ISLAMIC ECONOMIC ALTERNATIVES

ISLAMIC ECONOMIC ALTERNATIVES

Also by lomo K. S. A QUESTION OF CLASS: Capital, the State and Uneven Development in Malaya * GROWTH AND STRucruRAL CHANGE IN THE MALAYSIAN ECONOMY * Also published by Palgrave Macmillan

Islamic Economic Alternatives Critical Perspectives and New Directions Edited by Jomo K. S. Faculty of Economics and Administration University of Malaya Kuala Lumpur M

Jomo K. S. 1992 Softcover reprint of the hardcover 1st edition 1992 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 33-4 Alfred Place, London WClE 7DP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. First published 1992 Published by MACMILLAN ACADEMIC AND PROFESSIONAL LTD Houndmills, Basingstoke, Hampshire RG21 2XS and London Companies and representatives throughout the world British Library Cataloguing-in-Publication Data Islamic economic alternatives: Critical perspectives and new directions. I. Jomo, K. S. 330.1 ISBN 978-1-349-12289-9 ISBN 978-1-349-12287-5 (ebook) DOI 10.1007/978-1-349-12287-5

For the true Jihad and Mujahideen and the memory of Abu Dzar and Ali Shariati

Contents Acknowledgements Notes on the Contributors Introduction 1 1 The Economic System in Contemporary Islamic Thought Timur Kuran 9 2 Economic Justice in Contemporary Islamic Thought Timur Kuran 49 3 Property Rights and Islamic Economic Approaches Sohrab Behdad 77 4 Islamic Perspectives and Class Interests Ziaul Haque 105 5 Islamic Economics: A Progressive Perspective Asghar Ali Engineer 117 6 Islam and Capitalist Development: A Critique of Rodinson and Weber lomo K. S. 125 7 Economic Aspects of Islamisation in Pakistan Omar Asghar Khan 139 8 Principles of Islamic Economic Reform Syed Nawab Haider Naqvi, H. U. Beg, Rafiq Ahmed, Mian M. Nazeer 153 Appendix: Fundamentals of Islamic Jurisprudence Sohrab Behdad 188 Index 191 viii ix vii

Acknowledgements This book was originally conceived after years of frustration with much of what passes as Islamic economic discourse, whether it be mechanical ulama citations and elaborations from the Ouran and Sunnah, or fairly standard neoclassical economic formulations interwoven with Arabic - even Ouranic - terms to provide an Islamic veneer. The victory of the Iranian people's revolution against the Shah heightened the international Muslim community's expectations of intellectual breakthroughs and policy innovation. Fortunately, the subsequent disappointment has only strengthened, rather than undermined our resolve to develop and elaborate an ethical economics authentically rooted in Islam. Hence, once again, this volume truly represents a collective enterprise, of intellect as well as faith. In this effort, I have been encouraged and supported by many colleagues both in Malaysia and abroad. In particular, I would like to acknowledge Shamsul, Shabery, Ishak, Husin, Halim, Asghar and Suroosh. Professor S. N. H. Naqvi has also been a constant source of encouragement. In the final stages of preparation of this volume, Aslam, Farid, Rokiah, Kock Wah and Juliana Azlina rendered crucial assistance selflessly. None of these friends should be incriminated for any remaining faults and problems in this book, though all of them deserve to be commended for the contribution this volume seeks to make. Finally, Nadia and Emil distracted me often enough to delay the preparation of this volume, constantly reminding me that the most exalted labour is undoubtedly the labour of love. I should like to thank the following for permission to reproduce material which originally appeared, in a somewhat different form, in publications produced by them: Cambridge University Press for the two articles by Timur Kuran (International Journal of Middle East Studies, 1986, 1989); The Association for Social Economics for Sohrab Behdad's contributions; Zed Press (London) for material by Ziaul Haque and Omar Asghar Khan from Asghar Khan (ed.), Islam, Politics and the State; the Pakistan Experience (1985); the Pakistan Institute of Development Economics (Islamabad) for material by S. N. Navqi et al.; the Institute of Developing Economics (Tokyo) for material by Jomo K. S. from The Developing Economies viii

Acknowledgements ix (1977); the Institute of Islamic Studies (Bombay) for material by Asghar Ali Engineer from Islam and its Relevance in our Age (1984). Jomo K. S.

Notes on the Contributors Rafiq Ahmed has been Vice-Chancellor of the Islamia University, Bahawalpur, Pakistan, since 1981. He received his D. Phil from Oxford University. H. U. Beg has been Secretary of the Ministry of Finance, Pakistan, since 1979. Sohrab Behdad is Associate Professor of Economics, Denison University, Granville, Ohio. Asghar Ali Engineer is the author of numerous articles and books on Islam, including The Origin and Development of Islam, The Islamic State and Islam And Its Contemporary Relevance To Our Age, and is Director of the Institute of Islamic Studies, Bombay. Ziaul Haque has been with the Islamic Research Institute, Islamabad, and was editor of the journal, Islamic Studies. He is now with the Pakistan Institute of Development Economics (PIDE). He has a doctorate in Arabic and Islamic Studies from the University of Chicago and is author of several books on Islam, including Landlord and Peasant in Early Islam. Omar Asghar Khan has an MPhil from Cambridge University and has taught Economics at the University of the Punjab. Timur Kuran is Associate Professor of Economics at the University of Southern California, Los Angeles. He is the author of various articles on the evolution of values and institutions and on Islamic economics. Syed Nawab Haider Naqvi is director of the Pakistan Institute of Development Economics (PIDE), has a Ph.D in economics from Princeton University and is the author of many works on development and Islamic economics, including Ethics and Economics: An Islamic Synthesis. Mian M. Nazeer has been Dean of the Faculty of Arts, University of Peshawar, Pakistan, received his doctorate in economics from Amsterdam University and is the author of The Islamic Economic System: A Few Highlights. x