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Economic Thought of Muhammad Baqir al-Sadr: A Study of Iqtisaduna (Our Economics)

Dissertation Submitted to the University of Kashmir

In the partial fulfillment for the award of Master of Philosophy (M.Phil)

In

Islamic Studies

By: Mohd Lateef Khan

Under the Supervision of Dr. Manzoor Ahmad Bhat (Sr. Assistant Professor)

Shah-I-Hamadan Institute of Islamic Studies

University of Kashmir Srinagar -190006

September, 2011

Source:

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www.alhassanain.org/english

SHAH-I-HAMADAN INSTITUTE OF ISLAMIC STUDIES

UNIVERSITY OF KASHMIR SRINAGAR

Certificate

This is to certify that the dissertation entitled “Economic Thought of Muhammad Baqir al-Sadr: A Study of Iqtisaduna (Our Economics)” Submitted by Mr. Mohd Lateef Khan, for the award of the Degree of Master of Philosophy (M.Phil), in Islamic studies is an original research work of the candidate. The research work has been carried out under my supervision and has not been submitted for any other degree so far.

It is further certified that this work conforms to acceptable standards of scholarly presentation and is adequate, in scope and quality, as a dissertation for the award of M.Phil Degree in Islamic Studies.

Dr. Manzoor Ahmad Bhat

(Supervisor)

Notice:

This version is published on behalf of www.alhassanain.org/english

The composing errors are not corrected.

