ISLAMIC FOUNDATIONS of a FREE SOCIETY Edited by NOUH EL HARMOUZI & LINDA WHETSTONE Islamic Foundations of a Free Society ISLAMIC FOUNDATIONS OF A FREE SOCIETY EDITED BY NOUH EL HARMOUZI AND LINDA WHETSTONE with contributions from MUSTAFA ACAR • SOUAD ADNANE AZHAR ASLAM • HASAN YÜCEL BAŞDEMIR KATHYA BERRADA • MASZLEE MALIK • YOUCEF MAOUCHI HICHAM EL MOUSSAOUI • M. A. MUQTEDAR KHAN BICAN ŞAHIN • ATILLA YAYLA First published in Great Britain in 2016 by The Institute of Economic Affairs 2 Lord North Street Westminster London SW1P 3LB in association with London Publishing Partnership Ltd www.londonpublishingpartnership.co.uk The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. Copyright © The Institute of Economic Affairs 2016 The moral rights of the authors have been asserted. All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photo- copying, recording or otherwise), without the prior written permission of both the copyright owner and the publisher of this book. A CIP catalogue record for this book is available from the British Library. ISBN 978-0-255-36729-5 (interactive PDF) Many IEA publications are translated into languages other than English or are reprinted. Permission to translate or to reprint should be sought from the Director General at the address above. Typeset in Kepler by T&T Productions Ltd www.tandtproductions.com CONTENTS The authors ix Foreword xiv Acknowledgement xvii List of tables, figures and boxes xviii 1 Introduction 1 Kathya Berrada and Nouh El Harmouzi The contributions of the authors 6 2 The condition of social, political and economic thinking in the Islamic world from a classical liberal perspective 12 Atilla Yayla and Bican Şahin Freedom, religion and Islam 12 Can Islam as a religion be separate from politics? 15 The current situation of social, political and economic thought in Islamic countries 18 What are the most basic errors in Muslim thought now and how can they be changed? 23 Conclusion 28 References 29 3 Reason versus tradition, free will versus fate, interpretation versus literalism: intellectual underpinnings of the negative outlook for the Muslim world 32 Mustafa Acar Introduction 32 v COntents Miserable outlook of the Muslim world: poverty within abundance? 34 Political and intellectual reasons behind the poor performance of Muslim countries 37 Main schools of thought in the Muslim world 40 Reason versus tradition, Ra’y versus Hadith, free will versus fate, interpretation versus literalism 43 Intellectual conflicts with political roots and implications 50 Conclusion: destructive consequences of the conflict between reason and tradition 54 References 55 4 Welfare beyond the state: ‘ihsani’ societal-based welfare 58 Maszlee Malik Introduction 58 Functioning individuals and ihsani social capital 59 A benevolent society as an alternative to the state as provider 60 Welfare through waqfs 64 The nationalisation of society: can waqfs be revived? 65 An effective minimal state 67 Conclusion 69 References 71 5 The individual, freedom of choice and tolerance in the Quran 74 Azhar Aslam The individual in the Quran 75 Freedom of individual action and choice in the Quran 78 No compulsion 82 Subtexts 83 The Prophet’s Sunna 85 Islam and the state 86 Tolerance and the present-day state of Muslim societies 88 Apostasy 91 Conclusion 94 References 95 vi COntents 6 Economic freedom: the path to women’s emancipation in the Middle East and North Africa (MENA) region 98 Souad Adnane Women in development versus gender and development: implications for policy making in the Arab world 99 The economic participation of women in the MENA region 102 Market-friendly policies and their potential for advancing the position of women in the Arab world 106 Gender-sensitive and market-friendly policies: the way forward 109 Women’s economic participation in Islam 111 Conclusion 112 References 113 7 Jihad and political change: a perspective based on Quranic sources 116 M. A. Muqtedar Khan Colonialism and post-colonialism 118 Peace, non-violence and the difficulty of meaningful change 119 Jihad for change 121 Conflicts in the Islamic world 123 The Quran and the way to peace 124 Conclusion 126 References 127 8 Islam and politics today: the reasons for the rise of jihadism 129 Hasan Yücel Başdemir The problem 129 The political experiences of the Prophet Muhammad and his followers 131 Characteristics of the early period state model 134 Politics as part of Sharia 136 Colonisation and the birth of modern Islamic movements 139 From Pan-Islamism to jihadism 144 vii COntents The roots of jihadism and its birth 144 The pioneers of the idea of jihadism 147 Living out Islam in a free society 149 References 151 9 Islam and a free-market economy: are they compatible? 