Book Review: The Economic System of the Early Islamic Period, by Seyed Kazem Sadr

Posted by Samawi on Sep 29, 2016 in Blog, Reflections | 0 comments

Bismi Rabbi Shahri ʿĀshūrā (Ṣ)

What follows is a draft book review by Professor Abbas Mirakhor, current holder of the INCEIF Chair in Islamic Finance, of Seyed Sadr's latest book; it is presented here with his encouragement and blessing. As needed, we will update this post with edits of this draft, as well as with further information about the book under review and its author. In shāʾa Ãllāh.

Professor Abbas Mirakhor, one of the world's foremost authorities in Islamic Economics and Finance, is currently serving as the First Holder of INCEIF Chair in Islamic Finance, International Centre for Education in Islamic Finance, Lorong Universiti A, Kuala Lumpur, Malaysia. He has also worked for many years as Executive Director, as well as Dean of the Executive Board, at the International Monetary Fund. For a brief bio, click here.

Sayed Kazem Sadr, Professor Emeritus of Shahid Beheshti University, is also one of the world's chief authorities in Islamic Economics. He comes from a prestigious family of Islamic scholars.

In WALAYAH

Samawi

Seyed Kazem Sadr, The Economic System of the Early Islamic Period: Institutions and Policies, Palgrave Macmillan, 2016, 296 pp. $125 Hardcover.

By Professor Abbas MIRAKHOR

Laureate, Islamic Development Bank Prize

Abstract. The book is a major contribution to Islamic economic history and to Islamic economics in the English language. It presents a comprehensive yet concise economic hermeneutic of policies implemented by the Messenger (saas) in Medinah. It is an authoritative presentation based on the Qur’an, the Traditions of the Messenger, and some of the earliest writings of Muslim historians and jurists. Within the context of the universe of discourse of contemporary economics, the book discusses implications of policies of the Messenger with regards to allocation of resources, production, exchange, growth, development, environment, efficiency, and justice. For those who think that zakat, prohibition against interest, waqf, and the like are the only elements that distinguish an Islamic economy from other systems, the depth and the breadth of the book will provide a transformative experience. This Review argues that the appearance of the book is particularly timely given the distorted, disembedded, and fictitious model of an Islamic economy manufactured by Orientalists. The book will go a long way in correcting these distortions.

Keywords. History of economic thought, Macroeconomy, Macroeconomic policy, Economic policy, Economic history, economic systems, Political economy.

JEL. B1, E4, E6, N1, P4, P48.

For those familiar with the writings of Professor Sadr, the appearance of this book in English had been much awaited. More than three-and-a-half decades in the making, the book is indeed what Palgrave Macmillan Editors of the series in Political Economy of Islam call an “invaluable contribution” and “a unique and major piece of research” (see the foreword to the book). These words are no exaggeration. To the best knowledge of this reviewer, this is the first comprehensive yet concise book by a Muslim scholar in English on this topic. The author swims effortlessly in the oceans of history of Islam and the economics of its earliest period as well as that of the Qur’an, Hadith and Fiqh (Islamic jurisprudence). Evidence is the book’s seamless journey through time: from the writings of Ibn Hisham, Ibn Hajar Al-Asghalani, Hakim Naishaburi, Al-Mawardi and Ibn Al-Qudama; to Keynes, Friedman, and Becker. Readers will experience the same seamless movement from deep concepts of Fiqh to contemporary economic theory.

A competent analyst, Sadr covers a vast topic in less than 300 pages, beginning with the pre-Islamic socioeconomic and cultural history of the Arabian Peninsula; he shows concretely and analytically how the rules and institutions of the economy in that area were comprehensively changed by the Qur’an and the policies of the Messenger (saas). Up to now, this field, in terms of published works in English, has been left to Weberian¹ and Marxists Orientalists writers. By and large, Muslim scholars have not shown a great deal of interest in the economic history of the early Islamic period. Professor Murat Cizakca is an exception in that his recent book (2011) uses extensive evidence from the Qur’an, Sunnah and economic history to argue two major points. The first is that, contra Weberians, Islam is not responsible for the economic underperformance of Muslim countries. What is responsible is the cumulative effects of path dependency of deviation of practice from the ideal; indeed, that has been the central idea of Muslim reformers for more than a century. The second point Cizakca argues is that if capitalism is defined by protection of property rights, contract enforcement and good governance, then the economic system in place in Muslim countries from seventh to the thirteenth centuries was capitalism derived from the teachings of the Qur’an and the Sunnah of the Messenger (saas). While the objectives and approach of the two books differ, they complement one another. Readers would gain a deep sense of the dynamism of the ideal Islamic economy from reading the two books.²

