What is being called 'the Islamic economic/agrarian system is, indeed, a slow growth which took place in only a marginal sense in the lifetime of the Prophet, and was gradually developed, first by Caliph Omar, and subsequently by other jurists who followed.  The process of development spread over two centuries.

The nascent Islamic economic system freely borrowed (quite understandably) from the economic culture of pre-Islamic times. Thus, ‘jizya’, (the. tax on protected non-Muslim citizens of the Islamic state) was a medieval Iranian practice going back to the Jews in antiquity. Sovereign Muslim rulers (Sultans) in Central Asia, India and elsewhere adjusted and adapted the economic and political ideas and practices of the Umayyad and Abbasid Caliphs to suit local and ever changing conditions. As and when the orthodox ulema tried to arrest this practice, tension and conflict developed between the king and the priest, or the state and the church. With a few exceptions, the Indian Muslim rulers or sultans (even much before the radical and liberal Akbar) asserted the supremacy of the state in worldly matters and consistently refused to treat the opinions and advice of the ulema in such matters as binding upon the state. The so-called Islamic economic/agrarian system, therefore, has never enjoyed the sanctity and binding power as the Islamic precept system relating to prayers, fasting, zakaat and the Quranic laws relating to marriage, divorce and inheritance.

Islamic Economics

Does the expression 'Islamic Economics. have any significance apart from, (a)  economic history or geography of the Muslim world, or (b)  what Muslim social scientists have contributed to Economics? It might be thought that 'Islamic Economics' is also a theoretical social science that deals with the best method of maximizing material wealth within the parameters of Islam. If so, the scope of 'Islamic Economics' would go beyond the mere economic history or geography of the Muslim believers. According to this concept the social economic polity of a truly Muslim state must reflect and promote the basic Islamic conception of the good life in all its multifarious aspects. However, as soon as we try to spell out the concrete socio-economic features demanded by 'Islamic Economics’ we find ourselves faced with conflicting possibilities of choice. And we are thrown back upon our own common sense, economic theory and actual experience in order to clinch various issues.

This difficulty arises because Islamic values--equality, fraternity, generosity, charity, sympathy, justice, compassion and so on-are all abstract concepts. The moment we try to realize them in the framework of laws and a concrete polity, a plurality of social and economic blueprints become candidates for the title 'Islamic' as each claims to be the only true expression of Islam. The same difficulty (to a lesser degree) arises in connection with the two or three specific Quranic economic injunctions mentioned previously.

Thus,  'Islamic Economics’, in the sense of prescriptive economic theory, lands Muslims into controversies, which, by their very nature, cannot be solved on the basis of the Quran or the Sunnah alone without recourse to independent logical thinking and ethical reflection. In the final analysis, therefore, the term 'Islamic Economics' tends to mislead us into seeking and projecting 'Islamic truths' of economics, or saying that Islam demands the acceptance or rejection of any particular economic system as part of one’s faith. However, ‘Islamic economics' in the purely descriptive sense as a systematic area study of the economic history of Muslim society or societies or the economic ideas  and perspectives of Muslim social thinkers remains a valuable area of study.

Due to semantic confusions several Islamic social scientists, writers and statesmen now find themselves disputing not only with 'secular' economists but among themselves about the 'identity of the true Islamic system of economics. Paradoxically, Islamic prescriptions and injunctions (that are believed to be Divinely imposed and meant to function as infallible standard for judging man-made systems of thought) itself becomes a matter of unending debate. One, therefore, cannot help concluding that the directive thrust of the Quran lies in spiritual beliefs and moral exhortation rather titan in the sphere of economic legislation. Anyone who claims that the Quran prescribes any particular economic philosophy or system is as off the mark as one who claims that the Quran supports or affirms any particular theory of Astronomy, Physics or Biology. No system could possibly claim a Quranic mandate as in case of laws of inheritance, divorce, prohibited degrees of marriage etc which are, specifically, contained in the Quran. No positive economic system of Islam could be anything more than a rough logical construction based upon two or three economic injunctions viewed as axioms by the believer.