Table of Contents

Acknowledgements 8

Introduction 9

Chapter One Life and works of Muhammad Baqir al-Sadr 14

1.1. Life of Baqir al-Sadr 14

1.2. List of works [Books] 15

1.2 (a) Jurisprudence 15

1.2 (b) Fundamentals of the Law 16

1.2 (c) Philosophy 16

1.2 (d) Logic 16

1.2 (e) Theology 16

1.2 (f) Economics 16

1.2 (g) Qur'anic Commentaries 16

1.2 (h) History 16

1.2 (i) Islamic Culture 16

1.3. Articles 17

Chapter Two: Evolution of Islamic Economic Thought and Baqir al-Sadr 19

2.1. Early Development in Islamic Economics 19

2.2. Economic Teachings of the Holy Quran 20

2.2 (a) Justice and Social Responsibility 20

2.2 (b) Acquisition of Wealth 21

2.2 (c) Distribution of Wealth 22

2.2 (d) Non Exploitation of the Disadvantaged 22

2.2 (e) Regulation of Transactions Through Contracts: 22

2.3. Economic Teachings of Prophet Muhammad 23

2.4. Economic Thinking of Eminent Jurists, Sufis and Philosophers up to 450 A.H 26

2.4 (a) Imam Abu Yusuf (113-182 A.H./731-798 C.E.) 26

2.4 (b) Muhammad bin Hassan al-Shaybani (132-189 AH/750-804 C.E.) 28

2.4 (c) yahya bin Adam(d. 818 C.E.) 28

2.4 (d) Abu Ubayd (d.838 C.E.) 29

2.4 (e) Qudamah bin Ja’far (d.932 C.E.) 29

2.4 (f) Abu Ja’far Nasr al-Dawudi (d.1012 C.E.) 29

2.4 (g) Mawardi (d.1058 C.E.) 30

2.4 (h) Ibn Hazm (d.456/1064 C.E.) 30

2.5. The Second Phase (450-850 A.H. /1058-1446C.E.) 31

2.5 (a) Al-Ghazzali, (451-505 A.H. /1055-1111C.E.) 31

2.5 (b) Ibn Taimiyah (661-728 A.H/1263-1328 C.E.) 33

2.5 (c) Ibn Khaldun(732-808/1332-1404 C.E.) 34

2.6. The Third Phase (850-1350 A.H/1445-1932 C.E.) 35

2.7. Shah Waliullah (1114-1176 AH-1703-1762 C.E.) 35

2.7 (a) Al-Irtifaq al Awwal (The First Stage of Socio-Economic Development) 35

2.7 (b) Al-Irtifaq al Thani (The second stage of Socio-Economic Development) 36

2.7 (c) Al Irtifaq al-Thalith (The Third Stage of Socio-Economic Development) 37

2.7 (d) Al-Irtifaq al Rabi (The fourth stage of socio-Economic Development) 37

2.8. Later Development in Islamic Economic Thought 37

Chapter Three: Baqir al Sadr on Marxist Economic Model 38

3.1. Marxism: The Basic Components of the Doctrine 38

3.1 (a) Dialectical Materialism 38

3.1 (b) Economic Interpretation of History 39

3.1 (c) The Theory of Surplus Value 40

3.1 (d) End of Capitalism 41

3.2. Baqir al Sadr on Marxist Economic Structure; Economic Science and Economic Doctrine 42

3.3. Historical Materialism as a Single Factor Theory 42

3.4. Historical Materialism in the Light of Philosophy 43

3.5. Arguments in Favour of the Historical Materialism 43

3.5 (a) Philosophical Argument 43

3.5 (b) Psychological Argument 44

3.5 (c) Scientific Argument 45

3.6. Sadr on Marxist Conception of Ideology 45

3.6 (a) Marxism & Religion 45

3.6 (b) Marxism and Philosophy 46

3.6 (c) Marxism and Science 47

3.7. Sadr on Marxist Law of Value 47

3.8. Sadr on Primitive Communism 48

3.9. Sadr on slave Society 49

3.10. Sadr on Feudal Society 50

3.11. Sadr on the Emergence of Capitalist Society 51

3.12. Marxist Creed: Socialism and Communism 51

3.12 (a) Socialism 51

3.12 (b) Communism 52

Chapter Four: Baqir al-Sadr on Capitalist Economy 54

4.1. Capitalism: A General Overview 54

4.2. Outstanding Features of Capitalism 54

4.2 (a) Right to Have Private Property 54

4.2 (b) Economic Freedom 54

4.2 (c) Freedom of Choice by the Consumers 55

4.2 (d) Profit Motive 55

4.2 (e) Class Conflict 55

4.2 (f) Uncoordinated Nature 55

4.2 (g) Role of Entrepreneur 55

4.2 (h) Control with Risks 56

4.2 (i) Competition and Cooperation 56

4.2 (j) Importance of Price System 56

4.2 (k) Economic Inequalities 56

4.3. Sadr on Capitalist Economy 56

Sadr on Capitalist Economy & Its Nature 56

4.4. Sadr on General Framework of the Capitalist Doctrine 58

4.5. Sadr on Capitalist Freedom 58

4.5 (a) Freedom Ensure Good and Welfare of the Society 59

4.5 (b) Freedom Causes Growth of Production 60

4.5 (c) Freedom is the Real Expression of Human Dignity 60

Chapter Five Major Themes of Islamic Economics in Iqtisaduna 62

5.1. General Structure of Islamic Economy 62

5.1 (a) Dual Form of Islamic Economy 62

5.1 (b) Restricted Economic Freedom 62

5.1 (c) Social Justice 63

5.2. Integrative Nature of Islamic Economics 63

5.3. Religion Alone can Materialize Social Interests 64

5.4. Islamic Economics is not a Science 66

5.5. Economic Problem in the Light of Islam 67

5.6. Distribution of Wealth on Islamic Level 67

5.7. Distribution at Pre production Stage 68

5.7 (a) Ownership of Land in Islam 68

5.7 (b) Mineral Wealth 69

5.7 (c) Natural Waters 70

5.7 (d) Other Natural Wealth 70

5.8. Distribution at Post Production Stage 71

5.9. Relation Between Production and Distribution: An Islamic Perspective 72

5.10. Role of state in Islamic Economy 72

5.10 (a) Social Security 73

5.10 (a) (I) Social Security Based on Public Reciprocal Responsibility 73

5.10 (a) (II) Social Security Based on Societies Right on Natural Resources 73

5.10 (b) Social Balance 74

Conclusion 76

Bibliography 78

(a) [Books] 78

(b) Articles 81

(c) Websites 82

Notes 83

Acknowledgements

All thanks and gratitude are due to Almighty Allah without whose help nothing is possible. May, Allah’s peace and blessings be upon prophet Muhammad (SAW), the great benefactor of humanity.

It is a privilege to express my sincere and deep gratitude to my supervisor, Dr. Manzoor Ahmad Bhat, Senior Assistant professor, Department of Islamic Studies, University of Kashmir for his keen and diligent guidance at all stages of my research. His wise counseling, enduring encouragement and constructive criticism during the course of my preparation of this manuscript was indeed incredible and inspirational for its success.

I owe a deep sense of gratitude to Prof. Hamidullah Marazi, the Director of the Institute of Islamic studies, University of Kashmir for his constant encouragement, valuable comments and sincere suggestions.

I am grateful to the teaching staff of S.H.I Islamic Studies University of Kashmir especially Prof. Naseem Ahmad Shah and Dr. Ab. Rashid Bhat for their help and guidance in this academic pursuit. The other teachers at the faculty; Dr. Shiekh Jamiel Ali and Dr. Naseem Gul also deserve special thanks, for providing me good academic inputs.

