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Al-HISBAH in Implementation of Business Ethics in Traditional Ethics

Hisbah is a code of belief in Islamic that means accountability; it is a collective or an individual duty to intervene when doing good or bad to uphold the Islamic law. The Islamic religion advocates for a free lucrative system guided by ethically sustainable moral principles designed to protect and discipline human demeanor in social and economic activities before going astray (Anwar et al., 2020). Islamic law has been at the forefront in advocating for free, fair, and just economic systems. Islam has been advocating for the justifiability of all business operations to prevent all forms of self-interests and fraud. Therefore, it advocates for ethical issues in all economic transactions and when doing business to guide all business activities.

Human beings will always need order in all their activities; therefore, the authority must ensure order in the business market. Due to this, there must be a person that will always remind people of the order and oversee how they will follow it (Anwar et al., 2020). To achieve this order in business, the Muslim community introduced the Hisbah institution. It is an institution whose role is commanding good or preventing evil and overseeing craftsmanship, marketplace, and production activities to ascertain that quality standards are maintained and business ethics follow all the production organizations. This paper explains the contemporary significance of the hisbah institution in economic activities in Muslim societies. It also shows the goals of hisbah in ascertaining ethical business practices in society.

Background

The word hisbah is derived from different Arabic words where each word has a different meaning. Additionally, hisbah promotes good behavior and condemns all misdeeds in society, resulting in inequality and encourages people to avoid all types of misdeeds and offenses. Therefore, it does not only bring an ethical dimension but also brings values and morality in business. In business, Islam encourages people to practice all values of morality, including transparency, fairness, and honesty. When a person has these values, they become indispensable, and they become the duties of every market participant because they reflect their Muslim belief in Allah. According to Almoharby (2011), a person must have faith in God to maintain business ethics. The level of a person’s belief in business influence the way they conduct their business activities which later impacts the consumers or potential customers.

Muslims conduct all their activities based on their Islamic faith.  Muslims believers get encouraged to become sellers because it helps prevent laziness and dependence and encourages people to become entrepreneurs who will later require government social and financial support (Md Shah et al., 2013). Islam states that business is beneficial to the world and the field of worship; therefore, it helps people become successful entrepreneurs in the afterlife. For a business to grow, they need responsible and government support, especially when determining business policies that may affect the people. Hisbah states that every person should see the importance of implementing business ethics in all their trading activities. This means that sellers can trade to get maximum profits, but on the other hand, Islam looks for blessings and not only business profits.

At the same time, Islam does not allow people to work to fulfill their desires. Therefore, the Islamic economy aims at eradicating inequality, oppression, exploitation, and injustice in society. Therefore, there is what is permissible and not permissible in Islam and what is right or wrong. According to (Nedelko et al., 2017), the incorporation of business ethics in an organization motivates the employees and assists in achieving the company’s vision. This shows the significance of incorporating Islamic business ethics in all trading activities to enhance the well-being of the sellers. Besides that, Islamic business ethics are also required to meet customer requirements and achieve the organization’s targets. Studies show that there has been a significant shift in business operations in the traditional markets, for instance, the sellers that cut down the sale of harmful chickens. Additionally, in terms of finances, some people still seek loans from financial institutions. It is an indication of reduced social responsibility, fair competition, and honesty in the trading strategies.

Moreover, the government should regulate business practices in the traditional markets. The government also has the duty of ensuring business ethics get practiced to ensure that no party gets harmed. Apart from overseeing, the state has the duty and mandate to prosecute individuals that violate business ethics in the traditional market (Anwar et al., 2020). Sanctions should have adverse effects on individuals that violate business ethics to ensure that ethics are upheld in the traditional markets. Therefore, hisbah can help supervise the application of business ethics in the traditional markets. Additionally, hisbah has three primary authorities. These are the authority to endorse ethics correlated to fraud and mitigation of scales, the authority to instill ethics related to fraud in products and prices, and lastly, the authority in connection with delayed payments when a person cannot pay the borrowed money. Hisbah ascertains the application of sharia rules in public and social business interactions.

