Meta-Framework and Archetype of Economic Rules

The fountainhead of all Islamic paradigms is the Quran. It provides the framework within which all relevant envisioned conceptions of reality find their source. This eternal source specifies rules of behavior (institutions) applicable to all societies at all times. These rules are immutable temporally and spatially. The meta-framework specifies the immutable, abstract rules. The archetype model articulates the operational form of these rules and demonstrates how these rules are operationalized in a human community. The abstract became operational in the hands of the one human being who was the one and only direct recipient of the source of the meta-framework, the Quran. Through the words and actions of this perfect human, the meta-framework given by the Creator in the Quran was interpreted, articulated, and applied to the immediate human community of his time. The meta-framework specifies general universal laws, rules of behavior. The archetype model provides universal-specific rules of behavior and the institutional structure needed for organizing a human society based on the immutable rules of the meta-framework.

No one understood the Quran better than the Messenger (sawa), appointed to deliver it to humankind. During his blessed life on this plane of existence, he was both the spiritual and temporal authority for his followers. In his capacity as the spiritual authority, he expounded, interpreted, and explained the content of the Quran. In his capacity as the temporal authority, he operationalized the rules (institutions) specified in the Quran in the town of Medina. The economic system, which he established in Medina, is the archetype of Islamic economic systems. This archetype contains a core institutional structure that is immutable because it is firmly established based on the Messenger's (sawa) authoritative operationalization of the rules prescribed by the Creator in the Quran.

A typical example is the institution of inheritance. The specific procedure on how the inheritance is to be distributed is described in the Quran. There are also institutions that the Messenger (sawa) established which, while not explicitly stated in the Quran, are based on his understanding of the Quran as its highest interpretive authority. An example of this type of institution is the rules of market behavior. These two types of rules are immutable: Any conception of how an Islamic economy works will have to take these two elements of the archetype model as given. A third type of institutions at the periphery of the archetype model are temporally and spatially specific to the time and the place in which the archetype model was implemented. For example, the Messenger (sawa) instituted rules of noninterference with market forces and the need for unhindered flow of information in the market. This rule is of and itself an immutable rule of the archetype model, but forces that would interfere with market functioning may vary and are time and place dependent. For instance, before Islam, one acceptable method of interfering with market forces in Arabia was that middlemen would meet caravans bringing supplies some distance outside of the cities and purchase the supplies for resale in the cities. The Messenger (sawa) prohibited this procedure. Clearly, the principle of noninterference with the market forces is unchanged, but this particular procedure is no longer relevant. The economic hermeneutics of this rule and its application to a particular time, place, and market is part and parcel of what an Islamic economic paradigm would seek to address.

The meta-framework envisions an ideal society as one composed of believers committed to rule compliance. The individual members are aware of their “oneness” and conscious of the fact that their own self-interest is served by seeing “others as themselves.” Such a society is one of the “Golden Mean” that avoids extremes and is so rule compliant that it serves as a benchmark for and a witness to humanity (Quran 2:143). This is a society that actively encourages cooperation in socially beneficial activities and prohibits cooperation in harmful ones (Quran 3:104, 110, 114; 9:71). Moreover, in this society, consultation, both at the level of individual as well as the collectivity, is institutionalized in accordance with the rule prescribed by Allah (swt) (Quran 3:159; 42:38; 2:233). Similarly, all other rules of behavior prescribed in the Quran are institutionalized with sufficiently strong incentive structure to enforce rule compliance. The objective is the establishment of social justice in society.

