Islamic economics has grown significantly, offering diverse perspectives on managing economic activities within the framework of Islamic principles. These perspectives are shaped by three primary schools of thought: Baqir al-Sadr’s Iqtishaduna School, Islamic Neo-Classical School, and the Critical Alternative School. Each of these schools presents a unique approach to integrating Sharia values with economic practice.
1. Baqir al-Sadr’s Iqtishaduna School
The Iqtishaduna school was developed by Muhammad Baqir al-Sadr, a prominent Iraqi scholar who authored Iqtisaduna. Al-Sadr argued that Islamic economics must fundamentally differ from both capitalist and socialist systems, which he believed separate morality from economic activities. He emphasized justice in wealth distribution, particularly by banning riba (interest) and promoting profit-sharing models like mudharabah and musyarakah. Al-Sadr also viewed zakat and waqf as crucial mechanisms for achieving economic equity.
In his vision, Islamic economics is a unified system closely tied to maqashid al-shariah (the objectives of Islamic law), including the protection of religion, life, intellect, lineage, and property. For al-Sadr, the ultimate goal of Islamic economics is not merely efficiency but also the social welfare of the community.
Also read:Islamic Economic System and the Prohibition of Interest (Riba)
2. Islamic Neo-Classical School
The Islamic Neo-Classical School blends Islamic principles with the mechanics of free-market economics. Figures like Monzer Kahf and Umer Chapra argue that Islamic economics can adopt positive elements from conventional economics—particularly from the neo-classical model—while ensuring strict adherence to Sharia, such as the prohibition of riba and gharar (uncertainty). This approach supports Islamic banking as a viable alternative to conventional systems.
Islamic banking under this school operates on profit-sharing principles, including risk-sharing models. Chapra, in particular, suggests that this approach balances economic efficiency with social justice, promoting financial stability and fair wealth distribution through zakat and charitable giving. The goal remains to align market mechanisms with Islamic values while adhering to maqashid al-shariah.
Also read:Social Justice in Islamic Social Finance
3. Critical Alternative School
This school, led by scholars like Timur Kuran and Jomo Kwame Sundaram, offers a critical perspective on the two preceding schools. Kuran argues that both the Iqtishaduna and Neo-Classical Islamic schools merely modify capitalist or socialist systems without providing genuinely new solutions. He believes that modern Islamic economics replicates conventional frameworks under Islamic labels, such as renaming interest as zakat in certain contexts.
The Critical Alternative School emphasizes the need for deeper innovation and reinterpretation of Sharia principles, focusing on social justice. Scholars in this school argue that maqashid al-shariah must serve as the foundation of all Islamic economic policies, pushing for a more radical departure from existing capitalist structures. They also criticize how current Islamic economic systems fail to address core issues like poverty and inequality comprehensively.
Also read:Khilafatul Ardh: Bridging Faith and Finance
Conclusion
These three schools of thought present a broad range of perspectives on how Islamic economics can evolve. Baqir al-Sadr’s Iqtishaduna School advocates for a distinct separation from conventional systems, while the Islamic Neo-Classical School seeks to integrate market mechanisms within an Islamic framework. The Critical Alternative School offers a more radical critique, calling for deeper innovation and a focus on social justice in Islamic economics. Together, these schools continue to shape Islamic economics as it adapts to modern challenges, striving to balance efficiency and social equity.
References:
Al-Sadr, M. B. (1982). Iqtisaduna (Our Economics). Dar al-Fikr.Chapra, U. M. (2000). The Future of Economics: An Islamic Perspective. Islamic Foundation.
Kahf, M. (1995). Islamic Economics and Finance: Theory and Practice. International Association of Islamic Economics.
Kuran, T. (1997). Islam and Mammon: The Economic Predicaments of Islamism. Princeton University Press.
Sundaram, J. K. (2016). Islamic Economics and Critique of Capitalism. ResearchGate. Retrieved from https://www.researchgate.net/publication/377067447_Mazhab_dan_Pemikiran_Ekonomi_Islam_Kontemporer
Maqashid al-Syariah in Islamic Economics. (2020). Retrieved from https://islam.nu.or.id/ekonomi-syariah/fiqih-maqashid-mazhab-dan-manhaj-ekonomi-syariah-l6Tyj
Pengertian dan madzhab pemikiran ekonomi Islam kontemporer. (2018). Kompasiana. Retrieved from https://www.kompasiana.com/edisiswoyo/5a9c17f916835f660d300802/pengertian-dan-madzhab-pemikiran-ekonomi-islam-kontemporer
Metodologi ekonomi Islam: Overview tiga madzhab ekonomi Islam. (n.d.). Academia.edu. Retrieved from https://www.academia.edu/33133742/METODOLOGI_EKONOMI_ISLAM_OVERVIEW_TIGA_MAZHAB_EKONOMI_ISLAM
Iqtisaduna. (2023). Wikipedia. Retrieved from https://en.wikipedia.org/wiki/Iqtisaduna
Modern Islamic Economic Thought: A Study of Muhammad Umar Chapra. (n.d.). Academia.edu. Retrieved from https://www.academia.edu/44633192/Modern_Islamic_Economic_Thought_A_Study_of_Muhammad_Umar_Chapra
