Islamic Economic Systems and Sustainable Development: Islamic Capitalism versus Insanism (Islamic Humanism)

Abstract

This article examines different economic systems and assesses their implications for promoting sustainable development. In a capitalist system, capital is managed by homo economicus who focuses on maximising profits and capital accumulation without ethical considerations. This has led to the continuous exploitation of natural resources, resulting in destructive impacts on the environment. Recognising that capital has the power to affect production and value creation, this article asserts that ethics is needed to tame capital and its production processes to achieve sustainable development. The configuration of an Islamic economic system will depend on the meanings of Sharīʿah and how it is interpreted. A narrow legalistic perspective would focus on legal compliance and would produce an Islamic capitalist system that would have similar adverse impacts on the environment as its capitalist counterpart. Alternatively, expanding the meaning of Sharīʿah to include legal-ethical principles and values would frame the economic system as insanism (Islamic humanism) that embeds human welfare-related ethics of maqāṣid al-Sharīʿah and legal maxims. In this system, moral homo Islamicus (homo islami-ethicus) imbued with the ethical characteristics of khalīfah, will act as a steward to guide capital and production processes, preserve the environment and contribute to sustainable development.