An Islamic Economy based on Rizq:
A Grounded Study on Islamic Economics and Finance through an Everyday Understanding of Muslim Civil Society Representatives in Germany

Abstract

Theory development in Islamic economics has largely been based on the foundational texts of Islam, the Qur’an and Sunnah. As the main articulation of Islamic economics, the Islamic finance industry was once perceived as the main gateway of building an economic system based on the principles and ideals developed in Islamic economics. However, nowadays, Islamic economics theory has failed to integrate important alternative economic concepts such as sustainable development, and Islamic finance is often criticised for preferring ‘form over substance’ in terms of ethicality.
In order to address these shortcomings, the present study uses a grounded theory based and transdisciplinary research approach. On the basis of semi-structured elite interviews with representatives of Muslim civil society in Germany on questions regarding the economy in general and businesses in particular in connection with issues of ethics and sustainable development a theoretical model for an ideal Islamic economy is proposed based on the emerging concepts. The framework for the proposed model is located in economic sociology. Furthermore, this study develops an assessment tool for Islamic sustainable investment decisions from the theoretical model in order to address the perceived ethical gap in the practice of Islamic finance.
The research presented enriches the theory development in Islamic economics, because it introduces new concepts such as rizq and alternative economic mechanisms that have not been explored in Islamic economics before and that open new avenues of enquiry.
The research presented in this study also enlivens the debate by introducing new voices that have not been considered so far in Islamic economics. Voices, such as those of Muslim civil society actors, are important to give the field a reality check, make the theoretical foundations more meaningful and move them closer to the lebenswelt (lifeworld) of Muslims today. They also show the great diversity of interpretations of Islamic concepts in the Muslim community, and, therefore are a reflection of the plurality existing in the modern Islamic discourse.