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Islamic juridical discourse on the market

Islam required a good public order in which spiritual interests were organically related to individual material well-being. Hence the law of the marketplace was given almost equal weight with the regulations connected with acts of worship in the mosque. This emphasis on economic relations in the context of commercial markets was not suprising, given thatMecca was the most important trading center of western and centralArabia. Meccans played a dominant role in the creation of a culture that nurtured the cultivation and development of socioeconomic system based on Islamic justice.

The market mechanism is an integral part of the Islamic economic system because the institution of private property depends on it for its operation. It also provides the consumers to express their desires for the production of goods of their liking by their willingness to pay the price. But the profit motive that is essential for the operation of free enterprise, if not controlled, can also become a tool of greed and violate the Islamic goals of social and economic justice and equitable distribution of income and wealth. The strictures against usury in the Qur`an can be seen in the clear distinction Islam makes between legitimate trade with profit motive and unchecked individual greed to increase one's possessions manifold without engaging in precarious trade in a market economy. According to Muslim jurists:

The law in order for the people to benefit mutually permits buying and selling. There is no doubt that this can also be a cause of injustice, because both buyer and seller desire more profit and the Lawgiver has neither prohibited profit nor has He set limits to it. He has, however, prohibited fraud and cheating and ascribing to a commodity attributes that it does not possess.

The main concern of the Islamic public order was not so much collective interest as individual justice in transactions that had to be protected outside of close friendship and family ties. It was expected that, contrary to the claims of tribal kinship and noble family lineage that determined social relations in pre-IslamicArabia, most human relations under Islam would take the form of contractual relations rather than be determined in advance by social status. Many provisions in the law attempted to back those who were weak in one way or another against the strong who might take advantage of them. While on the whole, faith in Islam constituted ten parts, only one part was related to the God-human relationship and claimed the status of a common universal obligation. The remaining nine parts were related to human relationships, and determined by contractual responsibilities and specific social and cultural experience.

Muslim juridical writings give detailed rulings related to the acquisition and disposal of private and business property and purchase and sale of merchandise. The underlying principle operative in market law is twofold: the autonomy of individual to own productive resources to further her or his economic interest, and the protection of the consumer from harm. The pursuit of individual economic interest was to be regulated within a communitarian ethic requiring the individual to take the competing interests of the community at large as morally binding. Therefore, any individual business undertaking seen to cause harm to the moral and spiritual fabric of the society was to be condemned and prohibited.

The protection of the consumer was regulated through the principle of non-maleficence (al-darar al-muhtamal). This principle required that resource-owners could not seek to cause harm to the buyers by using false information and other means to raise sales. Hence, deceptive advertising was regarded as morally wrong and legally punishable. The principle of public interest (maslahah) required that free mutual consent of the buyer and the seller be regarded as a necessary condition for any business transaction. The Qur`an provides the grounds for the ruling: "O believers, consume not your goods between you in vanity, except there be trading, by your agreeing together". Individual freedom in negotiating business transactions was recognized in the directive given by the Prophet: "Leave people alone for God provides them sustenance through each other". Thus freedom of enterprise leaves much of the production and distribution of goods and services to individuals or voluntarily constituted groups. However, even this otherwise absolute freedom was regulated by the legal principle of public interest that requires that faithful Muslims produce more good than harm.

The integration of ethics and law was most clearly worked out in Islamic economics. The need to regulate an economic system that would be compatible with Islamic concern for redistribution of wealth and social justice required Muslim jurists to resort to legal doctrines and practical rules where the validity of their rulings against certain forms of usury received judicious legal elaboration. The apparent meaning of those verses of the Qur`an that spoke about the prohibition of usury in a straightforward manner were developed through the legal principles and rules, case by case, to create the framework for a morally accountable financial exchange. The nature of this process of legal and ethical construction is taken up next.

Adapted from the book: "The Issue of Riba in Islamic Faith and Law" by: "Dr. Abdulaziz Sachedina"

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