MUSLIM ECONOMIC THINKING AND INSTITUTIONS IN THE 10 AH

212 Pages·2009·0.86 MB·English

MUSLIM ECONOMIC
THINKING AND
INSTITUTIONS IN THE
th th
10 AH/ 16 CE CENTURY

Abdul Azim Islahi
Professor
Islamic Economics Research Center
King Abdulaziz University

Scientific Publising Centre
King Abdulaziz University
Jeddah, Saudi Arabia

1430 A.H. / 2009 A.D.
FOREWORD

The state of Muslim economic thinking in the tenth century Hijrah
corresponding to sixteenth century CE has been an un-researched subject.
It is a matter of great satisfaction for Islamic Economic Research Center
to present a pioneering work in this area.

There are many lessons to be learnt from the economic ideas of the great
lights of the period. I am sure that the readers will find some of the
chapters highly interesting and thought provoking. The present study
underscores the thesis that mercantilism was a reaction against Muslim
powers and investigates the factors that promoted mercantilism in the
Christian West and the reasons why it did not find favor in the Muslim
East. It informs us of many interesting examples of financial innovations
adopted in this period in order to protect awqaf properties. It also tells us
how those innovations were misused and corrective legal measures were
imposed and bypassed subsequently. It deals with the legal issues in
contracts and their settlements that arose due to unstable currency values
and monetary mismanagement. It highlights issues with respect to
kharaji lands and looks at land prices in the perspective of the purposes
of land sale. This gives us insight into the level of understanding about
price formation based on expectations. It also underlines new thinking on
preserving the incentives and maintenance of awqaf by resorting to
financial innovation of ‘ijaratayn’ (combination of long- and short-term
leases) and ‘istibdal’ (asset swap) as well as institutional innovation of
cash waqf that provided flexibility and efficiency in its maintenance. It
calls attention to fresh thinking on reclassification of sources of state
revenues and adding left-over property as an explicit funding source for
bayt al-mal as it had assumed significant proportions. In addition, the
book provides detailed information about works on public finance,
Shar`iyah governance and market supervision that have been depositary
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of economic ideas of Muslim scholars. A detailed bibliography
comprising the literature on Muslim economic thinking of the period has
been provided.

The present study by Dr. Abdul Azim Islahi is first of its kind that
systematically studies Islamic economic thought during the
tenth/sixteenth century. The book is selective rather than exhaustive and
makes no pretense of presenting a complete history of economic thought.
We hope that the present work will be a significant addition to the
existing literature on the subject. It is expected to provide a major fillip to
future research in the area of Islamic economic thought.

May Almighty Allah accept our humble endeavor and grant us His favor.
Wa bi’llah al-tawfiq

Dr. Abdullah Qurban Turkistani
Director
Islamic Economics Research Center
King Abdulaziz University

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PREFACE

More than seventy-five years have passed since writing on Islamic
economic thought began in the modern period. But these works do not
cover the period after the 9th AH/15th CE century. In the present work an
effort has been made to investigate the state of Muslim economic
thinking in the tenth century Hijrah corresponding sixteenth century CE.
This period occupies great significance in the world history. In the
sixteenth century the Ottomans consolidated their rule in parts of Europe
and took over the custodianship of the Holy lands of Islam by abolishing
the two and half a century old Mamluk Sultanate of Egypt. The
beginning of century also saw the establishment of a new dynasty –
Safawids – in Iran and the Mughal dynasty in India. In Europe it marked
the 'first phase' of early modern era. It was a time when renaissance was
already in full swing and social reform, scientific inquiry and economic
thinking and institutions were taking new shapes. This situation brought
both challenges and opportunities to Muslim world. However, the
balance of economic potential and technological scope moved
progressively in Europe's favour.
To provide background knowledge of the situation in Muslim countries
at that time, an overview of the history of Muslim governments,
intellectual and literary situation and economic condition have been
presented at the very outset. As far Muslim economic thinking is
concerned, the present study seeks to examine it in five major areas:
market and pricing, mercantilism, money, kharaj and land proprietary
right, and endowment and cash waqf controversy. It also presents an
analytical survey of works produced during the period under study on
public finance, al-hisbah and al-siyasah al-shar`iyah – most important
source material of Muslim economic thinking in the past. Occasionally
this study also attempts a preliminary evaluation and comparison of the
economic thinking of the Muslim scholars of the period with that of their
predecessors as well as their contemporary Western thinkers.

