Islamic economy has strong universal appeal, yet it remains on the fringe: A 'maqasid' expert explains why

KUALA LUMPUR, May 31 ― Shared prosperity. Inclusiveness. Anti-profiteering. Fair, ethical and sustainable trade.

These are what advocates of the Islamic economy say are the core tenets of an egalitarian economic system that is guided by the “higher goals” of shariah (maqasid shariah) which puts preservation of life, social well-being and environmental protection above profits.

Maqasid is Arabic for objective or purpose and Islamic economists say the overarching aims of the shariah is achieving public good and preventing harm to individuals and society.

So why is Islamic economics still ancillary to conventional free-market theories that are centralised on the belief that only profits can provide prosperity?

Malay Mail spoke to Jasser Auda, president of the Maqasid Institute, who was the lead panellist at the Global Forum on Islamic Economics and Finance recently held here.

Jasser, a professor, is considered an authority on the subject of maqasid shariah and its application in various fields, including economics.

In your own words Dr Jasser, how would you describe the Islamic economy?

The Islamic economy cannot be described in a singular way that's (rigidly) applied at all times.

As the time changes, we need to do ijtihad or new thinking so that we define Islamic economy according to the time.

The current philosophy of the economy that we live with is the capitalist economy. It is similar to an Islamic approach in some aspects but it also contradicts the Islamic approach in other aspects.

So what we need to do is fortify and support the good aspects of the capitalist economy and reduce the negative aspects.

(An example) of the negative aspects are the interest rates, or interest-based investments and economy. And in order for us to move towards an Islamic economy, we need to decrease as much as we can interest rate transactions into interest-free transactions.

The capitalist economy also has a problem of harming the environment, therefore to move towards an Islamic economy we need to consider the environment and the way we approach growth economically because sometimes growth goes against the interest of the environment so it's about how we achieve both ― that is to grow while protecting the environment.

How is it different from a more regulated capitalist economy?

The capitalist system also has positive sides that have to do with the technology that it develops and the markets and so on.

From an Islamic point of view we need to capitalise on that and make sure that we grow these positive aspects.

So the question of defining the Islamic economy does not have one answer. It is to increase what is good from the status quo and decrease what is harmful.

So what is preventing us from adopting the Islamic system as opposed to a capitalist economy?

One reason I believe is the way we approach Islamic education. Sometimes we educate our children very well for ibadat or the acts of rituals like how to do prayers, pay zakat or do umrah but we don't educate them on the economic side of Islam.

So basically I talked about wakaf or endowment. Our children grow up mostly not knowing what is wakaf even if it is an integral part of Islamic law.

It's when you have extra and you want to donate something, you donate to institutions like a farm that is going to feed everyone every year, or you donate to schools that are going to educate without charging or something of that sort. This idea is not an integral part of Islamic education and this is a problem.

Another big problem is greed. We have a culture of greed and individualism that can be found anywhere in the world, not just in Western societies.

... the Islamic world as well?

Yes, the Islamic world as well. I'm Canadian and I'm from the West and I see it also in Islamic countries and this greed makes us sometimes not rely on the concept of rizq of Allah (not only material possessions such as food, wealth, and shelter but also intangible blessings like knowledge, good health, opportunities, and guidance).

Allah is telling us that Earth is full of good, we don't have the concept of scarcity of resources on Earth... we have enough. Sometimes the haves are greedy over the have nots so we have to find a way to be more equitable as well as utilising Earth's resources in a more just and balanced way.

As we pursue growth we have to stop relying on a purely capitalist system to one that Islam can have an impact on.

Do you see Islamophobia as a hurdle in getting more people to support the tenets of Islamic economics because a lot of what you described actually has universal appeal.

I think that is also one of the problems. We present Islam as if it is only for Muslims. Fair trade for example, we talk a lot about fair trade in this conference, fair trade is for everybody. Interest-free economy is actually good for everybody and it's not just an Islamic thing.

When someone wants to leave a legacy and donate an endowment for charity it is for everyone not just for Muslims, similar to when a non-Muslim wants to open a university. I think the problem is we are not universalising Islam as much as we should.

From your assessment, do you think Malaysia applies the maqasid in its economy?

I'm actually quite impressed at how Malaysian society, Muslims and scholars, are open to new ideas at least from what I have seen.

The maqasid (shariah) are not new, they are from the old times but the study and focus in this way (economics) is new.

I am seeing more discourse on the maqasid in Malaysia when many other countries in the world, including the Arab world, do not know the meaning of maqasid. In Malaysia, there is more discourse.

I believe Malaysia should take the lead in education and research of the maqasid and that is why I'm here visiting the universities, spending some time, promoting these ideas and supervising research.