ISLAM AND THE PATH TO HUMAN AND ECONOMIC DEVELOPMENT – Book Sample
The Evolution of the Western Concept of Development
The concept of development in the West, which has evolved over a number of years, today can mean quantitative growth, qualitative improvement, and expansion in the capabilities, capacities, and choices of individuals, groups, or states.
Development is conceived as more than a quantitative change in some index, such as a higher level of per capita income; it is about being more, not having more. To appreciate the context for Islamic thinking on development, it is helpful to briefly review the historical origins and evolution of the Western concept of development. There are two distinct periods marking the evolution of the development concept in the West: the first period is from 1700 to 1945, covering largely the development of the capitalist economies of the West, and the second is after WWII, focusing on the less-developed economies.1
The Early Roots of Development (1700–1945)
The concept of development can be traced to the eighteenth-century writers of the Scottish Enlightenment, especially Adam Smith, who formulated the first systematic idea of economic development. The Scottish Enlightenment itself was a response to the challenge posed by seventeenth- century philosophers, such as Thomas Hobbs, who saw mankind as aggressive, self-absorbed, and given to extremes. In the natural state, where there is no organized government, this leads to intense competition, “a war of all against all,” to gain the greatest possible advantage.
In this view, a major challenge for society would be to establish social, political, and economic order. The solution, according to Hobbs, was a powerful sovereign—a Leviathan—to whom all citizens would “submit.”
During the late seventeenth century, the debate focused on the nature of human history as mirroring the life cycle of all living organisms, thus exhibiting the stages of germination, growth, maturity, and decay. The Scottish Enlightenment countered this pessimistic view with its belief in the progressive unfolding of human potential through effort and cooperation. An important member of this school, Francis Hutchison, believed that the need to be loved and respected by others would balance humans’ self-love and thus allow cooperation between humans.2
Deeply influenced by Hutchison, Smith believed continuous material improvement could be assured as a result of individual decisions motivated by self-love and moderated by the moral value of “sympathy” for others. Sympathy is the quality that each individual would take to the market as a mechanism that would translate the self-love, or self-interest, of each market participant into love for others. If individuals entering the market were devoid of sympathy and cooperation, progress would be undermined.
The dimension of the self that is a reflective judge of a person’s own actions and sense of duty would create an appropriate balance between the interests of the self and those of others. This guidance by an “invisible hand” would lead to positive economic and social change. The separate self-love of all individuals would be galvanized toward the benefit of all, leading to a stable social order.3
Driven by self-love and regulated by sympathy, each individual would be directed to the most productive economic activity. This division of labor would be one of two drivers for increasing the “wealth of nations.” The other driver would be capital accumulation motivated by self-love in pursuit of profit. Increased productivity of labor leads to a surplus in out- put beyond wages, rents, and profits, thus creating a source of funds for investment in machinery and equipment.
The notion of increasing returns based on the division of labor that creates gains from specialization pro- vided the basis for Smith’s optimism. Labor productivity could either be increased through the expansion of skills and the dexterity of labor because they produce the same commodity repetitively, or through the adoption of new technology and the deployment of new machinery and equipment, namely, the accumulation of capital. The accumulation of capital, requir- ing savings, was deemed necessary for sustained growth. Smith considered frugality and savings an integral part of human nature, stemming from one’s desire to improve one’s material conditions. An important element of Smith’s vision is the limited role of the state to guarantee the sanctity of property, to create the conditions allowing free and voluntary exchange, and to ensure that commitments generated from contracts of exchange are honored. Under such circumstances, the only limit to continuous material progress would be the size of the market; this limit could be removed through trade among nations.
Trade would benefit all trading nations, and all nations would be mutually enriched, resulting in global peace and tranquility.4
Smith’s optimistic vision was challenged by Thomas Malthus, who argued that human passion, especially passion between the sexes, would always overwhelm the self-love that motivates the pursuit of self-interest. This passion, geared to instant gratification, would lead to a geometric rate of increase in the population, which would soon outstrip the means of subsistence (food), which grows at an arithmetic rate. Malthus, therefore, rejected the idea that self-interest would lead to continuously expanding material wealth.