I am thankful to the members of the non-teaching staff working in the Institute especially Mrs. Zia, Mr. Mohd Shafi and Mr. Zahoor Ahmad for their cooperation and help.

With a feeling of humility I acknowledge and appreciate the unfailing encouragement I received from my brothers Mr. Ab. Majid and Mr. Abdul Hamid and from my parents as well as from other family members especially my sister Aisha. It was their constant encouragement that enabled me to concentrate upon my studies in research.

Mr. Shahid, Computer operator, deserves special thanks for giving shape to the script with meticulousness, skill and patience.

Last but not the least I am thankful to my friends Mr. Bilal Ahmad Wani, Tufail Amin Mir, Mohd Ashraf Rather, Sameer Ahmad Lone, Mirza Manzoor, Owais Majid, Jahangir Uqab and Hilal Ahmad Bhat for their support and help.

Mohd Lateef Khan

Introduction

Islam is a complete way of life. It aims at constructing the entire fabric of human life and culture on the firm foundation of ethical values and principles revealed by Almighty Allah for man’s guidance. In the field of economics, it provides necessary guidelines, values and rules that aim at achieving the twin objectives of social justice and sustained increase in economic productivity. Islamic economic system is based on Quran and the Sunnah. Its central concern is overall prosperity of man, the wholesome and balanced growth of his personality. It prompts that Judicious and efficient management of resources is possible only when an Individual’s total behaviour is designed within a proper ethical and moral framework. It further guides that a just society can be built only when the material and spiritual aspects of human activities are welded together.

The foundation of Islamic economics is laid on the principles of Justice, righteousness, brotherhood, equal opportunity, adequate employment and social security. Justice and social security are the basic foundations of the system. Justice is a very wide and comprehensive term embracing almost all phases of human life. In economic terminology it stands for maintaining balance among the people in respect of their rights as well as rendering their due share conscientiously. The entire universe is made amenable to exploitation by man though it is owned by Allah alone. The life on earth is a test, man is accountable to Allah for his deeds and his success in life hereafter depends on his performance in this life on earth. Islam guides that life is to be conducted in fair circumstances and no one should go without an adequate share of resources that are needed for his survival and good life. Equality of opportunity and social care of the disabled is the minimum requirement that this calls for. Islam discourages (ruhbaniyah) and its economic objectives aim at eradication of poverty, hunger, exploitation, corruption and illiteracy. It further focuses at mobilization of resources for strengthening the Islamic state and spreading the message of Allah and maintaining a sustained growth of economic development.

The literature on the subject of Islamic economics dates back to the early period of Islam. The Quranic injections, the prophetic Traditions and the juristic opinions all taken together provide voluminous material on the subject. Some of the early works on the subject are Kitab al Kharaj by Abu Yusuf (d.798 C.E.), another Kitab al Kharaj by Yahya b. Adam-al-Quraishi (d. 818 C.E.), Kitab- al-Amwal by Abu Ubayd (d.838 C.E), Kitab al Iktisab fil Rizq al Mustahab and Kitab al Asl by Muhammad b. Hassan al Shaybani (d.804 C.E.), Al-Ahkam al Sultaniyah and Kitab al Din wal Dunya by Mawardi (1058 C.E.), and Kitab al Muhalla by Ibn Hazm. Besides these works, we find objective insights on economic matters in a number of compendiums including Imam Ghazzali’s (d.1111 C.E.) Ihya al Ulum al Din, Ibn Taimiyah’s (d.1328 C.E.) Al-Hisbah fi-al Islam, Ibn Khaldun’s (d. 1404 C.E.) Muqaddimah and Shah Waliullah’s (d.1762 C.E.) Hujjatullah Balighah.

Although Muslim scholars have discussed economic principles of Islam earlier, exclusive attention to the subject is a twentieth century phenomena. It started in the third decade and specialized works appeared in the fourth. The process was stimulated by the world wide economic crisis during the thirties and forties and increased exposure of Muslim mind to the socialist doctrines. Besides this, the independence of Muslim countries and the rise of the Islamic movements also raised hopes of serious attention to the application of the Islamic teachings in the practical affairs of the new states including their fiscal domain.

On one hand economic principles of Islam were thoroughly analyzed and discussed by Muslim Scholars in the light of Quran, Hadith and the vast intellectual heritage left by their predecessors. On the other, the prevailing economic systems; capitalism and socialism were critically evaluated. The two systems, however, emerged as unbalanced and unjust approaches for solving man’s economic problems. A fairly good number of Muslim scholars got seriously and sincerely engaged in this endeavor. They adopted an objective, unbiased and judicious approaches to this issue. We present here, a synoptic view of this effort.

