The economist mohammed ibn abdullah (570-632)

Abstract

The absence of a dynamic market economy in many Islamic societies has encouraged the inference that the values of Islam are not compatible with capitalism. However, an examination of the biography and commercial record of Islam's founder, the Prophet Mohammed, refutes this presumption. Mohammed ibn Abdullah was a scion of an elite dynasty of religious, civic and commercial leaders in Mecca. He abandoned his successful business career in Mecca and fled to Medina at the age of 52, where he realised his vision of an Islamic society. In Medina, Mohammed implemented policies for competition, consumer protection and market regulation. Mohammed's approach to fair trading explains his ban on usury, as distinct from a proscription on borrowing. Mohammed's achievements as an economist and market reformer earn him a place in the history of economic thought. © 2011 The Author. Economic Affairs © 2011 Institute of Economic Affairs. Published by Blackwell Publishing, Oxford.