The economic role of the state in Islam

Abstract

The economic role of the state in Islam is a topic that has interested many Islamic economists. Their general approach has been to examine the verses of the Qur’an as well as the ahadith and the sunnah of the Prophet and then deduce from these how an ideal Islamic economy should function today. This approach can be summarized as ‘what the economic role of the state in Islam should be’. As an economic historian, I take a different approach, which can be summarized as: ‘how it actually has been’. That is to say, I will start, briefly, with the question of what this role should be according to the Qur’an and sunnah, but then I will focus primarily on what this role has actually been in history. In the process, the degree to which actual practice has diverged from the theoretical ideal will be of particular interest. This is followed by another question: ‘with what consequences?’ Finally there is a third question: ‘how can we improve the economic role of the state in a contemporary Islamic country?’ This last question catapults us from the past towards the future. Obviously this is a huge topic, and only the main points can be explored within the limitations of a chapter. © M. Kabir Hassan and Mervyn K. Lewis 2014.