The relationship between economics and religion has a very solid ground in Islam. This has reflected positively on Muslim society, which became a distinguished society in the way it dealt with the economical life of the individual, and consequently the society as a whole.
Another example from the previous prophets is presented in the verse which speaks about Prophet Shu`aib and how he was teaching his people not to deal in fraud and to be just and fair in their financial dealings: [And to Madyan (We sent) their brother Shu`aib. He said: O my people! serve Allah, you have no god other than Him; clear proof indeed has come to you from your Lord, therefore give full measure and weight and do not diminish to men their things, and do not make mischief in the land after its reform; this is better for you if you are believers] (Qur’an, 7:85).
Despite the universality of the Islamic laws, the economic systems could vary since there are communist, socialist, capitalist, and Islamic economic systems. Each is based on goals, principals, or philosophies which are quite unique to that particular ideology.
However, there are many Muslim scholars who have written about economics in a systematic way from an Islamic point of view, and their writing goes back as far as the 8th century; that is more than 1000 years before Adam Smith.
There are numerous individuals who have been contributing to trying to revive an economic system in Islam which should be very relevant to the Muslim as an individual in his/her dealings; a call for a return to the foundation, to the heritage of the Islamic economics to establish a system on the basic guidance of Islam, and as such provide a possible alternative to the present system.
Among others, Ibn Khaldun wrote about the economic system in Islam in the 15th century. Ibn Khaldun, in particular, was described once by the famous British historian Arnold Toynbee as the greatest sociologist who ever lived. Ibn Khaldun was both a sociologist and economist because he dealt in a systematic way with some aspects pertaining to economics. Throughout Islamic history, there have been numerous jurists and scholars who also wrote about certain aspects of Islamic economics, but these writings were scattered in a variety of books of jurisprudents.
Many economists tend to think that the first systematic way that deals with economics as a subject goes back to the 18th century and is connected with the name of Adam Smith—the Scottish economist who wrote the classic book on economics, The Wealth of Nations.
Muslim Economists Before Adam Smith
Islam’s economic system is not merely a matter of broad appeal to voluntary charity; rather, it gives a more comprehensive approach or view of economic life, which in turn is based on the basic teaching in the tenants of Islam.
The economic part of human behavior has been mentioned in the Qur’an as a part of the mission of all prophets and messengers in the past. For example, Allah says in the Qur’an: [ And We made them leaders guiding by Our command. And We inspired to them the doing of good deeds, establishment of prayer, and giving of zakah; and they were worshippers of Us.] (Qur’an 21:73). This verse talks about prophets such as Abraham and the Israelite prophets; it also mentions the economic system in presenting charity and social justice in the economic distribution of wealth.
Economic behavior is dealt by Muslims as a means of production, distribution, and consumption of goods and services. In Islam, human behavior—whether in the economic area or other areas—is not value free nor is it value neutral; it is connected with the ideological foundation of the faith.
Islam consists of a set of beliefs which organizes the relationship between the individual and his creator; between the person and other human beings; between the person and universe; and even the relationship of the person to himself. In that sense Islam regulates human behavior, and one human behavior is economic behavior.