153 Hicham El Moussaoui The foundations of Islam and a free-market economy are not incompatible 153 Explaining the deviation from the pro-market tradition of Islam 161 Conclusion 168 References 168 10 Islamic finance: between the reality and the ideal 170 Youcef Maouchi Introduction 170 Islamic finance: an overview 171 The origins of Islamic finance: the Sharia 174 The ideal of Islamic finance 176 The reality takes over from the ideal 177 Bringing Islamic finance back on track 180 Conclusion 183 References 185 About the IEA 188 viii THE AUTHORS Mustafa Acar Mustafa Acar is Professor of Economics at N. Erbakan University, Konya, Turkey. He received his BA from Middle East Technical University, Ankara (1986), his Masters (1996) and his PhD (2000) from Purdue University, all in economics. He was Departmental Chair and Dean at Kirikkale University, and Rector at Aksaray University. He has published extensively in national and inter- national academic journals, authored 14 books, translated 12 books, and contributed 37 chapters in edited books. Souad Adnane Souad Adnane is a Fulbright alumna. She holds an MA in Public Policy with a focus on Women’s Studies from the George Wash- ington University. She is a co-founder and active member of the Arab Center for Scientific Research and Humane Studies, a clas- sical liberal think tank based in Morocco. She is also a board member of the Istanbul Network for Liberty, whose mission is to explore the principles and values of a free society within the Muslim world. She worked for seven years in the develop- ment sector, with different international NGOs, coordinating projects aimed at the empowerment of women and vulnerable populations. ix The authOrs Azhar Aslam Azhar Aslam is a founder member of the Istanbul Network for Liberty and chief executive of EO Vision 21 Foundation, a Paki- stani-based NGO. He is the Program Director of its Speed Lit- eracy Program, with a mission to eradicate illiteracy in Pakistan. He also writes on Islamic issues, including previously for the Institute of Economic Affairs. Hasan Yücel Başdemir Hasan Yücel Başdemir is Associate Professor of Islamic Philos- ophy at the Yildirim Beyazit University in Ankara, Turkey. He is a Board Member of the Association for Liberal Thinking (ALT) in Turkey, editor of Liberte Publications of ALT and coordinates ALT’s Center for the Studies on Religion and Liberty. He has au- thored Ethical Foundations of Liberalism (Liberte, 2009) and The Problem of Definition of Knowledge in Contemporary Epistemology (Hitit Kitap, 2010), and edited Religious Freedom and Laicism in Turkey (Liberte, 2011). His research interests focus on Islamic po- litical thought, freedom of religion, the links between ethics and politics, and comparative epistemology. Kathya Berrada Kathya Berrada is a research associate at the Arab Center for Sci- entific Research and Humane Studies, a Moroccan-based think tank. Before joining the Center, Kathya worked for rating agencies and consultancy firms in France, Belgium and Morocco. Kathya holds a Masters degree in business from Grenoble Graduate busi- ness School and is currently pursuing her PhD in economics. x The authOrs Nouh El Harmouzi Nouh El Harmouzi has a BA in business studies and a Mas- ters and PhD in economics, the latter from the Université Paul Cézanne, where the topic of his thesis was Beliefs, Institutions and Economic Dynamics: The Case of Arab-Muslim Countries. He is an editor of www.minbaralhurriyya.org, the Arabic-language news and analysis website, and teaches part time at Ibn Toufail University in Kenitra, Morocco. Since 2013 he has been director of the first democrat-liberal think tank created in Morocco: the Arab Center for Scientific Research and Humane Studies (www .arab-csr.org). Maszlee Malik Maszlee Malik graduated from the Al al-Bayt University in Jor- dan in 1994 with a degree in the field of fiqh and usul al-fiqh. His master’s degree in the same field is from the University of Malaya and he obtained his PhD in political science at Durham Univer- sity. He is currently assistant professor in the Faculty of Islamic Revealed Knowledge and Human Sciences at the International Islamic University Malaysia, Kuala Lumpur. Youcef Maouchi Youcef Maouchi is the director of the Institute for Economic Studies, Europe. He holds a PhD in economics from Aix-Marseille Université, France. He was a teaching and a research fellow at Aix-Marseille Université and a regular lecturer on Islamic Finance at the Legal and Commercial Cooperation with the Arab World programme at the Aix-Marseille Law School and in economics at xi The authOrs the Kedge Business School. He also worked as a research assis- tant for Atlas Network’s francophone project UnMondeLibre.org. Hicham El Moussaoui Hicham El Moussaoui obtained his PhD in economics in 2008 at the Université Paul Cézanne (Aix-Marseille III).