Implications of the Agent-Trustee Relationship

Faculties such as áql (intelligence of the heart), human dignity, walayahh and fitrah (the primordial nature of humankind), gifted to humankind by their Creator, were to be employed in cognition, remembrance, and fidelity to the primordial covenant (mithaq). The crucial importance of fidelity to this covenant drives the necessity of remaining faithful to all covenants, contracts, and promises, as long as they are permissible, which often is emphasized in the Quran (e.g., 5:1). The commitment to remain faithful to the terms and conditions of the primordial covenant (to bear witness to Divine Existence and His Unity), equipped with the gifts of their Creator (the resources of the earth), humans were then assigned the role of trustee-agent (khalifah, or viceroy) of the Divine on earth (Quran 2:30). This mission consisted of, inter alia, developing the earth (Quran 11:61); establishing social justice through the exercise of love toward their kind and the rest of creation, as a reflection of the love of the Creator; and removing the obstacles from the path of others of their kind toward Allah (swt) (i.e., their passage from the darkness of personality traits unworthy of the human state toward the light of nearness to their Creator). Once again, it is the compliance with the rules of behavior prescribed by the Creator that makes treading the path feasible.

This agent-trustee position is a divine trust that is bestowed on humans. It is by virtue of this trust and the responsibilities associated with it that humans have been invested with domination over what has been created for them. Many verses in the Quran affirm this subjugation of resources to humans. The entire human population has the collective responsibility to ensure that every human being has the opportunity to tap his or her dormant potentialities and possibilities and convert them to actualities. This collective view of humans evokes the matter of unity of humankind, which in turn reflects the recognition of Allah's (swt) Oneness and Unity, that is, Tawheed. The link between responsible living in this world and accountability in the next provides a means for an infinite planning horizon for human beings.

The agent-trustee office bestowed on humans requires the activation of the nonmaterial gifts from the Creator that empower humans to perform their responsibility of agent-trustee. To this end, a self-cleansing and purification process is required. Believing in Islam is not a sterile, static, superficial, and passive verbal-physical expression and pretension to Islamicity. A process instituted by the Creator serves to energize the ascending movement and progress of the self toward its perfection.

Significance of Rule Compliance

A verse in the Quran contains the necessary and sufficient condition for the existence of an ideal society and economy: “If the members of the collectivity were to be rule-compliant and ever-conscious surely We should have opened for them blessings from the sky and from the earth. But they rejected [the Divine messages] therefore we seized them on account of their [noncompliant] deeds” (Quran 7:96). The necessary condition for an ideal economy is being rule compliant. The sufficient condition of taqwa (i.e., the inner torch of consciousness of the ever-presence of the Creator) requires that there be no occasional lapse in rule compliance whatsoever. That is the ideal society and the economy is one in which humans, individually and collectively, are fully rule compliant. In such a society, the members and their collectivity comply with rules specified for all in the society and other rules relating to behavior in particular circumstances, such as those relating to economic behavior. The first include, inter alia, the rules of enjoining the good and forbidding evil behavior; of consultation, cooperation, and avoiding harm to others; and of establishing social justice. Of these, by far, the first is the most crucial. It is an imperative without which compliance with all other rules, general and specific, will be weak or avoided altogether without impunity. It is a foundational rule that empowers all other decreed rules of behavior compliance that allow humans to tread the absolutely desirable path of closeness to Allah (swt) commanding us and others to rule compliance that derives directly from cognizance and acknowledgment of the love bond (walayahh) between the Creator and humankind as well as its derivative love bond among humans.

When we say that Islam is a rules-based system, we mean that the rules are prescribed by the Lawgiver, who monitors compliance, and there are rewards for compliance and sanctions for noncompliance. Accordingly, the prescriptions ordained by the Lawgiver and explained and implemented by His Messenger are rules. The most crucial and central to Islam's concept of development is the progress humans make in developing the self. Without this, balanced and appropriate progress in the other two dimensions of development is not possible; any forward movement in them without self-development leads to harmful distortions. Compliance with the rules prescribed by the Lawgiver prevents distortions. The rules constitute a network that regulates all dimensions of the human experience, individually and collectively, on this plane of existence.

