ISLAMIC ECONOMICS AND FINANCE, THEN AND NOW: A FIQHĪ-CONOMIC PERSPECTIVE ON ITS DOCTRINES AND DEBATES

Abstract

Each economy functions within a particular social framework, defined by its  moral philosophy and legal system. What makes an economy Islamic is Shari'ah,  the moral/legal discourses of the classical fuqaha, which defined the economy  of classical Islam, shaped its micro and macro institutions, and modulated its  actual performance. This economy, which was virtually effaced during the age of  European colonialism, has become, in the post-colonial era, both a symbol and  basis for revivalist movements in their attempts to re-Islamicize their economies  and polities.  

Taking the economy of classical Islam and its fiqhi-conomic foundations  as a point of departure and reference, this study generally aims at overviewing  the salient features of the modern Islamic economy, its performance criteria and  theoretical justification as envisioned in Islamic Economics, viewed as a science.  In particular, it critically narrates the mainlines of the ongoing debate among  Muslim scholars, and juxtaposes three main doctrinal approaches advanced by  Muslim economists, viewed from the vantage point of efficiency and justice, the  sine qua nonof that economy: namely, those of what I nominatively categorize  as Reformist Traditionalists (Neo-Taqlidis), Islamic Modernists/Rationalists  (Neo-Kalamis), and Neo-Conservative Muslim Secularists.

In Section 1, I present a portrait of what I have called the fiqhi-economy of classical Islam: its philosophy of social harmony and related moral  doctrine of economic justice as fairness ('adl qua qist), as well as its micro-  and macro-economic institutions, and their underlying economic doctrine of  socially embedded markets (suqs) à la Polanyi (1957). It serves as a backdrop  for dialogically representing the modern (especially the post-colonial) debate on  Islamic Economics, and Islamic finance, in the following sections: In section 2, the two polar disputational groups, the Reformist Traditionalists vs. the Muslim  Secularists; in section 3, the Islamic Modernists; and in 4 the study concludes  by delineating some fundamental commonalities and differences in their  respective doctrinal positions. In general, the approach I follow is historicist  and comparative-institutionalist; and the mainline argument follows the time-honored classical method of induction by example à laAristotle. As such, the  study and its conclusions are bounded by the limitations of this methodology.

JEL classification: B4, K00, N20, P5

Key words: Islamic economics, Islamic finance, Fiqhi-Conomic method