Untold Facts

Islamic attitude towards entrepreneurial development

Islam upholds the view that economic progress, though important to the well-being of humankind, cannot lead on its own to social justice and sustainable development. Human needs have deep religious/spiritual roots that must be accounted for and incorporated in the development process. The aim of ‘Islamic development’ therefore is to achieve a state of ‘human well-being’ based on spiritual/humanitarian and socio-economic foundations, as a stage towards the ultimate destination, well-being in the hereafter.

The philosophical differences between the Islamic and Western worldviews of the universe and the relationships between man and his Creator, his environment and other human beings are fundamental. A comprehensive inquiry into the disposition of both worldviews regarding the concept of ‘development’ reveals that in addition to differences in their core philosophies, they also differ in their focus, goals, approaches, applications and mechanisms.

It could be strongly argued that these differences are so real that they cannot be overlooked, marginalised or narrowed, nor can they be reconciled and integrated within a standardized single development model.

Such differences therefore do not only justify, but also necessitate the building of an alternative Islamic model of entrepreneurship that works towards the realisation and fulfilment of the Islamic vision of ‘well-being’.

A religion with a positive attitude to work and productivity is most likely to contribute positively towards the creation of new quality business entities and the fostering of a friendly entrepreneurship environment. It is anticipated that such a constructive attitude will produce fruitful results when complemented with a comprehensive framework and matched by political will and commitment from the state.

The suggestion that religion has a key role to play in shaping the mode and the level of entrepreneurial activity in a given society is gaining widespread acknowledgment and recognition. The link between religion and economic activity in the wider context was explored and demonstrated by the work of (Dodd & Seaman, 1998; Guiso, Sapienza & Zingales, 2004; Hirschman, 1983; Sood & Nasu, 1995; Wienen, 1997).

Among the basic rights that all individuals are entitled to, and should enjoy, is access to income. Chapra (1985) explained that socio-economic justice, based on the theory of “social equilibrium”, implies that people are entitled to have equal opportunity and does not entail that they should be equal in poverty or in richness. Earning lawful (halal) living is tenable through engagement in productive activities, namely: employment (working for others) and being self-employed and employing others (undertaking entrepreneurial activity). Although Islam endorses working for others for fixed salary, it encourages and stimulates Muslims to embark on entrepreneurship as the preferred option to earning halal income.

Beg (1979) noted that Islam does not only motivate Muslims to be entrepreneurs, but in fact, it makes it obligatory on them to work hard and gain halal earnings beyond their immediate needs in order to care for the community and the Muslim ummah at large. Earning halal income through entrepreneurship and helping others to earn a living spares the public wealth from being exploited by a few and discourages them from being dependent on the state. Public wealth belongs to the Muslim ummah, so it should be utilised in projects that serve the common need and the common interest of society.

Sadeq (1997) pointed out that entrepreneurship in Islam is highly regarded, and forcefully argued that Islam provides not only the incentives but also the conducive framework for economic and entrepreneurship development.

His argument is based on the interpretation of the Qur’anic verse “And when prayer is over, disperse in the world and search for the bounty of Allah” (Qur’an, 62, 10), and on the many traditions of the Prophet Muhammad (PBUH). Others have cited “It is He Who made the earth manageable for you, so traverse ye through its tracts and enjoy of the sustenance which He furnishes: but unto Him is the resurrection (Qur’an, 15, 67). Searching and steering through the earth’s tracts goes beyond simply finding employment opportunities or even engaging in basic entrepreneurial activities. The search implies the exploration of the unknown in order to discover new horizons and uncover new opportunities for the benefit of humankind. Such active search involves taking risks and requires innovative thinking and to Sadeq (1993), that is “entrepreneurship”.

The Holy Qur’an and the traditions of the Prophet Muhammad (PBUH) explicitly praise entrepreneurship and commend moral entrepreneurial activity; “But Allah hath permitted trade (bai) and forbidden usury (riba)” (Qur’an, 2, 275). The economic transaction of buying and selling for profit (bai) implies the existence of the entrepreneur.

It is narrated that the Prophet Muhammad (PBUH) said, “A faithful and trustworthy businessperson will be resurrected at the Day of Judgement with the prophets, the truthful, and the martyrs” (Ibn Majah; al-Tirmithi). Furthermore, the Prophet Muhammad (PBUH) and many of his close companions were trustworthy and successful entrepreneurs.

He explicitly emphasised the importance of entrepreneurship and encouraged Muslims to actively participate in business activity. Nu’aym Ibn Abd Al-Rahman narrated that the Prophet (PBUH) said, “Nine-tenths of the sustenance (rizq) is derived from trade (business ventures)”.

The second Muslim khalifah, Omer bin Al-khattab (May Allah be pleased with him) also was a trader, and he used to say “nothing is more beloved to me than to earn my living through my own hard work and efforts”.

The concept of collective obligation (fard kifayah) in Islam is based on the ability of society to meet its minimum and basic needs from a specified activity or meet national challenges and obligations.

An appropriate share of the Muslim population should undertake entrepreneurial activities by their own choice and according to their own initiative to ensure the continuity of the nation’s economic viability.

Failure to achieve such a level of performance means that the Islamic government has to step in and assume its legal and moral obligation to compensate for any shortfall of the private sector.

Perkins (2003) analysed the role of Islam in the process of “wealth creation”, and confirmed Weber’s conclusions: “There is no doubt that Islam is an economic hindrance and barrier to prosperity and fulfilment of human ambition, potential and welfare” (Perkins, 2003, pp. 5-6). However, the claims that Islam has the propensity to deter development (Weber, 1963) and that Muslims in general are low in achievement (McClelland, 1961) have been conceptually challenged even by Western intellectuals.

A number of Western thinkers, in addition to Muslim scholars, have acknowledged the progressive nature of Islam and recognised its positive attitude towards prosperity and the desirability of engaging in productive business activity. While Sullivan (2004) acknowledged that Islam is “a religion of knowledge”, Wienen (1997, p. 42) stated that “Islamic tradition has always included a positive approach to economic activity” and noted that the Prophet Muhammad (PBUH) was “a merchant before his prophetic mission”. Zapalska, Brozik, and Shuklian (2005) stated that Islam generally has a positive attitude to entrepreneurship and the rights of ownership. Wilson (2006) acknowledged the uniqueness of the Islamic code of business ethics and the positive contributions that ‘trust’ can render to the economic activity in the form of cost effectiveness and organisation competence.

Author: Rasem N. Kayed and M. Kabir Hassan
Source: The New Nation