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However, due to certain limitations, the main focus of research has been,
with a few exceptions, works available in Arabic language and economic
institutions that existed in territories of the government that controlled
the heartland of Islam. It also takes the note of some Western economic
institutions and ideas for purpose of comparison. At occasions the reader
may feel that there is a mixture of history of economic thought and
economic history. The present writer has been aware of this kind of
unavoidable overlapping. This was due to the nature of the research. The
two disciplines are intimately related. Dependence on details of
economic history becomes a necessity when information about economic
thought is not sufficiently available. We hope that the historical details
will be useful to understand and appreciate Muslim economic thinking of
the period.
Although only a sketch of the state of economic thinking in the 10th/16th
century, we hope that this study fill a gap, to some extent, in the literature
on history of Islamic economic thought.
It is a pleasant duty to express my gratitude to Professor Muhammad
Nejatullah Siddiqi and Professor Ishtiaq Ahmad Zilli who have read and
commented on portions of the manuscript. I am also thankful to Professor
Zafarul Islam and Dr. Mohammed Obaidullah who have provided me
with valuable feedback and suggestions for improvement. None of them,
however, should be held accountable for any deficiencies which remain.
I would like to express my deep gratitude to the Deanship of Scientific
Research, King Abdulaziz University, for a generous funding of this
project. I am also grateful to our former Director Dr. Muhammad Najeeb
Ghazali Khayat as well as to the present Director Dr. Abdullah Qurban
Turkistani and to all my colleagues at the Islamic Economics Research
Centre for being a constant source of inspiration and encouragement in
this endeavor.
Thanks are also due to the two anonymous reviewers of this project
report at various stages of preparation. I would like to put on record my
special thanks and appreciation for Br. Syed Anwer Mahmood for
providing secretarial assistant to the project.
Wa’l-hamdu lillahi awwalan wa akhira.
Abdul Azim Islahi

Jeddah
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CONTENTS
Page
v
FOREWORD
vii
PREFACE
CHAPTER ONE: INTRODUCTION: LITERATURE
1
REVIEW AND IMPORTANCE OF THE
PERIOD
1.1 Literature Review 2
1.2 Sixteenth Century: A Turning Point in the World History 4
1.3 Something about the Source Material 7
Endnotes 8

CHAPTER TWO: AN OVERVIEW OF THE HISTORY 11
2.1 Mamluks 11
2.2 Ottomans 12
2.3 Safawid Dynasty 17
The Mughals – The Third Great Muslim Empire in the
2.4 19
Sixteenth Century
2.5 Other Muslim States 20
2.6 The Triangle Diplomacy 23
2.7 Rule of Shari`ah and Development of Qanunnamah 26
2.8 The Ottoman Administration 27
2.9 Justice 28
2.10 Divisional Administration 28
Ahl al-Dhimmah (People of the Pledge, Christians and
2.11 29
Jews)
Endnotes 30

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Page

CHAPTER THREE: THE SIXTEENTH CENTURY
INTELLECTUAL AND ACADEMIC 33
ATMOSPHERE
3.1 Traditional Education 33
3.2 Importance of Arabic Language 34
3.3 Rational Sciences 34
3.4 Some Eminent Scholars of the Period 37
3.5 An Age of Imitation, Commentary and Repetition 39
3.6 Opposition to Printing Press 39
3.7 Emphasis on Poetry, Art and Historiography 40
3.8 Intellectual Interaction with Europe 41
3.9 Intellectual and Cultural Relations with Iran and India 42
Endnotes 43

CHAPTER FOUR: ECONOMIC INSTITUTIONS AND
45
PRACTICES
4.1 Institution of Iqta` 45
4.2 Institution of Guild and Industrial Relations 48
4.3 Money 51
4.4 Institution of Ihtisab or Market Supervision 54
4.5 Institution of Commenda or Partnership Venture 56
4.6 Institution of Bayt al-Mal 61
4.7 Waqf 64
Institution of Zakah and Measures for Removal of
4.8 66
Poverty
4.9 A Note on Economic Conditions in Iran and India 68
Endnotes 70

