By Edo Omerčević
The main objective of this study is to review the literature on the compatibility of a free market economy and Islam and discuss how the free market concept fits into the Islamic system of life. The paper is based on an extensive review of literature that deals with various economic systems with the objective of building a case that Islam prefers, or at least accepts the free market economic model.
The review of literature and theoretical reasoning assert that in order to achieve the stated socio-economic goals in Islam, the implemented economic system must contain certain characteristics. The issue of markets, price controls, redistribution of wealth and poverty will be covered as well as the extent of divine instructions to the Muslim population on how to manage their economy by referring to the Qur’an (Holy Book of Muslims), Sunnah (Practice of Prophet Mohammed) and academic literature.
The study will show that Muslims are allowed to manage their economies by means of a free market mechanism and that the practice of Prophet Mohammed supported a self-managed economic system. However, it is also shown that in modern times, the concept of free market is abused, and as a result some of the Muslim scholars express their dissatisfaction with the mechanism of free market.
Edo Omerčević (MEC, BEcon) has gone through more than a decade of training in economics and finance. He started his tertiary education at the International Islamic University Malaysia where he obtained his Bachelor in Economics (Hons) as well as his Master of Economics degree. He is currently a Ph.D. in Economics candidate at the International University of Sarajevo. His interest and specialization is in the field of money and banking, with special reference to complementary and alternative currencies and monetary systems. Mr Omerčević is presently a lecturer at the American University in Bosnia and Herzegovina and he is a co-founder of the Center for Advancement of Free Enterprise (Centar za poslovnu afirmaciju) that is promoting free market ideas in Bosnia and Herzegovina.