Islam and the Origins of Capitalism

Islam and the Origins of Capitalism September 17, 2018

I am writing this on my MacBook Air made by Apple, using software made by Microsoft, drinking coffee brewed by Starbucks all while contemplating how capitalism has afforded me the time and energy to write about capitalism. How profits have given us the luxury to condemn the profit motive. And how modern innovation has given us the audacity to condemn modernity.

From the plastic cup to the flushing toilet, one must know the difference between biting the hand that feeds you and chopping it off. Biting is okay. Chopping is anachronistic and not part of our Sharia (but more on that later).

Anyone who comes from the resource-dense third world intuitively understands that the problem of poverty is not material but political. It has never been about a lack of resources, but about the individual freedom to develop technology to convert resources to material wealth. You may not see anyone starting revolutions with slogans that read “We Want Capitalism!” or “We Want the state to stay out!” And yet the Arab Spring was triggered by the cries of a man who was prevented, not from praying, not from protesting, but from selling his fruit; The fruit of his labor.

To be fair, the modern day distaste for capitalism in the Muslim world while misguided, is not totally unwarranted. For one, the Muslim world is only familiar with a kind of crony capitalism where the privatization of resources is exclusively granted to so called “entrepreneurs” who are “well connected,” either by blood, or because they have shed blood on behalf of the dictators that oppress them.

If an average citizen wishes to open a business in a country like Egypt for example, he will need a license which he can only obtain by belonging to or being close to a member of the ruling elite. And even if one is able to obtain a license they would have to bribe or “share their profits” with crooked officials euphemistically referred to as bureaucrats.

Furthermore, Corporations have a long history of employing the U.S government, using American tax dollars, to forge alliances with mafias in the Muslim world, who are euphemistically referred to as autocrats; All in the name of capitalism.

But capitalism is not just an economic model but a social one where certain values like individual rights, freedom of speech, rule of law, objectivity and most importantly, property rights have to exist.

Without the mechanisms of enforceable legal representation, you get the brand of capitalism that we have today. The brand where men employ the government to act as a weight upon which they can leverage productivity and ensure limited liability. In other words, you get Donald Trump’s capitalism. A Capitalism designed to give privileges to some not based on a system of meritocracy but plutocracy. A system which makes concessions for some and not others, opening the door to the political corruptions inherent in today’s pressure group politics.



Is Islam pro-capitalism

The fact that many Muslims today oppose capitalism does not mean Islam is opposed to it.  For Islam is an ideology that stands apart from its adherents in the same way that capitalism is a social system which stands apart from those who commit crimes it its name.

Islam is a pro- market religion with a pro-capitalism ideology. The principles and spirit of capitalism took root in Islamic civilization long before the seeds were even planted in Europe. Long before there was Adam Smith there was the father of modern economics, Ibn Khaldun. And long before there was John Locke there was Ibn Tufyl, who is said to have heralded in the scientific revolution.

The  prophet Muhammed’s Position on the free market can be encapsulated in the following tradition or hadith:

When the city of Medina encountered problems resulting in a shortage of food, not healthcare, but food, not internet access, but food, there were attempts by his companions imploring him to fix prices. The prophet’s response was this “God grants plenty or shortage; He is the sustainer and real price Maker. I wish to go to him having done no injustice to anyone in blood or in property.”

In other words, economics must exist as an extension of natural law and fluctuate as naturally or catastrophically as the weather. Nature can be harsh but it is also restrained by the immutable laws of cause and effect.

In Islam, the law or Sharia is the codification of natural law within a particular social context. Natural law is an extension of God’s law and a free market responds to mankind in the same way that nature does.  To be commanded it must be obeyed.

The Quran’s position is equally clear in its endorsements. Success is defined as a goal both in this life and the next. The Quran emphasizes the contractual nature of human interaction with an emphasis on mutual agreement. And it holds property rights as a sacred trust which must never be violated by the state or other individuals. Nor does it condone government ownership of property. The prophet emphasized the importance of property rights in his farewell pilgrimage by declaring to his followers that “Nothing shall be legitimate to a Muslim which belongs to a fellow Muslim unless it was given freely and willingly.”

“O’ you who believe. Squander not your wealth among yourselves in vanity, except it be a trade by mutual consent.”

“And in no wise covet those things in which God hath bestowed his gifts more freely on some of you than on others; to men is allotted what they earn and to women what they earn.”

Islamic civilization’s economic infrastructure was not built by the state, but by civil institutions like charitable endowments (awqaf). Property rights were expanded to include women. And an objective standard of weights and measures as well as commercial law were a few of the many features which pushed Islamic civilization to the economic front lines. Islam is a religion that not only took the sacred and applied it to the secular world, but took the secular (man’s life and his property) and declared them sacred.

So, if Islam was so philosophically advanced and consistent with free market principles, why did the Muslim world decline so rapidly?