The rules in Islam go beyond those considered important by economists for economic growth—property rights protection, the enforcement of contracts, and good governance. In Islam, these are the rules of seeking knowledge through education; avoiding waste, harm, or injury; pursuing hard work; and not engaging in fraud, cheating, or abuse of property. The internalization of the rules of conduct governing market participation and compliance with them ensures that the market will be an efficient mechanism to create a balance within an economy. Because fairness and justice are ensured by rule compliance, the price that emerges will be a fair price. Rules regarding the fair treatment of others ensure that those who participate in the act of production receive just payment for their efforts. Thus, market-based distribution guided by the price mechanism would also be fair. Rules governing income redistribution ensure that the rights of others to access resources are preserved before income becomes disposable. All economic transactions are governed by rules requiring strict faithfulness to the terms and conditions of contracts and promises. Hence, the probability of asymmetric information and moral hazard, and their negative consequences, is minimized. Rules governing consumption ensure that there is no opulent or wasteful consumption. Since consumers internalize these rules before entering the market, the rules also shape consumer preferences and thus demand, moderating excessive wants. Rules governing the use of disposable income and wealth (i.e., income and wealth after they have been cleansed of the rights of others) ensure that wealth is not hoarded and that it is made available in the form of investment and expenditures in the way of Allah (swt). Prohibition of interest ensures the direct participation of wealth holders in sharing risk associated with investment.

The internalization of rules of behavior by individuals and their institutionalization, along with the incentive structure and enforcement mechanism, reduces uncertainty and ambiguity in decision-action choices confronting the individual and the society. The problems associated with coordination are resolved through compliance with the rule of cooperation. Moreover, a binding rule from the archetype model resolves the negative aspects of the collective action problem. Not only cooperation is ordained as a rule-based feature of society's institutional structure; the rule of negation of harmful externalities and reciprocation of one harmful act by another (i.e., the rule of not harming third parties by one's action and the right not to be harmed by anyone's action without reciprocation) mitigates the risk of the emergence of collective action problems.²

Impact of Scarcity

The agent-trustee duty of humans is central in the Islamic economic vision for a number of intertwined reasons. Conventional economics doctrines focused on scarcity and unlimited human wants as the central reason for the study of economics. Economic growth is presumed to create wealth and thus relax the scarcity constraints. While scarcity is a serious constraint in a world of unlimited wants, it is not so in Islamic vision. The Creator has provided humankind with sufficient resources at the global level to satisfy all human needs if humans follow His rules. The creation of the earth was not a random event. Allah (swt) created the earth by incorporating human needs and creating conditions (as a test) that require humans to share.

In Islam, scarcity takes on three different aspects. First, the Quran repeatedly asserts that from a macro-global standpoint, Allah (swt) has created all things in “exact measures” (Quran 49:52), indicating that the Lord Cherisher, sustainer of all creation, provides sufficient sustenance for all in His creation including humankind. The Quran, however, recognizes two other dimensions of scarcity. It acknowledges a micro-actual scarcity stemming from misdistribution of resources and from greed and gluttony. Hence, one encounters in the Quran the overwhelming emphasis on social justice and rules against waste, accumulation of wealth, and extravagance. The third concept refers to the real scarcity arising from the fact of finite conditions of man on this plane of existence. The physical conditions of man impose a finite constraint. “Man is finite, mortal and aging, limited in time and space.”³ Becoming aware of these constraints as well as of the potentialities of the human state, human consciousness, once awakened, not only allows humans to grasp potentialities but also permits the human realization of them and the ability to transcend the limits of their physical existence to imagine what is and what could be. Humans, thus, realize that their physical existential constraints impose limits on how much of their potentialities they can actualize; they must then “choose between the alternatives grasped by transcending consciousness.”⁴ The third notion of scarcity dealt with in the Quran is this “existential scarcity” arising from the finite conditions of humans on this physical plane of existence. The Quran's constant reminder of limitations of time on this earth and the rapidity of its passage is symbolized by the question humans are asked on their transition to the next level of existence. They are asked, “How long did you spend on the earth?” and their answer is “A day or part of the day!” (Quran 18:19). Similarly the Quran clearly and repeatedly reminds humans about the natural aging process that erodes their physical and mental abilities (Quran 68:36; 70:16). The existential scarcity caused by the finite conditions of existence of humans on the earth “leads to an allocation problem of scarce means to alternative ends…the resources which are ultimately scarce are life, time and energy because of human finitude, aging and mortality.”⁵

