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Islamic Finance, Risk-Sharing and Macroeconomic Stability pp 11–40Cite as

Palgrave Macmillan

Islamic Economics: “New Paradigm” or “Old Capitalism”?

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Abstract

This chapter argues that the recent rise of Islamic finance is moving towards “disguised capitalism” rather than the new economic system based on Islamic values. It defines Islamic moral economy based on the Islamic worldview. It explores the foundational and axiomatic differences between Islamic and capital economic systems. It calls for an authentic economic system based on the Islamic worldview.

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Notes

  1. 1.

    Gregory, P. R., & Stuart, R. C. (1985), Comparative Economic Systems, Houghton: Mifflin, p. 12.

  2. 2.

    Toynbee et al. (1946, p. 99).

  3. 3.

    Wealth is defined in Merriam Webster dictionary as “An abundance of valuable material possessions or resources”.

  4. 4.

    Muslim (1987, vol. 4, p. 34).

  5. 5.

    Islahi, A. (1984), Economic Thought of Ibn Al-Qayyim, International Centre for Research in Islamic Economics, p. 2.

  6. 6.

    Islahi, A. (1984), Economic Thought of Ibn Al-Qayyim, International Centre for Research in Islamic Economics, p. 4.

  7. 7.

    Chapra, U. (1996), What Is Islamic Economics, IDB Prize Winner Lecture Series No. 9. Jeddah: Islamic Research and Training Institute.

  8. 8.

    Pabst, A. (2011), Beyond Well-Being and Happiness: The Moral Market and the ‘Good Life’, Presented at the Conference on Market and Happiness, Universita Milano, June 8–9, 2011.

  9. 9.

    Al-Jarhi, M. A., & Zarqa, M. A. (2007), Redistributive Justice in a Developed Economy: An Islamic Perspective, in Advance in Islamic Economics and Finance, Volume I, Proceedings of 6th International Conference on Islamic Economics and Finance, Islamic Research and Training Institute, Jeddah, p. 44.

  10. 10.

    Al-Jarhi, M. A., & Zarqa, M. A. (2007), Redistributive Justice in a Developed Economy: An Islamic Perspective, in Advance in Islamic Economics and Finance, Volume I, Proceedings of 6th International Conference on Islamic Economics and Finance, Islamic Research and Training Institute, Jeddah, pp. 43–68.

  11. 11.

    Al-Bukhari, Al-Adab al-Mufrad, p. 52, No. 112.

  12. 12.

    Al-Ghazali, al-Mustasfā min ʻilm al-uṣūl, 1937, Vol. 1, al-Maktabah al-Tijārīyah al-Kubrā, pp. 139–140, quoted from the following study: Chapra, U. (2008), The Islamic Vision of Development in the Light of the Maqasid Al-Shari’ah, Islamic Research and Training Institute, Jeddah, p. 5.

  13. 13.

    Ghazali, p. 40.

  14. 14.

    Ghazali, pp. 39–40.

  15. 15.

    The following verse clearly states the boundary set by God: “O you who believe! Do not hold as unlawful the pure, wholesome things that God has made lawful to you, and do not exceed the bounds (either by making forbidden what is lawful, or by over-indulgence in the lawful). God does not love those who exceed the bounds” (Quran 5:87).

  16. 16.

    Schweitzer, A. (1949, p. xii).

  17. 17.

    Schweitzer, A. (1949), The Philosophy of Civilization, New York: Macmillan, pp. 76 and 92–93.

  18. 18.

    Chapra, U. (1979), Objectives of the Islamic Economic Order, p. 26.

  19. 19.

    Al-Ghazali, pp. 973–974.

  20. 20.

    Al-Ghazali, p. 974.

  21. 21.

    James (1950, pp. 291–292).

  22. 22.

    Islam is not against making money if it is not done at the cost of human’s main mission. Indeed, the Qur’an clearly states that believers should seek for their share in this world as well: “Eat and drink of that which God has provided, and do not go about acting wickedly on earth, causing disorder and corruption” (Qur’an, 2:60). “And when the Prayer is done, then disperse in the land and seek (your portion) of God’s bounty, and mention God much (both by doing the Prayer and on other occasions), so that you may prosper (in both worlds)” (Qur’an, 62:10). “But seek, by means of what God has granted you, the abode of the Hereafter (by spending in alms and other good causes), without forgetting your share (which God has appointed) in this world. …” (Qur’an, 28:77).

  23. 23.

    Ghazzali (Translation by Abdulhalik Duran), Kalplerin Kesfi, Yeni Safak Kultur Armagani (2005), pp. 39–40.

  24. 24.

    Al-Ghazali, p. 751.

  25. 25.

    Al-Ghazali, p. 741.

  26. 26.

    Al-Ghazali, Alchemy of Happiness, p. 735.

  27. 27.

    Al-Ghazali, Alchemy of Happiness, p. 733.

  28. 28.

    Adorno (1974, p. 230).

  29. 29.

    Nozick, R. (1974), Anarchy, State, and Utopia, New York: Basic Books, pp. 42–45.

  30. 30.

    Yalcintas, N. (1986), Problems of Research in Islamic Economics: General Background, Islamic Research and Training Institute, Jeddah, p. 38.

  31. 31.

    Ahmed, K. (1986), Problems of Research in Islamic Economics with Emphasis on Research Administration and Finance, Islamic Research and Training Institute, Jeddah, p. 79.

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Authors and Affiliations

  1. Alfaisal University, Riyadh, Saudi Arabia

    Necati Aydin

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  1. Necati Aydin
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Editors and Affiliations

  1. Islamic Research and Training Institute, Islamic Development Bank, Jeddah, Saudi Arabia

    Muhamed Zulkhibri

  2. Islamic Research and Training Institute, Islamic Development Bank, Jeddah, Saudi Arabia

    Turkhan Ali Abdul Manap

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Aydin, N. (2019). Islamic Economics: “New Paradigm” or “Old Capitalism”?. In: Zulkhibri, M., Abdul Manap, T. (eds) Islamic Finance, Risk-Sharing and Macroeconomic Stability. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-05225-6_2

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  • DOI: https://doi.org/10.1007/978-3-030-05225-6_2

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