Prophecy, Piety, and Profits: A Conceptual and Comparative History of Islamic Economic Thought

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195

Ayman Reda

Prophecy, Piety, and Profits: A Conceptual and Comparative History of Islamic Economic Thought

Palgrave Macmillan, New York, 2018, pp. 402

Reviewed by: Tariq Aziz

Assistant Professor, Department of Business Administration, Aligarh Muslim University, India

ABSTRACT. In the history of ideas, the unit of analysis is an individual concept. A historian tries to identify and describe the emergence, evolution, and recession of ideas over time. The present book may fall in this category where the author presents the history of intellectual thought on selected topics in major intellectual traditions including Islam. Islamic economic thought is an important link between Greek philosophy and modern economic thought. This book under review presents, in an intellectually provoking and lucid manner, the intellectual economic thoughts in Greek, Christian, Islamic, classical, neoclassical, and modern intellectual traditions. At a time when the world is facing grave economic and financial issues, the book‟s attempt to provide an intellectual history of economic thought from diverse traditions is novel in its scope and aspiration. This is an admirable work in an area of immense importance.

KEYWORDS: Intellectual thought, Islam, Greek ideas, Classical tradition, Neoclassical economics.

JELCLASSIFICATION: B10, B20, B29

KAUJIECLASSIFICATION: D0, F0, G2, A1, A2

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In the history of ideas, the unit of analysis is an individual concept. A historian tries to identify and describe the emergence, evolution, and recession of ideas over time. The present book may fall in this category where the author presents the history of intellectual thought on selected topics in major intellectual traditions including Islam. The author, Ayman Reda, is a PhD in economics from Michi- gan State University, USA, and teaches at the Uni- versity of Michigan-Dearborn, USA. He has au- thored many scholarly works on topics of the intersection of economics and religion. The present book is divided into five parts and 25 chapters. The first part surveys the intellectual history of thought on scarcity and abundance, the second part is on poverty and wealth, the third part deals with charity and usury, the fourth part discusses self-interest and rationality, and the fifth part covers the history of markets.

The first part, divided into 7 chapters, discusses the Greek, Christian, classical, neo-classical and Islamic views of the main plank of economics, i.e., scarcity. The author raises the question of whether the economic problem is that of scarcity or abundance. Analyzing of the Greek economic thoughts on abundance and scarcity, the author states that under the Greek economic thought, Hesiod considered the main economic problem as scarcity, as humans enjoyed abundance before being ejected from paradise, but now face physical and psycho- logical scarcity. Work assumes an exalted position while idleness invites social wrath. Healthy com- petition would solve the economic problem of scarcity in society. The author points out that his views on economics in Works and Days share a striking resemblance to the definition of economics by Robbins in 1932.

On the other hand, other Greek philosophers, Plato and Aristotle, differed substantially from Hesiod‟s view of the main economic issue. They consider the improper conduct and values of humans as the source of all economic, social, and political problems, and material insufficiency is not the root of the problems in their view. In their analysis, the nature of a good and happy life is the main concern and “allocation of scarce means … is pushed to the margin of their schema” (p. 12), and the solution lies in the readjustment of human values rather than a reallocation of resources. The

author quotes Aristotle as “men become richer not only by increasing their existing wealth but also by reducing their expenditures” (p. 13).

In the third chapter, the author elaborates on the thoughts on scarcity and abundance in the Chris- tian tradition starting from the fall of humans from the Garden of Eden to the stories of prophets in the Old and New Testaments. Yahweh‟s promise to lead back people from the land of scarcity to the land of abundance; Prophet Abrahams‟s reward of greater prosperity after a set of tribulations and trials; Prophet Joseph‟s rise in the ruling class of Egypt and celebrating economic policymaking as an exercise of wisdom; from the hardships of the people of Prophet Moses to gaining land, faith, and wisdom and observance to the law of Moses thereafter; the general belief at the time of Third Isaiah that prosperity of the nation can be achieved by assuming the role of mediator between Prophet Yahweh and the people of the surrounding nations in addition to the conditions of social justice and Sabbath; the author infers the possible solutions of the problem of scarcity from these Abrahamic traditions. In these biblical stories, the glory of nations is promised if countries follow the economic laws depicted in Yahweh‟s books. Thereafter, Je- sus‟s call was for – as epitomized in the Gospel of Mathews and sermon on the mount – seeking the kingdom, righteous conduct, prayer and fasting, and seeking the treasures of heaven instead of the treasures of the earth. However, the teachings of piety and not to worry for tomorrow by the prophets was triumphed over by mankind‟s concern for livelihood and work.

