Business ethics in Islam
THE term ‘business ethics’ refers to the behaviour that a business organisation is supposed to adhere to in its interaction with society, transactions with customers and in its internal affairs. The concept of business ethics is as old as business itself.
Initially, different cultures and regions had different ethics of business. With increasing globalisation, the various sets of business ethics are continuously acquiring common values and forms. Islam has given guiding principles for all human activities and also prescribes and explains the ethics of business.
However, the Quran is not the only divine text that lays down such instructions and Muslim thinkers were not the first to conceive this idea. The Bible, for instance, also has many notions that can be and have been applied to commercial activities.
Hammurabi, in his famous code, addressed various commercial issues. Plato discussed justice in The Republic, and Aristotle explicitly discussed economic relations, trade and commerce in his Politics. Many Muslims are unaware that Aristotle too condemned usury. Also, he gave the classic definition of justice as giving each his due, treating equals equally and trading equals for equals.
These issues were also analysed by Christian scholars. For instance, Thomas Aquinas discussed business in the context of justice and honesty, and condemned usury. Luther, Calvin and John Wesley, among other personalities of the Reformation, discussed trade and commerce, and led the development of the Protestant work ethic. However, in the modern West, economic activity has been divorced from religion just as politics has been separated from the church.
Still, if we compare Islamic business ethics with present-day western business ethics, we find numerous similarities. For instance, workplace harassment, discrimination in hiring and promotion, employment benefits, layoffs, conflict of interest, quality control, misuse of business assets, environmental pollution, etc., are matters on which Islamic and western approaches are more or less similar.
In fact, regarding such matters of common approach, Islam often lays down more benevolent provisions and puts more stress on their observance. For example, about employee-employer relationship, Islam very clearly declares that both enjoy the same dignity socially and legally. As a general rule, Muslims are instructed to choose for their fellow men what they choose for themselves. The Prophet (PBUH), in his farewell sermon, instructed Muslims not only to feed and clothe their slaves just like themselves, but also not to treat them harshly even if they committed a fault. Applying this to employees, one can imagine the standard of the working environment and employment benefits that Islam entails.
Just as there are differences between other aspects of Islamic and western practices, Islamic and western business ethics too have certain differences. The most important discerning features are their sources and nature. While western business ethics are secular, Islamic business ethics originate from revelation and the traditions of the Prophet (PBUH), the Quran and Sunnah.
A breach of western business ethics never results in the violator incurring a sin. In the case of Islamic business ethics, a breach always causes divine displeasure. Consequently, Muslims must abide by these instructions not only for the betterment of society, but also to secure their afterlife.
This also means that even if there is no supervisory authority, a Muslim is still bound to comply with the norms of fair business practices. For instance, Islam does not allow an entity to deal in alcohol, drugs, gambling, gharar, pork, pornography, prostitution and riba. In jurisdictions where all or some of these are allowed, Muslims there must avoid them because Islam has prohibited these trades.
In other words, Islamic business ethics must be observed by the believers in Muslim and non-Muslim jurisdictions alike.
Thus, a true Muslim must never neglect the welfare of employees, performance of business covenants, quality standards, the environment, social responsibilities of the enterprise, etc., whether he is running a venture in Pakistan or in the US.
Unfortunately, present-day Muslims mostly just talk about the Islamic way of life without actually practising it. Ask a Muslim entrepreneur about Islamic business ethics and he will gladly give a lengthy sermon on the instructions given in the Quran and Sunnah on the topic and will accurately narrate numerous examples set by early Muslim businessmen regarding honesty in trade and employee welfare. However, his real conduct will be the opposite. Unfortunately, this is the general rule.
No wonder, in a report recently published in Financial Times, some Islamic financial experts openly criticised Islamic financial institutions for resorting to “juristic engineering” to bypass Islamic restrictions in order to maximise profits. Thus, Islamic financial products and services, in most of the cases, are Islamic only in form, not substance.
Does this mean that Islam makes hypocrites or that the provisions given in the Quran and Sunnah are no more practical? Not at all. Can we say that Christianity makes thieves just because there are thieves who happen to be Christian? Does the Quran not say that revelation is valid for all times?
The fault lies with corrupt and selfish Muslim businessmen who disregard Islamic injunctions for worldly enrichment. By growing a beard, praying five times a day and fasting in Ramazan, they believe it is enough to fulfil their obligations to God.
Can the beard, prayers and fasting really absolve them from ignoring their duties to their employees, clients, competitors, consumers and society as a whole? Is it possible to deceive God?
The writer is a graduate of Harvard Law School and the director of the Centre for Law and Policy, University of Management and Technology, Lahore.