El ciclo escolar 2002-

Academics consider Islam against capitalism or economic growth (Weber, 2013; Guiso et al.,

2003). They argue that Islam is “anti-market." and its teachings are the primary reason for the lagging economic condition of the majority of the Muslim countries (Stefan Voigt 2005, p 66).

As stated by Shamsuddin (2014), the prohibition of “Riba” or interest rate as hostile to economic progress, whereas others consider the collection of zakat as limiting the ability of the people to attain socio-economic progress (2014). However, as stated by Noland et al. (2004), Islam is not the direct reason behind the economic turmoil faced by the Muslim countries. The reason could be that “Islamic religious tradition or other cultural or historical experiences may have affected the development of local institutions or conditioned local attitudes on a wide range of issues that could indirectly affect economic performance” (Nolan et al.,2004 p 140).

The primary sources from which we can shed light on an Islamic perspective on economy and

entrepreneurship is Quran and Sunnah. Muslims believe that the Quran is a Book of Allah and consider as the first line of reference to understand the meaning of life and actions. The Sunnah is the sayings and deeds of which Prophet Muhammad that the Muslims are supposed to follow if they are not able to solve their issues through the Quran.

The other secondary sources after the Quran and Sunnah are Ijma (Consensus) Qiyās (Analogy). Qiyas is a kind of analogical reasoning, which is to some extent contested and

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who belong to the same school of jurisprudence. These sources have the potential to influence entrepreneurial behaviour and their environment.

Now, there are two contemporary schools of thought which try to explain the relationship of Islam with modernization and economic development. The first school of thought views Islam

as a static religion that opposes innovation and economic development and considers Islamic

values as barriers in terms of bringing reforms that for the successful development of entrepreneurial culture (Coulson, 1964; Labohm, 2003; Perkins, 2003; Pipes, 1983). The adherents of this school of thought consider that non-western cultures must break away with their values and traditions and incorporate western culture in order to attain socio-economic progress. They argue that the reason behind the economic success of western economies is their cultural attitude in the form of individualism, democracy, secularism, and freedom of action and expression. Therefore, if any non-western culture wants to uplift their economic condition, they have to adhere to these western values.

The second school of thought believed that Islam is compatible with modernization and economic development (Kayed & Hassan, 2010). They argued that Islam proactively supported economic development and modernization and led global modernization when the west was in the era of dark ages. Ernest Gellner(1983), a British social anthropologist negated the assumption that non-western societies cannot be modernized without western cultures and its values. He stated that Islamic teachings are not against modernization and argued that Islam is closer to modernization as compared to the other two monotheistic religions (Judaism and Christianity) (Gellner, 1983).

In Islam, there is no separation between the temporal and spiritual world of the follower, since Islam provides clear guidance and a roadmap for a follower to use in all spheres of his or her life (Nadwi, 1978). Cantori and Lowrie (1992) stated that the religion of Islam gives more

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importance to society as compared to the state. Hence, the ethical parameters of the society are

not decided by public vote or by state officials but by the Quran alone. As stated by Chapra

(1992), Islam encourages socio-economic justice and brother/sisterhood and advocates a comprehensive balance between materialistic and spiritual needs of the follower.

In addition, all the actions of a Muslim including commercial activities are considered as worship to God if they in accordance with the Islamic code of ethics and morality (Al-Faruqi, 1992). Therefore, if a Muslim is engaged in any form of business activity in accordance with Islamic law, which results in both individual and societal, benefit than it can be interpreted as a form of worship to please God and attain salvation.

Islam provides a clear guideline and ethical framework on the economy due to its impact on human relations and societal development. Al-Misri and Keller (1991) pointed out that many of the basic contemporary guidelines on the economy are derive from Islam for many centuries. For instance, Islam provides a clear framework for forming business relationships, allocation of wealth and distribution, financing tools, consumption, fair trading, tax and many more. Rice (1999) argued that in order to overcome the economic challenges in our contemporary society

we need to get rid of “value-free economics” (economic decisions based on hard facts and do

not take into account human values) and pay more attention to the "human-oriented system." He points out that Islam provides one with a ”moral filter” based on Justice (Adalah) that stand for equality within society, unity (tawhid) which means a belief that one is accountable to God and trusteeship (Khilafah) that enable people to enjoy the goods God has entrusted upon them. This form of moral filter help followers to resolve contemporary social-economic issues successfully and live life in accordance with God’s will. He also argues that Islam has already created production priorities that enable followers to satisfy their needs first and then satisfy their materialistic needs and desires.

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Beekun and Badawi (2005), has conducted a study, which discusses the Islamic ethical system

from the viewpoint of the stakeholders that include suppliers, buyers, employees, debtors, and

competitors. They mentioned three foundations for Islamic ethical system:

● The first pillar is justice which influences the follower to live a balanced life;

● the second is trust (Amanah), which makes followers answerable in the after-

life based on their trustworthiness on earth;

● The third is benevolence (Ihsan) which is about excellence.

Hence, in Islam, every transaction in commercial affairs must be dealt with and executed in

accordance with the teaching of Quran and Sunnah. Therefore, one can say that the pursuit of work or entrepreneurship is the main reason behind the creation of men in Islam and salvation can be achieved through “serving the consumers and the society in a fair and judicious manner” (Elfakhani and Ahmed, 2013, p.59). However, failure to comply with the teachings of Islam can result in societal grievances and chastisements (Quran 24:63, 11:101, 11:102).