Consequently, leading by example, St. Paul ad- vocated for strong work ethics and working hard, and not to be dependent on others. In his view, work has to be seen as a service performed for God and not for the sake of men. The author goes on detailing the views of various Church fathers vis-à- vis work and wealth including Saint Clement of Alexandria, Saint Ambrose of Milan, Saint John Chrysostom, Saint Augustine, and Saint Thomas Aquinas who have varying opinions on private ownership. The stewardship theory of property was common to the fathers in which property and wealth are a trust from God and mankind is the trustee. To fathers, scarcity was a man-made problem and can be solved by controlling the excessive

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desires of rich and through charity. The nuances of different views of fathers, the author presents are remarkable. The author concludes the chapter by examining the papal views on matters of scarcity and wealth and reflects and integrates the views of fathers. The prominent deviation in their views was about the evolutionary nature of mankind where human effort can increase the general level of prosperity.

The fourth Chapter discusses the classical economic views on abundance and scarcity. The author elucidates the views of Adam Smith and Da- vid Hume on scarcity. He discusses how they consider production powered by division of labor and specialization as a solution to scarcity and at the same time they are concerned with the ine- quality which is a by-product of growth in production; how the desire for the niceties, refined tastes, and the desire to be distinct from others act as growth engines of the human society and production is not only about the necessities of life. Socie- ty in Hume‟s and Smith‟s views is not governed by a desire to lead a virtuous life, but it chooses its own morality based on social approbation. In contrast to these two main protagonists of scarcity, other classical economists like Thomas Robert Malthus and David Ricardo, are less optimistic about future human prosperity and abundance.

Unlike Smith and Hume who envision a state of opulence, Malthus considers it unlikely because of overpopulation. Criticizing the Malthusian view, the author writes: “he basically presented an omi- nous view of the world in which mankind is unable to overcome what he believed to be the imminent and permanent problem of scarcity” (p. 43).

The political economy discourse was replaced with scientific economics or neoclassical economics powered with the image of mathematics and science. The fifth chapter deals with the views of neo-classical economists like Alfred Marshall and Robbins, vis-à-vis scarcity, and presents a detailed discussion of scarcity as a fulcrum around which modern economics revolves. This discourse is val- ue-neutral and morality and ethics take a back- stage, unlike in classical economics.

In the sixth chapter, the author provides a thor- ough critique of the scarcity paradigm in neoclassical economics from the viewpoint of Karl Marx,

who attributes the scarcity to the class exploitation by the capitalists, and George Henry who believed in absolute abundance and contrary to the views of Malthus and Mills, considered population as a

“power of the human factor” which is the source of a nation‟s wealth (p. 65).

Moreover, the author provides an account of Thorstein Veblen‟s “industrial sabotage” in which the leisure class sets the standards which get social and cultural prominence and the lower class emu- lates it and indulges in an “impossible rat race” (p.

66). Industrial progress and technology can allevi- ate the scarcity and poverty, but the “class exploitation” of Karl Marx and “industrial sabotage” of Thorstein Veblen prevented it from delivering its promise of abundance (p. 67).

Turning to Keynes, the author examines his views on scarcity who predicted in 1930 that the economic problem of scarcity will be solved within a century. To him, scarcity is a temporary phase in the history of mankind, and avarice and usury will lead us out of this tunnel. In the words of the author: “Material progress, hailed by many as capitalism‟s special gift to humanity, comes at a price, a price that in Keynes‟ words, would shock even the most casual moralist” (p. 69). Keynes believed that this price should be paid because the benefit of abundance far exceeds the cost of capitalism, or in other words, ends should be preferred over means.

The author continues: “Almost a century later, Keynes‟ conjecture has failed to come true” (p.

