1.2.1 The Spiritual and Social Reconstruction of Colonial Life

There were various degrees of resentment toward adapting to Western political and legal structures that can be seen within the Muslim reformist camp.

Jamāl al-Dīn al-Afghānī (d. 1897) was an Islamic ideologue who wrote about the political and economic losses of the Muslim world and whose main theme was unity against European (especially British) imperialism.Footnote ³⁰ Al-Afghānī’s political views indicate an interest in adopting a constitutional government with active citizenship using a pan-Islamic model.Footnote ³¹ His ideology welded together traditional religious views of Islam, a critique of Western imperialism, and an appeal for Islamic unity with a call for adoption of Western sciences and institutions. Al-Afghāni advocated the moral crux of Islam by expounding the notion of social solidarity (al-taḍāmun al-ijtimāʿī) and social responsibility (al-takāful al-ijtimāʿī),Footnote ³² while addressing the concepts of socialism (al-ishtirāqiyya) and capitalism (raʾsmāliyya), as well as their critiques. He perceived their materialism as a destructive force that would culminate in the breakdown of society. Al-Afghānī’s critiqueFootnote ³³ of socialism and materialism is expressed as a concern for the emerging potential for social disorder and the tearing apart of the social fabric.Footnote ³⁴ He also preached about an “ideal” or “golden” Islam – one that he himself had neither known nor experienced but that had existed prior to his time.

Even though al-Afghānī and ʿAbduh (d. 1905) agreed on reviving Islam through the application of Sharīʿa as an anticolonial struggle,Footnote ³⁵ they parted paths in how to incorporate Western sciences, knowledge, and political systems into an Islamic vision of society.Footnote ³⁶ ʿAbduh and his early nationalist stance, which can be seen as a reaction to the British occupation of Egypt (1882–1956), influenced the flourishing of nationalist sentiment in Egypt and across the Middle East. For ʿAbduh, colonial rule was the embodiment of the decline of Egypt and the Middle East region as a whole. To extirpate this domination, he proposed to revise the social order in Muslim societies through Islam’s political and moral reconstitution.Footnote ³⁷ As a trained theologian and mufti, ʿAbduh was versed in Islamic studies and legal tradition, which he combined with his reformist views and incorporated into his writings.Footnote ³⁸ While al-Afghānī believed that the source for revivalism ought to be found in Islam itself, ʿAbduh contended that pan-Islamism (and not Arab nationalism) was the answer to addressing the sociopolitical crisis. For him, there was no conflict between Islamic sciences and Western knowledge since the aim of his reform was to raise Muslim consciousness. Even though he called for the cessation of the four legal schools or madhāhib and held that, along with the Qurʾan, the main source should be deeds and views of the Prophet Muḥammad and the Rāshidūn caliphate, he believed in the immutability of doctrinal Islam but not of legislative Islamic practices.Footnote ³⁹ Similarly to Mawdūdī, he emphasized the education of Muslims, which would integrate both an Islamic and Western pedagogy.

Rashīd Riḍā (d. 1935) also promoted the establishment of an Islamic state that would be fully in accordance with modernization, based on Sharīʿa as a legal-moral system,Footnote ⁴⁰ whereas Ḥasan al-Bannā (d. 1949) of the Muslim Brotherhood, who lamented the loss of Islamic spirit due to the material gains that had enchanted Muslims of the time, called for the restoration of mutual responsibility and social cohesion.Footnote ⁴¹ Unlike ʿAbduh, al-Bannā believed that elements of Western knowledge and modernization were alien to Islam. The revival or awakening of religious sentiments could be achieved through Islamic beliefs and its moral values, which would reinvigorate society, for capitalism would diminish its spiritual qualities. Armed with a social agenda, the Muslim Brotherhood entered the realm of politics as the largest mass movement in Egypt at the time; they addressed questions of poverty, property, state, and power. They used the political arena as a vehicle to restore an Islamic order and to recuperate the spiritual revival.Footnote ⁴²

Sayyid Quṭb (d. 1966), a leading member of the Muslim Brotherhood, criticized the impact of Western cultural and political values in Egyptian society and argued that social justice ought to be preserved in Islamic tradition.Footnote ⁴³ Even though he flirted with socialist ideas,Footnote ⁴⁴ Quṭb believed that Islam put forward basic principles of social justice and provided mechanisms to preserve the egalitarian structure between the poor and the wealthy.Footnote ⁴⁵ However, he aimed to return to the “lost” Islamic knowledge that would liberate Muslims: “Rather our summons is to return to our own stored-up resources, to become familiar with their ideas, and to proclaim their value and permanent worth, before we have the resources to an untimely servility which will deprive us of the historical background of our life.”Footnote ⁴⁶

In South Asia, Muhammad Iqbal (d. 1938) also addressed the ideas of socialism (or proletariat, nadar) and capitalism (sarmayahdar). Iqbal was interested in socialist communal views (and not its materialist philosophy), while being skeptical of capitalism because of its economic inequality.Footnote ⁴⁷ Even though he did not develop a reformed system of Islam, he nonetheless argued that the faculties of social norms, solidarity, and cooperation could contribute to the common well-being of society in the direction of a spiritual renewal.Footnote ⁴⁸ Two interrelated key concepts in Iqbal’s vocabulary for the resurgence of Islam were khudi and tawḥīd. Iqbal states that “Humanity needs three things today – a spiritual interpretation of the universe, spiritual emancipation of the individual, and basic principles of a universal import directing the evolution of human society on a spiritual basis.”Footnote ⁴⁹ Khudi is a moral and existential term expressing the consciousness of umma as well as individual agency, since the individual is expressed through the communal.

Mawdūdī (d. 1979) had more frequent interaction with Iqbal than with other reformists. Like Mawdūdī, Iqbal seemed eager to pursue the idea of a Muslim-governed province in India,Footnote ⁵⁰ while calling for an Islam that would adapt to modern conditions. Iqbal advocated a Muslim homeland in the 1930s but without offering a political organization to achieve that objective.Footnote ⁵¹ Yet, while Iqbal was openly using Western sources and literature, Mawdūdī, despite relying on Western thought, did not do so openly. This was in order to facilitate an image of Islam as a dynamic and revolutionary ideology that was primarily based on its own worldview. Mawdūdī asserted that Iqbal’s influence on him was limited by saying that “the commonality of views between ʿAllamah Iqbal and me are limited to our belief that Islamic law should underlie the revival of our religion; my thoughts and intellectual probing are my own.”Footnote ⁵² For Mawdūdī, the very concept of Islamism asserts a degree of intellectual independence; this stems from his interpretation of Iqbal’s notion of khudi (selfhood), which Mawdūdī read as Islamic self-confirmation against foreign political and ideological isms.Footnote ⁵³ As such, Mawdūdī took historical Islam out of its context by making it politically viable for modern needs – especially his theory of an Islamic state. Iqbal’s understanding of tawḥīd implied rejection of the dualistic projection of the world,Footnote ⁵⁴ indicating a unity of spirit and matter and embodied in the term khudi.Footnote ⁵⁵ The ultimate level of khudi, which is God, is both immanent and transcendent and points to the spiritual foundations of reality. Similar to Iqbal’s, Mawdūdī’s goal was the reintegration of tawḥīd in society, yet the former’s concept appears more mystical, whereas the latter’s appears more policy-oriented.

