The emergence of new Islamic economic and business moralities

• DOI: http://doi.org/10.1002/tie.22064
• Author: Harun Sencal,Mehmet Asutay
• Date: 01 September 2019
• Published date: 01 September 2019

RESEARCH ARTICLE

The emergence of new Islamic economic and business

moralities

Harun Sencal | Mehmet Asutay

Durham Centre for Islamic Economics and

Finance, Durham University Business School,

Durham University, Durham, UK

Correspondence

Harun Sencal, Durham Centre for Islamic

Economics and Finance, Durham University

Business School, Durham University, Mill Hill

Lane, Durham DH1 3LB, UK.

Email: harun.sencal@gmail.com

Abstract

This article aims to explore the sources of the observed transformation in the

embeddedness of economic, business, and financial practices of Muslim individuals in

comparison to premodern period Muslims. It argues that the predomination of instru-

mental reasoning in modern times, as opposed to substantive morality in everyday

practice, is one of the main reasons behind the transformation of embeddedness of

Muslim individuals. Instrumental reasoning, being the dominant methodology, leads

to diminished submergence in social relations; that is not limited to interpersonal

relationships, but further extended to the core religious acts. How such an emergent

economic and business morality is reconciled with the Islamic substantive morality is

examined. It is argued that “transformation of exception into norm”is the main

method used to reconcile instrumental reasoning with Islamic law in fulfilling religious

obligations, at least in terms of fulfilling the form and in complying with the necessi-

ties of modern life. This has led to the emergence of new economic and business

moralities.

KEYWORDS

embeddedness, instrumental reasoning, Islamic finance and business, Islamic morality, public

utility (maslaha)

1|INTRODUCTION

The contemporary period has witnessed the emergence of an alterna-

tive and faith-based financial sector in the form of Islamic financial

arrangements and banking sectors. Islamic legal theory and practice

blended with the Islamic normative world mainly determines and

shapes the operations of this financial sector. Its unprecedented suc-

cess as a sector, with a growth rate of 15.7% for the 2007–2014

period (Asutay, 2015, p. 19), motivated the major financial centers to

consider it being a profitable financial option. However, its growth

and development have raised a number of concerns leading to a

debate around “form”and “substance”, suggesting that form orienta-

tion has become dominant, while the essentialization of substance has

been ignored in its operational forms and transactions (Asutay, 2012).

Thus, we have witnessed the emergence of new economic and

business moralities as well as behavioral norms, as opposed to norma-

tively constructed Islamic ethics.

As Hallaq (2012) argues, the central domain of Islam is morality as

defined by Islam and through which other domains such as law are

determined. Islamic normative values, as an articulation of the moral-

ity of Islam, are aimed at constructing a particular social formation,

based on substantive morality, according to which both relationships

between the individual and society (horizontal relationship) and

between individuals and the God (vertical relationship) are regulated.

These normative values suggest a state of embeddedness of an indi-

vidual with his/her surroundings including, but not limited to, eco-

nomic and financial affairs, which should be shaped according to the

prescribed morality of Islam, as the moral substance of Islam aims to

promote a moral society, especially in terms of economic relation-

ships. In the premodern

1

period, when religion was one of the domi-

nant institutions in society, the morality of Islam was significant in

DOI: 10.1002/tie.22064

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