With the collapse of the western financial system, Muslim economists have an excellent opportunity to present the model of Islamic Iqtisad to provide social and economic justice to all. They will also find a ready audience among non-Muslims.
The ongoing economic meltdown of the US and the EU offers a good opportunity for Muslims in Europe to become the vanguard of economic change on the European continent. The degradation of the Western imperialist economic system has revealed the unsustainability of the dogma of free market and the ideology of unlimited and unregulated consumption.
Today the core principles of capitalism such as the invisible hand of the market, “free” trade (that in reality has never been free) and most importantly riba (interest/usury) are openly questioned and challenged by the non-Muslim mainstream in the EU and beyond. The current situation gives experts and institutions in Islamic iqtisad a great advantage; they no longer have to constantly defend their perspective, and instead they can actively promote Islamic concepts of iqtisad as solutions to the contemporary problems.
Five or ten years ago when Muslim economists talked about the natural necessity for eliminating riba, it was easy to attack their idea as religious dogmatism or as irrelevant to the contemporary world. This is no longer the case.
Five or ten years ago when Muslim economists talked about the natural necessity for eliminating riba, it was easy to attack their idea as religious dogmatism or as irrelevant to the contemporary world. This is no longer the case. Today non-Muslim economists openly question the immorality and economic irrationality of riba. In April 2012 a case study on Canada by Ellen Brown, an attorney and president of the Public Banking Institute, published in Asia Times showed that eliminating interest would greatly reduce federal debt, increase economic productivity and eliminate the draconian austerity measures that produce unemployment. According to research by a well-known economics professor Margrit Kennedy, “on average we all pay about 40% interest for all goods and services we use, because the producers of those goods and services include their interest costs into their prices. Contemporary economics obliges people to pay interest even if they never borrowed money from the bank.”
Unlike earlier times, Islamic economic concepts now have a large audience that is willing to distance itself from capitalist dogma. Islam does not negate human disposition to seek Allah’s (swt) bounties and material benefits while keeping the hereafter in mind. The reality is that humans want to see tangible results of progress and prosperity because we are all materialistic to a certain degree. Therefore, by building an alliance with economic organizations that question capitalist dogma, Muslim economists can emerge as the leading force of the new emerging economic global order.
People in Europe have been raised in a materialistic environment where divine sovereignty was made irrelevant. For Muslims to attract them toward Islam’s ideas they have to speak with them in their language and that is economic prosperity. Once non-Muslims in Europe see that Islamic economic concepts are actively contributing to solving their problems, they will destroy the imperialist and racist narrative against their fellow Muslim counterparts, which is fostered by those in power in many Western countries. This would be one of the best vehicles to eliminating Islamophobia in Europe.
The reality is that humans want to see tangible results of progress and prosperity because we are all materialistic to a certain degree.
In the midst of the financial crisis in 2008–2009, Islamic economists and financial institutions have missed an opportunity to present the progressive essence of Islam’s economic philosophy. Even though most contemporary Islamic financial institutions have been co-opted or infiltrated by non-Islamic economic practices, the IMF study published in 2010 was forced to admit that Islamic financial institutions performed better during the global financial crisis in 2009. This is a clear indication that even partial adherence to Islamic economic principles leads to better economic performance. This phenomenon is an excellent marketing tool that Muslims have failed to utilize. If the Muslim world were hit by financial crisis and conventional financial institutions were to perform better than the Islamic ones, Western intuitions comprising various media outlets, think-tanks and research institutes would be constantly harping on the “inferiority” of Islamic economic philosophy for decades.
Against magnificent odds, Islamic movements worldwide have managed to create strong socio-political institutions and established strong cooperation with non-Muslims worldwide committed to social justice. Establishing Islamic economic institutions with a practical action plan is an urgent necessity today. Muslim entrepreneurs and economists must establish an independent financial center or network through which they can actively pursue micro and macro economic projects founded on Islamic principles.
As Europeans were able to develop better-organized public administration institutions, mainly due to the absence of interference in their domestic affairs that Muslim societies under colonialism in the past or neo-colonialism today did not have the luxury to experience, the EU provides a good organizational environment to project the power of Islamic economics. Also if one pays close attention to the economic philosophy and policies in Europe it is evident that they are less cut throat-capitalist and aimed at fostering economic welfare in society. There is thus an organizational and philosophical potential for Muslims in Europe to establish Islamic financial institutions.
Muslims in Europe have managed to create strong anti-imperialist and anti-war networks in cooperation with their non-Muslim friends. One of the manifestations of this work can be seen in the regular Free Gaza convoys led by George Galloway. Similar success can be repeated in the realm of economics where the people in host societies will see its benefits directly. Such a project must be undertaken immediately.