Islamic Economy Its Ideological and Legal Foundations

Conclusions

Based on what was discussed above we can briefly highlight the following practical conclusions:

First, we repeatedly see or hear those who suggest the idea of cross-combination of ideology and system which signifies the establishment of a socialist or a capitalist economic system in an Islamic environment or the implementation of Islamic institutions in secular social structures. When these combinationists do not achieve desirable results from their efforts they tend to ignore the contradiction between the system and its implementation context and place the blame on the system itself. We may mention two experiences as examples here:

1. the experience of establishing socialist systems in our Islamic world and their quick failure as in Algeria -- during Houari Boumedienne's presidency -- and Libya.

2. the experiment of setting up al-qar_ al- [interest-free loan] funds under secular systems where it was struck with unsatisfactory results that encouraged the opponents to attack the resulting situation as cacophony and accusing the planners of neglecting the absence of favorable conditions.

Second, If we wish to achieve good results in our Islamic community, we must provide the desirable grounds through deepening the faith in Allah and disseminating the elevated Islamic ethics, explicate the Islamic concepts related to economics and convey them to the public, and strive to mobilize the feelings and sensations and give them a desirable Islamic shape. As long as we do not accomplish this task we should not expect ideal results. In this regard, I would like to draw your attention to some advertising tactics employed by the banks which concentrate on the profits generated by the money deposited in al-qar_ al- funds and on prizes that it may bring for the depositors without ever referring to the great reward which ensues whenever they participate in the revitalization of the public economy and server the society through their bank activities and deposits and without mentioning the noble ayat and a'dith which call for such deeds.

Third, we propose that Islamic banks form a fiqhi' committee consisting of prominent scholars, and further, that the mujtahids in al-'t al-`ilmi'yyah (Islamic theological schools) undertake a study about the legitimacy and plausibility of the proposed economic, financial, and banking systems from the viewpoint of Islamic laws and constantly express their opinions concerning new forms for such systems.

Bay` al-salam [forward sale], and bay` al-salam al-muma'thil [fungible forward sale], bay` al-is[manufactural sale], tawri'd [mutual forward] contracts, murabahah [resale with stated profit] contracts, and so on are examples of economic institutions that provide banks with more alternatives for economic activities. This is what the late Shahi'd al-@adr proposed a quarter of a century ago through his famous proposal known as riba'-free banking and what I put forward as the draft law for the prohibition of riba' in the Islamic Republic of Iran. Ijtiha'd is indeed a source of blessing and Islamic rules are overflowing reserves that can undoubtedly help us to safeguard the Islamic character and spirit and overcome the difficulties caused by the developments of modern life.

Endnotes

1. These goals include, for example, Qur'a'n's emphasis on avoidance from creating a situation that causes exclusive circulation of wealth only among the rich, and its emphasis on the necessity to prohibit the manipulation of the property which Allah made the sustenance of the ummah, or the emphasis by some nu#u'# on the view that the purpose of trade is to extract benefits or on the prohibition of if its opening results in evil consequences and so on.