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The First Step towards Islamic Finance: Separation of Secularism and the Islamic Agenda
Murat UstaoÄlu and Ahmet Ä°ncekara
Abstract: Muslims have created great civilizations throughout history; but the Muslim world has experienced a visible decline starting from the 19th century dueâat least in partâto the technological developments in the West. Since then, many of the scientific and economic models that were transferred and implemented in commercial and social life in Islamic countries were mostly against Islamic culture. This is the main reason for the ongoing discussions on whether the notions imported from the Western literature are Islamically acceptable or not. What does an Islamic reference in an economic or social model refer to? This chapter seeks an answer to the question of who is a Muslim and what responsibilities he/she has under Islam in order to distinguish a Muslim individual from a secular one. Hopefully, this will enable us to better explain the differences between the economic models offered by Islam and the secular world, and clarify the conceptual arguments.
UstaoÄlu, Murat and Ahmet Ä°ncekara. Islamic Finance Alternatives for Emerging Economies: Empirical Evidence from Turkey. New York: Palgrave Macmillan, 2014. DOI: 10.1057/9781137413307.0008.
Introduction
The growing role of Muslims in trade activities and accumulation of capital in Islamic countries in recent years have contributed to the increase in commercial activities and to the emergence of intellectual culture and conceptual diversity in different social fields. It is controversial, however, that this diversity refers to some sort of richness or a conceptual confusion. Islam has reinterpreted and rearticulated a number of Arabic notions to create a unique identity of its own and to contribute to universal values. Despite strong criticisms, the Islamic values and what Islam offers are viewed today as primary alternatives to global issues that the modern world is experiencing. Muslims have created great civilizations in history; but the Muslim world has experienced a visible decline starting from the 19th century due to the technological developments in the West. A number of Islamic states emerged in the Middle East region after the collapse of the Ottoman Empire. However, none of these states was able to lead the Muslim world in political, military and economic terms.
Up to the 2000s, foreign trade activities had been mainly focused on natural resources for meeting the need of the industrialized nations for raw materials. Because production of science and technology was far behind the Western world, the notions to regulate institutional and social life have been imported from the West and adapted to local conditions. Countries like Malaysia and Turkey preferred Western-type development models in economic life; in this sense, they acted differently than many other Islamic countries whose economic activities were dependent upon production of raw materials. Scientific and economic models that were obviously against Islamic culture were implemented in commercial and social life. This is the main reason for the ongoing discussions on whether the notions imported from the Western literature are Islamic or not. What does an Islamic reference in an economic or social model refer to? In other words, what does Islamic finance (IF) actually mean? Does it refer to a marketing method developed to attract the attention of pious Muslims? This discussion becomes even more relevant as more notions are imported from the West.
Should the notions that emerged out of the intellectual past of the West have a corresponding match in Islam and the mentality of Muslims? Should these notions be used in their original forms? It is possible to add more questions to this list. But finding the proper answers is not an easy task.
Islamic economy (IE) and IF are two important notions that were imported from the Western literature. The inclusion of the IE in modern literature and emergence of discussions on an intellectual level in relation to this type of economy have become more visible after the integration of Muslims within the global system since the mid-20th century. One of the criticisms made in this matter is that IE cannot be discussed on the grounds of Western notions and parameters. Obviously, this argument holds some validity given that there are huge disparities between how these two civilizations depict the world and economic affairs. However, a review of the historical background and mentalities of both civilizations will reveal the differences and properly address the notional problems. For this reason, we need to first distinguish how Islam defines and perceives the individual in order to attain a better understanding of the differences between IE and the literature of modern economics. Defining the individual as the core of all social and economic activities will adequately address all future methodological controversies.
This section seeks an answer to the question who is a Muslim and what responsibilities they have under Islam in order to distinguish a Muslim individual from a secular man. This will enable us to better explain the differences between the economic models offered by Islam and the secular world and clarify the conceptual arguments. To this end, the differences between secularism and Islamic thought are analyzed first. In the subsequent chapters, the notion of IE is explained in terms of the economic conjecture of the time to analyze how it would fulfill the expectations of the global economy and the Islamic nations.