The objective of the “book is to provide an authentic model of an Islamic economy.”³ That model is a coherent framework gleaned from the policies of the Messenger (saas) who operationalized the Qur’an’s abstract and immutable vision of an economy. The first two chapters of the book deal with the history of the Arabian Peninsula before Islam up to the time of migration of the Messenger (saas) and his followers to Medinah. A unique feature of these chapters is that it sheds light on the social reforms of the Messenger’s grandfather, Abdul-Motallib, aimed at improving social solidarity and social stability. The important role of this social reformer has been ignored or not emphasized enough by Muslims and Orientalist writers even though the importance of some of the institutions (see pages 14-17 of the book for the list) he established have been acknowledged. Overall, the two chapters provide a short but comprehensive glimpse of socioeconomic conditions of Mekkah and the position of the Messenger (saas) before and at the inception of Islam.

Chapter 3 covers the migration (Hijrah) of the Messenger (saas) and his followers from Mekkah to Medinah. One of this chapter’s unique contributions is the coverage and analysis of one of the most important documents in human history: the Constitution of Medinah, the first written and extant social contract in the history of humanity.⁴ The preamble of this document declares that Muslims and non-Muslim residence of Medinah constitute an Ummah⁵, an astonishing contrast with the present sorry and deplorable state of inter-religion relationships. In Chapter 3, Sadr discusses the rules promulgated by the Messenger governing the rights and responsibilities of Muslims and non-Muslim inhabitants of the city-state. Once the historic background to the subject is firmly grounded, the remaining chapters (4-12) of the book turn to collating all the elements of the institutional scaffolding of economy designed and implemented by the Messenger based on the rules prescribed by the Allah swt in the Qur’an. Within the context of the economic universe of discourse, and employing contemporary analytic economic tools, the author analyzes the implications of each rule for physical and human capital allocation, growth and development, environment, efficiency and justice. For those who think of an Islamic economy as one differentiated from a capitalist economy only by existence of institutions such as zakat, prohibition against interest, and the institution of waqf, chapters 4-12 of the book are sure to be a revelation and a wake up call.

As often happens when reading a truly significant book, one is left thirsty for more and this book is no exception. The book’s policy recommendations for Muslim countries of today, based on the Medinah model, would be enlightening for a world thirsty for a new paradigm of economics and finance. But that would mean a much larger book. A strong positive response to the present book may persuade the author to address this issue in another book. For now, however, the book is a timely contribution to correcting the distorted image of the Islamic model of the economy currently in vogue. To argue why this is the case, the remainder of this review will focus on the present deconstructed, disembedded and highly distorted image of the model created by contemporary Orientalists.

Orientalists’ ersatz model of an Islamic economy

Sadr’s book is especially timely given the current ferocity of attacks on anything Islamic. Even to Muslims aware of the history of a millennium and a half of anti-Islam rhetoric⁶, the intensity of the present dawning of the “age of unreason” of the “West against Islam” in the twenty-first century “global village” is baffling. Muslims, by and large, have been aware of misrepresentation of Islam by Orientalists writers, such as Bernard Lewis and his “native informant” followers.⁷ However, until recently, apparently no Muslim scholar considered these views worthy of response. This “silence of the natives” left the field wide open for the ideologically based, quasi-intellectual works of Orientalists missionaries. The task of unmasking the “charlatanism” of these writers was left to the Palestinian-American scholar, Edward Said, whose book Orientalism is now a classic⁸.

The essence of Said’s argument is that these “charlatans,” unwilling or unable to understand the Islam of the Qur’an, create a “fictitious Islam”, an ersatz Islam with its own fictitious “Islamic Law”⁹ as a straw man. This “vulgarization of Islam”¹⁰ then becomes the subject of their robust criticism. Said argues that this “Islam” in the Orientalist discourse is part fiction, part ideological, and part minimal designation of a religion called Islam.¹¹ To erect the ersatz Islam, Orientalists select a few institutions from “Islamic law,” which they often conflate with Islam, to serve their agenda. For Bernard Lewis’ ersatz socio-political model of Islam these are the concepts of “fitna” and “bid’a”; the former inhibits development of democracy while the latter prohibits progress through innovation¹². The ersatz Islamic economy supplements Lewis’ socio-political conception by adding five other institutions, prohibition against interest, zakat, waqf, Islamic contract law, and inheritance law, all taken out of their original context. As Sadr’s book makes clear, these four institutions are essential and inseparable elements of the totality of the model implemented by the Messenger (saas) in Medinah. Sadr explains, using contemporary analysis, how this model insures stability, sustainability, efficiency, growth and prosperity with justice.