Thus there can be scarcity because some humans are selfish, hoard, and do not share with others who are less fortunate, because some humans have excessive wants, or because some humans are lazy and do not work hard enough. Thus scarcity can be a factor only at the local level because some people are taking more than their fair share of resources. While self-interest is fully recognized in Islam, it must be subservient to social interest. Human wants and preferences cannot be accepted as a given but must be shaped to reflect Allah's (swt) intentions for humankind. Conventional economics assumes that humans have unlimited wants and takes this as a given; Islam abhors greed and selfishness and sees them as traits that must be changed. Conventional economics assumes unlimited wants and emphasizes economic growth and material output for human happiness; Islam emphasizes the spiritual. Humans who live in regions with high per capita incomes are not any happier than those in poorer regions, because those living in rich areas invariably focus on their relative material position and, more generally, wealth does not by itself bring happiness. The sharing of material output with the less fortunate is of spiritual importance and brings about inner joy to those who share and should not be seen as charity. It instead supports the unity of humanity and protects the rights of those who for reasons beyond their own control are deprived. Allah's (swt) bounty to humankind has other important dimensions. Allah (swt) is the Ultimate Owner of His Own Creation that is intended for all humankind of all generations. These gifts, such as all depletable resources, water, land, and the environment, generally must be managed in trust so that the rights of all humans of this and future generations are preserved.

In sum, scarcity is only a constraint at a micro-individual level; at this level, it is a test both for the person who is constrained and for the person who is not constrained. For the constrained, it is a test of the strength of belief that has been experientially revealed to the person and is a light shining on the strength and weakness of the self. For those economically better off, it is a test of their recognition of the real source of their wealth—Allah (swt)—and the strength of their rule compliance in helping remove (self-sacrifice) economic constraints, namely, barriers from the path to perfection of those in need of help, a major purpose of life on this earth. Moreover, Islam asserts unambiguously that poverty is neither caused by scarcity or paucity of natural resources nor by a lack of proper synchronization between the modes of production and distribution. Rather, it is a result of waste, opulence, extravagance, and nonpayment of what rightfully belongs to less able segments of the society. This position is illustrated by the prophetic saying: “Nothing makes a poor man starve except that with which a rich person avails a luxury.” This is why waste, abuse of wealth, extravagance, and excessive consumption are condemned as unjust, particularly when they occur in conjunction with poverty that they could help to alleviate. In the morality of property, Islam unequivocally considers all individuals entitled to a certain standard of life; it is this entitlement that entails the satisfaction of their claim as a matter of equity and justice.

Rationality and Freedom of Choice

In recognition and acknowledgment of their dignity, the Supreme Creator has endowed humans with freedom of choice. This gift is so important that the prophets and messengers and all of the revelations sent to humanity can be understood as attempts by Allah (swt) to persuade humans to choose—through the activation of their faculties of spirit, consciousness, and intelligence (áql)—to freely recognize and acknowledge the Love of the One and Only and to then return that Love through active love (love service) to the Creation of Allah (swt). This supreme gift of the Creator affords humans the choice of rejecting the reality and existence of their own Creator. In many verses of the Quran, Allah (swt) declares that had He wished He could have created all humans fully aware, conscious, and active believers. But humans are given the gift of free choice to recognize, acknowledge, and accept the love of Allah (swt) in gratitude for His gifts and to reciprocate His Love through their own love extended to the rest of creation through service to the creatures (humans and other living inhabitants of the earth) of Allah (swt), or to reject it all. In emphasizing this freedom of choice, the Quran unambiguously states that there is to be no compulsion in belief and religion. Even the Prophet (sawa) was instructed that He was appointed to remind and to warn but not to compel humans. This freedom of choice clearly extends to economic decisions and is again a test in which humans must encounter and overcome the temptations that they face.