CHAPTER FIVE: PERCEPTION OF MARKET AND
73
PRICING
5.1 Prior to Sixteenth Century 74
5.2 Understanding of Price Fluctuations and Market Forces 74
5.3 Administrative Price Fixation 76
5.4 Examples from the Sixteenth Century 78
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Page

5.5 A Word on the Just Price 80
Endnotes 81

CHAPTER SIX: MERCANTILISM AND MUSLIMS OF
83
THE SIXTEENTH CENTURY
6.1 Mercantilism in the Sixteenth Century 83
6.2 Essence of Mercantilism 84

6.3 An Amoral, Restrictive, Unjust, and Exploitative System 86
Mercantilism: A Reaction Against Muslim Powers:
6.4 87
Revisited
6.5 Crusading Movement Transformed 90
6.6 Kārimī Merchants 91
Factors that Promoted Mercantilism in the Christian West
6.7 and the Reasons why it did not find favor in the Muslim 92
East
6.8 Impact 95
Endnotes 96

CHAPTER SEVEN: MONETARY THOUGHT 99
7.1 Monetary Thought of Early Muslim Scholars 99
7.2 Western Monetary Thought of the Period 100
7.3 Quantity Theory of Money and Muslim Scholars. 101
7.4 Monetary Problems of Sixteenth Century 102
7.5 Al-Suyuti and his Treatise on Money 106
7.6 Al-Tumurtashi on Changes in Currency. 109
7.7 A Journey of Hundred Years 110
Endnotes 111
CHAPTER EIGHT: KHARAJ AND LAND PROPRIETARY
RIGHT: AN EXAMPLE OF LAW 113
AND ECONOMICS
8.1 Lands Subject to Kharaj. 115
8.2 How Egypt Transforms from Kharaj paying Country to
117
Rent Paying
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Page

8.3 Ibn Nujaym’s Treatise on Land Tenure in Egypt 117
8.4 Law and Economics 121
8.5 Risalah dar Bay`-i Aradi 122
Endnotes 124

CHAPTER NINE: WAQF AND CASH WAQF
127
CONTROVERSY
9.1 Importance of Waqf in Economic Life 127
9.2 Kinds of Waqf. 128
9.3 Development in Waqf Administration 130
9.4 Measures for Waqf Development and Misappropriations 131
9.5 Gender and Waqf 134
9.6 Cash Waqf Controversy 135
Endnotes 139

CHAPTER TEN: WORKS ON PUBLIC FINANCE 141
10.1 Public Treasury During the 10th/16th Century. 142
10.2 Al-Balatunusi's Work on Public Treasury 144
10.3 Ibn Nujaym's Treatise on Kharaj 147
10.4 Khunji on Islamic Public Finance 150
10.5 Works on Kharaj under Safawid Iran 154
Endnotes 155

CHAPTER ELEVEN: WORKS ON AL-HISBAH AND
157
AL-SIYASAH AL-SHAR‛IYAH
11.1 Development of the Institution of al-Hisbah 157
11.2 Writings on the Subject of al-Hisbah 159
11.3 Kitab al-Hisbah by Ibn al-Mubarrad 160
11.4 Ibn al-Dayba' and His Work on Hisbah 161
Al-Hisbah in the Sixteenth Century Iran and India:
11.5 161
A Brief Note
11.6 Works on al-Siyasah al-Shar'iyah 162
Tahrir al-Suluk fi Tadbir al-Muluk by Muhammad Ibn al-
11.7 163
A'raj
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Page

11.8 Al-Siyasah al-Shar`iyah by Dadah Afandi 163
11.9 Suluk al Muluk by Fadl-Allah Khunji 164
10.10 A’in-i Akbari by Abu’l-Fazl [Abu’l-Fadl] Allami 165
Endnotes 169

CHAPTER TWELVE: CONCLUDING REMARKS 171
187
BIBLIOGRAPHY
199
INDEXES
Index of Names 199
Index of Subjects 207

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