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Chapter Summary

Contrary to the heavily dirigistic stance taken by Islamic economists, this book clearly shows that an Islamic economy is necessarily a free market economy. Two points are emphasized in this chapter: (1) the conventional economic discourse is essentially predicated on the existence of a representative form of government; and (2) while an Islamic economy is a market economy, it is not necessarily the same thing as capitalism. The institution of private property is not only sanctioned but rather sanctified by Islam. The chapter ends with two observations: first, the link between profits and interest may break as a result of the commoditization of money but more so through the instrumentalization of interest. Second, the terms of trade in any exchange, including the one involving interest, crucially depend on the power, economic or political, that may be brought to bear on that exchange.

Keywords: capitalist economies; interest rate; Islamic economy; profit sharing; property rights



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