Consciousness and awareness of their Creator and the prescribed rules render humans rational decision makers. Rational, meaning reasoned, action in a human who is aware follows reasoning by a faculty with which the Creator endows every human. This is intelligence (áql), which initiates a process of cognition by the heart. Áql is defined as the instrument by which the All-Merciful Creator is adored and through which final felicity (al-Jannah, or Paradise) is achieved. Áql is distinguished from intellect, which is a process of cognition by the mind. The ultimate operating rule of áql is for its possessor to cognate the truth that the criterion for reason-based action is achieving the satisfaction of Allah (swt).

This faculty is dormant in bashar (humankind). It is activated when man embarks on the path of becoming human (insan). Reading the Revelation to humans, cleansing them, and teaching them how to internalize the Revelation by the messengers activates the áql. When intelligence is dormant, man can reason only through intellect. Without áql, the decision-making process takes place through reasoning via the intellect alone. The process is faulty because without cognition by the heart, reasoning is activated and governed by character traits unworthy of the human state. When humans reason through the use of áql while choosing among alternative decision-actions available, the one selected is the one with the best chance of achieving the satisfaction of the Creator (i.e., choosing the decision-action compliant with the rules prescribed by Allah [swt]). Choice of a decision-action in the absence of áql would be governed by whims (hawa') and in response to stimuli to the basic of instincts of man. This discussion demonstrates that while the postulates of self-interest and rationality are crucial in decision making in both the conventional economic and Islamic paradigms, they are radically different in their substance and implications.

The autonomy provided by the freedom of choice is exercised through compliance with rules (codified in institutions) specified by the Creator that are necessary for harmonious existence. Therefore, autonomy here is the exercise of freedom of choice in light of the responsibilities incorporated in the human state. Humans are endowed with the ability to choose freely and responsibly in accordance with reflective-meditative reasoning in carrying out the duties of the office of agent-trustee. Humans can use the natural-material resources of the earth and the nonmaterial gifts of empowerment endowed by the Creator. This exercise of the freedom of choice by humans to behave on earth in accordance with the rules of behavior prescribed by their Creator implies action and dynamism on their part to act in accordance with the will of the Creator and in keeping with the unity of His creation.

This discussion provides the basis for comparing the postulates of self-interest and rationality in the classical-neoclassical and Islamic paradigms. While both postulates are crucial in decision making in both paradigms, they are radically different in their substance and moment.

Individual Obligations, Rights, and Self-Interest

In Islam, human freedom is envisaged as a personal surrender to the Divine Will rather than as an innate personal right. The human being is ontologically dependent on Allah (swt) and can only receive what is given to him by the Source of his being. Human rights are a consequence of human obligations, not their antecedent. Man is charged with certain obligations toward his Creator, nature, himself, and other humans; all of these obligations are outlined by the rules prescribed by the Creator. When these obligations are fulfilled, certain rights and freedoms are gained. Limitations that are imposed by the rules on the rights and freedom of the individual are directed at removing negative possibilities from human life. The obligations, rights, and limitations defined by Islam must be observed if the individual and the system are to have an Islamic identity.

Within the Islamic framework, individuals have natural rights that are guaranteed, including the right to pursue their economic interests. Islam considers natural rights of the individual as the rights granted to him by Allah (swt). Pursuing one's economic interests, within the framework of Islam, there is first an obligation and a duty, then a right that no one can abrogate. What is significant, however, is the fact that if an individual lacks the power and ability to pursue economic interests, the obligation to do so is no longer incumbent on the person, while his or her rights are still preserved. The right to economic benefits is never negated as a result of a lack of ability to undertake the duty to pursue economic interests. The potential right remains even if a person is unable to actualize it. Conversely, if the person is able but does not perform his or her obligations, the rights are also negated.