Further west, in Iran, ʿAlī Sharīʿatī (d. 1977) was developing a fully novel approach to Shiʿism and to interpretation of religion, while critiquing Marxism and liberal democracy.Footnote ⁵⁶ His theory of Islam did not rest solely on an Islamic state but rather on the conception of God that is to be found in personal and practical aspects of human endeavor.Footnote ⁵⁷ He believed that Marxism could not provide the ideological means for its own liberation,Footnote ⁵⁸ thus he focused on Islam as a revolutionary ideology and thought of Shiʿism as a complete party.Footnote ⁵⁹ According to Sharīʿatī, even though historically the foundation of the human problematic is the emergence of private ownership, in modern times the development of machines would be a necessary transition for the human condition. Islam and Marxism are two ideologies that embrace all aspects of human life, yet in a very different form of ontology and cosmology. Marxism is based on materialism, while Islam is founded

Sharīʿatī, who wrote on religious knowledge, stressed that Islam also addresses economic provision and social justice as principles of its social and cosmological order that pertain to moral growth.Footnote ⁶¹ His religious reform of Islam centered both on the Qurʾan, which is perceived to contain a revolutionary theory, and on tawḥīdFootnote ⁶² as an absolute unity of God and all things connected to God.Footnote ⁶³

Moreover, in Pakistan Fazlur Rahman (d. 1988), one of the key proponents of the modernization process of Islam,Footnote ⁶⁴ who was also critical of Mawdūdī,Footnote ⁶⁵ held that

While he favored the spiritual and metaphysical components of Muslim society,Footnote ⁶⁷ he was nonetheless critical of Islamization of knowledge:

Yet Rahman agreed with Mawdūdī that education is vital for the recuperation of the Muslims and that the Qurʾan should be analyzed within the context of historical, social, political, and economic developments, in order to understand the pressing conditions of the time.

1.2.2 The Social Logic of the State and the Material Imprint of Capitalism and Socialism

The above-mentioned reformists deliberated over not only the sociopolitical conditions of the time but also the idea of morality and moral restructuring of man that could be attained through social mobility. This would be levied against the dangers of capitalism and communism. Islamic socialism merged the question of social norms and power with moral and spiritual components, reflecting on the premodern ideas of social cohesion, religious morality, and spiritual well-being. The underlying notions of mutual responsibility and cohesion led reformists to believe that the Islamic vision (of the state and society) would contest the ideas of individualism and property ownership, linking the economic and the ethical realms.Footnote ⁶⁹

The notion of social balance that was discussed by the reformists in part invokes an understanding of moral economy, reflected in God’s balanced and proportioned ordering of the universe. According to Tripp, some of the modernists have taken up the subject of wealth and property in light of the prophetic hadīth that insinuates the moral fortitude of the acquisition of wealth,Footnote ⁷⁰ yet many of them have delved into the subject matter by resorting to the Western intellectual corpus. The question of wealth acquisition – one of the focal points of premodern Muslim scholars – has emerged as a major concern also among modern Muslim economists, especially in relation to twentieth-century capitalism.

The Islamic critique of the materialism and socialism of the 1940s and 1950sFootnote ⁷¹ influenced how Islamic economics would be conceptualized and treated during the 1970s. The early social critique centered on the notion of the state (dīn wa dawla), “which would both defend society against the depredations of capitalism and lay the foundations for its Islamic reassertion.”Footnote ⁷² Dīn wa dawla, however, was not a traditional phrase invoked in premodern Islam but only appeared during the anticolonial movements toward the late nineteenth century.Footnote ⁷³ This had irrevocable ramifications toward the development of the political and economic systems of modern Islam – in particular, in South Asia, where the first scholars of Islamic economics emerged.

The institutionalization process of such endeavours across the Middle East and South Asia normalized the transition of religious ideologies into political systems, carried out by reformists. The difference between European concepts of the state and citizen and Islamists’ designs of the state is apparent on an epistemological level, wherein the emancipation of the citizen in Europe occurred through their emancipation from religious authority; conversely, the revivalists supported the emancipation of their citizens from colonial powers (chiefly Britain and France) through Islamic moral teachings. This was paradoxically carried out through the homogenous structure of state formation, which was historically a uniquely European experience.Footnote ⁷⁴ The popular movements for decolonization, national independence, and state activism that developed in the early twentieth century sought to justify an Islamic narrative, pitching social reforms and political developments in a framework of a new, ideal Islamic state, which would fulfill the sociopolitical and economic void created by the colonial powers. Such a narrative of social criticism, willingly or unwillingly, presupposed an authentic Islamic socio-politico-economic vision, which was, however, rooted in a liberalist logic.Footnote ⁷⁵ The state authorities in the Middle East managed to hold onto state power and to idealize historic narratives of Islamic rule, giving leeway to facilitate and reconstruct the necessary mechanisms for the establishment of an Islamic state with popular support.Footnote ⁷⁶ The secular logic of the state in the Middle East and South Asia, which also meant an opening for a later capitalist development, remained the dominant political and systemic force.

The Muslim religious scholars who wrote on Islamic economics (analyzed below) envisioned an Islamic state, which was, however, never fully parted from the capitalist, secular, and liberal functions, despite its Islamic character. It is exactly in this sense that the once-colonized and now formally “decolonized” subjects took upon themselves the same systemic structures of governance, for the (Islamic) state became the dominant guide in expounding the laws and norms of Sharīʿa, which would liberate the underprivileged from the colonial rule.Footnote ⁷⁷ The secular-liberal logic of statehood has been the main agency of power since the 1950s in the emerging Islamic states of Iran, Pakistan, Malaysia, and others.Footnote ⁷⁸ State formation meant also facing the handicaps of the socioeconomic, political, and historical circumstances of independence in those countries. Some leaders, such as Muhammad Zia ul-Haq from Pakistan and Ayatollah Ruhollah Khomeini from Iran, sought to increase state authority and to expand control over the economy by Islamizing economic and financial sectors.

