Capitalism, Wilāya, and the Case for an Islamic Economic Theory

What kind of a response does Islam have for modern economic theories?

Modern economic and political theory is based on the idea that man is nothing more than a compulsive beast. He engages in whatever benefits him most immediately as far as accumulating resources and safety, even if it comes at the cost of the destruction of the society around him, the environment, and even his own self.

This is taken as axiomatic by all sides of the political spectrum. On the left, this base theory of man’s evil nature is used as the framework for a political system that privileges the state’s power in an effort to restrict and control man from harming the society around him. On the right, this same basic theory leads to a more hands-off approach, with the presumption that man, being inclined towards his own benefit, will engage in constructive behavior that will enrich him and eventually those around him.

In both cases, the underlying theory is that man is an animal. A rational, capable animal who only acts out of his own immediate self-interest. And that self interest is measured solely in material terms. Even approaches that attempt to account for altruism, such as behavioral economics, ultimately interpret non-materially beneficial acts through a utilitarian lens, reducing them to equivalent material values.

But is any of that actually true and reflective of man’s nature? The consequences of degrading man to the status of just a particularly smart animal have clearly been disastrous on both a political and economic level. While the technological and political advancements of modernity are undeniable, the cost paid has been the degradation of social cohesion across all aspects of life, as individuals are increasingly isolated from robust communities and thus more susceptible to exploitation by governments, corporations, and other individuals. Both approaches, despite ostensibly being opposed to each other, actually absolve man of any responsibility.

This is where an Islamic framework for economics could intervene: personal responsibility, or wilāya. Contrary to the Western framework, man is not an isolated object that only seeks material growth. He exists as part of a society and community and his motivations take account of this. And depending on where in society he is situated, his level of responsibility matches accordingly.

Take for instance the oft-cited example of the pre-modern merchant in the marketplace who closes his shop as soon as he earns as much as he needs for himself and his family that day. It’s common to find references to such behavior in books of political ethics, legal theory, and even in modern day marketplaces across the Muslim world. The merchant knows how much he needs to earn in a day and once he reaches that threshold, he closes his shop and redirects potential customers to his “competitors” in the same marketplace. The socialist on the left has no way to account for such an individual who does not need to be forcibly prevented from harming others around him by a government. And the capitalist on the right cannot account for an individual who does not seek to absolutely maximize his material gain at the expense of others.

This individual acts as he does because he’s a part of a broader system of individual responsibility within social harmony. He is an ethical being. His worldview is predicated on the notion that he is accountable for his actions and how he interacts in the society around him. Not accountable to a government which could restrict his freedom in order to protect others, but accountable to One who designed society as part of a cosmological system meant to act in harmony with itself. There is an internal self-regulation that both modern capitalism and socialism cannot conceive of.

The famous Hadith of the Prophet ﷺ “He is not a believer whose stomach is filled while his neighbor goes hungry” is one that most Muslims throughout history would be familiar with in one form or another. The imperative of such a Hadith is not to create a governmental system that ensures socio-economic equity, but rather that each individual Muslim has a self-imposed obligation to work within their level of wilāya to ensure economic harmony. It doesn’t demonize earning wealth, even large amounts of it. But it also doesn’t remove the notion of responsibility from the individual.

So then what is the role of a government? If we envision a hierarchy of wilāya, we can begin to organize levels of responsibility wherein each level is tasked with creating harmony within its own purview of power:

• The individual simply only has wilāya over himself and his limbs. His task is to guard his own actions in accordance with the sharī’a’s imperatives. This is fairly straightforward.

• The parent has wilāya over himself and his family. He is tasked with guarding his own actions as well as creating a harmonious home environment that encourages individual responsibility and familial love.

• The ruler (whether at the level of an emperor or a town mayor) has wilāya over everyone under his administration. His task is to create economic and political systems that encourage social cohesion and man’s affinity towards goodness, exemplified by the sharī’a. Just as a parent would be lacking if they only used punishment to enforce good behavior among children without properly teaching it, a ruler would be lacking if his only recourse to encourage goodness in society is the threat of consequences inflicted by the long arm of the state.

• Going further up the hierarchy, the scholar has wilāya over the preservation and dissemination of the legal system in the first place. The sources of law, namely revelation, require interpretation in accordance with the intent of the Lawgiver in order for them to be useful to the ruler.

• And at the very pinnacle of the system is the Prophet. His wilāya extends over humanity as a whole. Tasked with receiving the revelation itself from the Creator, his role is to teach and disseminate that religion so that man has the tools to know right from wrong and fulfill their own obligations at all levels - the individual, the parent, the ruler, and the scholar.

If this system is in harmony and man recognizes his own personal responsibility at each level, then the hierarchy within society reflects the hierarchy of creation as a whole, which similarly begins with an initial point of creation and then disseminates through various levels of existence down to the realm of material bodies we inhabit. This entire schema is not novel. It is detailed by the 15th century scholar ʻAbd al-Rahmān ibn Muhammad al-Bistāmī (d. 1455) who authored a text titled al-Fawā’ih al-miskiyya fi’l-fawātih al-Makkiyya that was gifted to the Ottoman sultan. But the overarching framework for all this is seen in hundreds if not thousands of texts throughout Islamic intellectual history, in particular the works of Ibn Arabi and the scholars who followed his philosophical school.

A manuscript copy of Bistami’s al-Fawā’ih al-miskiyya fi’l-fawātih al-Makkiyya. This is one of three known copies, and the only one copied by the author’s own hand in the 15th century.

Let’s return back to the merchant who closes up shop as soon as he earns his daily monetary needs. On a practical, material level, his approach ensures that his competitor across the aisle in the marketplace can also feed his family, overall leading to a more prosperous and stable society. But on a cosmological level, his actions, whether he’s aware or not, are in accordance with the harmony of creation itself across all levels of existence. His father, who taught him how to interact with society, has fulfilled his role to inculcate goodness and morality. The ruler, who instituted schools that teach the Prophetic Hadith about economic justice and implemented policies that encourage social cohesion, has fulfilled his role. The scholar, who took on the task of understanding and interpreting revelation and authored the books taught in the schools, has fulfilled his role. And the Prophet, tasked with receiving the revelation and disseminating it to humanity, has fulfilled his role.

So what does an “Islamic” economic policy look like? The answer to that question is relatively not actually that important. It can take on many different forms in different historical, geographic, and cultural contexts. Taxation rates, government incentives, trade policies, etc. are minor details that should never be set in stone anyways. But as long as an economic framework is predicated on the notion of an individual’s responsibility in accordance with a Divine schema of existence as a whole, we can begin to fill in the details and create an alternative to the cynical, material, and individualistic frameworks of modern economic theory.