Corresponding to the objectives of the messengers and prophets, humans are to listen to the revelation with the aim of internalizing the rules of behavior (institutions) prescribed in the message, cleanse themselves of character traits unworthy of the human state, develop the earth, establish social justice, and, finally, move from darkness into light and help others of their kind to do the same. Humans can achieve all of these simply by being fully rule compliant. Doing so, humans serve their own best self-interest. Being fully rule compliant requires humans to be fully conscious and aware of their true self-interest, which is not limited only to the life on this plane of existence but includes and incorporates, in accordance with the third fundamental principle, the life to come. This means recognition that no one knows the best self-interest of humans other than their Creator who has prescribed rules of conduct compliance that assures them of attainment of their best self-interest. In 126 verses, the Quran explains that the prescribed institutional framework ensures that compliance with the rules is “best” for humans. To emphasize that their Creator knows best, the Quran asserts that there are things that humans believe to be best for them but are in fact harmful to them and there are things humans believe to be harmful to them but are best for them. This assertion is immediately followed by the phrase “Allah knows and you do not” (Quran 2:216). In a number of verses after prescribing a rule of behavior, the Quran immediately states that compliance with the rule “is best for you if you only knew” (see, e.g., 2:184, 271, 280; 4:25; 8:19; 9:3, 41). Continuous consciousness and awareness of the need to be rule compliant progressively actualizes the potential in humans to come to know why behaving according to a prescribed rule serves their best self-interest because their Creator provides them with “a light with which to traverse on earth” (6:122).

To summarize, in Islam, and contrary to popular opinion, self-interest is not negated. Islam, in fact, considers it a primary factor in its incentive-motivation system—a necessity in any organized society if individuals are to maximize utility by following the behavioral rules prescribed by the system. Provided that self-interest is defined to cover spiritual and temporal (i.e., eternal and temporary) interests, there is not one rule that does not carry with it its own justification for individual self-interest. Individuals are invited to follow the rules for their own benefit, material and spiritual, in this world and for their ultimate salvation and felicity in the next. This is made clear by the Quran, which generally couples injunctions with the assertion that compliance with them by individuals is for their own benefit. Often the Quran enumerates the incentives and the rewards for compliance and the retribution for noncompliance, both here and in the hereafter. It is in the context of the pursuit of self-interest that individual obligations and rights, as well as the limits and accountabilities to these rights, are specified by the rules in Islam.

Central Notion of Justice

Justice is at the left, the right, and the center of Islamic economic teachings. Indeed, in Islam, there can be little progress unless the focus is on justice and the rights of all humans are acknowledged and preserved. But this does not translate into a socialist economic system. The economic justice that is envisaged in Islam is not equal incomes and wealth. The focus of economic justice is not solely placed on the outcome. Again, if Allah (swt) had wanted this, He would have so designed His creation. Instead, the focus of justice is on the available means and opportunities to all humankind.

Thus, the central framework and operation of these rules is justice. The Prophet (sawa) understood the essential objective of His selection, appointment, and message to be to encourage and insert justice in human societies, as emphasized in the Quran. The Prophet (sawa) 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. Hence the famous saying attributed to him: “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. In Islam, economic justice is centered on affording all humans an equitable chance (the means) to flourish while affording the disabled a dignified life and erasing poverty everywhere.

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, especially oppression, from the path of human development. There is a 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. Allah (swt) loves justice; it is a central part of His universal love. Humans must live a life that is just and must stand up to and eradicate injustice wherever they find it.

As mentioned earlier, a central aim of Islam is to establish a just and moral social order through human agency. This all-embracing desideratum of the Islamic system is the ruling principle from which human thought and behavior, the substantive and regulative rules of Shariah, the formation of the community, and the behavior of polity and of political authority derive their meaning and legitimacy. This emphasis on justice distinguishes the Islamic system from all other systems. It is through the scaffolding of justice that the raison d'être of the rules governing the economic behavior of the individual and economic institutions in Islam can be understood. What gives the behavior of a believer its orientation, meaning, and effectiveness is acting with the knowledge that justice evokes Allah's (swt) pleasure and injustice, His displeasure. Whereas justice in Western thought is a quality of the behavior of one individual in relation to another and actions can be perceived as unjust only in relation to the other, in Islam justice has implications and consequences for the first individual as well. That is, when one does injustice to someone else, there is always reciprocity; through injustice to others, ultimately, one also does injustice to oneself and receives its results both here and in the hereafter. The concept of justice permeates Islam. It is very simple: Put everything in its rightful place and give everyone his or her due (see Box 2.1).

