Free Market Mojo is proud to present an interview with Dr. Imad-ad-Dean Ahmad, President of the Minaret of Freedom Institute, a free market Muslim think tank.
Dr. Ahmad, a Palestinian-American Muslim, graduated cum laude from Harvard in 1970 and obtained a Ph.D. in astronomy and astrophysics from the University of Arizona in 1975. He is an internationally known interdisciplinary scientist and author of Signs in the Heavens: A Muslim Astronomer’s Perspective on Religion and Science.
He is a senior lecturer at the University of Maryland where he teaches courses on religion and progress and on religion, science and freedom. He also teaches a course on Islam, Science and Development at Georgetown University for the Center on Muslim-Christian Understanding.
Dr. Ahamd is also the Islamic chaplain at the Perkins Hospital, Imam of the Dar-adh-Dhikr Mosque, President of the Islamic-American Zakat Foundation, and arbitrator for the Coordinating Council of Muslim Organizations in the Greater Washington Metropolitan Area.
As with our other interviews, the author’s views are his own and are not necessarily endorsed by either author of Free Market Mojo.
FMM: Is Islam compatible with capitalism?
Ahmad: I would prefer to say it is compatible with free markets, although it is compatible with some aspects of capitalism and not others. The word capitalism was coined by Karl Marx as a term of disdain for both the free market and for the culture he believed that it engendered. It is fascinating that the capital-owning class he despised has embraced the term. Islam is not only compatible with free markets, but rather pointedly promotes many of their aspects including free trade, voluntary exchange, transparent and enforceable contracts, the making of honest profit, and no limitations on wealth accumulation. However, there is a cultural side of capitalism that Islam challenges, and that is Mammonism, that elevates the accumulation of wealth into the object of worship. The only limits Islam places on the accumulation of wealth is that it should be honestly acquired and it should be used to good purpose once acquired. Thus, while Islam favors free markets, it has two serious objections to capitalism as a system. The first is objection with the ethos that elevates the accumulation of wealth above all other values and turns human beings away from their spiritual nature, that is to say their purpose as the “vicegerents of God,” into objectified consumers or commodity fetishists. The mindset represented by that ethos says notions of good and evil should be omitted from the marketplace, that one’s moral belief that, say, prostitution is wrong, should not prevent one from becoming a pimp since that is providing a service for those who disagree. The second is with the “crony capitalism” that the imperial powers have imposed on the rest of the world, so that mixed economies, masquerading as free markets, allow the government and its friends to use the power of the state to dominate the markets to the exclusion of the masses who, denied the opportunity to compete end up as effectively as serfs rather than as the middle class actors indispensable to a true market economy.
FMM: There seems to be several distinctions between capitalism and Islamic economics, particularly with the prohibition of usury (riba), speculation (maysir) and certain commodities (haram). Do you see these as conflicting with capitalism?
Ahmad: The economist David Friedman has suggested that a pragmatic, as opposed to moral, defense of capitalism could be generated by beginning with the assumption that a unit of exchange (say the dollar) has equal value for every actor in the market. While he is aware that his is not literally true, he feels it is a good enough approximation to make his case. It is approximately true for the middle class, but it is emphatically not true when one compares the destitute with the super-rich. A dollar, which may buy a homeless woman enough formula to prevent her infant from starving to death, is infinitely more to her than it is to Bill Gates who, if a dollar fell through a hole in his pocket might never even notice. I subscribe to the view that the prohibition of usury applies to cases where the economic disparity between the lender and the borrower opens the door to loan sharking. That is to say, when economic disparity allows the lender to charge more than the market clearing rate of interest. Although we who hold this position are small minority (the majority of Muslims believe any interest in lending is usurious), but we have two strong arguments in our favor. The first is the economic argument, namely that usurious or unfair rates of interest are impossible (apart from coercion or fraud) unless such a disparity exists, since no one would otherwise knowingly choose to pay an above-market rate of interest. The second is a jurisprudential argument. Every single verse of the Qur’an that condemns “riba” does so in the context of an endorsement of charity, never in the context of trade. To the contrary, the Qur’an denounces those who equate “riba” with trade as being in the position of “one whom the evil one by his touch hath driven to madness. That is because they say: ‘Trade is like usury,’ but God hath permitted trade and forbidden usury.” (2:275) Further, I have written an article that shows that the traditions of the Prophet Muhammad (peace be upon him) also favor such an interpretation. Thus mutual agreements are binding unless the agreement is tainted by coercion, fraud, or unfair advantage. Thus Islam distances itself from crony capitalism (in which coercive states taint trade), fraudulent contracts, and loan-sharking.
