Individual liberty and ownership

An Islamic economy is based on participation, production and an authentic market mechanism. However, it does not entirely leave the social sphere to the market. It regulates the markets through the prohibition of interest and achieves social fairness and justice through moves of institutionalization, including almsgiving and charity (moves that would raise the income levels of the poor). Here we have a democratic society where the public, not the state, rules. The great Muslim thinker Bediüzzaman Said Nursi, who lived in Anatolia in the early 20th century, formulated this entire social order noting that the world would become familiar with individual liberty and ownership after capitalism.

In fact, this formulation was partially applied in microfinance and social business theory by Muhammad Yunus, a Bangladeshi economist who won the Nobel Prize, as an economic development paradigm. Yunus argued that ensuring that the individuals take place in the economic setting with their talents and skills as well as training -- this is expressed by Said Nursi as perfection -- is of great importance and that this should be organized as a social system. To achieve this, he developed the notion of micro-credit.

The basis of micro-credit is a financial system relying on the real economy that we call participation banking. This system is also a process that ensures individuals achieve a certain level of perfection and are trained for engaging in business. Individuals are supplied micro-capital that they are then able to transform through their skills and ambition in a certain field into the commercial cycle. This is actually a fund that is lent to individuals for use in production; but no interest is applied.

But there is an important institution that complements Yunus' micro-credit. This is the social business institution. Social business does not seek profit maximization; instead of profit maximization, social business seeks to deal with major social issues, including, as specified by Said Nursi in the early 20th century, poverty, ignorance and a lack of unity.

Yunus' social business system is financially and economically sustainable; it is also a system that pays attention to make sure that the profit is used for the labor and work of the individuals and for valuable investments. So is this a marginal system that could be used in less developed parts of the world suffering from poverty and hunger only, or is it possible to define it as a social model of production after some minor revisions? I believe that to answer this question we need new hypotheses that would go beyond Yunus' theory.

But I believe that this holds some clues which would improve Yunus' thesis and generate a systemic and new economic solution because, at the current stage, it seems that the economic system has lost its fundamental dynamics based on competition and the division of labor. The alternative system I referred to above, on the other hand, offers a new dynamic that is suitable for the spread of individual liberty and knowledge infinitely. Competitive capitalism has become the maker of a capitalist social formation because of its nature; this has been the major problem of capitalism and its main contradiction.

In his book “The Great Transformation” (1944), Karl Polanyi stresses that liberalism created by capitalism and interventionism are sisters. He even goes further, arguing that we need to take a look at the liberal economy of the 19th century. In other words, the competitive capitalism that emerged in Britain in the first half of the 19th century was inspirational for Ricardo as a sign of a perfect market whereas it served as a model for his theory for Marx.

At the end of this 50-60-year period, capitalist accumulation required the intensification of capitalism and its centralization, which led to the integration of the state with the economy. This caused income inequality and poverty. Said Nursi said ignorance, poverty and a lack of unity are the three major social problems and that to deal with them we need art, training and unity. The world has seen that the 20th century has generated these three problems. The Oriental societies were deliberately made ignorant of their own cultures, uneducated and untrained. As a result, they suffered from division. The states have existed for elites rather than individuals and societies.

For Said Nursi, both art and perfection are for individuals. By this he actually tells us something more important that we need today. The individual does not exist for the state; the state exists for the individual; and the individual is greater than anything else.