In practice, justice is operationally defined as acting in accordance with the law as outlined in Shariah, which, in turn, contains both substantive and procedural justice. Substantive justice consists of elements of justice contained in the substance of the Law, while procedural justice consists of rules of procedure assuring the attainment of justice contained in the substance of the law. The underlying principles that govern the distinction between just and unjust acts determine the ultimate purpose of the Islamic path, Shariah, which includes: the establishment of the “general good” of society (considered to be the intent of the Quran for human collectivity; Shariah is the path by which it is achieved); building the moral character of individuals; and, finally, the promotion of freedom, equality, and tolerance, which are often stated as important goals of Shariah. Of these, protecting the interests of society is accorded the greatest importance. Although there can be no contradiction between justice for the community as a whole and justice for the individual, interests of the individual are protected so long as such interests do not come into conflict with the general interests of the community.

We should again emphasize that the cornerstone of all ethical rules and regulations in the community is the concept of social justice. All economic rules in the Quran relate one way or another to the principle of social justice. The Quran puts great emphasis on economic justice as the foundation of social justice. Social and economic justice requires a simultaneous adjustment in all aspects of human life, as required by the axiom of unity. In adopting the axiom of unity, the Quran stresses the economic and material side of life. Whenever wealth is mentioned, adjectives such as “the good” and “the bounty of Allah” (swt) are used. Muslims are told to earn and enjoy wealth with the economic dimension of life injected with a unique moral quality to become the substantive base of the Islamic social order.

A Muslim engaged in the act of production is engaged in a form of worship. Economic justice as the cornerstone of social justice becomes indispensable to social order in Islam. In the end, the existence of absolute and relative poverty along with significant income inequality is an indisputable evidence of economic, social, and political failure. These adverse developments would be attributed to rule violation and governance failure, for which members of society are, individually and collectively, responsible, no matter how strong their pretensions to Islamicity. As noted by Chapra, ethical values must be enforced.⁶ The Quran and the Sunnah provide the framework for moral behavior, but it is up to individuals, communities, and the state to enforce ethical values. And the effectiveness of moral behavior, in turn, increases with its widespread adherence.

Shariah: The Law

Islam legislates for humans according to their real nature and the possibilities inherent in the human state. Without overlooking the limited and the weak aspects of human nature in any way, Islam envisages man in light of his primordial nature as a theophany of Allah's (swt) attributes, with all the possibilities that this implies. It considers the human as having the possibility of being perfect but with a tendency to neglect potentialities of the human state by remaining only at a level of sense perception. It asks, therefore, that in exchange for all the blessings provided by their supreme Creator, humans seek to realize the full potential of their being and remove all the obstacles that bar the right functioning of their intelligence. To order human life into a pattern intended for it by its Creator, humans are provided with a network of injunctions and rules that represent the concrete embodiment of the Divine Will. By virtue of accepting specific codes of behavior—through the exercise of free choice—a person becomes a Muslim and then lives both his private and his social life according to these rules. This network of rules—called Shariah, a word that is etymologically derived from a root meaning “the road”—leads humans to a harmonious life here and felicity hereafter.

The emphasis on the axiomatic principle of unity forms the basis for the fundamental belief that Islam recognizes no distinction between the spiritual and the temporal, between the sacred and the profane, or between the religious and the secular realms. Islam seeks to integrate all human needs, inclinations, and desires through the all-embracing authority of Shariah. Life is considered as one and indivisible. Therefore, the rules of Shariah hold sway over economic life no less than over social, political, and cultural life; they persuade, determine, and order the whole of life. It is through the acceptance of and compliance with the rules of Shariah that individuals integrate themselves not only into the community but also into a higher order of reality and the spiritual center. Violations of these rules will have a disintegrative effect on the life of the individual and on the community.