The colonized countries of the Middle East (and South Asia), such as Egypt, Pakistan, and Malaysia, experienced capitalism in the twentieth century through the political power of colonialism and the subsequent expansion and exploitation of local structures embedded in the creation of the modern nation-state.Footnote ⁷⁹ It was exactly the nation-state that encapsulated and generated the legal framework, institutional nature, and economic policies for the expansion of a market economy under the auspice of allegedly Islamic governments.Footnote ⁸⁰ The gradual withdrawal of colonial rule and the achievement of formal independence in the region generated the sentiment among the local population that the moment to establish a society (and a state) driven by authentically Islamic norms had arrived. Such a society would be possible only within the context of the modern state, which would reinforce the narratives of prosperity, social cohesion, independence, and Islamic legal rule. Yet many questions remained unsettled that were germane to the legitimacy of such a state, its far-reaching consequences, the issue of territorial limits, and the concern of national sovereignty and religiously driven governance. The changing political and socioeconomic conditions from the 1970s onwards in Pakistan and Malaysia – the countries in which Islamization of knowledge and Islamic economics were most pronounced – did not replace the colonial state but rather took over its operations.Footnote ⁸¹ The change in the political arena in Pakistan, Malaysia, and Iran and the vast oil-price rises of the 1970s had altered the balance of economic power between many oil-producing countries across the Middle East and the industrialized states.

In what follows, I discuss how a key Muslim revivalist of Islamic economics, Mawdūdī, voiced the promulgation of healthy accumulation and launched a critical stance against capitalism, based on his theory of moral economy as something that should emerge from within a modern Muslim society. Since capitalist monetary economy uses moneyFootnote ⁸² both as a commodity and as a tour de force of development, the aforementioned Muslim reformists contested such an economic mode due to its power in colonizing all domains of life. The credit for envisioning and, more so, realizing an Islamic state and society, based on the fundamental premise of the Qurʾan and equipped with an Islamic political economy, goes to Sayyid Abū al-Aʿlā Mawdūdī and his theory of theo-democracy.

1.3.1 Mawdūdī’s Key Islamic Concepts

The reintegration of the notions of tawḥīd, Sharīʿa, and dīn in the political discourse of the modern state are crucial for understanding Mawdūdī’s vision of an Islamic state and society, which promulgated development of Islamic economics as a discipline through his disciples, such as Khurshid Ahmad and other Muslim economists. As the mastermind of political Islam,Footnote ⁸⁷ Mawdūdī’s key concepts expound his vision of the religion of Islam and its sociopolitical predicaments, which give incentives also for the study of the revivalist vision of Islam’s political economy. Mawdūdī holds that Sharīʿa is “the detailed code of conduct or the canons comprising ways and modes of worship, standards of morals and life and laws that allow and proscribe, that judge between right and wrong.”Footnote ⁸⁸ As for fiqh, he maintains that it is a “detailed law derived from the Qurʾan and the hadis covering the myriads of problems that arise in the course of man’s life have been compiled by some of the leading legislators of the past.”Footnote ⁸⁹ In a similar vein, Mawdūdī’s notion of dīn contains multiple meanings. The first pertains to the higher reality, reign, and heavenly kingdom, whereas the second is rather the opposite, denoting subordination and communality.Footnote ⁹⁰ He understood that the underlying difference between Sharīʿa and dīn was that religion, translated as dīn,Footnote ⁹¹ always remained the same, whereas Sharīʿa contained multiple forms that have undergone alterations in order to adapt to new realities and times.Footnote ⁹² In light of his idea of an umma-based Islamic state, Mawdūdī opposed Hindu nationalism, while promoting the idea of Islam as a religion of unity. He observes

In his writings, however, Mawdūdī often resorted to Western philosophical and political thought and invoked the postulates of an Islamic vision of society based on the notion of tawḥīd, as the absolute oneness of God. This allowed him to combine philosophical, sociopolitical, and economic theories with dogmatic religious interpretations, deploying an idiosyncratic methodology of ijtihād and literalist exegesis of Islamic sources.Footnote ⁹⁴ Mawdūdī described tawḥīd as

His concept of tawḥīd – a central term that is also used by proponents of Islamization and Islamic economics – presents a building block for the advancement of his sociopolitical theory of the state. What I refer to as Mawdūdī’s “modern Islamic nation-state” rests upon the conceptualization of religious terminology, yet reintegrated in the framework of a political economy of a state. He views tawḥīd through the sovereignty of God, which encompasses socioeconomic and moral systems.Footnote ⁹⁶ As a result of this, he adopted a more literalist approach to the Qurʾan but did not contest scientific knowledge, which he perceived as objective. A major point of contestation for him was how science is used and for what purposes. As long as it is rooted in the Islamic belief with accompanying ethical norms, it can be regarded as Islamic, a view that will also have repercussions for the field of Islamic economics. In this regard, he differentiated between modernization, which he accepted, and westernization – a feature that set him apart from other Islamists. Instead of criticizing the processes and modes of modernization for the decline of the Muslim umma – like some of the early revivalists did – he also directed his focus on the Muslims’ inability and failures to emerge and succeed in establishing their own sociopolitical system.Footnote ⁹⁷ His view on the umma also correlates to his comprehension of tajdīd as renewal process, perceived as an inevitable outcome of applying Islamic worldview to the system of thought that commences within an individual and has far reaching paradigmatic consequences upon society as a whole.Footnote ⁹⁸ His reading of the Qurʾan does not suggest reinforcement of the seventh-century religious paradigm but rather an attempt to reformulate Islam’s sociopolitical domain through the inception of tajdīd as part of the Qurʾanic revelation.Footnote ⁹⁹

1.3.2 Colonial Legacy and Mawdūdī’s Vision of an Islamic Society and State

Mawdūdī’s views on Islamic state and society are, as will be analyzed in the following pages, crucial to the development of an Islamic economic system, due to the intersection of his theory on religious morality and the unfolding of the political economy embedded in the formation of a modern state of Pakistan. Since the reconstitution of political power of Muslims in India in the first half of the twentieth century was closely associated with the idea of modernity, the fusion of Islamic and Western concepts and ideas in Mawdūdī’s writings was inevitable in order to achieve the political and economic autonomy of a postcolonial state.