When Muslim governments suppressed the scholarly tradition of Ijtihad or independent critical thinking, they petrified the process of Islamic jurisprudence and replaced it with a process of blind imitation called Taqlid. Hundreds of years’ worth of intellectual stagnation led to a brand of scholarship where government and religion began to foster and unhealthy alliance. Unlike scholars of early Islamic civilization, who were completely independent of the government, the present day scholars cannot boast any degree of intellectual freedom, which is why modern day Muslims like me no longer recognize their authority. Even many independent mosques in many western countries hire Imams or scholars who are beholden to board members and exist simply to reinforce and lend credibility to the subjective decision-making process of a largely patriarchal and power wielding establishment.

Compare this to the founders of all four Sunni schools of thought in Islam who endured persecution for refusing to collaborate with government entities. Abu Hanifa was imprisoned for refusing to accept a judgeship. And Ibn Hanbal was tortured for refusing to endorse a state- sanctioned doctrine.

The decline of a civilization is the decline of critical thinking, which is almost always a feature of an unhealthy mixture, not just between religion and politics, but of economics and politics too. Early Islamic civilization took their inspiration and guidance from a religion establishment that was divorced from government entities.

Capitalism is not the cause of poverty. It has lifted men out of poverty whenever it was implemented in spite of the fact that it has never been fully implemented. And yet it continues to serve as the camouflage for all the evils being perpetuated against the third world.

Islamic jurisprudence does not condemn wealth because it does not see wealth as something that exists independently of the values that make wealth possible. Values which are espoused by both capitalism and Islam.

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  • Barros Serrano

    Your worship of capitalism is without justification.

    “Capitalism” did not provide you with the things you have. They were produced by workers. In a society organized in some other way, those things would still be produced.

    Keep in mind that the Marxist-Leninist Communist USSR put a man in space before the capitalist world did so.

    I am not defending Communism here, but pointing out that capitalism is a nebulous term, and in its modern incarnation as corporate hegemony it is abusive of humanity and of the planet.

    Capitalism was not created in the Islamic world, sorry. Soon y’all will be claiming you invented the moon. Capitalism evolved out of European feudalism. It remains essentially nothing but a modernized form of feudalism. The corporate logo is the heraldic shield. The sanctity of contracts is but a reworking of the feudal contract. Serfdom.

    Both Western and Islamic societies trace back in large part to the Roman Empire (Mecca was in the Empire, and every “Arab” nation outside of the Arabian nPeninsula was as well).

    We see evidence of this in the slave plantations maintained by Arabs on Zanzibar, Pemba, Mafia Is., etc. All very Roman.

    Keep in mind that a farmer selling his tomatoes is not “capitalism”. The term “capitalism” was coined by Karl Marx and refers to the use of capital to manipulate and exploit workers. While Marx’s notions of inevitable stages of social evolution and his revolutionary praxis were flawed, he was correct in his analysis of capitalism.

  • Tom Borromeo

    You seem like a ‘Commie’tted intellectual who does put forth his brief quite convincingly.
    I am all ears, …
    Well then, what, …?
    You :
    1. Diss Capitalism as a historical offshoot of Feudalism,
    2. ISLAM did not ‘invent’ Capitalism, …
    WELL, …
    Pls. continue

  • Barros Serrano

    You are a name-caller, but of course never in person. You cowardly flame warriors online are remarkably silent face to face. Always.

    I’m a demosocialism, not a commie, thanks. You should learn what words mean before tossing them around thoughtlessly

    Yes, capitalism evolved from feudalism, duh. The precepts and practices of capitalism are all rooted in feudalism, notably the all-important CONTRACT, the sanctity of which upheld by the Marshall Court screws U$A workers until this day.

    No, Islam did not invent capitalism. That’s a big DUH. Truthfully, Islam invented virtually nothing. All its intellectualism and science was from other pre-Islamic and non-Arabic cultures, largely India, Greece, Persia, Egypt and Rome.

    People forget (or as in your case, never knew) that all the “Arab” countries we see today were once Roman provinces, including Arabia Felix whence Mohammed.

    The Arab slave system was in fact largely derived from the Roman.

    Much of feudalism, and of subsequent social economy, is rooted in fact in Roman antecedents. The U$A Southern slave plantation, for example, is very much an evolved form of the Roman villa.

    Sorry, I know all of this is going over your head.

  • Tom Borromeo

    Tsk tsk, a ‘name-caller,’ “Sticks and stones, …”
    a shame, you miss my clumsy attempt @ a little ‘levity,’ no matter.

    Indeed, this is going over my head,
    BUTT, 😉
    Interesting historical take yours &
    Like I said, I am all ears,
    and you mention ‘demosocialism.’
    How is that different from being a “SocDem?”

    If you might share some site, or article, or even a book if I can find it.