69). The author points out that Keynes had as- sumed that wants will be constant. However, capitalism has set up a new dynamic of want creation;

a situation of pleonexia in which there is never enough. The author also discusses the works of Alasdair MacIntyre and Ivan Illich who think a virtuous life and unleashing human potential is the way out, respectively.

The dominant narrative of scarcity and hope for abundance in the secular world is challenged from the perspective of Islamic economic thought. The author examines the Islamic perspective of scarcity and abundance in chapter seven. In doing so, he chooses the work of Mohammad Baqir al-Sadr (1982) as representative of the Islamic thought.

The Islamic solution to the economic problem is neither capitalism nor communism, but adherence to the Creator‟s vision which will lead men to a

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happy society. In the Islamic view, Allah‟s blessings on humankind are innumerable, and collec- tively they are sufficient for the needs and appro- priate degree of their welfare. Any lack thereof is not because of Allah‟s plan, but because of human oppression and infidelity.

The author elaborates on how the concept of vicegerency is central to the Islamic economic vision in which all wealth belongs to Allah and humankind is entrusted with it as His appointed vicegerent and how imagining a world of scarcity is doubting Allah‟s generosity. The Islamic perspective is neither absolute scarcity nor infinite abundance as humanity has been endowed with bounties incommensurability, or in proportion to what in Allah‟s wisdom was sufficient and needed for due balance and justice. However, the Qur‟ān acknowl- edges that humanity faltered in its role as vicegerent by disbelief, injustice, oppression, corruption, wrongdoings, and being ungrateful. Poverty and destitution are due to human transgression. Some of the misfortunes are due to the recompense of the sins and some are to test the patient.

The author discusses the practical solution pro- posed by Islam: the principle of moderation, the middle path between extremes, which extends to every walk of life and its emphasis on spending from what Allah has given upon the poor and needy of the society. The author draws parallels between vicegerency or trusteeship in Islam and the concept of stewardship in Christianity. In the Islamic view, the human effort will not be motivated only by the earthly reward and punishment, but also by Allah‟s infinite blessings here and in the hereafter. In the Islamic mindset, one has to trust in Allah, and “the likes of Malthus should not fear (for) their children, for God‟s bounty and mercy suffice us all” (p. 104).

The author quotes Mullainathan and Shafir (2013)

“scarcity creates a mindset that perpetuates scarcity”

to buttress the importance of having an abundance mindset instead of a scarcity mindset (p. 104).

The second part of the book from Chapter 8 to 13 analyses the Greek, Christian, Classical, neoclassical, and Islamic views towards wealth and poverty. The Greek philosophers predominantly

viewed justly procured wealth as a gift of God while poverty was considered worse than death. However, the corrupting influence of wealth is well- recognized by them and how excessive desire for money often translates into deliberate acts of corruption and injustice. But this positive view towards wealth is only for a moderate level of wealth and too much wealth was certainly bad in their view.

However, this view does not represent the full spectrum of Greek opinions.

Socrates considered the desire for money to be non-satiable which leaves the rich feeling worse than a slave. In his opinion, the best state is one in which the needs are least. Plato believed money as the cause of “unconscionable deeds”. The author quotes Plato to highlight his damning view towards money: “Surely, when wealth and the wealthy are honored in a city, virtue and the good men are less honorable” (p. 118). While Aristotle opined that wealth inflicts men with qualities unbecoming of a virtuous life which he believed was the proper end.

The Cynics, the Stoics, and the epicureans viewed wealth in its most favorable image as merely a means to higher ends of virtue. The founder of Cynicism believed money to be “mother-city of all evil” (p. 125). Epicureans viewed happiness to be the ultimate goal and considered wealth merely an instrument in achieving it.

Summarizing the Greek thought on wealth and poverty the author states:

Despite some significant differences among the Greek philosophers from Socrates to Epi- curus, several principles stand out as common to all: the pursuit of happiness, the sig- nificance of virtue, serious reservations about wealth and the wealthy, and a favorable view of poverty. (p. 128)

In Chapter ten, the author examines the Christian views on wealth and states that despite being great- ly influenced by the Greek philosophy it has its unique style and morality. In his penetrating analysis of Christian views, the author writes: “Wealth is therefore a „mixed blessing‟: it may grant „life and joy‟ to those who „remain faithful to the Cove- nant‟ or is „likely to corrupt and to kill‟ those who are not”. (p. 132).