Shariah rules are derived, based on the Quran and its operationalization by the Prophet (sawa), through a rigorous process of investigation and thinking across time and geographical regions. The expansion of the rules of law and their extension to new situations, resulting from the growth and progress of the Islamic community, is accomplished with the help of consensus in the community, analogical reasoning—which derives rules by discerning an analogy between new problems and those existing in the primary sources—and independent human reasoning of those who specialize in the law. As a result, Shariah is invested with great flexibility in handling problems in diverse situations, customs, and societies. Therefore, it has a wide range of solutions and precedents, depending on different circumstances.

History has not recorded instances when Muslim jurists were unable to provide Islamic solutions to new problems. Their opinions covered all aspects of life. They laid down innovative theories, exemplary rules, and solutions. However, with the decline of Islamic rule in Muslim countries, the significance of Shariah in running day-to-day life also declined and development of Shariah remained dormant. In the last few decades, however, the reawakening among Muslims has generated enormous demand for the development of Shariah-based rules that address the problems of modern society (see Box 2.2).

The overall aim or objective of Islamic law—that is, the concept of maqasid-al-Shariah—is to promote the welfare of humankind and prevent harm by preserving the faith, lives, intellect, prosperity, wealth, and interests of future generations. The preservation of these promotes society and its interests. The achievement of society's interests (maslahah) is essentially the same as maqasid; they are one and the same.

Summary

Four fundamental concepts support the rules-based religion that is Islam: walayahh (the love of the Supreme Creator for His Creation that is manifested through creation and the provision of sustenance for all humans), karamah (human dignity), meethaq (the covenant calling humans before their Supreme Creator to recognize in Him the One and Only Creator), and khilafa (agent-trustee relationship).

Islam considers self-interest a primary factor in its incentive-motivation system; it is a necessity in any organized society if the individual is to maximize utility by following behavioral rules prescribed by the system. But in Islam, self-interest is defined to cover the spiritual and the temporal (i.e., eternal and temporary). Rules are for an individual's material and spiritual benefit in this world and for his or her ultimate salvation and felicity in the next. The incentives and the rewards for compliance and the retribution for noncompliance are sometimes detailed.

A central goal of Islam is to establish a just and moral social order through human agency (khilafah). Justice is operationally defined as acting in accordance with the law, which, in turn, contains both substantive and procedural justice. Humans are provided with a network of injunctions and rules that embody the divine will in terms of specific codes of behavior for both private and social life. The network of rules—called Shariah—etymologically derived from a root meaning “the road”—leads humans to a harmonious life on this earth and happiness in the hereafter. The overall goal of Islamic law—that is the, concept of maqasid-al-Shariah—is to promote the welfare of humankind and preserve their faith, lives, intellect, prosperity, wealth, and the interests of future generations, which in turn promote society and its interests. The achievement of society's interests (maslahah) is essentially the same as maqasid; they are one and the same.

Key Terms

1. Shariah
2. Maqasid-al-Shariah
3. Maslahah
4. Walayahh
5. Karamah
6. Meetaq
7. Tawheed
8. Khilafa
9. Ummah
10. Unity of creation
11. Justice
12. Freedom of choice
13. Scarcity
14. Meta-framework
15. Archetype model

Questions

1. What is the concept of ummah in Islam?
2. What are the meta-framework and the archetype model?
3. What are the four concepts that are at the foundation of the Islamic system, and what do they mean?
4. In Islam, are individuals assumed to have freedom of choice?
5. How is individual incentive preserved in Islam?
6. What is meant by the phrase “Islam is a rules-based system”?
7. What is the importance and implication of the role of agent-trustee in Islam?
8. Why is rule compliance important in Islam?
9. How is the notion of scarcity in Islam different from that in conventional economics?
10. What do the terms “Shariah” and “maqasid-al-Shariah” mean?