Career and Money

Islam’s Free Market Heritage

Published

March 20, 2007

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The Institute of Public Affairs (IPA), an Australian conservative/libertarian think tank, has published an interesting article [pdf] on Islam and free markets in their latest issue of Review. There are some questionable parts, but it’s worth a read, particularly the section on Ibn Khaldun’s contribution to economics: giving the world an early version of David Hume’s partition of employment or Adam Smith’s division of labour; and, it seems, an early version of the Laffer Curve, which formed the basis for the supply-side economics and associated tax cuts carried out during the Reagan administration.

We often hear about the contribution of early Muslim scientists, such as al-Biruni or al-Zahrawi, but it’s not often we hear about the contribution of early Muslim economists.

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10 Comments

Hassan

March 20, 2007 at 9:59 AM

Subhan-Allah, Islam is always in smack middle of 2 extremes. Even in economy it has beautiful balance of capitalism and socialism. Hence its comprehensive in nature.

I remember while taking Aqeedah 102 with Sheikh Yasir Qadhi hafidullah, he mentioned a hadith, for which I have forgotten exact words, so kindly if someone remembers quote it. It was something to the effect that shabah RA wanted prophet Muhammad PBUH to set prices in market, and he PBUH refused saying Allah is ___ (I am not sure of name, so do not want to quote, it was something to the effect that Allah is the one who sets the price). This shows the free nature of islamic economy. From fiqhi point of view, I want to ask, can islamic state set the price of gas?

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Amir

March 20, 2007 at 10:14 AM

Narrated AbuHurayrah:

A man came and said: Apostle of Allah, fix prices. He said: (No), but I shall pray. Again the man came and said: Apostle of Allah, fix prices. He said: It is but Allah Who makes the prices low and high. I hope that when I meet Allah, none of you has any claim on me for doing wrong regarding blood or property.

Source: Sunan Abu Dawud

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ِAbu Bakr

March 20, 2007 at 12:08 PM

al-Musa”ir

المُسَعِّر

Reply
Hassan

March 20, 2007 at 12:31 PM

http://www.counterpunch.org/naylor02242007.html

Interesting, but not sure if it is accurate.

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abu ameerah

March 20, 2007 at 12:59 PM

“Islams Free Market Heritage”….

word.

Adam Smith ain’t got nuthin’ on us! Back Up Adam Smith…BACK UP!

I see you trying to look all tough in background Milton Friedman….you too, John Maynard Keynes!

Reply
AnonyMouse

March 20, 2007 at 2:46 PM

Masha’Allah, awesome! And perfect timing, too – I’ve been wondering what Islam’s relation is to capitalism and socialism/where in between the two it falls…

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Amir

March 20, 2007 at 7:40 PM

Intervention in the market is the exception, rather than the rule. See this post for an example of what happened to the Ottomans and how their attempt to institute a socialist-style command economy led to their decline.

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shireen

December 22, 2008 at 12:54 AM

salams. the pdf file is ‘not found’ anymore. does someone somewhere have it saved?

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