Relationship between capitalism and Islam
Islamic capitalism
was active during the
Islamic Golden Age
and
Arab Agricultural Revolution
, where an early
market economy
and form of
merchant capitalism
took root between the 8th?12th centuries. A vigorous
monetary economy
was based on a widely-circulated
currency
(the
dinar
) and the integration of
monetary
areas that were previously independent. Business techniques and forms of business organisation employed during this time included
contracts
,
bills of exchange
, long-distance
international trade
, forms of
partnership
(
mufawadha
) such as
limited partnerships
(
mudharaba
), and forms of
credit
,
debt
,
profit
,
loss
,
capital
(
al-mal
),
capital accumulation
(
nama al-mal
),
[1]
[
failed verification
]
circulating capital
,
capital expenditure
,
revenue
,
cheques
,
promissory notes
,
[2]
trusts
(see
Waqf
),
savings accounts
,
transactional accounts
,
pawning
,
loaning
,
exchange rates
,
bankers
,
money changers
,
ledgers
,
deposits
,
assignments
, the
double-entry bookkeeping system
,
[3]
and
lawsuits
.
[4]
Organizational
enterprises
independent from the
state
also existed in the medieval Islamic world, while the
agency
institution was also introduced.
[5]
[6]
Many of these early capitalist concepts were adopted and further advanced in
medieval Europe
from the 13th century onwards.
[1]
Some have argued that these economic activities laid the foundations for the development of modern capitalism.
[7]
[8]
Market economy
[
edit
]
A
market economy
was established in the Islamic world on the basis of an economic system resembling
merchant capitalism
.
Capital formation
was promoted by
labour
in medieval Islamic society, and
financial capital
was developed by a considerable number of owners of monetary funds and
precious metals
.
Riba
(
usury
) was prohibited by the
Qur'an
, but this did not hamper the development of capital in any way. The capitalists (
sahib al-mal
) were at the height of their power between the 9th?12th centuries, but their influence declined after the arrival of the
ikta
(landowners) and after production was monopolized by the state, both of which hampered the development of
industrial capitalism
in the Islamic world.
[9]
Some
state enterprises
still had a
capitalist mode of production
, such as pearl diving in
Iraq
and the
textile industry
in Egypt.
[10]
During the 11th?13th centuries, the "
Karimis
", an early enterprise and business group controlled by entrepreneurs, came to dominate much of the Islamic world's economy.
[11]
The group was controlled by about fifty Muslim merchants labelled as "Karimis" who were of
Yemeni
, Egyptian and sometimes Indian origins.
[12]
Each Karimi merchant had considerable wealth, ranging from at least 100,000
dinars
to as much as 10 million dinars. The group had considerable influence in most important eastern markets and sometimes [politics through its financing activities and through a variety of customers, including
Emirs
,
Sultans
,
Viziers
, foreign merchants, and common consumers. The Karimis dominated many of the
trade routes
across the Mediterranean Sea,
Red Sea
, and Indian Ocean, and as far as
Francia
in the north, China in the east, and
sub-Saharan Africa
in the south, where they obtained gold. Strategies employed by the Karimis include the use of agents, the financing of projects as a method of acquiring capital, and a banking institution for loans and deposits. Another important difference between the Karimis and other entrepreneurs before and during their time was that they were not tax collectors or landlords, but their capitalism was due entirely to trade and financial transactions.
[13]
Though medieval Islamic economics appears to have somewhat resembled a form of capitalism, some
Orientalists
also believe that there exist a number of parallels between Islamic economics and
communism
, including the Islamic ideas of
zakat
and
riba
.
[
citation needed
]
Others see Islamic economics as neither completely capitalistic nor completely
socialistic
, but rather a balance between the two, emphasizing both "individual economic freedom and the need to serve the common good."
[14]
Others point out that Islam has an inherently capitalist nature and argue this most through respect for private property as the foundation of capitalism in Islam, as well as the historical fact that the
Muhammad
was an entrepreneur, a merchant.
[15]
[16]
See also
[
edit
]
References
[
edit
]
- ^
a
b
Jairus Banaji (2007), "Islam, the Mediterranean and the rise of capitalism",
Historical Materialism
15
(1), pp. 47?74,
Brill Publishers
.
- ^
Robert Sabatino Lopez, Irving Woodworth Raymond, Olivia Remie Constable (2001),
Medieval Trade in the Mediterranean World: Illustrative Documents
,
Columbia University Press
,
ISBN
0231123574
.
- ^
Subhi Y. Labib (1969), "Capitalism in Medieval Islam",
The Journal of Economic History
29
(1), pp. 79?96 [92?3].
- ^
Ray Spier (2002), "The history of the peer-review process",
Trends in Biotechnology
20
(8), p. 357-358 [357].
- ^
Said Amir Arjomand (1999), "The Law, Agency, and Policy in Medieval Islamic Society: Development of the Institutions of Learning from the Tenth to the Fifteenth Century",
Comparative Studies in Society and History
41
, pp. 263?93.
Cambridge University Press
.
- ^
Samir Amin (1978), "The Arab Nation: Some Conclusions and Problems",
MERIP Reports
68
, pp. 3?14 [8, 13].
- ^
Heck, Gene W. (2006),
Charlemagne, Muhammad, and the Arab roots of capitalism
,
Walter de Gruyter
,
ISBN
978-3110192292
- ^
Nolan, Peter (2007),
Capitalism and Freedom: The Contradictory Character of Globalisation
, Anthem Press, p. 277,
ISBN
978-1843312802
- ^
Maya Shatzmiller, pp. 402?3.
- ^
Judith Tucker (1975), "
Islam and Capitalism
by Maxime Rodinson",
MERIP Reports
34
, pp. 31?2 [31].
- ^
Subhi Y. Labib (1969), "Capitalism in Medieval Islam",
The Journal of Economic History
29
(1), pp. 79?96 [81?2].
- ^
The Cambridge economic history of Europe
, pp. 438?40.
Cambridge University Press
,
ISBN
0521087090
.
- ^
Subhi Y. Labib (1969), "Capitalism in Medieval Islam",
The Journal of Economic History
29
(1), pp. 79?96 [81?4].
- ^
Shadi Hamid (August 2003), "An Islamic Alternative? Equality, Redistributive Justice, and the Welfare State in the Caliphate of Umar",
Renaissance: Monthly Islamic Journal
,
13
(8)
(see
online
Archived
2011-08-25 at the
Wayback Machine
)
- ^
"Is Islam a socialist religion?"
.
Hurriyet Daily News
. Retrieved
2020-06-24
.
- ^
"ILN | Economic freedoms in Islamic countries ? Admir ?avali? - ILN"
.
islamandlibertynetwork.org
. Archived from
the original
on 2020-06-26
. Retrieved
2020-06-24
.
Further reading
[
edit
]