ABSTRACT
Which is the role of human freedom in the Islamic conceptualization of the market? To what extent is the free market economy compatible with the notion of social justice in Islam? Which instruments can enhance wealth redistribution in an Islamic economy? This chapter replies to these intertwined questions by moving from a descriptive to a normative approach in the understanding of the role of contractual freedom as performance of God-man’s agency relationship (khilafah) in Islam. To this objective, the text first compares the abstract conception of contractual freedom that belongs to the Western free market, within the framework of Adam Smith’s “invisible hand,” with the reality of God’s justice for His agent (khalifah) in Islam, where human freedom is inserted in the Right Path of Shari’ah. Accordingly, by underlining how criteria of division and competition are replaced in Islam with the market intended as a shared enterprise of mutual cooperation, the chapter indicates instruments of economic and social inclusion (such as Zakat, microfinance and waqf) that can promote social justice in an Islamic economy. The role of political economy tools in order to fully realize the welfare derived from the “invisible hand” of khilafah is also highlighted.
