the overall wellbeing of humans and society.
In Islam, institutions have been seen as an essential element and the foundation of achieving human and economic development, something that became only popular in conventional economics about 30 or so years ago but had been almost forgotten from the writings of Adam Smith with the emergence of neoclassical economics.
All humans should have the same (similar) opportunity and the freedom to achieve their economic goals (a level playing field in education, healthcare and basic nutrition) through hard work, while preserving the rights (not to be confused with charity) of the disabled. After humans have worked and received their just rewards, then they must help the less fortunate to eradicate poverty and avoid great disparities in wealth; this is a test for humans to show their love for their Creator and His creation as contrasted with a love of fleeting wealth. Individuals as well as the state should remove all roadblocks, importantly including oppression, from the path of human development.
Again, we repeat that the overarching rule in Islam is rule compliance and standing up to rule violators. Compliance with this rule is required of all members of society. In a sense, the government’s role is akin to a trustee of society and a referee to make sure that rules are followed for the good of society. Thus, the foundation for a legitimate government is its rule-compliance.
The government makes a commitment to strict adherence to rules prescribed by the Koran in exchange for the loyalty of the people, so long as that government remains rule-compliant. But members of the community must be engaged also and support rule compliance.
It would seem that this function is performed by election in contemporary times. If so, then it is the responsibility of the people in society to participate fully in the election of the government. Hence, the duty of electing and voting out a government is given to society, where every individual has equal political rights and the responsibility of participation.
While all public policies shape economic developments in a community, the direct policies needed to support development in the Islamic economic system are policies that are targeted to achieving (the Islamic vision):
- Freedom for all members of society to pursue their economic interests;
- Economic justice for humans of all generations while preserving the interests of all living creatures;
- Equal opportunity (education, healthcare and equality before the law) to succeed;
- Provision of good jobs for all that can and want to work;
- Personal property rights and sanctity of contracts;
- Equitable distribution of income and wealth;
- Poverty eradication;
- Basic need fulfillment of food, shelter and clothing when private alms giving is insufficient;
- Management of natural and depletable resources to benefit all members of current and future generations;
- Abolition of corrupt practices;
- Supportive financial system that excludes debt and interest; and
- Minimum level of public debt (and, of course, not tied to interest).
Given the Islamic pre-occupation with individual rights as well as obligations, the role of the state should be minimal in an Allah-conscious and law-abiding community. Humans aware of the rules set out in Islam would abide by them and do all that they can to ensure rule compliance on others in the community because they realize that life on this plane of existence is merely a test for the Judgment Day that all must face.
If a community follows the set rules, it will thrive. State policies and intervention are thus only needed as collective action because individual action is not possible – in areas such as construction of infrastructure, safeguarding the interests of future generations, establishing and implementing a just legal system and providing for national defense – or when individual humans have not complied with the set rules and society needs state intervention to get back on the right path.
Have Muslim countries adopted public policies that have achieved some of the 12 public policy objectives listed above? Our answer is a definite no.
While reasonable people can debate the reasons why, it is important to note that failures are not a result of Islamic teachings but are the consequence of rule non-compliance, propagated by rulers and by Muslims who have not asserted their rights and practiced their obligations.
Hossein Askari is Professor of Business and International Affairs at the George Washington University.