By Murray Hunter
28 October 2015
Islam through many eyes is seen as a homogenous view of the world. In addition, many elements of the media have stereotyped Islam as an extreme religion. This situation has not been assisted by the lack of published academic and intellectual thought by Muslim academics themselves, which could assist in providing the public domain with more balanced views about what the principles of Islam stand for in society.
The focus of most published works on Islamic economics and business has been in the domain of finance, which leads most to the conclusion that Islam has little to contribute to the theories of economics and business.
The first and most comprehensive model of Islamic economy in modern times was published by Dr M. Umer Chapra in the early 1990s. His hypothesis was that existing economic models of capitalism, Marxism, socialism and the welfare state have failed to provide full employment, remove poverty, fulfil needs and minimise inequalities of income distribution.
Both the market and centrally planned models have been weak in providing overall wellbeing, where problems of family disintegration, conflict and tensions, crime, alcoholism, drug addiction and mental illness have indicated a lack of happiness and contentment in the life of individuals.
With these failings, an alternative system needs to be considered which could optimise human wellbeing. An Islamic view may have potential to solve common economic problems due to the overall humanitarian goal of achieving the wellbeing of all members of society. An Islamic model of economy has never been implemented in any world economy, only versions of political Islam, laced with tribal customs.
The message of Islam derives its principles from the Quran, which is believed to be the direct word of Allah. The Hadiths are documents made up of lessons taken from the life of Muhammad, written down by a number of apostles, which put the knowledge from the Quran in context in which they were revealed, and assist in developing a general and universal significance for the information sourced within the Quran.
The Islamic faith claims that the Quran was revealed to Prophet Muhammad, who was born into a trading family and brought up by Abu Talib, who was a trader. Society in the prophet’s time was almost totally dependent on trade as a means to earn a living and unlike any other religion, the Quran is heavily written in the metaphor of business and trade.
Within many parts of the Quran life is paralleled to a business venture, where one earns profits to gain entry into heaven – profits meaning faith and good deeds to others and those that accept Allah’s guidance as a bargain to save them from punishment on judgment day.
Islam urges individuals to strive their utmost to earn large monetary rewards and spiritual profits, while at the same time being inspired to be successful and honest people. This is part of the concept of ad-din, which makes material and spiritual pursuits inseparable, where one’s whole life is concerned with the needs of humankind here on earth to secure a comfortable life in the hereafter.
Consequently, Islam does not prohibit worldly success – in fact the Quran states that Allah has provided opportunities for humankind to obtain success and it is certainly the responsibility of the individual to do so. However involvement in business should also carry with it benevolent intentions for others while seeking success for oneself.
Islam espouses a market economy with freedom of the individual to operate a business with minimal outside interference:
"He who brings goods to the market is blessed with bounty; he who withholds them is cursed." (Ibn Majah & Al Hakim)
A market mechanism is urged with free flowing knowledge without exploitation by middlemen:
"Do not chase after those who are going to the market before they reach the place." (Al-Bukhari & Muslim)
Islam also prohibits price manipulation:
"Anyone who withholds goods until the price rises is a sinner." (Muslim)
Thus Islam espouses that free trade is a major factor in the enhancement of living standards of the general community, subject to some constraints on business in the interests of the wider community.
Central to Islam and human existence which relates to all activities is Tawhid, "… a man’s commitment to Allah, the focus of all his reverence and gratitude, the only source of value. What Allah desires for man becomes value for him, the end of all human endeavour."
Tawhid is the Islamic way of life, the fundamental of all Islamic civilisation, which is process, means and end together. Tawhid is both the essence of the individual and the society he or she lives in. Tawhid is acceptance of one creator and His divine guidance of humanity. Tawhid implies both the mission and morality of humankind in both social and spiritual contexts.
Mankind’s responsibilities under Tawhid fall into two categories, Fard Ain which is an individual’s obligation to perform his or her religious duties and fard kifayah, which is an obligation for man to serve the entire community, through services to each other, necessary for the community to live safely and comfortably.