Islamic Economic Scholars

Moch K. Anwar, A’rasy Fahrullah, Ahmad Ajib, and Muhammed Hasan

Moch K. Anwar, A’rasy Fahrullah, Ahmad Ajib, and Muhammed Hasan work in the department of economics and business in Negeri Surabaya institute. They have published an article that is essential in providing information to various generations on hisbah and its importance and developed the article so that people can understand easily. Their primary focus is a market called Wanokromo, located in Surabaya (Anwar et al., 2020). According to their studies, the Islamic markets thrive well than the conventional markets because of the application of religious teaching in the religious field and the market.

Moreover, the economic scholars have revealed that hisbah has played a vital role in ensuring quality regulation of goods, guaranteeing cleanliness in the market, regulating measurement and scales of goods, regulating orders and safety, and overseeing price stability. They also stated that sellers’ understanding of business ethics and traditional markets are very different (Anwar et al., 2020). Additionally, not all sellers know business ethics theoretically; however, they get to practice and implement them because of their religious values and teaching acquired from their families. Hisbah has been functioning well in the Wanokromo market despite some challenges that develop, but they can be managed through supervision. These challenges are quality of goods, price, and size. The purpose of their research was to reveal the importance of hisbah in the Islamic economic market and come up with ways of developing it.

 

Ibn Taimiyah

Ibn Taimiyah was an important Muslim jurist in the thirteenth century; in his days, he frequently engaged in ethical issues, theological and philosophical issues in the community. According to Ibn Taimiyah, the government was essential to maintain order between good and evil in society, fulfilling God’s will. He emphasized the significance of having a ruler in the community to maintain order (Al-Foul & Soliman, 2006). He stated that religion could not succeed without a government institution because people cannot understand their good without consolidation; hence consolidation requires authority. He further revealed that guiding individuals is a spiritual duty, and religion could not exist without the sons of Adam. To command between good and evil in the community will only work if there is authority and rules that people have to follow. Hence, the government’s introduction is part of religious duty because no tasks can be performed without authority and power. He believed that authority that came from Allah and should get practiced according to sharia laws.

In addition, Ibn Taimiyah also stated the significance of economic freedom for individuals; however, it is acceptable if it is within the sharia laws. He also believes that Allah has allowed people to undertake profit-making activities but does not allow fraud and injury. At the same time, the state can intercede a person’s freedom to benefit a larger group of people (Al-Foul & Soliman, 2006). The primary objective is to secure huge social goals with minimal injury. In markets, the state has a duty of controlling prices. However, under normal conditions, the state should not intervene because people should be allowed to sell their products at the prices they like. He gave an example where the prices were increased, and the prophet refused to control the prices stating that Allah is the price maker, sustainer, and disposer.

In his take on hisbah, he stated that there are many lucrative activities that the government regulates. Hisbah is the tool regulating these activities headed by a Muhtasib. Hisbah had the obligation of controlling spiritual well-being, morals and overseeing social projects. Prophets in the holy book had the role of inspecting the market to detect fraud (Al-Foul & Soliman, 2006). Notably, he also defined the social, economic, and religious functions of Muhtasib. Muhtasib had the role of requesting Friday prayers to encourage truthfulness and trust and forbid immoral activities like dishonesty, telling lies, and fraud. The duties of Muhtasib were more than ordering prayers and punishing those who did not participate in the prayers. He had to supervise industries to regulate products and introduce bans on detrimental commodities and avert deceit. He also had to provide essential products and services that individuals required. Market supervision was his responsibility, especially in checking weights, quality, and measures of products to prevent exploitation of consumers.

Al-Mawardi

Economic empowerment has been the primary concern of Muslim scholars. Al-Mawardi stated specific strategies the government undertakes to maintain a sustainable economy. To establish a state, military, religious and economic resources are essential (Nashihah, 2018). He also stated that state policies should consider citizen protection, military management, revenue administration, and country development. For a country to develop, it has to consider both the rural and urban areas. Concerning the ideas about state development, he further mentioned different criteria such as employment strategies, crime-free society, planned cities, districts, sufficient drinking water, required industries, training facilities, and education. All these elements he mentioned are significant for human development. He also gave six elements for developing social-economic development. The first element was religion because it guided in differentiating between what is wrong and good. Religion is useful in restricting human behaviour as they strive to achieve pleasure. Secondly, the state’s role in managing its citizens is because a firm government can regulate and control the economy.

