Saturday, September 12, 2009


The central focus of Imam al-Ghazali (1058-1111 AD), a great philosopher and sufi (Islamic mystic), was Islamic philosophy and Islamic ethical values, which compass all dimensions of life including economics. As such his discussion of economic issues emerge in the ethical perspective of human life as a. whole, rather than a segregated value-neutral discipline as it appears in the contemporary economic analyses and systems. Hence his analysis is generally normative rather than positive in nature.
Al-Ghazali was writing in the 11th and early 12th centuries which were roughly six centuries before the emergence of Mercantilism and seven centuries before Physiocracy and Adam Smith (1723-1790), that is, roughly six to seven centuries before the beginning of economics as a discipline. Even then, it is interesting to note that al-Ghazali's writings contain a good number of economic ideas, although discussed in the ethical normative perspective.
Life and Time
Born in 1058 in a village called Ghazalah of northern Iran, Abu Hamid Muhammad al-Tusi al-Ghazali was a great Islamic scholar in a number of subjects including philosophy, sufism, theology and jurisprudence. A son of a poor but righteous spinner, he lost his father at a young age and began study with his father's sufi leader and friend, then joined a madrasah (a religious institution), and gained knowledge from several reputed scholars of the time. His reputation as a scholar made Nizam al-Mulk al-Tusi to appoint him to the Chair of Theology at the Nizamiyyah College of Baghdad in 1091 at his age of 34. Although highly successful in teaching, drawing even the jurists in his classes, he left the college in 1094, performed hajj (pilgrimage), traveled places to meet great Islamic personalities, and devoted to Sufism when he also got time for writing. Although he took up teaching positions.
The present paper is based on this classic work of al-Ghazali, the Ihya 'Ulum ai-Din, which provides a mirror image of his scholarship and personality and contains several chapters ("kitab" in his terminology) on subjects related to economics.
Economic Philosophy
Underlying every-economic system there is a philosophy, and so is the Islamic economic system. Although economics did not emerge as a system as yet, al-Ghazali's philosophical and intellectual mind did not fail to put Islamic economic thought in its proper philosophical perspective.
The philosophy underpinning al-Ghazali's analysis of economic pursuit is that economic achievement is a means to the end, and not an end in itself. Wealth is a means to the success in the eternal life. Implicit in this is the philosophy of life embodied in the concepts of tawhid (the unity of Allah), akhirah (the hereafter) and risalah (the institution of Prophethood), and also explicitly mentioned elsewhere in his works.

Place and Benefit of Economic Activity
Al-Ghazali has written a full section, as indicated above, to show the significance, importance and benefit of economic activity and earning. Economic activity for halal (permitted) earning has a religious status, provided one follows the Islamic norms of economic activity and the objective is good, and not for pride and accumulation. He substantiated this by quoting from the Qur'an, the traditions of the Prophet (SAW) and the traditions of other Islamic personalitiesl4. The major points may be summarized as follows. First, Allah (SWT) has provided resources for the benefit of mankind and so they should work to earn them, use them, and express the gratitude of Allah (SWT). Second, economic pursuits in order to be free from the dependence on others, and to fulfill one's own need, the need of the family, need of parents, neighbors and relations, and to satisfy other Islamic obligations are considered efforts in the way of Allah (SWT), which will have high status in the hereafter, provided Islamic norms of earning have been followed. Third, economic pursuits for accumulation of wealth, pride, and for spending in undesirable things are considered as efforts in the Way of the devil. That is, the means and objectives of economic activities should be Islamically permitted and desirable.
Al-Ghazali has clarified the doubts arising from such sayings which seem to discourage economic pursuits.15 According to him, economic pursuits are condemned if their objective is to get more than needed for the accumulation of wealth and its hoarding, and not to spend in goodness and charity. This is because its implication is to make the world as one's objective, which is the root of all evils. Even worse, if one resorts to cheating, oppression and other malpractices to make money. On the other hand, if the objective is to be independent of others, meeting the needs of the life for himself and family, and to spend in goodness and charity, then the economic pursuit is better than abstinence from it.
Need for The Knowledge of Islamic Economics
Al-Ghazali included the knowledge of economic matters into the obligatory knowledge mentioned in the Prophetic tradition, "Seeking of knowledge is obligatory (fard) on every Muslim". If economic activity is encouraged so much so that it has a status of worship, its knowledge is also necessary, "Know that acquiring knowledge in this Bab (in the field of economics) is wajib (compulsory) on every earning Muslim ". This is because one must know how to deal with a problem when it arises, lest he might get himself involved in what is not allowed. One should not wait to ask around when he encounters a problem. If he does so, there is a likelihood to do what he is not supposed to do. Therefore, every earning Muslim should have the basic knowledge of the matter. In his support, al-Ghazali presents the practice of' Umar, the second caliph, who used to visit the market places and say, "He should not do business in our markets that does not have its knowledge".
It seems from his discussion that al-Ghazali is concerned with the Islamic rules of economic activity which are Islamic legal norms and values of economic activities, and are the subject of Islamic jurisprudence, discussed in the chapter of mu'amalat (socio-economic activities). In the contemporary literature, Islamic economics includes Islamic legal norms and their economic analysis. Therefore, according to al-Ghazali, the basic knowledge of Islamic economics is compulsory on every economically active Muslim to the extent of basic Islamic legal norms relevant for his activity, whether it is obtained from Islamic economic literature or from the juristic sources, through study, reading or discussion with the persons of knowledge. Such obligatory knowledge of economic activities is of many kinds (branches), of which six must be acquired by those who are involved in such activities. These are bai' (trade and commerce), riba (interest, usury), salam (forward buying), ijarah (renting), musharakah (partnership) and mudarabah (sleeping partnership for profit sharing). Al-Ghazali discussed all of them
Bai' (Trade)
Following the tradition of Fiqh literature, al-Ghazali analysed three elements (arkan) in bai': (1) the two transacting parties, the buyer and the seller; (2) the items of exchange, the goods and services; and (3) the statement of contract. This classification proves his analytical insight and perception of economics.
Al-Ghazali discussed the juristic eligibilities of persons for valid transaction. Transaction with any man or woman is valid provided the person is not minor, insane, blind or slave. The transaction of minor and insane persons is invalid because they are not mukallaf. Although a blind person is a mukallaf, he or she is unable to see the item of transaction and hence his/her transaction is invalid. If, however, the blind person appoints a wakil (representative or agent) to act on his behalf, the transaction will be valid. Arms (weapons) cannot be transacted with a non-Muslim if he comes from dar al-harb (a country in the condition of war, or a non-Muslim country).
There are six conditions for a mubi' (an item of exchange) to be eligible from Shari'ah point of view for a valid exchange. First, the item of exchange should not be impure in itself, such as dog, pig, alcohol and so on. Those items which are not impure in themselves and are useful may be exchanged. Second, the items of exchange should be useful and beneficial. On this score, snakes and rats may not lawfully be exchanged. Third, the seller should be the owner of the items of sale, or be permitted by the owner to sell them. A person is not allowed to sell even his spouse's or children's items in the expectation that they will not object to it. Fourth, the item of sale must be transferable in a Shari'ah approved manner. For example, milk in udder and fish in the water may not be sold because of the mixing of the sold and unsold items. Similarly a mortgaged item may not be sold by the owner, because it is not transferable from Shari'ah point of view until it is released from the mortgage. Fifth, the item of sale must be known with certainty, and also its quality and quantity. Sixth, the item of sale must be in the possession of the seller.

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