Thus the obligation to improve the Muslim Ummah (community) falls under Fard Kifayah, where undertaking business is the principle method of improving the economy and community"
"Be involved in business as nine out of ten sources of income lie in business." (Ihya)
The Principles of Tawhid
The building blocks of Tawhid are the concepts of al-Iman (belief), al-Ilm (knowledge) and al-Amal (pious acts and efforts). Al-Iman is the belief in the existence of one God and Creator, with a commitment to His teachings and revelations, revealed through the Quran, and prophets, through the Hadiths and Sunnah, i.e. what Prophet Muhammad said, did, agreed or disagreed to. Faith in Allah must be reflected in daily behaviour, influenced by our moral system formed and contained within us.
It is our inner self:
"Faith is not expectations and not outward ornamentations, but implanted in the heart and realized through actions." (Ibn Najjar & Dailami)
Al-Iman is deepened by al-Ilm, which is the responsibility of all Muslims to seek in order to fulfil and perform al-Amal. Knowledge (spiritual, wisdom and scientific) is the foundation of all acts of al-Amal which would be futile and unproductive without the search for further knowledge to enhance the wellbeing of society.
Islam places great importance on scientific discovery, knowledge and wisdom to develop civilisation. Al-Iman and al-ilm manifested through al-Amal is the basis of the advancement of civilisation for the benefit of humankind and the Ummah (Muslim community) in particular. This is undertaken under the principle of ad-din (relating humans to Allah through spiritual acts), which is referred to as Ibadah.
In Islam a person who of faith, knowledge and pious devotion, manifested in effort and acts, using reason and experience and adheres to the teachings of the Quran and prophets is a person of Taqwa, adhering to the philosophy of Tawhid.
He or she is fulfilling their purpose on Earth to perform Ibada to God, through obedience (ta’ah), which conforms to his or her true and essential nature (Fitrah) of humanity.
This relates a person to God through everything an individual does, including spiritual duties, thoughts, actions, and deeds to other people.
As humans operate in a social environment, Islam prescribes a number of forms of business organisations, through which obligations can be fulfilled. A Mushharakah (organisation) can take a number of forms. Such business organisations are founded and operated on the principle of al-Ta’awun (mutual assistance and cooperation) among members of a society for both their mutual benefit and that of a society as a whole.
Islamic business is governed by the rules of Shariah, the path by which all Muslims should follow. The Shariah is the divine law that establishes the standards of justice and human conduct, as well as what is permitted and prohibited in action.
The Shariah is based on the Quran, Sunnah and interpretations by Islamic scholars. Some Muslim scholars have stated that these standards are beyond human and are a goal or path of guidance, where others see these utopian ideals as mandatory for advancement of the community.
Central to the Shariah are the concepts of Halal and toyyibat, which govern all the economic activities of man in wealth production and consumption of wealth, where certain means of gaining a livelihood are declared unlawful.
Halal means lawful or permitted for Muslims, a concept that is much wider than just issues of food, concerning as to whether things are undertaken according to the Shariah.
Toyyibat is a much wider concept, meaning good, clean, wholesome, and ethical in the Islamic concept. In nutrition, toyyibat is much wider than Halal, as food must also be clean, safe, nutritious, healthy and balanced. Toyyibat would also mean that agriculture must be undertaken within sustainable practices, and in business all things must be undertaken with good intentions.
In Islam, the individual’s vision, mission and objectives in business is to achieve both success in this world and the hereafter. This is al-Falaah.
Islam puts very little restriction upon the scale of worldly success, except specifying, it must be reasonable, provides the comforts of worldly life, with consideration to the poor and suffering, and within the balance of worldly and spiritual life. Human success must also serve the legitimate needs of the Ummah.
Allah equipped humans with the faculties of understanding right and wrong, so they may obtain a bright destiny. Humans have a free choice in what they choose. Opposition and straying from his/her true nature (Fitrah) will bring discord to the individual where negative attributes will distort his or her true nature, which could lead him into doing evil deeds.
The individual has his al-Iman and al-Ilm to keep him from this path of self destruction (al-Fasad), which would manifest itself through nepotism, favouritism, envy, greed, corruption, injustice and ignorance.
This in Islam is the influence of Satan, manifested in many different ways to humankind to lure one away from God’s chosen path. Humans can become unfocused through ignorance and lack of knowledge.