The Orientalist ersatz Islam deconstructs and disembeds the essentials of Islam. Talal Asad suggests that this “de-essentialization” of Islam is necessary to the mission of the liberal, secularist, new-Orientalists: remaking Islamic tradition “in the image of liberal protestant Christianity”.¹³ Secularism is a crucial element of the narrative of Orientalism’s ersatz Islam as the inhibitor of development compared to economic evolution of the West. In essence, secularism’s ostensible aim is the separation of sacred from secular or at least privatizing religion and secularizing public life. Kuran (2011, pp. xi-xii) stresses that secularism is a precondition for capitalism. He argues (p. 7) that “the identifiable handicaps” created by “Islamic law” for “investors, merchants, artisans, or money lenders” could have been “circumvented” by “secularization” of “commerce and finance.” The message is clear: secularism led to capitalism and rapid development of the West while Muslim countries diverged from the West and fell behind because secularism, and thus capitalism, did not develop in these countries. Choice of the West as a benchmark is axiomatic in the Orientalists’ thought. Hence “in exploring links between economic failures” and Islam, the “West serves as the primary basis for comparison because it is where the modern economy gradually took shape.” (p. xi). Other Orientalists’ rhetoric is more blunt. For example, Huff (1999, p. 15) asserts that “those Muslim countries (both with or without massive oil reserves) which seek to embark upon the path of economic development have to jettison virtually all aspects of Islamic law that relate to business and commercial activities.” There is no hope for Muslims, according to this line of thought, to exit their wretched economic backwardness unless they de-essentialize Islam, “a religion now widely viewed as a source of backwardness, ignorance, and oppression.” (Kuran, 2011, p. xi). There is, however, good news. Muslims have been borrowing “key institutions of modern capitalism” by stealth. They have disguised these institutions in the process of adopting them so that they become “culturally acceptable, even to a self-consciously anti-modern Islamist.” This helps Muslims to secularize without “opposing Islam as a religion, or even dealing with it.” (Kuran, 2011, p. 302). The arrogance is breathtaking.

Orientalism inherited its anti-Islam ideology from the secularism of the Enlightenment; its rhetoric goes back to the anti-Islam polemics of the Middle Ages and even further back to the origin of Islam.¹⁴ Jakobsen and Pellegrini (2008, pp. 2-3) suggest that the claim “that Islam is responsible for the violence in today’s world is deeply indebted to the fact that the idea of secularism, with its claim of universal reason, is accepted as common sense powerful protection against Islam.” In a recent book, Joseph Massad argues “Islam is at the heart of liberalism, at the heart of Europe. It was there at the moment of the birth of liberalism and the birth of Europe. Islam is indeed one of the conditions of their emergence as the identities they claim to be. Islam… resides inside liberalism, defining its identity and its very claims of difference. It is an internal constituent of liberalism, not merely an external other, though liberalism often projects it as the latter” [p. 1]. He further observes that regardless of the point of origin of Europe, Islam “seems to have a foundational role” [p. 15]. Massad echoes Roberto Dainotto (2007) who observes “a theory of Europe, from its very outset, is a theory of Orientalism” as it differentiates itself as opposite to Islam and the Orient; an essential element for the “European project” [pp. 18-19.]. In short, without Islam, Western liberalism seems inconceivable. It owes its very existence as well as “its current legitimation as a global ideological system” to its anti-Islam identity [Massad, 2015, p. 1.]. However, in a recent book, historian Larry Siedentop (2015) argues that Western liberal secularism was promoted by Christian moral beliefs and urges “those who live in nations once described as part of Christendom” and who “seem to have lost their moral bearing” to “look at the West against a global background” to see “that we are in a competition of belief” against Islam “a worldview in which religious law excludes a secular sphere” [p.1]. Note that according to Siedentop, liberal secularism’s emergence is tied to a religion (Christianity) and to a specific region and culture (Europe).