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In his extensive analysis, the author draws conclusions from the texts of the Old and New Testa- ment on wealth and poverty, like the emphasis on just way to earn wealth, not to get distracted by it, and its proper use. The author notes that many scholars have pointed out the hostile view of the New Testament towards wealth and wealthy people and how it holds wealthy people responsible for the existence of poverty since God provided abundance.

Analyzing the New Testament‟s view on wealth, the author writes: “wealth becomes an ‘evil’ where piety is absent” [emphasis in original] (p. 141).

The nuances of differing views of fathers vis-à- vis wealth, as the author presents, are quite extensive and vary in its degree of condemnation of wealth. However, Protestantism removed the nega- tive outlook of wealth and freed it from all ethical and moral restraints and the theoretically linked concepts of wealth and poverty were delinked.

Chapter 11 discusses the classical economic thoughts of Thomas Hobbes, Adam Smith, David Hume, which was characterized by liberalism, in- dividualism, materialism, self-interest, and lack of ethical and moral considerations. In Chapter 12, the author provides a survey of the neoclassical economic thoughts on wealth and poverty which primarily extended classical economics to its logical and empirical conclusions. The critiques of the dominant neoclassical views are also presented from the Romantics and Institutional school of economics. However, the author notes that the role of ethics and morality is downplayed or assumes less importance in these views which is not the case in modern and postmodern thoughts. Con- cluding the chapter, the author writes: “It seems, therefore, that the age of modernity (and post- modernity) holds a conspicuous sensitivity toward ethical programs of change – and especially, of the religious kind” (p. 170).

In Chapter 13, the author brings home the point, drawing from al-Sadr (2011), that it is the wealthy and the most affluent members of the society who are most resistant and hostile to the message of prophets especially those whose wealth and author- ity was threatened by their message. Moreover, it is due to the injustices committed by the ruling, wealthy, and privileged class that leads to the de- struction of an entire community. The Holy Qur‟ān

promises a state of prosperity and abundance for those who follow a life of piety, and poverty and scarcity to those who live a life of luxury and injustice. And the fate of a community falls in the hands of its members.

In Chapters 14 to 17, the author examines the intellectual discourse on charity and usury. He presents his views forcefully that charity has to be viewed in contrast to usury and this is how the Holy Scriptures wanted us to view it. The author traces the history of charity in various traditions including Hammurabi, Greek, ancient India, ancient China, Jewish, and biblical traditions. In all these traditions, charity and spending money for the poor, needy, orphans, and widows is considered commendable and has been emphasized. This is in contrast to the secular tradition of classical economics which views altruism as unnecessary and intellectual discourse on the subject of poverty and charity is lacking in it.

Chapter 16 presents the religious traditions of discourse on usury and examines the Jewish and Christian intellectual debate around it. Describing the Jewish legitimization of usury using the dis- tinction of “strangers” and “brothers”, the author writes: “Based on this thesis, one may reasonably interpret the ubiquity of usury in modern society as a consequence of the complete and utter waning of

„universal brotherhood‟ ” (p. 218). A brief survey of the Church‟s fathers‟ opinions on usury is also presented. Commenting on the divorce of discourse on charity and usury, the author writes: “It would seem that modernity chose to only see in Luke 6:35 the demand to „lend freely,‟ while ig- noring the very essence of the call, „expecting nothing in return‟ ” (p. 234).

In Chapter 17, the author presents the Qur‟ānic view of ribā and emphasizes that the Qur‟ān juxta- poses ribā with charity. In the Qur‟ānic view, ribā is an immoral and unjust system that causes the wealth of some at the cost of the poverty of others, and charity causes the wealth to be shared and dis- tributed rather than accumulated and concentrated.

The analysis of intellectual thought on usury and interest is in continuation of recent works of Khan (2013) and Lewis and Kaleem (2019) who dis- cussed it in depth.

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In chapters 18 to 21, the author examines the history of intellectual thought on self-interest and rationality in Greek, Christian, and Islamic traditions.