Religion and construction of individual identity
Nineteenth-century thinkers believed that modernity and materialism would promote secularism and that eventually religion and religious sentiments would disappear from social life. However, history proved them wrong. Despite efforts to make secular thinking dominant in social life, people show greater interest in religion and what it offers. Unlike the main targets of secularism suggesting that religion should play a minimal role in social life, there is visible attention to religious rituals and practices in the modern world; in observation of this tendency, some analysts refer to a great awakening, Oriental religious awakening or new religious awareness. Such analyses suggest that, since the 1960s, developed nations have been experiencing a visible tendency towards religious and spiritual matters, traditional religious teachings and mystical beliefs. This interest has presented itself in the form of creative innovation and spirituality that places emphasis upon hybridity. In other words, there is visible tendency towards not only great religions including Islam and Christianity but also pagan faiths and mystical and spiritual thinking and teachings as well (Arslan, 2010).
Religion has therefore become more popular than envisaged by secularism in social life. Islam, on the other hand, is one of the fastest growing religions in not only the Middle East but also in the Western world. Growing interest in religion in parallel to the improvement in welfare standards is also reflected in the definition of an individual identity and in the acts and preferences of the people in their daily lives. In recognition of this, political actors in modern societies spend efforts to minimize the restrictive measures before religious beliefs. With its growing role in society and social life, religion becomes more suitable for serving as a reference for social reflexes. As a result, religion gains greater power to influence many notions and trigger a discussion on those concepts.
For this reason, a number of conceptual definitions and readings can be made with reference to religious teachings that are acceptable by the society. The cultural reference of the Western development is secularism that emerged out of Protestant ethics. But the case is different in the Muslim world. Unlike the West, Islam offers a comprehensive explanation for the creation and worship, a fundamental need of the man; as a result, it gains tremendous power to mobilize all social dynamics because it promises eternal satisfaction.
Islam holds that belief and worship is an inherent need for an individual and argues that it is comparable to breathing or eating. Therefore, Islam offers that religion has always played key roles in the history of humanity even though its influence has been in different forms. This is one of the reasons for the determinative influence of three major religions in human life. Hence, it is almost impossible to eliminate the impact of faith in human life because of his inherent need for worshipping. The secular evolution which made the individual more material-oriented forces the man to worship different sources of authority. A man worships something that is more powerful than him. For a man who does not believe in God, material values replace the idea of God as a source of power.
Worshipping power is to bow to any utility that represents power. This is the main starting point of the difference between the secular model and the Islamic economic model. So who is a secular man? Who is a Muslim individual? Where does the difference start and end? Without offering plausible answers to these questions, the goals of Islamic economics on what sort of social order it wants to achieve and what economic principles it wants to establish cannot be properly understood. For this reason, the questions âWhat is secularism?â and âWho is a secular individual?â should be answered with particular reference to the historical evolution of secularism.
Secularism: definition and brief history
The ulama1 has expanded the sphere of what cannot and should not be deliberated upon in Islamic thinking since the 17th century; however, European thinkers including Descartes, Spinoza, Leibniz, Hobbes, Locke, Rousseau and Voltaire have spent efforts to open up new horizons. Islamic thinking, despite its rich and dynamic past, has been converted into some sort of dogmatic Christianity in the Medieval Ages. The source of legitimacy for the rulers in the Islamic world was static legal accumulations that were against the dictations of the course of the daily life.
On the other hand, the popular demands and requests served as a source of political legitimacy in the emergence of the Western democracies where the people played a determinative role. Naturally, the political administration has become a sole authority in the Muslim world where religious monarchies have acquired greater power and legitimacy because of the decline of investigative mind and intellect. Instead of a critical stance that does not contradict with Islam and its main precepts, a culture of obedience has been promoted to ensure the ruling elite faces no problems governing the country. This was legitimized by previous religious positions leading to the emergence of religious monarchies. The fairly limited intellectual accumulation subsequently contributed to the strengthening of the political ground of the religious monarchies rather than the democratic sphere that attempted to expand the boundaries of human rights and fundamental freedoms (AltıntaĆ, 2005). The intellectual journey of the Islamic world in the post-war period can be summarized this way.