The subject of non-universal and geographically particular characteristics of secular liberalism and its link to a particular culture and religion owes much to the classic contribution of Max Weber (1958). Secularism, according to Weber, liberated markets from religion. However, Jakobsen and Pelligrini argue (2008, p. 2-3) that the market “was not fully secular but was, in fact, tied to a specific form of religious activity—reformed Protestantism.” Weber singled out the practice of what he called “worldly asceticism,” practice of self-control against worldly passions, as the most important characteristic of Calvinism that contributed to the emergence of capitalism. Jakobsen and Pelligrini note that practicing worldly asceticism while engaging in market activity was demonstration of “an already achieved salvation promised in Calvinistic predestination. Thus it could form a practice at once secular and religious.” Consequently, they argue “secularism remains tied to a particular religion, just as the secular calendar remains tied to Christianity.” They then ask, if secularism claims and promises universality, then “what does it mean that this universalism and the rationality it embodies are actually particular (to European history) and religious (Protestant) in form?” Based on these arguments, since the Orientalists argue that secularism is a pre-condition for capitalism and, yet, secularism and, by extension, capitalism are culture- and religion-bound, the argument of Orientalists that the only way for Muslim countries to converge economically to the West is to secularize in effect means to abandon Islam for another religion.¹⁵

A chief characteristic of the Orientalist mission is a willful ignorance of the Qur’an and the social, political, cultural and economic system it envisions for human society. Nor do they seem to be much familiar with the model of the economy established by the Messenger (saas) in Medinah, as described by Professor Sadr in his book. As Abou El Fadhl observes, these writers appear to have “an epistemic block” in understanding the authentic Islamic system. Aware Muslims will not be persuaded by the “smoke and mirror” delusional ersatz Islam of the Orientalists. This begs the question, for whom are they writing? Orientalists provide part of the answer themselves. They write for each other (as Bernard Lewis asserted in his debate with Edward Said in New York Times Review of Books, August 12, 1982). Also, as Crone and Cook (1977) declare in the preface to their book, Hagarism: “This is a book by infidels for infidels. Our account is not merely unacceptable; it is also one which any Muslim whose faith is as a grain of mustard seed should find no difficulty in rejecting.” This applies equally to more convoluted and more nuanced fictions masquerading as historical analysis with a covert agenda. A second group addressed is uninformed or ill-informed Western readers for the purpose of the usual “dehumanization” propaganda that precedes aggressive intervention by their governments, as was done in case of Iraq invasion, whose chief “academic” ideologues were Bernard Lewis and his followers.

It may be argued by some that Orientalist writers render a service since their criticism would help Muslim countries to reform. There is neither an attempt here to reject the idea that these countries need reform nor that some among these writers may have a genuine interest in the reform of Muslim societies. The point is that their approach is epistemologically misguided and methodologically wrong.¹⁶ Muslims are aware that their societies are in need of reform, but a reformed Muslim society is not one described by the Orientalists. An ersatz model based on the selective history of a very limited number of Muslim countries, whose historical record is hardly reflective of a society that the Qur’an envisions, could not be expected to convince anyone except the uninformed. Those who have no agenda other than genuine concern about the economic wellbeing of Muslims should consider the advice of another (exceptional) Orientalist, Bishop Kenneth Cragg who argues: “What hallows and dignifies Islam is from its own sources, what weighs upon Muslims of religious stress must be relieved in their own context. Islam belongs to Muslims and Muslims to Islam whether in the joy of assets or the register of debits, if such are the terms we use. Muslims need and want to be Islamically secure and secured. The terms of their present inner crisis belong with their historic inter-possession of faith by faithful, of truth by troth. Wise relationship from outside must, therefore, learn to come within” (Cragg, 2005, P. 9).

There have been many valuable diagnostics of Muslims’ “inner crisis” offered by Muslims themselves in the past many decades including those of contemporary scholars such as Allawi (2009), Abou El Fadhl (2014), Cizakca (2011), Davutoglu (1993), and M. Umar Chapra (2010). These and many other writings of Muslims are usually ignored by Orientalists. But those who are interested in reform of Muslim societies, are willing to “come within”, to understand the benchmark against which Muslims themselves measure reforms, would do well to start with Professor Sadr’s book. For the authentic and ideal structure of Muslim society, as well as its institutional scaffolding, is the one envisioned in the Qur’an and established, in a manner appropriate for that time, by the Messenger (saas) in Medinah. The core immutable principles of that model, covered well in the book under review, establishes the framework of reform of current Muslim societies.

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Notes