Mawlana Mawdudi in his book Islam aur Jadid Maashi Nazariyat1 (Islam and Modern Economic Theories), mentions private ownership, freedom of enterprise, competition, profit motive as the soul incentive, discrimination between the rights of the employees and those of the employer, reliance on natural forces for growth and the principle of non intervention by the state as the fundamental principles of modern capitalism. He recognizes an element of truth in these principles, but finds them carried to extreme by capitalism. According to Mawdudi Undue emphasis on rights of individual ownership and freedom of enterprise played havoc during the industrial revolution and it caused wide spread suffering and privation. Over emphasis on self interest and the profit motive produced a society devoid of human character, brotherhood, sympathy and cooperation. He reviews the reforms introduced in capitalistic countries, allowing an active role for the state and a better deal for labour. Despite these changes, he argues, the problems like large scale unemployment, existence of unattended needs, and occurrence of trade cycles and the domination of society by usurious financers have not been resolved.

Mahmud Ahmad in Economics of Islam: A comparative study2 , disapproves capitalism’s claim of being a self adjusting process leading to maximum satisfaction of human wants by pointing out the chaos it has led to.

Abdul Manan in Islamic Economics: Theory and Practice3 , criticizes capitalism on account of its failure in maintaining full employment and ensuring free competition.

Syed Muhammad Ismail in his book, A Critical Analysis of Capitalism, Socialism and Islamic Economic order4 , criticizes capitalism for accumulation of wealth in a few hands and thereby extending the gap between the rich and the poor.

A strong criticism of capitalism came from Syed Qutb who in Ma’rikat al Islam, Wal-Ra’smaliyah5 (Confrontation of Islam and Capitalism), mentions that it is thoroughly inhuman and un-Islamic. Like capitalism socialism has also been critically evaluated by the Muslim scholars.

Masud Alam Naqwi in his book entitled Ishtirakiyat aur Islam6 (communism and Islam), regards undue emphasis on distribution and the move to abolish private property to be mere reactions to the evils of capitalism. He argues that man does not have to opt for such an extreme solution when the middle path shown by Islam is sufficient to ensure the elimination of these evils and secure the legitimate ends of socialism.

Muhammad Nejatullah Siddiqi in Islam Ka Nazariya-e-Milkiyat7 (Islam’s theory of property) examines and rejects the arguments in favour of socialization of all means of production and concludes that individual ownership is a necessary condition for democracy and spiritual and moral growth of human beings. A balanced approach would accommodate individual ownership under social supervision as well as socialization whenever necessary, he opines.

Syed Muhammad Ismail in his book, A critical Analysis of Capitalism, Socialism and Islamic Economic Order8 , disregards the Marxist view point, that the means of production govern our thoughts and actions and determine the course of our mental and physical activities. He considers exploitation of man by man as a biological phenomena. He remarks that it is the man himself who is responsible for this exploitation. Man’s ego compels him to show his superiority over others and makes him to exploit others. All material objects of the external world act only as a media for expressing this inner human urge. He also criticizes Marxists for applying dialectical method for analyzing and interpreting the historical and social phenomena. He remarks that there is an inherent defect in the method of dialectics. The dialectical process of reasoning Jumps straight away from thesis to anti-thesis, totally ignoring the vast spectrum of diverse shades and colours in between them.

Mirza Muhammad Hussain in Islam Versus Socialism9 , condemns socialist doctrines on the ground that they ferment class war.

Muhammad Abdul Mannan in Islamic Economics: Theory and Practice10 , accuses communism of having grossly over emphasized the problem it sought to solve, with the result that the solutions are highly unrealistic and unworkable.

Abdul Hameed Siddiqi in Insanyat Ki Ta’mir-i-nau aur Islam11 (Reconstruction of Humanity and Islam), refutes the Marxian theories and finds that communism has created more problems than the issues it has solved.

Sheikh Mahmud Ahmad in Economics of Islam: A comparative study12 , regards the problems of efficiency as the greatest one faced by communism which completely disregards incentives and rewards. Thus, much has been discussed by Muslim economists on comparative economics. However, Iqtisaduna by Baqir al Sadr encompasses almost all the major aspects in this field, including the contemporary challenges, some of which have not been touched upon by other sources on Islamic economy. He not only criticizes Marxism and capitalism in terms of their resultant problems in the form of injustice, human suffering and loss of individual freedom, but also examines and refutes the philosophical and theoretical foundations of these systems. Besides discussing the fundamental principles of Islamic economics, Baqir al Sadr also presents a well balanced economic model for an Islamic state in this book.

