Price control in an Islamic economy

Abstract EN

-Discussions on state intervention in free market began to reemerge in Islamic economic literature in the 1950s.

Islamic economists sought to redefine margins of state intervention by raising the questions: why, when, where and how the intervention will be justified.

Their literary efforts led them to divergent conclusions on the matter as it had happened with the early jurists between eleventh and sixteenth centuries.

Unlike the jurists who explicitly analyzed the legality or its absence in state action from jurisprudential point of view, the Islamic economists concentrated analytical efforts on the relevance or irrelevance of market mechanism in synchronizing individual and societal interests to establish permissibility of price regulation.

One group of these economists that includes Siddiqi (1972:138), Kahf (1981:106), Mannan (1982:5) and Naqvi (1983:52) is of the opinion that attainment of such synchrony of interests under unfettered market operations is unlikely.

The other group that includes Haikal (1983:158-60), Ghanim (1984:87) and Mahboob (1992:43) is of the opinion that market mechanism guarantees harmony and synchrony of interests and produces prices that conform to the aim of the Islamic law.