well, basically if you look at most fiqh books or hadith books which deal with economic issues in islam, there are a considerable number of dos and don’ts which put ethical/moral limits on what can be done with wealth. (not just the minimum of not stealing, but limitations on charging interest, certain forms of share-cropping, price gouging, profiteering, other business arrangements). not every example of economic behavior between consenting adults is permitted. And under an Islamic regime, these rules would be enforced by the government.

Another factor to think about is zakat, one of the pillars of islam which is a wealth redistribution program which would also be ideally adminstered by the government.

For example, in part of a “hadith” of Abu Bakr:

Abu Bakr said, ‘By Allah, I will fight anyone who makes a distinction between prayer and zakat! Zakat is the right which is due on wealth. By Allah, if they refuse me a nose-rope which they used to pay to the Messenger of Allah, may Allah bless him and grant him peace, I will fight them for refusing it!’ ‘Umar said, ‘By Allah, then I realised that Allah had expanded Abu Bakr’s breast in respect of the decision to fight and I recognised that it was the truth.” [Agreed upon]

Then in the time of the prophet and the early khalifahs there was a bayt-al-mal an institution which distributed wealth to the needy in addition to zakat… so the early Islamic state was basically a welfare state in some respects.

One passage in the Quran which I think is interesting in this regard is the 70th surah which talks about the attributes of a certain kind of righteous person:

70:23 Those who remain steadfast to their prayer;
70:24 And those in whose wealth is a recognised right.
70:25 For the (needy) who asks and him who is prevented (for some reason from asking);

perhaps this is something which depends on the translation but the idea of “a recognised right” seems pretty strong to me. There is not just a simple notion of private property where I have “my stuff” and I do whatever I want with it because it is “my stuff”. The things I have, I’m entrusted with from Allah, and it is up to me to use it ethically. Among the things which are “mine” are actually things which the needy have a right to. And in any case it really belongs to Allah anyway.

There is more evidence but those are some of the basic ideas I would want to put out there for your consdieration.

I agree with you that Islam doesn’t support extreme communism but it doesn’t support extreme capitalism either. It’s somewhere in the middle. Wealth should be used ethically, and under a functioning Islamic government, some of those rules/principles would be enforced by the state (a weldare state).

Abdul-Halim, could you please expand on what you have written above? Firstly, what are the elements in Islamic economics which are similar to socialism and, secondly, what is the proof that Islamic economics doesn’t advocate the free market (and capitalism)?

Jazak Allah khairan.

so what is the best common term to describe Islamic economic system? Islam isn’t communist but it also doesn’t advocate free market capitalism either. There are definitely some elements which are similar to socialism so quasi-socialism is actually a pretty accurate description.

Some very good arguments. I’ve often been amazed at how easily quais-socialist rhetoric is passed off as “Islamic economics” today.

wasalam