Some aspects of economic ideas of Baqir al Sadr have been briefly discussed by T.M.Aziz, Rodney Wilson, Muhammad Umar Chapra and Muhammad Nejjatullah Siddiqi.T.M.Aziz in his thesis entitled, “An Islamic Perspective of Political Economy: The Views of (Late) Muhammad Baqir al Sadr13 ”, discusses Baqir al Sadr’s views on various aspects of Islamic economy like; ownership of property, economic relationships in Islam, economic development, distribution of natural resources and role of the state in Islamic economy. Rodney Wilson in his article entitled, “The Contribution of Baqir al Sadr to Contemporary Islamic Economic Thought14 ”, highly acknowledges the contribution of Baqir al Sadr in the development of modern Muslim economic thought. In this study he refers three other Muslim economists besides Baqir al Sadr, these include; Muhammad Nejatullah Siddiqi, Muhammad Umar Chapra and Syed Nawab Haider Naqwi.

Muhammad Umar Chapra in, Islam and the Economic Challenge15 ”, while acknowledging the role of Muhammad Baqir al Sadr in the development of contemporary Islamic economic thought approves Sadr’s view that poverty and deprivation are caused by the absence of a morally defined framework of human relationships between the rich and the poor.

Muhammad Nejatullah Siddiqi in his book, “Muslim Economic Thinking: A Survey of Contemporary Literature”16 mentions economic ideas of Baqir al Sadr on various Islamic economic issues like ownership of property, goals of Islamic economy, money and banking and role of the state in Islamic economy.

The above mentioned scholars have discussed only a few economic insights of Baqir al Sadr. The present study, however, provides a thorough analysis of his economic thought in the light of his most celebrated book Iqtisaduna. It is a humble effort to evaluate the imperfections in capitalism and socialism and the practicability of Islamic economics in the modern times.

The analysis presented in this study spreads over five chapters followed by a concluding chapter and the Bibliography.

Chapter first provides a brief account on the life and works of Baqir al Sadr. Some important aspects of his life have been discussed, and his works on various disciplines like Jurisprudence, law, philosophy, logic, theology, economics, exegesis, history and Islamic Culture have been mentioned, besides this, his numerous articles on various academic fields have also been mentioned.

Chapter second provides background study of Islamic economics. It examines the economic teachings of the Quran and Hadith and presents the economic insights of eminent Muslim scholars throughout the Islamic history. For the sake of convenience the economic history of Islam is divided into various stages and a few scholars, as representatives, are discussed from each of the stages. In this chapter our effort has been to present that Muslim scholars have discussed economic problems right from the prophet’s period, in the light of Quran and Hadith and in accordance with their times and situations.

Chapter third focuses upon the criticism of Marxism by Baqir al Sadr. In the beginning of the chapter, the basic components of Marxist economy including; dialectical materialism, economic interpretation of history, the theory of surplus value and the end of capitalism are briefly discussed. After that, the chapter is divided into two major parts; part first deals with analysis and criticism of historical materialism by Baqir al Sadr and part second, presents his analysis of socialism and communism. The chapter analyses that historical materialism as a single factor (economic) interpretation of history does not hold any scientific ground. For every social or historical occurrence various factors such as; social, political, religious, psychological are also responsible besides the economic factor.

Chapter fourth deals with Baqir al Sadr’s analysis of capitalism. In the beginning of the chapter the basic features of the system are discussed, followed by the critical analysis of its basic principles by Baqir al Sadr. The claims of capitalism in appreciation of economic freedoms; such as freedom promotes public interests, it causes growth of production and is a real expression of human dignity are critically examined. The chapter intends to evaluate, how the humanity has suffered terribly in the hands of capitalism. Poverty, hunger, unequal distribution of wealth and an ever increasing gap between the rich and the poor have emerged as the resultant problems of the system.

Chapter fifth embodies Baqir al Sadr’s analysis of Islamic economics. The basic principles of the system are analyzed and discussed and the system emerges as a distinctive one from that of capitalism and socialism. The chapter besides other aspects focuses on the critical assessment of the extreme approaches that the capitalism and socialism have adopted in attempting to solve man’s economic problems which, however, have led to the severity of the problem in contrast to the claims of adding human miseries. The middle path as presented by Islam emerges as the only logical solution for humanity to get rid of the whole gamut of problems that have resulted due to these systems. The chapter also discusses the role of the state in Islamic economy and also provides an outline of the distribution of the natural resources in an Islamic state.