Mawdūdī’s actual turn to a more Islamic ideological formation took place in the 1930s when he accepted an offer from Nawab Salar Jang, a politician from Hyderabad, to propose and then promulgate an Islamic vision of society.Footnote ¹⁰⁰ The geopolitical context and timeline of this occurrence is important, since the Hindus and Muslims of India were facing the British Raj as the system of governance that was instituted in 1858. This had an impact on the political and socioeconomic landscape in the region.Footnote ¹⁰¹ Mawdūdī’s understanding of Islam meant adhering to what later became his vision of political Islam, which would encompass his religious doctrine and his political engagement. It was in 1932 that Mawdūdī’s politics reiterated his anticolonial stance and envisioned organization of society driven by Islamic norms, which for him was a natural consequence of the religious-spiritual and economic decline of Muslims under British rule. Yet his political stance was expressed more substantially in 1937 when he arrived in Delhi,Footnote ¹⁰² where he began commenting on nationalism, Islamic values, and India’s politics after its independence. Notably, his political outlook on the state was entrenched in Western tradition and scholarship. This was evident in his usage of particular terms when articulating his political vision, integrating his Islamic revivalist agenda through concepts such as “religious ideology,” “party,” “state,” “code,” and so forth.Footnote ¹⁰³ His articulation of his political views within the concept of a nation-state does not stem from a historical understanding that Islamic theology necessitates formation of a modern nation-state but rather from his conviction that a nation-state was best suited for his political agenda for the Muslim community, given the centrality of the state and its social, judicial, and political imprint in colonial India.Footnote ¹⁰⁴ Given that Muslim-dominated Punjab was the political heartland of British India, Mawdūdī’s anticolonial voice and his daʿwa program had repercussions for the political makeup of the region. For Mawdūdī, the project of Daru-l-Islam, an educational organization over which he presided, became the objective of Muslim India. It provided the Muslim community a political voice and a religious movement. This organization later laid the foundations for the Jamaʾat-i Islami, founded in 1941.Footnote ¹⁰⁵

Mawdūdī transitioned from an ideologue to a politician along with the Jamaʾat-i Islami, changing their course from an Islamic movement into a political party and proposing an Islamic constitution in Pakistan.Footnote ¹⁰⁶ His development of the party’s program was interwoven with his political agenda, which was conceived in the Indian political and religious context of the time. At first, the party’s orientation was primarily a cultural reassertion; later it became more politically and economically oriented in answer to the colonial usurpation and simultaneous rise of nationalistic tendencies in India. Mawdūdī’s perception of colonialism and imperialism was at the beginning primarily a cultural concern against Western ideologies that influenced the political and socioeconomic makeup of India. At first, “he worried less about economic liberation than about preserving dress, language, and customs, for they were essential to safeguarding Muslim culture. Mawdūdī’s expositions on Islamic revolution, state, and economics attested to the central role played by the drive for cultural authenticity, what he termed ‘intellectual independence’.”Footnote ¹⁰⁷ Some of Mawdūdī’s key interpretations of Islamic religious concepts, such as Sharīʿa, Islamic state, umma, and khilāfa were utilized in intersection with modernity’s political and cultural predicaments of a modern state. In this sense, his revivalism meant not only restructuring Muslim character but also establishing Islamic state institutions and economic programs.Footnote ¹⁰⁸

Mawdūdī was suspicious of democracy and Western political systems as well as simultaneously in favor of some of its ideas and mechanisms. He perceived the (Islamic) state in ahistorical terms as an ideal archetype, while pursuing the idea of a political entity that would include the Islamic fundamental tenets. On the one hand, he referred to a utopian Islamic state as a theo-democracy, based on the example of Medina, and, on the other, to the political order in Europe. This contradictory political ideology implied Western political ideas compounded with an Islamic religious worldview, which integrated Islamic vicegerency and the idea of state sovereignty.Footnote ¹⁰⁹ The amalgamation of the philosophical foundations of Western democracy as the sovereignty of the people with the core ideas of Islam as a religious doctrine made him believe in a social order designated as theo-democracy:

Mawdūdī’s central aim was to develop a vision of a modern state enshrined in the Islamic narrative wherein the Qurʾan and ḥādīth play a crucial role.Footnote ¹¹¹ For him, the notion of an Islamic state was relevant to the idea of leading a moral and virtuous life,Footnote ¹¹² whereby Islamic terminology was incorporated into the narrative of the modern nation-state based on shūrā (Islamic consultation).Footnote ¹¹³ Despite the fact that references to an Islamic state were generic in nature, given the absence of national boundaries and the reinforcement of the idea of the umma as Islamic community, the very idea of an Islamic state for Mawdūdī meant both a practical and an ideological (religious) entity. Even though he promoted an Islamic state as a universal and all-embracing entity, it exposes his methodological inconsistencies.Footnote ¹¹⁴

According to Mawdūdī, the Islamic state would comprise of the legislature, the executive, and the judiciary branches, wherein the ruler would be bound to the laws of God.Footnote ¹¹⁵ Yet his vision of the modern ruler would be incomparable to the role of the caliph, for the former was to be responsible to the state as well as to the nation.Footnote ¹¹⁶ Despite his criticism of nationalistic tendencies and his support for transnational Islamic unity and universal umma, his one-sided perception of twentieth-century sociopolitical and international contexts made him oblivious to the fact that the only possibility of conceiving an Islamic state in the modern period would be through the coercive power of state authority and its apparatus, which deviates from his idealistic vision of society. The idea of the Islamic state was henceforth in his mind not a utopian project but something tangible, wherein the modes of Islamic governance, law, and economics would flourish. Since Mawdūdī believed in a united form of Islamic nationalism, an Islamic state would function as a cultural, social, and religious entity. Its leadership would be elected, for him meaning a democratic government that was based on Islamic principles of political engagement. In this sense, the democratic process (of modernity) could be Islamized.

As such, Mawdūdī’s Islamic revivalism was envisioned as a reaction and an adaptation to sociopolitical changes, incorporating political, cultural as well as economic predicaments of Islamic tradition. It endorsed modern social and political thought in order to achieve political and economic strength in Muslim society. Hence, Mawdūdī’s assimilation of Western thought into Islamic intellectual discourse was crucial to conceiving the modernist trend of Islamic revivalism,Footnote ¹¹⁷ which became “a vehicle for modernization of Islam and in turn would bring about and sustain a new Islamic order.”Footnote ¹¹⁸ This development to an extent prompted the process of Islamizing modern sciences,Footnote ¹¹⁹ which aimed not only to revive the religion of Islam but also to reinforce its political and economic teachings. Such an impetus of reinforcing a sociopolitical and spiritual revivalism aimed to restructure the individual and the community, whereby dīn as a religious reality was extended to sociopolitical and economic understanding, if it were to preserve and advance the well-being of the Islamic community.