David Ricardo’s analysis of wages, rents, and profits (distribution issues) led him to argue that in the evolution of mar- ket capitalism a stage would be reached where the economy would no longer grow. This would be the result of diminishing returns to agriculture as production expanded into less and less productive lands. This process would squeeze producers’ profits, which would, in turn, reduce investment and place the economy in a stationary state. At about the same time, appalling conditions and misery resulting from a series of crises in the latter part of the eighteenth century and the early decades of the nineteenth century in England and in France led to serious social and political turmoil.5
Faced with such turmoil, French thinkers at first questioned and then rejected the idea that linear automatic progress was possible through the free workings of the market. The emphasis of the French thinkers of the time was on how to bring about a just social order. Among them, Henry de Saint-Simon and his followers focused on the possibility of social engineering to create order and progress.
They rejected the idea that driven by self-love, men of industry would have any concern for society. They saw the operations of the free market without government interference as the foundation of social disorder. Saint-Simonians envisioned humanity as a collective entity with a history of progressive development of social relations characterized by phases of order and disorder. Each phase of disorder meant that old social and economic relations would decay and break down, creating conditions for the emergence of an improved social order with widening social relations and greater awareness of the common good. This would mean that improvements in the prosperity of each member of soci- ety would depend on the prosperity of all, with morally aware elites serving as agents of change and transformation.6
The most celebrated member of the Saint-Simonians, August Comte, believed that progress was dynamic and the logical goal of humanity, but that it had to be achieved with social stability and order. The social order, just as the natural order, had static laws that would regulate the dynamics of social progress. To achieve ordered progress, these laws would have to be understood through the method of positivism, namely, devoid of metaphysical assertion.
Thus, a science of social order could be created through the application of social laws. In this way, a system of objective knowledge would become the basis for human action to control the forces that create disorder. Socially conscious industrialists would be in charge of utilizing the wealth of society as a temporal power to serve as agents of progress. Humanity would progress to reach a stage where universal love, as opposed to self-love, would become the main social instinct and the arbitrator between social order and progress.
Influenced by Saint-Simonians, John Stuart Mill argued that societ- ies were either in a desirable steady state or in a transitional state. The transitional state was characterized by disorder caused by the inability of those in power to manage change and maintain social order. This state of chaos would continue until growth of knowledge and human understanding, gained through education and the exercise of individual liberty and choice, would bring about a new social order, namely, a stationary state. Mill distinguished between progress and development.
ISLAM AND THE PATH TO HUMAN AND ECONOMIC DEVELOPMENT, ISLAM AND THE PATH TO HUMAN AND ECONOMIC DEVELOPMENT, ISLAM AND THE PATH TO HUMAN AND ECONOMIC DEVELOPMENT
Whereas development was a process that led to ordered social and economic improvements, progress was chaotic. A development process designed to manage and mitigate the chaos of progress would lead to a stationary state in which human beings adapt by preserving nature against the chaos of progress. To avoid chaos, Mill believed progress had to be steered toward a stationary state. He suggested that chaotic progress that leads to “unlimited increase in wealth and population” would lead to the earth losing a “great portion of its pleasantness—for the mere purpose of enabling it to support a large, but not a better or happier population.” Mill believed that societies in which conditions for development, or ordered progress, do not exist could be guided by more developed societies.7
In Germany, development was seen as being of two kinds according to Friedrich Hegel: natural and intentional. The first is an inherent process, which is repetitive and without change, much like the growth process inherent in natural organisms. A seed, for example, holds within itself the potential to grow into a plant; a cycle of germination, growth, maturity, and decay is a continuous and repetitive process. Every being contains within itself the potential to develop. Hegel made a distinction between “being-in-itself” and “being-for-itself.” The first is the characteristic of a plant. As self-conscious beings humans have the potential to develop
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