As for whether lotteries (maysir) or gambling and such haram activities as prostitution conflict with capitalism, I would make two points. First, that in the United States today neither lotteries nor prostitution are unregulated free market activities. Second, I deny that capitalism constitutes a moral theory that can have any position on such activities whatsoever. Capitalism, when stripped of the coercion, fraud, and inequities with which it has been plagued in practice is a good economic system, but it is not a code of moral guidance. Even libertarianism, of which the free market is an economic corollary, is not a complete ethical system but only a code of political ethics. Not everything that is economically profitable is necessarily good. Not everything that is politically permissible is necessarily good. Do I not, under capitalism, or libertarianism, have a right to sit in a corner and cut away small pieces of my flesh until I eventually die of blood loss and infections? Should I therefore do this, say for perverse psychological satisfaction or for profit because someone has offered me a seductive sum of money that I can leave to my heirs? Islam is a complete way of life. It’s political system, in my humble opinion, is libertarian, and its economic system is free market. Yet, it transcends both, and its commands to the believers may prohibit activity that is neither uneconomic nor aggressive, but is bad for other reasons. Islam claims to offer the believers success in this life and the next. Thus, my investments will be guided by more considerations than monetary return. Perhaps I could make more money as a drug dealer than as a drug counselor, but there are other considerations.
In any case it is important to understand that laws such as the prohibition on buying, selling, or consuming wine apply to Muslims only and are not to be imposed on non-Muslims. Thus, Dubai has been an attraction to non-Muslims who have called it (with some hyperbole) the Las Vegas of the Muslim world.
There are some other elements of Islam that conflict with capitalist practice, including the prohibition of unbacked fiat currency, denial of the fiction of corporate persons that enables corporations to escape responsibility for their actions through limited liability, and the prohibition of speculation in perishable goods that enables speculators to make malinvestments that harm others as well as themselves.
FMM: Is it possible for a nation to live under Shari’a law and still respect individual rights? Specifically, how can a national legal system simultaneously respect individual rights while enforcing an Islamic legal code that seemingly promotes communal rather than individual interests?
Ahmad: The Islamic code is balanced between communal and individual considerations. This would indeed contradict that atomic individualism which has no consideration for communal interests, familial obligations, or good manners whatsoever, but in what society has atomic individualism ever been respected? A woman can no more go topless in the streets of Washington, DC, than she go bareheaded in the streets of Riyadh. Man is by nature a social animal and the communal considerations, while they should not violate individual rights, should not be completely discarded. The resolution to this paradox was dealt with by the philosopher Robert Nozick in his chapter on “The Framework for Utopia” at the conclusion of Anarchy, State, and Utopia. Rather than have an interventionist state as the guarantor of individual rights, let the state be the guarantor of the independence of mini-states living in peace with one another, each of which has a its own standards to which the inhabitants voluntarily agree. This is what the Shari`a envisions, since only those who are Muslims by choice are bound to the Islamic law in full, and those who subscribe to other religious codes (Jewish, Christian, Zoroastrian, whatever) shall follow their own laws insofar as it does not adversely affect the Muslims or other protected minorities. This was specifically stated with regard to the Jewish community in Muhammad’s compact for the governance of Medina and that model has been followed (more or less imperfectly) by most Muslim states in history. Certain modern Muslim states that follow the European Western models rather than the Islamic one are among the unfortunate exceptions, but even the puritanical Wahabis do not intervene in the unIslamic activities that go on in the private compounds in Saudi Arabia. (Even when such activities take place in Muslim households, they are ignored by the state because of the Islamic respect for the right of privacy.) I would expand the Muslim system of religious pluralism from its mandatory inclusion of the “People of the Book” to include all communities that want to peacefully coexist under the Muslim umbrella. At the risk of glibness, the short answer is that Shari`a law (like the law of gravity) is something to be obeyed, not to be imposed.
FMM: Promoting the virtues of capitalism in the West often centers on arguments concerning liberty. Has the Muslim experience, particularly under colonialism, created alternate perceptions of liberty? If so, are Western arguments in support of capitalism useful in the context of the Muslim world?
Ahmad: It has been said that when Muslims say “justice” they mean what Americans mean when they say “liberty.” In the Muslim world there is a deep suspicion that the world “liberty” is just a code word for colonialism and imperialism. How else to explain Western support for such illiberal regimes as Egypt in the name of liberty? How else to explain American indifference to the looting of Palestinian property in the name of a mythical Zionist collective land right? Arguments in favor of individual rights, property, contracts, free trade, etc., are easier to make to Muslim audiences when couched in terms of justice. However, as a libertarian, I am not ready to abandon the word liberty. Instead we should consistently use it honestly. If we will stop trying to defend colonialism and imperialism under the banner of liberty, I think it will be quite easy to add liberty to the canon of human rights traditionally included under Islamic law (life, property, intellect, family, and dignity) as issues of justice.
FMM: Part of Israeli Prime Minister Benjamin Netanyahu’s approach to reaching an Israeli-Palestinian peace agreement is through forging what he calls an “economic peace.” In this method, he has said that an improved Palestinian economy will create favorable conditions towards negotiations on a Palestinian state. Do you have any thoughts about this?