1.4.1 South Asian Muslim Economists

The majority of modern Muslim economists were natives of South Asia, writing primarily in Urdu and English, while other proponents of Islamic economics could also be found in Southeast Asia, Iran, and Iraq. Abdul Azim Islahi notes that the first book on Islamic economics was the 1932 publication of Hifzur Rahman Seoharwi’s Islam ka Iqtisadi Nizam (The Economic System of Islam), a critique of socialism and capitalism that advocated for an Islamic economic system. More than a decade later, the second most important book on the subject was published in 1945, Islami Maʾshiyat (Islamic Economics) by Manazir Ahsan Gilani from Hyderabad.Footnote ¹²⁰ There were also publications in English by Anwar Iqbal Qureshi, Islam and the Theory of Interest, in 1947, and by Shaikh Mahmud Ahmad, Economics of Islam: A Comparative Study, in 1938, which were followed by Muhammad Hamidullah’s writings on similar topics in Urdu and in English.Footnote ¹²¹ Despite the relative importance of their works and the nuances in their writings, the scholarly corpus on Islamic economics was formed into a discipline only in the 1970s, manifest in an institutional, bureaucratic, and educational systematization of the discipline.Footnote ¹²² This further illustrates that it was not Mawdūdī who coined the term “Islamic economics” (what would in Urdu be translated as Islāmī maʿāshīāt), since he referred to maʿāshī niẓām as an “economic system.” Moreover, it was certainly not only Mawdūdī who pursued the idea of Islamic economics as a distinct economic system.Footnote ¹²³ Yet, as indicated above, he did establish the popular discourse of political and religious engagement with an Islamic vision of state and society. This ideological discourse also consisted of an economic philosophy that was pertinent to the lives of Indian Muslims at the time.Footnote ¹²⁴ His theoretical writings were later developed by the following generations of Muslim economists,Footnote ¹²⁵ and they became applicable beyond the borders of Pakistan. Khurshid Ahmad, a respected Muslim economist and one of Mawdūdī’s students, transmitted, edited, and published his teachings on Islamic economics.Footnote ¹²⁶

Muhammad Hamidullah, a Pakistani scholar who wrote in Urdu, Arabic, German, French, and English, began his writings on Islamic economics as early as the 1930s, and it was Hamidullah who coined the term “Islamic economics.”Footnote ¹²⁷ Originally from Hyderabad, Hamidullah stated that the region continuously had Islamic rule: “Dynasties changed and wars came, yet its independence was always preserved, until 1948.”Footnote ¹²⁸ The nationalization of currency and interest-free lending banks were long known to the region. In 1891, the first-known step was taken in this direction, when the Muʾayyid al-Ikhwān society was founded by a local mystic, Sayyid ʿUmar Qādirī. In 1902 another society, Muʿīn al-Muslimīn, was established, which organized interest-free deposits of money, on the basis that its members paid a certain amount in order to purchase shares.Footnote ¹²⁹ This marks the beginning of how interest-free loans were issued in South Asia. In 1913, however, the Hyderabad government instituted cooperative lending societies modeled according to a Western form, allowing interest-free societies to be registered at the department of state.Footnote ¹³⁰ Thus, the Hyderabad ʿulamāʾ had extensive experience with issuing inheritance laws, prohibition of interest, and commercial transactions. Hamidullah himself met with the Pakistani government in 1948 to draft a new constitution for the newly established state.Footnote ¹³¹ In 1949, he also participated in the Board of Islamic Education of Pakistan. Similar to other Muslim economists, he refers to the scriptural sources of Islam in stating that the theocratic fundaments of Muslim polity deny an absolute state ownership.Footnote ¹³² Hamidullah maintained that both laissez-faire and socialist economic systems are untenable extremes and that Islam offers an attainable solution since it eliminates economic fluctuations.Footnote ¹³³

In analyzing capitalist and communist systems and critiquing them for their materialist exposition of reality, Hamidullah maintains that no existing form of governance is particularly Islamic, and yet all of them could be regarded as such, if the protection of the state and its citizens would be guaranteed:

Hamidullah reiterates that any form of government could be Islamic if it were only based on Islamic principles of governance. Even if there are certain similarities between Islam and communism,Footnote ¹³⁵ the two are in essence incompatible. Since the notion of equality and pious behavior are some of the main Islamic principles, according to Hamidullah, Islam opposes class divisions and upholds the idea of unity. According to him, modern Muslim economists are not versed in fiqh studies, as much as fiqh scholars lack knowledge of economics.Footnote ¹³⁶ The problem of such a reading is that it displays economic and financial science as interpreted by the dominant voices in Islamic economics. As will be shown in Chapter 2, literature on contemporary Islamic economics emphasizes ethical economic norms and an interest-free economic systemFootnote ¹³⁷ that is nonetheless theorized within the scope of modernity.

1.4.2 Mawdūdī’s Economic System

As is the case with many other modern Muslim scholars, Mawdūdī did not focus only on economics in his writings but on the wider socioeconomic and political propositions as an alternative economic system. He advanced the link between Islamic economics and the political-ideological spectrum of the modern Islamic nation-state. The need to modernize Islamic (economic) law due to the constant dynamism of Sharīʿa was introduced as the prerequisite for the establishment of an Islamic state, which also involved recodifying bylaws. His writings on economics were not systematized in a field but rather scattered and closely related to the concepts of dīn: “The Pakistan movement was an expression of Muslim India’s firm desire to establish an Islamic State. The movement was inspired by the ideology of Islam and the country was carved into existence solely to demonstrate the efficacy of the Islamic way of life.”Footnote ¹³⁸ Despite the distinct features of an Islamic economic system as an alternative model to both capitalism and socialism, its moral imprint, and Sharīʿa-stipulated economic behavior, Mawdūdī’s economic discourse remained confined to the mechanisms of economic science.

Still, his Economic Problem of Man and Its Islamic Solution has been cited as being the first book on Islamic economics – though, as previously mentioned, he never used the term “Islamic economics,” but rather “economic system of Islam.” Even though the book was published in 1955, there were several other texts on Islamic economics published before it.Footnote ¹³⁹ Translated into English, it elaborated his theological, legal, social, and political opinions on an Islamic society and state, making him one of the most prominent representatives of Islamic economics. In it, Mawdūdī stresses that man is also a moral and spiritual being.Footnote ¹⁴⁰ He rightly assessed that an economic problem is hence not only economic in nature, but it is also relevant to morality, culture, and society,Footnote ¹⁴¹ for a human being’s economic standpoint only reflects the (lack of) moral, spiritual, sociological, and political (dis)equilibrium. Humanity’s economic problems originate from human selfishness, which “exceeds the limits of moderation”Footnote ¹⁴² and extends to the issue of wealth and ownership. Private ownership is licit when entangled with a political system that fosters human goodness and social justice. What remains responsible for the social malaise is, however, the degradation of humankind to selfish consumers who are centered in the material world.

