In the midst of concerns about the Islamist threat, a quieter revolution is going on in Islam which could ultimately lead to a new economic bloc in the world. Since the 1970s, an economic theory has been taking hold in a number of Muslim countries, backed by a growing Islamic financial system. 

Historically, like Judaism and Christianity, Islam forbade usury and advocated "economic" laws. There are scant references in the Koran, which could be used to defend any number of economic policies, but they have been seen as prescriptive enough to merit a complete Islamic economic theory. 

The practical outcome is the creation of Islamic banks, with funds currently totaling some $250 billion and growing at 15 percent per annum, with the potential to reach $1 trillion easily within ten years. Initially, this was fueled by wealthy Muslims, corporations and foreign banks seeing this as a niche market. There is a certain irony in this, because Islamic economic theory places socioeconomic justice at the center of its response. 

However, the aim goes further than allowing finance houses to provide services to the faithful in a growing niche market. Pakistan and Sudan have Islamized their economic policy, while Malaysia has supported a hybrid system between a market-based economy and an Islamic financing system. There is a statist aim of hijacking Islamic financing in certain countries and propagating policies to encourage an alternative market order, namely an Islamic one. What would such an order offer? 

Simply stated, it rejects both the market economy and socialism, offering a system based on an Islamic worldview. Muslim economists argue that capitalism fails because it reflects a lack of contentment, illustrated by our single minded pursuit of wealth, rampant consumerism and preoccupation with sensual pleasure. They say socialism fails because it lacks harmony between its goals and its worldview, which is rooted in post-Enlightenment secular philosophy. It is also dogged by what one Muslim economist called the "Americanization of the left," yet offered in its place is an Islamization of the left. 

The solution propagated is a reallocation of resources and redistribution of wealth, fulfilling a Muslim's moral obligation to be a worthy example. Such Islamization of the economy aspires to spiritual as well as material well-being, thus establishing socioeconomic justice. This means an economy according to a divine mandate giving humanity stewardship of the earth's resources, refined through a "moral filter" before being made subject to the discipline of the market. 

However distant the prospect at present, this is a radical alternative economic system which has found a home in Islam, prescribing an holistic organization of society as an economic system. It is potentially a powerful vision, just as Communism and socialism were. 

The attack on September 11 by al Qaeda and its attempt to destabilize U.S. economic power is akin to that of the Bolsheviks' assault on the Winter Palace, which led to the Soviet Union and an economic system tyrannizing a large part of the world for much of the last century. It may only be a matter of time before a powerful state based on Islamic economic teachings creates a new iron curtain, or iron veil. 

This provides a new direction for the Islamists on the one hand, and, on the other, market economy critics may see this as proof that there are economic alternatives. With only one economic order today, a vacuum exists for those opposed to the market economy, and critics are just waiting to give house room to any alternative since the fall of Communism. In some respects, it is the latter group that we need worry about more, since they will take on board the socialism inherent in much of this Islamic economic argument, while failing to understand the theological basis. 

As in socialism, Islamic economists fail to establish how the injustices in the existing world order are avoided in their system, or how redistribution of wealth would be fairer. The theological problem is that Islam, like Judaism and Christianity, takes issue with how we live our lives responsibly in the modern economic world. The latter two religions have long since accepted that one cannot take prescriptively an economic theory from sacred texts, and Islam ought to follow suit. 

The political problem is that for Islamization of the economy to be successful as an alternative one would have to accept an Islamist worldview - in other words submit to Islam. We may well be on the edge of a new economic revolution, or will this be seen for what it really is: Socialism in religious dress?

David Cowan, who earned a degree in theology from Oxford University, taught Islam and religion theory at Cambridge England's Lutheran Seminary.

Source: Washington Times