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AL HABTOOR RESEARCH & STUDIES 
America and the western democracies have claimed that the economic collapse of the Soviet Union that ended the cold war was a triumph of free market capitalism
over socialism. This crumbling of the socialist economic model is cited by the West as the first step towards a global economic system, through which goods, services,
capital, investment and labour to be able to cut across old political and geographical boundaries and national borders, and assume an international character. This
globalisation of goods, services and capital, it is claimed, also allows ideas and values that have positive social and economic benefits to transcend geographical borders
and national differences. This change in international affairs and the setting up of institutions such as the World Trade Organisation (WTO), the International Monetary
Fund (IMF) and the World Bank -to facilitate this flow of capital, goods, services and manpower - has become known as Globalisation.
Almost every country in the world today is in some way affected by the forces of the globalisation. Mankind's future is linked as never before, as a revolution in
communications technology brings us all closer together. Optimists argue that this globalising of the world economy is creating unprecedented opportunities for the
creation of wealth and the betterment of the human condition. They argue that reducing barriers to trade and capital flows will fuel economic growth for everyone
and ultimately eradicate poverty. But it is obvious to many, that, as the shape of our new globalised society becomes more defined, the benefits of globalistion are not shared equally by all.
Prosperity still remains the preserve of the world's major industrialised countries. Despite progress in raising the standard of living for people around the world over the
last few decades, half the world's population still lives on less than two dollars a day. Many live in conditions of extreme deprivation. In the new global economy the poor
are being marginalised. The expanded capital flows sweeping across the globe are like violent ocean tides, suddenly flooding local markets and just as suddenly ebbing,
leaving financial instability in their wake. Most of the mature developed economies can cope with such capital surges, but for developing countries these flood tides can
have a devastating effect, often collapsing their entire economy, causing political and social uncertainty. People around the world are beginning to question the effectiveness of a global free
trade system at delivering the benefits it first promised. Many are looking for other, more equitable alternatives to this unrestrained free trade economic model. None more so than Muslims and their leaders.
Muslims have long felt very uneasy with the notion of unrestricted laissez faire capitalism, because it goes against many of their deeply held religious and moral beliefs. Islam is a complete way of life. Muslims believe that God, the Creator, through the Qur'an and Sunnah,
has given clear guidelines affecting all aspects of life. For instance, it gives guidance on how Muslims should engage in economic
transactions and trade. Just as Muslims are obligated to obey the rules of Islam regarding prayer, fasting and conduct in their daily lives, they are also commanded
to obey the injunctions regarding commerce. This has led many Islamic scholars, intellectuals and businessmen to call for a more equitable form of capitalism that
meets Islamic moral injunctions on profit and interest. 
An Islamic economic model, like the conventional economic models, is really the study of man and his behavior in the acquiring and using of resources for the
satisfaction of the necessities, needs and other requirements of life. The Islamic economic model differs from the western one by placing emphasis on human and
social considerations when making economic decisions. It does not merely seek profit, regardless of the cost. The criterion by which investment decisions are made
should be the product of a mix of moral values, social aspirations and concerns, and a desire to fulfill other needs, feelings and emotions.
An Islamic economic model is an attractive alternative to globalised free trade, as it dictates that all economic activity has to have an ethical and moral dimension. It
proclaims that life and property are a trust from God and absolute ownership resides with him and not man. Therefore, man does not have the right to destroy his life and
property at will, or take advantage of others for his gain. Moral values and economic benefit to mankind as a whole would govern production and consumption.
Nevertheless, freedom of enterprise is allowed, providing it is both moral and socially beneficial. The Islamic economic model disapproves of the western disregard of the
global ecological balance, as it is offensive to the Islamic value system. It sees man as holding all of the earth's resources in trust for future generations of mankind. God,
who ultimately owns all things, has placed this trust with man; to destroy these resources is therefore an offense to God. Although the profit motive is recognised as
a legitimate driving force of economic endeavour, the Islamic economy condemns excessive profit and the charging of interest. An Islamic economy would not do what
capitalism does, namely, legitmise greed and the pursuit of material gain. Perhaps, the Islamic economic model can become a viable alternative to global laissez-faire
capitalism. Its emphasis on a just distribution of resources, while recognising the principle of wealth creation, is ironically exactly what every anti-
globalisation protester and environmentalist is calling for when they demonstrate against the International Monetary Fund, the World Trade Organisation and the
World Bank. They too recognise the need for profitable economic activity. Their grievance is that the benefits of a globalised free market economy work to the
benefit of those already rich, at the expense of the world's poor. They wish to see an economic system that is balanced and fair to all.
There is a huge bias towards the rich under capitalism; their huge reserves of wealth enable them to speculate on currencies, trade in shares and lend money through
stock exchanges and money markets whose rules are written by the rich. Global currency speculation is particularly destructive and in many instances it destroys the
targeted countries economy, leaving poverty in its wake. This bias also allows powerful global corporations and financial institutions to have free reign on the
wealth of all developing countries as they open their economies to global free trade. Islamic economics could be the answer to the current Darwinian "dog eat do" trading
system, that allows financial markets to control capital, regardless of the harm that it may do. A trading system based on the Qur'an and the Sunnah would provide an
ethical and humane economic model in which speculation and interest would disappear, and money, once again, would become means of exchange and not a commodity for speculation.
In the search for a workable alternative to globalisation it needs to be recognised that it is now absolutely impossible to evolve any alternative based on nation states,
or particular secular or religious beliefs. No state or religion by itself can find a viable answer to the challenge of globalisation. Information technology and modern
transportation systems have enabled trade to cross borders to such an extent that today no one country or economy can stand alone and prosper.
However, for the global trading system to adapt an Islamic economic approach to globalisation it must not become dogmatic; it has to recognise that seeking change,
improving our circumstances and seeking to advance ourselves is a fundamental human urge. Therefore, an Islamic economic model that denies this dynamic will
become moribund. While it is right that there should be an underlying ethical and moral base to the Islamic economic model, any notion that economic behavior has
the sole aim of conserving a certain social structure will fail. For Islamic economic theory to be successful it must incorporate the notion of change in its development.
We cannot ignore the human urge to be creative. Humanity's creative drive has allowed humans to advance and transform the way in which they conduct their lives.
An Islamic economic model should now, as it did in the past, allow mankind to continue to develop and grow.
The spiritual and moral values of an Islamic economic theory can offer a viable alternative to laissez -faire capitalism. It can create and develop markets, allow for
entrepreneurship and develop banking and trade, but be based on a system that emphasises a fair distribution of the benefits of the Earth's riches by valuing human
life above the blind pursuit of profit. Muslims and non-Muslims alike should argue for an ethical market; a market that is regulated not by the interests of any particular
group, but on the basis of values. If this could happen, then we could shape a global economic system that comes closer to the values that are fundamental to all our religions. |