Furthermore, Economic Problem of Man and Its Islamic Solution discusses his views on communism and capitalism. The former treats an economic problem as the central issue of human life and hence lacks an ethical attitude toward the economic problem of man.Footnote ¹⁴³ As a centralized system of the means of production, it indicates that in practice a small executive body runs the collective ownership.Footnote ¹⁴⁴ On the other hand, for Mawdūdī, capitalism encourages an illicit means of acquisition of wealth and stockpiling of money. The Islamic solution is incongruent to economic behavior alone and must be linked with the moral transformation of society.Footnote ¹⁴⁵ The so-called “Islamic economic system” is based both on Qurʾanic predicaments and on objectives such as personal freedom, moral and material progress, and justice.Footnote ¹⁴⁶ Concerning those objectives, Islamic economic principles are preserved through the parameters of private ownership, the value of labor, the institution of zakāt, interest-free economy, and the interrelationship between economic, political, and social systems.Footnote ¹⁴⁷

Mawdūdī stands against the delinking of economics from religion and morality.Footnote ¹⁴⁸ Yet, his usage of Islamic order or economic system must be understood within the broader context of the Islamic vision of life, as inextricably related to broader social developments. Linking economic postulates with a sociopolitical vision not only generates a distinct ideological characteristic of such economics but also places it within secular methodology and a paradigm centered on the modern nation-state. He writes,

The discrepancies between Muslim religious scholars’ and economists’ theories of Islamic economics as being based on the moral predicaments of Sharīʿa, and the factual application of those theories within the dominant economic paradigm, exemplify the structural inconsistencies of merging religious ethics and modern economics. It also illustrates a process of a gradual yet forceful applicability of Islamic economic theories within the systemic confinements of the nation-state. Even though Mawdūdī states that capitalism and secular democracy are one of the biggest deceptions of modern times to which humanity is being subjected,Footnote ¹⁵⁰ his vision of an Islamic society (in Pakistan), which also entails a developed economic system, would be structurally possible only within the modern Islamic nation-state. This entity would have all the corresponding systemic, bureaucratic, administrative, political, and economic configurations, while reappropriating the modern state conditions.Footnote ¹⁵¹

1.5.1 Ismaʿil al-Faruqi’s Division of Islamic Sciences

Islamization of academic discourse in the twentieth century is in part linked to a particular intellectual orientation by Muslim reformists who espoused an antithetic vision of a modern Islamic nation-state. Much of the unease among the intelligentsia of the umma they claim, was because Muslims “were secularized, westernized, and de-Islamized by internal and external agents.”Footnote ¹⁵⁹ Contemporary Western-trained Muslim economists advanced the idea of an Islamic society and Islamic economic agents on the grounds of an Islamic, politically independent, and economically viable system.

Al-Faruqi, a Palestinian-American scholar on Islam, who with Taha Jabir Al-Alwani cofounded the IIIT in 1981 by securing $25 million from the Saudi Islamic Development Bank, was pivotal for the promotion and expansion of the IOK agenda. The far-reaching influence of al-Faruqi’s ideas in the creation of the IIIT has had tremendous impact on the implementation of the IOK project by various scholars, institutes, and educational facilities in the West. His book, Islamization of Knowledge has become the manifesto for many Islamic universities that implemented their curriculum programs and designed their learning pedagogy according to its main framework.

Since contemporary knowledge has undergone a process of secularization and westernization, al-Faruqi, unlike al-Attas, sees IOK as a process that can contest the Eurocentric knowledge that has been universalized,Footnote ¹⁶⁰ since, he argues, education is the cornerstone and a prerequisite of any state. Al-Faruqi defines the Islamization process as applying new knowledge to the Islamic intellectual corpus,Footnote ¹⁶¹ rooted in the tawḥīd epistemology. Yet IOK presents only one type of knowledge, and “a way and a method to formulate a methodological, scientific, mental approach to humanities, social sciences, and applied sciences.”Footnote ¹⁶² One of its aims, which targets contemporary knowledge, is to expand the methodology due to the shortcomings of traditional Islamic sciences.Footnote ¹⁶³ Al-Faruqi sets up the Islamization plan founded on several objectives, which include efforts to increase awareness among the umma of the crisis of ideas; to revive the lost ideology; to define the relationship between the failure of Islamic thought and its methodology; to adopt Islamic methodology in the field of social sciences; to master modern disciplines and Islamic history; to establish a bridge between Islamic and modern knowledge; and to launch a trajectory of knowledge that would fulfill the divine message.Footnote ¹⁶⁴ In order to achieve those objectives of the IOK plan, certain steps should be taken: for instance, mastering and critically evaluating modern and classical disciplines; analyzing the current problems of the umma; disseminating Islamized knowledge;Footnote ¹⁶⁵ and producing university-level texts books to recast the modern disciplines as imbued with Islamic vision.Footnote ¹⁶⁶ A central task would be to integrate the two systems, instilling an Islamic vision through political, cultural, social, and educational platforms. Moreover, Islamic educational systems would be established, consisting of elementary and secondary schools, colleges, and universities,Footnote ¹⁶⁷ which would be instrumental for the dissemination for the Islamization of Islamic economics.

Along with al-Faruqi, Muhammad Naquib al-Attas is the main representative of the IOK process in Malaysia, who espouses the theory of Islamization through the study of Islamic intellectual history and taṣawwuf.