The description and analysis of the thoughts of Pla- to, Aristotle, and Socrates, followed by Smith‟s and Hume‟s views on self-interest, with details on the fine differences in their opinions, is excellent. The author points out that the modern concept of rationality equates it to self-interest which Amartya Sen disapproves, and argues that rationality can be a wider concept that may incorporate altruism. How- ever, Sen‟s conception falls short of providing a positive framework of human behavior. Comment- ing on the divorce of morality and rationality, the author writes: “The transformation from traditional society to modernity gradually loosened longstand- ing moral and religious bonds, thereby according to economic rationality, a free rein” (p. 298). Further, the author observes: “The ascent of capitalism and its associated notion of economic rationality not only elevated the „quest for efficiency‟ to a supreme position, but relegated the quest for virtue and justice to the lowest rank of intellectual and social pri- orities” (p. 300).

Chapters 22 to 25 present the secular and Islam- ic vision of ideal markets and Utopias. Comment- ing on the pitfalls of the invisible hand argument, the author writes: “The market then truly becomes all that there is, and we have no recourse to a moral savior” (p. 360). Under the Islamic vision, religion is the visible hand that guides and directs individu- als and society towards their general interests. The moral character of the market participants has been stressed in the Islamic view of ideal markets.

The book‟s attempt to provide an intellectual history of economic thought from diverse traditions is novel in its scope and aspiration. A striking feature of the book is that it presents the Islamic economic thought in the backdrop of the Greek, classical, and neoclassical economic thoughts bold- ly. Islamic economic thought is an important link between Greek philosophy and modern economic thought and literature as highlighted by Islahi (2014). Islahi notes that the huge gap between the two can be explained by the Islamic economic thought and the period between these two was not of intellectual stagnation. The author builds the narrative around the thoughts of Greek, Christian,

and classical philosophers and economists, and then presents the Islamic economic thoughts and doctrines that act as a drop scene. The author at- tempts to answer in this book how Islamic economic thought fits in the broader history of economic thought. The book also refutes the constricted view of Islamic finance that revolves only around interest and presents a broader and holistic conception based on the Qur‟ān. While dealing with various economic topics, the author displays his profound and deep understanding of the economic concepts. For instance, the fact that the author treated “abundance and scarcity” sepa- rately from “wealth and poverty” reflects his penetrating analytical prowess. The author‟s case that charity should be viewed in contrast to usury is a fresh perspective. These two are two opposite mind states. One empathizes with the underprivileged and the other exploits the needy. In the end, both lie at the ends of a spectrum of nobleness.

A reader would, however, be disappointed if, going by the title of the book, he will search an exposition of Islamic economic thoughts regarding a wide variety of economic issues. The issues cov- ered in the book are limited to wealth and poverty, scarcity and abundance, charity and usury, self- interest and rationality, and ideal markets. Unlike el-Ashker and Wilson (2006), who provide the history of Islamic economic thought, this book focusses on selected economic issues and com- pares them with the intellectual thoughts from other intellectual traditions. Moreover, the opinions and views of Greek philosophers and classical economists on these economic topics dominate the book and Islamic thoughts are at the peripheral.

The work in this book is an excellent synthesis of the intellectual thoughts from various traditions, and the author‟s main contribution is providing a powerful and fresh perspective from Islamic tradition. While presenting the Islamic economic thought, the author mainly draws and analyses the work of al-Sadr (1982). Had the works of medieval Islamic scholars like al-Ghazali (1058-1111 CE), Ibn Taymiyyah (1263-1328 CE), Ibn Qayyim (1292-1350 CE), Ibn Khaldun (1332-1406 CE), etc., also been examined and presented, the book would have been even richer. However, the author in his defense can argue that that the book already

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runs into 402 pages and increasing the scope of coverage would have made it voluminous. The author‟s affinity to draw economic inference and doctrines from the Qur‟ān is commendable. The discussion on modern rationality, which equates it to self-interest, touches the topic of justice but falls

short of providing an in-depth conception of justice (ʿadl) in Islam. In this regard, a recent book by Askari and Mirakhor (2020) provides an excellent synthesis and exploration of the concept of justice in Islam. Overall, this is an admirable work in an area of immense importance.

References

el-Ashker, A.A.F., & Wilson, R. (2006). Islamic economics: A short history. Leiden, The Netherlands:

Brill.

