On the Theory of the Islamic Market and Finance (Part 1)

Definition of the Islamic Market

The Theory of the Islamic Market is a collection of positive and normative propositions appertaining to the bazaar and its components, a theory that is developed from the holy Quran and tradition.

News ID: 446385

Date: 06 August 2019 - 08:34

RNA - The scientific session on the theory of the Islamic Market Stressing the Essential Commodity was held by the Secretariat of the International Congress of the Islamic Humanities together with Imam Khomeini Institute of Education and Research in Andishe Hall of the said institute.

The session was presented and reviewed respectively by the faculty member of Imam Khomeini Institute of Education and Research, Sayyed Muhammad Kazim Rajaei and the faculty member of the Seminary and University Centre for Research, Sayyed Hamidreza Husseini.

Hujjat al-Islam Rajaei, opening the session, expressed his views and said, “The theory of the Islamic market is composed of some ideas and propositions; the one who seeks to deal with the Islamic market should first examine the foundations of market, economic man, the purpose/s of the economic man both as a consumer and producer, theory of the demand and supply, the data-x-items that together form the mechanism of the market.”

“If the market is going to be examined through a positive and normative approach, some other data-x-items will be required, accordingly, the theory of the Islamic Market is established through a group of papers responding to a bundle of questions.”

“The question raised and answered by the present paper include, what is the basis of the Islamic Market? What are the characteristics of this market? What is/are the discrepancies between this market and the perfect competition market? As a consumer and producer, what is the purpose of the economic man in the Islamic market? According to the Islamic principles and values, what and how is the essential commodity demanded by the individual and the market? How do the principle and values impact the demand? And how the principles and foundations, extracted from among the does and don’ts provided by Quran and tradition impact the supply and demand itself? How do the foundations of the principles impact those factors affecting the supply? Whether is the Islamic-instructions-based mechanism of the market commensurate with the market mechanism provided by the perfect competition market or not? Which one does provide higher efficiency, durability and welfare?”

“Both the perfect competition and Islamic markets are ideal, and an instance of each case might have been tested or not, therefore, considering the answers to the aforesaid question, if we seek to elaborate on this topic, we ought to deal with each bazaar’s methodology, foundation, motivation, the purpose of demand and supply within them and finally the mechanism of them.”

“The paper presents and uses some keywords that should be first explicated; the first term is “theory” meaning a group of general claims along with some related secondary propositions, they could have specific and non-clear implications in a specific area, and thus they need to be elaborated. By bazaar/market, a place, position and environment is meant, it is not bounded to a place, i.e., the bazaar is a position or an environment in which goods are produced, supplied and purchased; moreover, there are different markets providing different goods and services.”

Definition of the Islamic Market

“A bazaar is considered Islamic provided that it is consistent with Islamic principles, besides, the economic man in that bazaar is supposed to set the Islam-based criteria as his own standard of selection and apply enough resources and means for observation of deterrent and positive values and other people's rights. In other words, it can be claimed that the Islamic market is an institution established based on the Islamic principles, its active players believe in Islamic principles and its laws and disciplines are consistent with the religion. In addition, the Islamic values, especially honesty, govern such environment and the Islamic government is responsible for the adoption of the policies pertaining to this type of market and it is observed regularly by the government.”

“The Theory of the Islamic Bazaar is a collection of positive and normative propositions appertaining to bazaar and its components, it is developed based on the instructions of the Holy Quran and tradition, the theory seeks to describe and define the mechanism of bazaar together with the behaviour of the economic man who believes in the Islamic principles and observes the Islamic codes of ethics; moreover, the theory has the potential to predict the promotion from the current status to the desired form.”

“For the elaboration of the theory of the market, both positive and normative issues have been employed. The method of the Islamic market should be understood using Quran and tradition as it is based on Quran and tradition; therefore, the theory can’t be examined without dealing with orders and dos and don’t.”

“The category of essential commodity covers the essential commodities and goods needed by the society, and the lack or shortage of such commodities lead to the disorder in the system of the society; any problem in the production of such commodities will result in social troubles, therefore their production is a collective obligation.”

“Motivation, as the energy putting the man into an economic motion or the consumption of the commodity, is an internal factor generated externally by the need. Targeting the aim, motivation encourages and activates the behaviour into the move towards meeting the ends.”

“There are different types of purpose that should be recognised from each other; they fall into two categories of median and ultimate. The median goals act as the prelude to the ultimate ones, however, they are not as original/authentic as the chief end. The ultimate goals are as authentic/original as the chief purpose. For instance, the man works in order to earn income, he earns income to use it for buying and consuming something, and consumption as a purpose is a median goal and the man consumes to have enjoyment. Despite being a median purpose, enjoyment is regarded as the ultimate goal by the capitalist system, besides, it is based on as a foundation by capitalism. Different from capitalism, Islam maintains that the man enjoys in order to continue his life and generation so as to step towards perfection and Heaven as the ultimate goal.”

“The method used in this research is named “the Interpretation of the Theory of Islamic Economics”. The method is based on the Holy Quran and tradition and employs different data-x-items including the deep epistemology, exploration of the foundations and engagement in reasoning, searching for and extracting the principles and strategies appertaining to the present topic from the Holy Quran and tradition. The method is established and employed for the development of the reasoning and exploration of assessment criteria and finally for making the theory coherent. It can be said that there is a mutual relationship between this theory and the theory of the Islamic Market because they complement each other.”

“By the deep epistemology here, an epistemology different from the existing and common types of epistemology is meant. For example, concerning the market, a question raised and defined by a specific expert shouldn’t be confined to, yet, a historical evolution should be followed, even for theorisation, the deep epistemology alone can’t be confined to and the lower layers of the bazaar ought to be delved into, they should all be studied, and then it can be claimed that the bazaar is known.”

To be Continued

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