1.5.2 Muhammad Naquib al-Attas and the Metaphysics of Islam

Al-Attas maintains that knowledge as such is never value-neutral, but rather it is influenced by the religious, moral, social, and cultural worldview of the society in which it emerges.Footnote ¹⁶⁸ In spite of Western disciplines not accepting the Islamic sources or division of knowledge,Footnote ¹⁶⁹ the IOK process has consequently meant assimilating Islamic knowledge from within its own epistemology into the modernist discourse, which has shaped in part the discipline of Islamic economics. As a result, in the modern period many Muslim scholars and economists amalgamated Western knowledge with their own tradition, procuring a Cartesian dualism embedded in different worldviews and ideologies.Footnote ¹⁷⁰ According to al-Attas, Islamization involves the Islamization of language, since language is closely related to one’s worldview. He maintains that IOK is the inclusion of knowledge from its interpretations based on secular logic.Footnote ¹⁷¹ The deletion from Islamic legacy of foreign concepts within the Western tradition – such as the philosophy of dualism and secular logic – is a precondition for a successful process of Islamization, whereby the category of knowledge becomes fundamental not only to the Islamic tradition but to any real modern education. In the traditional Islamic worldview, knowledge was encapsulated in the open-ended farḍ kifāya knowledge, which includes the natural, physical, and applied sciences and the farḍ ʿayn, the absolute nature of the knowledge pertaining to God and the spiritual realities and moral truths.Footnote ¹⁷² Farḍ ʿayn knowledge is dynamic, increasing in accordance with the spiritual and social responsibilities of a person. Contemporary modern knowledge is, however, delivered from its interpretations based on secular ideology, which requires

However, for al-Attas, maʿrifaFootnote ¹⁷⁴ as a priori knowledge does not need to undergo an Islamization process since it is inherently Islamic; this is why al-Attas refers to the term “Islamization of present-day knowledge” as aslamat ʿulūm al-muʿāṣirah or Islamīyatul ʿulūm al-muʿāṣirah.Footnote ¹⁷⁵ Science is hence regarded as a form of taʾwīl or allegorical interpretation of the empirical reality that constitutes the natural and cosmological world,Footnote ¹⁷⁶ whereas religion is constituted as an established law (Sharīʿa) and truth (haqīqa).Footnote ¹⁷⁷

Al-Attas expounded the notion of adab, which he translated as “right action,” which became one of the central terms of his philosophy of Islamization. Adab is closely linked to kashf as a source of inner predisposition that springs from self-discipline and is intrinsically connected to knowledge, whereas ʿadl (justice) is the condition of things in their proper places that has been lost in the Muslim world as a result of neglecting adab.Footnote ¹⁷⁸ In the context of disciplines and fields of scientific inquiry, education is acquired knowledge only if it includes morality and moral purposes, also called adab.Footnote ¹⁷⁹ Islamization is hence the recalibration and reintegration of adab into the Muslim social fabric. The disintegration of adab in Muslim societies occurred due to both the corruption of knowledgeFootnote ¹⁸⁰ and the blind adaptation of Western patterns of education, which impacted the theory of knowledge of sciences. This was inextricably related to the “secularization process” in Western societies, which disassociated moral postulates from scientific inquiries. Al-Attas has thus been advocating the process of purifying Islamic knowledge, its epistemology, and its sciences of Western concepts – which have been integrated into the very composition of the Muslim perception of the world. In order to reintegrate Islamic concepts into the Muslim worldview, one has to reexamine and analyze the fundamental terms within Islamic tradition as manifestations of theory and practice.Footnote ¹⁸¹ This entails isolating key Western concepts from a modern vocabulary – such as secularism, humanism, and dualism – and infusing them with an Islamic epistemology.Footnote ¹⁸²

Below, I analyze the case study of Pakistan and its Islamization processes with the aim to explain how the Islamization of its state economy was introduced and how Islamic finances were established in a modern Islamic nation-state.

1.6.1 Islamization of Pakistan’s Economy

The creation of Islamic finances and banking and the emergence of Islamic universities in Pakistan, Malaysia, and elsewhere, as well as the demand for educational curriculums and religious education, went hand in hand with the ideology of Islamic economics as part of the restructuring of modern Muslim societies. Islamization involved social, political, cultural, and economic reforms, encompassing finances and economic transactions. Islamic financial institutions were created across the Middle East, North Africa, and South(east) Asia. In many respects, the process of Islamization was easier to accommodate in economics than in other fields, providing an Islamic legitimacy to national economic and political decisions.Footnote ¹⁸³

The secular postcolonial states such as Pakistan and Malaysia adapted a unique path to the development of Islamic economics as a prerogative based on religious identity that was eventually incorporated as a state ideology during the transition from secular to Islamic state.Footnote ¹⁸⁴ The institutional flourishing of Islamic economics occurred gradually and systematically. In the case of Pakistan, General Arif, a member of its military forces, stated that Pakistani state power and sovereignty ultimately had to be addressed within the parameters of God.Footnote ¹⁸⁵ Eventually, the Islamic state of PakistanFootnote ¹⁸⁶ was at the forefront of opposition to the secular logic of the postcolonial state, when Muhammad Zia ul-Haq, a Pakistani four-star general and the sixth president of Pakistan, eliminated interest from three financial institutions in 1979. This was also an opposition move to his predecessor, Prime Minister Zulfikar Ali Bhutto, and his program of nationalization and land reform. The 1979 declaration of the Pakistani government transferred the country’s economic system to an Islamic economy, which was the first attempt to put into practice “Islamic economic principles” through real economic policies, implementing an Islamic taxation system, the institution of zakāt, and the elimination of ribā.Footnote ¹⁸⁷ Modern and Islamic education systems would coexist as long as they were infused with Islamic values. The establishment of the International Islamic University of Islamabad and the International Islamic University in Kuala Lumpur sought to provide the state with modern, albeit religiously stipulated, knowledge and a workforce that would cope with the modern economy. As such, Pakistan’s Islamization efforts were thorough on societal, juridical, and economic levels, assuring that a particular ideological strand met political ends. However, due to various historical factors, the Pakistani state was unable to assert the same level of political hegemony as that which was established in Malaysia.Footnote ¹⁸⁸

Pakistan turned to Islamization in order to consolidate political control and state formation.Footnote ¹⁸⁹ In both Pakistan and Malaysia, when the establishment of the state apparatus and the national economy were still in their early stages, the process of Islamization, which happened in 1977 and 1981 respectively, enabled a political hegemony over national identity and economic development.Footnote ¹⁹⁰ Pakistan continued the colonial project’s governing systems, interweaving hegemonic policies, modernization process, and formations of secular governments in accordance with the European notion of sovereignty, while implementing an Islamic economy; in brief, they replicated similar state operations. The political institutions and social structures inherited from colonial powers included a bureaucracy, a judiciary, and a military, ensuring the promulgation of political conditions that resembled the colonial situation. Furthermore, the propagation of religious, tribal, and ethnic affiliations by colonial states in the Muslim world facilitated national disunity in the 1970s and 1980s through the political assertion of Islamism, which was seen as a solution to the crisis of the secular state.Footnote ¹⁹¹ The Islamization of state politics in Pakistan demarcated the adaptation of the postcolonial state apparatus based on local cultural and social structures.Footnote ¹⁹² In this regard, Islamism and Islamization ought to be analyzed in light of modernity and secular ideologies. The secularization process in the Muslim world politicized religious tendencies that had an effect on the political landscape.Footnote ¹⁹³ Because of this dichotomy, Pakistan, Malaysia, and other postcolonial countries experienced an inclusion of religious principles into domestic politics and a gradual decline of secular politics based on colonial administration. In Pakistan, the ruling regimes empowered an Islamic narrative as a political discourse by also drawing new constitutions and establishing state–society relations, which meant also Islamizing the economy. Interest-free banking became prominent in the 1980s, especially in Pakistan.Footnote ¹⁹⁴ Islamizing academic disciplines in order to make them compatible with Islamic teachings was designated as an effort to decolonize the society and Islamize the judiciary. This, however, also meant developing a modern Islamic theory of knowledge based on Western epistemologies such as phenomenology, historicity, and relativism, as well as Islamizing concepts such as state and democracy.Footnote ¹⁹⁵

