Is the economic system of Islam similar to the liberal economy? What are the differences between them?

Details of the Question
The economic system of Islam is similar to the liberal economy. The Islamic economy is also called the liberal economy because it operates on the basis of supply and demand. However, is there any resemblance between Islam and the liberalism of Adam Smith, who wants the state not to interfere with the economic life, or other liberal systems applied by non-Muslims? Will you explain it?
The Answer

Dear Brother / Sister,

Adam Smith is described as 'the father of the economy'; he is accepted to have laid the foundations for the free market economy. His book called 'the Welfare of Nations' was published in 1789. The essence of the book is based on the following idea:

"The right thing to do about the economy is not to intervene in the market at all because the market always does the best."

This view is expressed with the famous slogan 'Let them do (Laissez faire)'. The rationale behind Smith's ideas is very interesting. There is an invisible hand that manages the market; this secret hand means God. Were these ideas, which are still regarded as a fundamental doctrine in economics, really put forward by him for the first time as it has been told to people? Let us look at Islamic history to find the answer.

Answering those who demanded fixing prices officially during the Era of Bliss, Hz. Muhammad (pbuh) set forth the principle of not intervening in prices by any means and stated the following as the reason:

"Allah knows where prices will go."

These words, which describe the liberal economy system in the most concise manner, correspond with Smith's description so much that it is clear that one quoted from the other. On the other hand,

"Give the worker his wages before his sweat dries."

With its approach of social justice, the hadith of the Prophet above opposes the liberal economy acting like wild capitalism. In addition, practices like zakah, sadaqah and interest-free lending are among the innovations of Islam as institutions that aim to prevent injustice in income distribution. On the other hand, twelve to thirteen centuries past and the society suffered unbelievable pains before the West started to regard workers as human beings and adopted the concept of social justice.

Trade is the lifeblood of economic life. In a broad sense, it can even be said that economy = trade. The following hadith of the Prophet of Islam is a very clear message regarding the issue: 

"Be brave and engage in trade. Nine-tenths of sustenance comes from trade."

Our Prophet stated that trade had risks but he advised us not to avoid taking those risks. In addition, he informed humanity that almost all of the gross national income (sustenance) nationally and globally originated from trade directly or indirectly by mentioning a generally accepted macroeconomic phenomenon of our day. However, the priests of the Christian world regarded trade to be equal to fraud until recent ages, saying that selling a product at a price more than its cost was theft.

In the Quran, the holy book of Islam, we are ordered to record information about shopping. Thus, companies are guided to ensure that the business transactions, which constitute one of the most fundamental issues of the business world, are recorded healthily in the books and to prevent informal economy, which is the source of many bad things. As a matter of fact, thanks to this decree of the Quran, the contemporary accounting system was first invented by the Arabs. It has been many years since the West reached this level in accounting and incorporation.

The Messenger of Allah (pbuh) said,

"The master of our community is the one that serves the community the most."

With this statement, He gave all the leaders in the world a divine guide for success. Servant leader is one of the newly studied issues of contemporary management science.

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