    Re: Islam, a very interesting subject impacting on the whole world as we speak/post.
    I am not an Islamic scholar, but I have read a few articles, books, and one of them, “the Closing of the Muslim Mind” by Robert Reilly.

    He spoke of an Islamic Golden Age, with as you mention other civilisations pre-dating it.

    I was under the impression that “Algebra,” “Arabic numerals”
    come from Islam ?
    Also, I read that if it were not for Islam, we would not have today
    Greek Philosophy. Something about Greek Philosophy was translated into Arabic and only it survived and then re-translated for the ‘West,’ in Islamic “al Andalus,” in Cordoba, & Toledo considered to be the ‘centre’ where the Western intellectuals ‘traded’ and learned with their Islamic counterparts.

    Pls. continue.

  • Barros Serrano

    Algebra was made possible by the discovery of the zero, which was made in India (and independenty by the Maya). Most of the scholars in Baghdad were Persians and Jews. In Córdoba and Toledo they were mostly Jews.

    I have no idea what is a SocDem. Demosocialism is a common term used for the progressive policies enacted in Europe. It is the reason EVERY other developed nation is superior to the backwards craphole U$A.

  • Tom Borromeo

    “SocDem” is a Social(ist) Democrat. Is it just a different emphasis on one or the other terms ?
    This “SocDem” focuses more on keeping the Democratic portion of Socialism;
    while DemoSocialism wants to keep/emphasise more the Socialism portion ?
    Have you been “Bern’d” ???

    Question: if the U.$.A. is a ‘cr*phole’ as you say, why is it the only genuine ‘Superpower’ left on the planet ? It still is the biggest economy too, still ahead of China.

    Acerbic wit notwithstanding,

  • Barros Serrano

    You know little of democratic socialism. It would be easy enough for you to research the politics of the rest of the developed world, all superior nations to ours, with happier people and better standards of living. In the U$A currently, the life expectancy is dropping. The U$A since 1981 has been sliding into the 2nd world.

    The Roman Empire was militarily powerful even when millions lived on the edge of starvation, including in Rome itself. They had to create a dole of bread to prevent rioting. Learn history… because you will be repeating it.

    U$A’s treatment of immigrants on the border under Trumpolini is an outrage and national disgrace. Anyone still supporting Trumpolini after that debacle is amoral scum.

  • Tom Borromeo

    Guilty ! I plead “Socialismutitis SINdrome” and cannot help but see the over-all ‘positives’ of “Capitalism” in our time, but hold,
    as an observant Catholic, I also plead Pope Leo XIII’s Encyclical “Rerum Novarum.”
    “It discussed the relationships and mutual duties between labor and capital, as well as government and its citizens. Of primary concern was the need for some amelioration of “The misery and wretchedness pressing so unjustly on the majority of the working class.”[6] It supported the rights of labor to form unions, rejected socialism and unrestricted capitalism, whilst affirming the right to private property.”

    Many thanks for your ‘patience,’
    & with that I might say FULL STOP !

  • Barros Serrano

    That was not entirely coherent, but it seems that you are using Papal authority to support demosocialism.

    Indeed “misery and wretchedness” do press unjustly on many still today, especially in developing nations, and all are oppressed for the profit of the corporations who support their dictators and deathsquad governments.

    The Right calls Unions socialism or communism. Any restrictions on capital are considered by today’s Republicans to be socialist or communist.

    The closest to a Biblically valid system on earth today is the demosocialism of ALL the developed nations but the U$A, a putrid backwater of reactionary fascist “conservative” retrenchment.

    France, Israel, New Zealand, Denmark, UK, Canada, Germany… they’re all SO much better.

  • Robert__H

    I generally agree with your pro capitalist view of Islam. but would like to emphasize the driving force of the profit motive as the force behind innovation, efficiency, and economic growth. This does not lead to exploitation as Mr. Serrano (your opposing commentator below) suggests, but has lifted hundreds of millions of people from poverty to a more secure and prosperous existence (I’m reluctant to call it middle class yet). Paradoxically, Mr. Serrano’s evil greedy capitalists have also given rise to a rapidly growing sector of the capitalist economy, foundations and charitable organizations, also a tenet of Islam. Most of those capitalists have realized that you cannot take it with you. Lastly, to reign in the excesses we need in our mixed economy some tough regulation and social support services.

    In your discussion of capitalism you do not discuss Islamic finance. I would criticize Islamic finance as follows: it does a disservice to devout Muslims who believe that to be Islamic they must deal with the opaque and expensive products offered by Islamic banks, rather than the equivalent products offered by conventional institutions. Modernist scholars such as Fazlur Rahman and Abdullah Saeed do not accept that interest is the the prohibited riba. interest in modern markets is obviously not the same as exploitive usury practiced at the time of the prophet by unscrupulous money lenders. While Islamic scholars reserve the right to interpret such issues, I cannot believe that Allah would really care whether I took a declining balance murabahah Islamic mortgage or a conventional one with similar cash flows.