The founding of other Islamic financial institutions throughout the Middle East and North Africa transformed Islamic economic teachings into concrete establishments, for example, the Mit-Ghamr Saving Bank in Egypt in 1963, the Islamic Development Bank (ISDB) in 1975, the Dubai Islamic Bank in 1975, Kuwait Finance House in 1977, Jordan’s Islamic Bank for Finance and Investment in 1978, Bahrain’s Islamic Bank in 1979, Iran’s Islamic Bank in 1979, the Islamic Exchange and Investment Corporation in Qatar in 1979, International Islamic Bank in Bangladesh in 1983, Tadamon Islamic Bank in Sudan in 1983, Bank Islam Malaysia in 1983, a group of Faisal Islamic Banks in the 1970s and 1980s.Footnote ¹⁹⁶

1.6.2 Intellectual and Institutional Efforts of Islamization

The establishment of Islamic finances and banking has its origins in the theoretical, ideological, and institutional frameworks of ideologues, scholars, and Muslim economists, a motley group who created and expanded the field of Islamic economics.Footnote ¹⁹⁷ Islamic economics grew through the establishment of religious, social, educational, and economic organizations and institutions, such as the Organization of the Islamic Conference (1969); the Islamic Development Bank (1975), which was founded by the finance ministers at the Organization of the Islamic Conference and includes ten member states; the International Conference on Islamic Economics (1976); the International Centre for Research in Islamic Economics (1977); the International Islamic University in Islamabad (1980) and Malaysia (1983); the Islamic Research and Training Institute (1981); and the IIIT (1981), which directed the course of Islamizing knowledge processes, educational curriculums, and economic incentives of those countries, along with the establishment of Islamic financial institutions and business enterprises.Footnote ¹⁹⁸ Hundreds of works on Islamic economics, finance, and banking appeared, predominantly in English, Arabic, and Urdu languages,Footnote ¹⁹⁹ published primarily by Islamic Publications in Lahore, Pakistan; the International Islamic University in Kuala Lumpur, Malaysia; the Islamic Foundation in Leicester, UK; and the Islamic Economics Institute at King Abdul Aziz University in Jeddah, Saudi Arabia, in addition to the literature on IOK published by the IIIT in Herndon, USA. This literature commented on social justice, taxation, ownership, financial transactions, the legal system, banking, and more. Even though the literature produced by these centers and institutions was not meant to be political per se, it impacted some of the implementation policies on the ground, in that Muslim economists’ writings on the Islamic economic ideas in the second half of the twentieth century were favored by the very academic institutions that published their work.

Despite the diverse body of literature on Islamic economics, early Muslim revivalists and Islamic ideologues of South Asia, as well as Western-trained Muslim economists, give evidence of a particular intellectual lineage of Islamic economics. Islamic finance and banking are only by-products of a long stretch of intellectual, ideological, and political contestations and accommodations of Islamic teachings and Western-induced knowledge through epistemological tendencies. The Islamic financial system, however, would not be possible without the potential clientele who forms the majority of its markets.

Three methodological trends can be observed in the formation of contemporary Islamic economics and finance: first, the application of uṣūl al-fiqh methodology to Islamic economics; second, the utilization of various economic methodologies from Western and Islamic sources; and third, the inclusion of Islamic economic ethics into the episteme of conventional economics.Footnote ²⁰⁰ The notion of dīn as the central element of the Qurʾanic worldview plays a prominent role for the proponents of the Islamization of Islamic economics, as is found in the writings of Mawdūdī and al-Faruqi. The epistemology of Islamic economics is hence formed around the centrality of revelation in the pursuit of knowledge,Footnote ²⁰¹ whereby Islamic methodology invokes the knowledge of Sharīʿa and other secondary sources.Footnote ²⁰² Muslim economists are interested in both sources and methodologies.Footnote ²⁰³ For instance, Muḥammad Zarqa perceives Islam as a religion of guidance with normative statements, encouraging the analysis of normative hypotheses of economic thought in Islamic tradition and focusing on the relationship between Islamic economics and jurisprudence.Footnote ²⁰⁴ The objective of Islamic economics is thus “to arrive at descriptive hypotheses or assumptions that diagnose reality and link the various economic phenomena.”Footnote ²⁰⁵ Al-Faruqi’s eight-step Islamization plan,Footnote ²⁰⁶ which reintegrates Sharīʿa into the economic philosophy of Islam, has been referenced by Muslim economists such as Zarqa,Footnote ²⁰⁷ Monzer Kahf, Muhammad Haneef, and Mohammad Nejatullah Siddiqi.Footnote ²⁰⁸ The main representatives of contemporary Islamic economics, as presented in Chapter 2, despite their various methodologies, seem to follow the basic plan of the IOK.

Among the most prominent areas dominating IOK were Islamic economics and finance. Even though early discourse on Islam and economics commenced in the 1930s, and IOK only emerged in the 1970s, the Islamization of financial institutions and state economies, as well as more intellectual endeavors, such as al-Attas’s conceptualization of Islam and secularism, and especially al-Faruqi’s elaborated IOK plan, had repercussions on the blossoming of the Islamic economic project, in addition to the implementation practices by the aforementioned institutional and financial centers that produced or advocated for an inclusive model of Islamic economics and finances. As a discipline, Islamic economics was included in the Western and Islamic educational curricula through Islamic finance and banking,Footnote ²⁰⁹ and also became an academic field. Part of the credit for its development goes to the subsequent proponents of the IOK and to the global institutions that advanced their teachings in the United States, Pakistan, Indonesia, and Malaysia. The most known by-product of the Islamic economic project became its financial aspect – the creation of Islamic banks – which was product-focused, and not so much an epistemological quest for theoretical and historical analysis of Islam’s moral economy. Islamic banks also emerged across Europe, including the United Kingdom, Luxembourg, and Denmark.