Askari, H., & Mirakhor, A. (2020). Conceptions of justice from Islam to the present. New York, USA:

Palgrave Macmillan.

Islahi, A.A. (2014). History of Islamic economic thought:

Contributions of Muslim scholars to economic thought and analysis. Cheltenham, UK: Edward Elgar Publishing.

Khan, M.A. (2013). What is wrong with Islamic economics? Analysing the present state and future agenda. Cheltenham, UK: Edward Elgar Publishing.

Lewis, M.K., & Kaleem, A. (2019). Religion and finance:

Comparing the approaches of Judaism, Christianity and Islam. Cheltenham, UK: Edward Elgar Publishing.

Mullainathan, S., & Shafir, E. (2013). Scarcity: Why having too little means so much. New York, USA:

Times Books.

al-Sadr, M.B. (1982). Iqtisaduna [Our Economics].

Beirut, Lebanon: Dar Al-Ta‟aruf.

al-Sadr (2011). Al-Sunan Al-Tarikhiyyah fi Al-Quran [Trends of History in the Qur‟ān]. Beirut, Lebanon:

Dar Ihya‟ Al-Turath Al-„Arabi.

Tariq Aziz is a PhD in Finance and an MBA from Aligarh Muslim University (AMU). He has been teaching subjects in the area of finance at the Department of Business Administration, AMU since 2016. He was the recipient of Junior (JRF) as well as Senior Research Fellowship (SRF) of UGC. He was awarded the Best Paper Award at the 7^th Doctoral Colloquium, 2013, at IIM-Ahmedabad, and “Special Mention Paper Award” at the PAN-IIM World Management Conference (WMC), 2019. His research interests lie in asset pricing, behavioral finance, and Islamic finance. His latest research has appeared in journals of repute published by Elsevier and Emerald among others.

E-mail: [email protected]

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اضر نميأ

حابرالأو ىولتلاو ةوبنلا يملاسالإ يداصتكالا ركفلل نَرالمو يميهافم خيراث :

،نلايمكام فيشجلاب

،كسىيىيه 8102

، ص 218

زيزع قراط :ةعجارم

،ذعاسم راتسأ مسق

ةسادإ لامعالأ

، ذنهلا ،ةيملاسالإ ةشكيلع ةعماج

:صلختسلما لواحي نأ خسؤلما تابجاو نم .ساكفالأ خيساث يف يدشف مىهفم يه ليلحتلا ةذحو

ةئفلا هزه يف باتكلا ازه عقي ذق .تقىلا سوشمب ساكفالأ شامكهاو سىطثو سىهظ فصوو ذيذحث امب ةيسيئشلا ةيشكفلا ذيلاقتلا يف ةساتخم عيضاىم لىح يشكفلا شكفلا خيساث فلؤلما ضشعي ثيح .ملاسالإ كلر يف شكفلاو ةيهاهىيلا ةفسلفلا نيب مهم طباس ىه يملاسالإ يداصتقالا شكفلا

يذحلا يداصتقالا ةعجاشلما ذيق باتكلا ازه ضشعي .ث

ساكفالأ ،ةحضاوو ةيصاضفتسا ةقيشطب ،

ةيكيسلاكلاو ةيملاسالإو ةيحيسلماو ةيهاهىيلا ةيشكفلا ذيلاقتلا يف ةيشكفلا ةيداصتقالا اىي يزلا تقىلا يف .ةثيذحلاو ةيلامو ةيداصتقا لكاشم ملاعلا هيف هج

،ةريطخ ةلواحم نئف

.هحىمطو هقاطه يف ةذيذج يه ةعىنتم ذيلاقث نم يداصتقالا شكفلل يشكف خيساث ميذقث باتكلا .ةريبك ةيمهأ تار ةقطنم يف باجعلإل ريثم لمع ازه تاملكلا ةلاذلا

: داصتقالا ،يكيسلاكلا ذيلقتلا ،ةيهاهىيلا ساكفالأ ،ملاسالإ ،يشكفلا شكفلا

ذيذجلا يكيسلاكلا .

فينصث :

JEL

B10, B20, B29

فينصث

KAUJIE

:

D0, F0, G2, A1, A2