Achieving al-Falaah means that a human has lived up to God’s trust placed upon him or her, through performing Ibadah, while obeying all the laws of the Shariah. This is where humankind can overcome their general weaknesses in the service of Allah through righteous deeds (Amal), in the obligation of Fard Kifayah. A human has reached the state of Amanah, fulfilling the trust God has put in him or her.
Islam also specifies the way organisations should be operated and managed. An organisation must base all its work on al-Amal and Ibadah with the overall management objective of achieving al-Falaah for the organisation as a whole and each individual within it.
This is based upon a foundation of al-Iman and al-Ilm, within a civilisation based upon a Tawhid philosophy, so that employees have the opportunity to achieve Taqwa and avoid straying towards the state of al-Fasad. Central to achieving this are the concepts of Shura (participation in decision making and community learning) and Aadab (justice and rights).
Shura is total organisational community participation in decision making to ensure an organisation gets the best views, is creative, to develop employees understanding of decisions made, to achieve better implementation of decisions and strengthen the Islamic fraternity.
Shura is can also be seen as an organisational control mechanism to prevent management and individuals within the organisation from straying down the path of ignorance, greed and oppression, so that the organisation can continue to serve its members and the wider community and thus sustain itself.
Shura creates a positive learning environment within and organisation, similar to the concepts of learning organisation proposed by management guru Peter Senge in the 1990s. The Quran states that the concept of Shura is mandatory upon an organisation.
An organisation should build its foundations upon the basic principles of human rights in its administration based on the concept of Aadab. Aadab is based on the existence and recognition of Allah and recognition of his commands and laws (Shariah).
Within an organisational context, Aadab persuades a person to do good and avoid evil (al-Fasad), in accordance with the nature of man (Fitrah) and nature of his action (al-Amal).
Aadab comprises four major responsibilities:
1. Responsibility to God
2. Responsibility to oneself
3. Responsibility to society and other human beings
4. Responsibility to the universe and other creatures
Over the last few decades Western management ideas and ethics have moved closer to Islamic principles and ethics. Stephen Covey, a devout practicing member of The Church of Latter-Day Saints, evangelistically preaches personal development, fulfilment and spirituality within the context of the organisation.
There are similarities with Peter Drucker, Dale Carnegie, David Allen, and Peter Senge in the approach. Dale Carnegie’s work is also on the rise again in popularity and consequently, corporations are taking notice of the importance of employee personal growth within the corporate environment.
Western management scientists have taken the initiative on similar principles that were laid down in the Quran and Hadiths, more than 1,500 years ago.
Islam somehow lost the intellectual initiative and needs to regain its place and dignity in the world.
There are three main reasons for the need to develop this ethical framework to bring Muslims back to Islam:
Firstly, is the nature of man himself – man has both the potential to rise to great spiritual heights and also disintegrate into total immorality. Man’s ability to act rightly or wrongly is a matter of moral choice.
Under the Islamic viewpoint, man’s purpose on earth to carry out Ibadah (relates man to Allah through spiritual acts) and follow God’s will with total devotion, according to his natural disposition (Fitrah), where everything fits into the divine pattern under the laws of Allah.
Submission to the laws of Allah brings harmony to man. However, man was created with many weaknesses, forgetfulness, greed for material comforts and power, is capable of oppressiveness and ignorance, is rash and impatient, stringy and miserably, ungrateful, quarrelsome, ruthless, and full of self-interest, which can easily lead him astray.
Secondly is the amoral society we live in today: general society has become amoral and lapsed in faith, believing that truth and reality is based on what can be touched, smelled, seen, heard and tasted. This has led to a society that has become materialistic and less spiritual.
This absence of spirituality is leading business into immoral activities such as stealing; lying, fraud and deceit, making people believe that they cannot succeed without pursuing the same practices.
Finally and most importantly, the underdevelopment of Islamic societies: approximately 80% of the world’s Muslims live in poverty, as cultural minorities in other countries with high incidences of unemployment and low productivity.
Countries with majority Muslim populations are declining in their knowledge generation, research, innovation and educational standards, have a generally a lower life expectancy, higher illiteracy rates, lower GDP per capita rates with the majority of people living in fragile and non-arable lands, poorer infrastructure and water supplies and a larger number of dependents than the non-Islamic world.
Islamic GDP as a percentage of total world GDP is estimated to be only 45% of what it should be, in order to be on par with the rest of the world.