Ahmad: What Netanyahu means is that he thinks the Palestinians can be bought out by granting some critical Palestinians wealth in order to continue looting the rest of the population. This is the precisely the form of cronyism that gives capitalism a bad name. Instead, a true economic peace can be achieved by restoring to the Palestinians their property rights and their freedom of movement, releasing all political prisoners, and offering all citizens of Palestine-Israel (by whatever name one wishes to call it) equal rights and liberty, and a roadmap to attain self-determination through a democratic mechanism. Unfortunately, there are political obstacles to such an economic solution, primarily that it violates the collectivist basis of modern Zionism under which the land of Palestine is considered not to be owned by individuals but as trust for the Jewish people. There is also the problem that Hamas has imitated the Zionists by adopting its own variation on this theme by declaring Palestine to be a trust for the Muslim people. It may not be sufficient to solve the impasse, but it would certainly help to change the terms of debate for libertarians to openly reject these collectivist notions and to embrace the principle laid down by the late Palestinian statesman Fayez Sayegh that the solution to the problem lies in “the recognition of the primacy of the human person over the juridical-political abstraction of statehood.”
FMM: For better or for worse, much American political rhetoric concerning the Middle East has involved the spread of democracy. The use of force, particularly in Iraq, has proven to be an ineffective method for this end. On the other hand, many Middle East analysts contend that free elections across the Middle East may result in ruling governments hostile to democratic values. How then can Muslim countries transition into free societies?
Ahmad: The evidence is to the contrary. Elections have only given the people a taste for elections that are even more free and fair. The street demonstrations in Iran are sparked by the suspicion of fraud in the elections, not by any desire to put an end to them. When the late King Hussain of Jordan allowed the Islamists to participate in the elections there, they changed their position from opposing women voting to claiming it was an Islamic duty for women to vote. The U.S. accused Algeria’s FIS of calling for “one man one vote one time,” but one of the winners of the parliamentary election (not allowed to take his seat unfortunately), Anwar Haddam, has told me that he has only become more committed to the cause of freedom after participating in the elections. I think that Westerners have forgotten how long, drawn out, and riddled with wrong turns its own progress towards democracy and liberalism has been. England is held up as the paragon of progress, but from the Magna Carta to modern England took eight centuries, centuries that included reversals like Cromwell’s rise to power. The path to an open society in the Muslim world will also be uneven and erratic, but if allowed to develop organically using its Islamic heritage in a positive sense, it can happen without direct Western intervention and, hopefully, in a lot less than eight centuries (God willing).
FMM: How can Muslim societies make their indigenous concepts of democracy and representative government compatible with liberal notions of individual rights? Will they be able to do this?
Ahmad: The Turkish experience demonstrates how this can happen. In Turkey the secular ruling elites relied on military power to maintain their grip on society while the Islamist movement blossoming in the new entrepreneurial middle class of Anatolia has struggled for human rights and a liberalized economy. Of course, these are not American liberals, and they have a conservative social agenda, but their record on democracy, representative government and economic reform is very impressive. (The Justice and Development Party took inflation down from 80% to a single digit.) When it comes to making money, they live up to the American standards. They have used that money, not to indulge in drugs or build Playboy mansions, but to start schools and charitable organizations that have further whetted the Turkish appetite for reform. It was not the government but these private charities that came to the rescue when the earthquake hit Turkey. It is these schools, not the government schools, that are educating a new generation of business people, journalists, and intellectuals willing to think for themselves. They are motivated by a deep religious conviction in the direct responsibility of the individual to the Creator.
FMM: How has the Muslim community, both in the United States and abroad, responded to your message?
Ahmad: The response has been mostly favorable. Our book Islam and the Discovery of Freedom (a running commentary on the chapter on Islam in Rose Wilder Lane’s Discovery of Freedom) is now in its third printing and Signs in the Heavens (on the role of individual critical thinking to the progress) is in its second edition. Our website gets over 100,000 hits per month from over ten thousand unique visitors. I have been invited to speak at conferences in Turkey, Morocco, and Malaysia and most recently to give the keynote address at a conference on Islam and science in India. Donors to the Minaret of Freedom Institute include not only many Muslim Americans, but a Saudi entrepreneur. The response has been most favorable among the young people. At a conference in Turkey young people swarmed up after my talk to say that they were certain that what I said was correct because what their elders were saying made no sense. I have been invited to speak at mosques around the country and have collaborated with major organizations such as the International Institute for Islamic Thought and the Association of Muslim Social Scientists with whom we produced the Directory of Experts on Islamic Studies and Muslim Affairs. A member of Fethullah Gulen’s movement (based in Turkey and influential in many Central Asian countries) has asked me to write a book about how that movement touches on issues of liberty, human rights, and free markets. Although I have found few Muslims who have accepted the libertarian message whole (there have been some), the response in that respect is no different from the American public as a whole to libertarian activism. The basic message, however, that Islam must be understood to favor critical thinking, justice, human rights, and free markets, has received a favorable response from Muslims in general and an enthusiastic response from the young Muslims in particular. It is the latter who will determine the course of Islam in the future.
We would like to thank Dr. Ahmad for his time and wish him well in his future academic and political pursuits.
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