On the other hand, secularism was spreading as a key element of modernity in European continent which served as the basis of the Western civilization. Secularism emerged in the 16th century after Martin Luther. Protestantism was born out of the objection by Luther against Roman Catholicism as the outcome of a reform movement started by Luther and Calvin against the Catholic Church and the authority of the Pope, the most significant religious figure of Christianity. Scholars and rationalist thinkers raised a systematic objection against the Churchâs authority of that time. For instance, Copernicus, Kepler, Galileo and Newton discovered that the Earth revolves around the Sun, not vice versa. These discoveries were against the theological teachings of Christianity, leading to a clash between secularism and theological branch (Rahim, 2010).
For this reason, 16th century Europe witnessed disagreement between Catholicism and Protestantism which questioned the major theological arguments. In the late 17th century, thinkers of the time including Thomas Hobbes and John Locke advanced principles for new political and social institutions that distinguish between theological issues and the political state. They mainly saw religious authorities, including the Church, as obstacles in the way of the social institutions they were trying to create. The first movement that emerged as secularism, noting that religious authority should withdraw from the social sphere, is considered an important development in intellectual circles in Europe in that time.
Secularism became popular in the western world after the industrial revolution. The obstacles in the way of factors promoting democratic culture were removed, so that being a secular individual was made to be a desired object in the daily life. Secularism emerged as a response to a world where religion defined everything rather than disconnection with religious rituals and symbols. In other words, it represents transition to a world where the political sphere is not determined by religion but where religions still survive (Gouchet, 2000).
Such a transition that restricts the influence of religion upon the individual and society is in stark contrast with the main dynamics of Islam because in its simplest form, it claims to comprehend and regulate the entire life of a Muslim individual. Islam is pretty assertive in this argument. The references a Muslim will need in leading his life are embedded inherently in his religion. The sphere of freedom of an individual is rationally restricted and the source of Islamic thinking is taken as reference; when this is done, no significant disorientation is observed in social and commercial life.
However, secularism has restricted the guidance by God in life and worshipping God and encouraged human beings to follow their instincts and wills in their affairs. In a secular setting, it is not meaningful to comply with the commands of God and consider the priorities and orders spelled out in sacred books of different religions. This led to emergence of a new lifestyle and of a modern orientation (Rahim, 2010). For this reason, the definition of the modern individual must consider secularism as the source of inspiration of the codes of behavior. Islam clearly categorizes those who comply with its precepts and those who remain outside this frame. The ideal individual as sought by Islam is characterized by a monopolist understanding that the Quran and Prophet Muhammadâs (PBUH) practices promote. Even if the realities of the developmental process and the natural course of history are recognized, no significant and systematic change in the essence of monopolist identity is endorsed. In this way, it offers a limited opening to the impact of the western world upon the essence of the modern lifestyle constituted mainly by science, technology, experiment, observation and rationality. Islam does not strive to explain the current time and space, the main concerns of secularism. Instead, it offers a method focusing God as the source of everything to offer an explanation to the past, the future and the present as well. The essence of the notion of future for Islam is the afterlife where everybody will be given another life after death. The individuals are asked to pay attention to the afterlife rather than short-term considerations by observing the rituals of the religion; they are also encouraged to spend efforts to maintain balance by delivering justice in the world.
Adoption of a mystical lifestyle is in clear contrast with the dynamism of Islamic thinking. Of course, it is not possible to argue that Islam has not been affected by the customs, cultural tendencies and traditions of other communities over the past 14 centuries. However, Islam in this study refers to a pure practice as narrated in Quran and Sunnah not influenced by other traditions and currents. Despite some similarities with the secularist view and approach in terms of reliance on some mystical beliefs and religious rituals, it is opposed to the secularist explanation paying attention to the present time and worldly notions. Conceptual debates involving the causeâeffect relationship in the essence of Islamic faith as well are resolved in Quran, revelation of Allah. To this end, there is no difference between the secular and the reading of the present time. On the other hand, secularism relies on different dynamics. A brief review of how secularism has evolved will allow one to frame it properly and to offer a better explanation and identification of a secular individual.
If different sociologists and theologists are asked about what secularization is, most probably their answers will not be brief. Secularization is not a simple notion in the literature that could be explained and elaborated without extensive debates (Ertit, 2013). The term secularism has been defined by reliance on interpretations which focus in on the time dimension in reaction to the untimely identification of God which constitutes the foundation of the Christian do...