Al-Ghazali

Al-Ghazali was an Islamic theologian and a philosopher who had mastery of philosophical conventions. In his philosophies, he had an impact on business ethics and traditional ethics. He wrote numerous articles, but only two are essential in understanding his ethical opinion on business ethics application (Sidani & Al Ariss, 2015). The first one is the criterion of action which comprises his foundations of ethical hypothesis. Religious sciences revival is the second one that constitutes a long title that reveals his business ethics. His belief in the criterion of action contains a methodological framework of his teachings. He states that his ethical rules cannot get challenged by a simple reason. Additionally, he believes the scriptures constitution additional knowledge. According to Al-Ghazali, ethics is an example of practical science, and if a person cannot manage one soul, they cannot sustain a good relationship with others (Sidani & Al Ariss, 2015). When people get to understand and know themselves, it becomes easier for them to know the creator. Happiness is the ultimate goal that people should pursue, but the real happiness that people should pursue is the one expected in the afterlife.

Besides not being a Persian and not an Arabian, Al-Ghazali was also a well-known philosopher who connected with Western culture because of his association with Thomas Aquinas. He had a significant impact on the economy because he is the person that introduced monetary issues which brought essential development to the Islamic economy (Sidani & Al Ariss, 2015). His monetary perspective makes people view the Islamic religion as a significant point of reference. He stated that money is a gift that brings essential benefits to man. He related money to gold and silver mention in the holy book that made the lives of human beings smooth. Al-Ghazali believed that money would ease the challenges faced in barter trade and double coincidence, making it easier to conduct economic activities within the business ethics

 Ibn Khaldun

Ibn Khaldun is one of the best Muslim economists recognized by western economics and the founder of economic theory. He was different from other economics because he applied social and historical approaches to understanding the state’s economy. In his economic thoughts, he did not discuss public funds conventionally (Mujahidin, 2018). This was a business ethic that he applied to maintain privacy. He advocated for low taxes so that people can get motivated to work and pay their taxes happily. He understood optimal taxation and their effect on incentives therefore low taxes was a business ethic that he advocated for even in the traditional markets. He also argued for an effective and wise public spending policy by explaining the effects of government spending recklessly. He further analyzed the fall and resurrection of society and economic development, which was essential for the well-being of people and economic development. He used two approaches to develop his economic thoughts; the judicial and sociological approaches. Through sociological approaches, he would coordinate the economic activities in the society and legal approach to monitor economic regulations in a society. Besides these two, a factor determines a community’s economic status, which is justice and freedom. Additionally, he also analyzed the market pricing strategies in Islamic economies. Price mechanisms are essential to keep commodities prices even, protect both the seller and buyer and maintain an even demand and supply.

Western Perspective

The Islamic values impacted Europe and value addition in the continuity of economic development. Muslim scholars began their rational journey equipped with exhibited knowledge. However, they were skeptical about learning sciences which was the existing human knowledge in Europe. Due to this, Greek philosophy got their attention (Islahi, 2005). In Europe, Greek philosophy had consequences in various leaders because philosophy did provide answers to all challenges. Greek economics were connected to few characteristics of life, such as wants and how to satisfy them—additionally, Greek economic science comprised money, division of labour, and barter. Moreover, Muslim academics were not restricted to these sectors alone. Therefore, they introduced their perspective concerning the economy, and it was comprised pricing techniques, market function, distribution challenges, production, poverty elimination, government roles, economic development, and public finance. Besides that, Muslim scholars criticized the European economic system.

Discussion of All the Contributions

Hisbah has been helpful in the lives of many human beings in different ways. First, it helps maintain honesty in the market by regulating the production of goods, ensuring that there is a clean market and all scales and measures are genuine. This is one of the united nations’ sustainable development goals of ensuring that there is market equality to avoid exploitation of buyers and even sellers. Sellers apply Hisbah differently because not all of them know about it theoretically, but it is instilled in them from different generations. Secondly, Mohd DANI Muhamad and Amal Ishak advocated for producing and selling quality products in the market. It is important to maintain people’s health and ensure that people get value for their money (Anwar et al., 2020). To maintain quality products in the market the state must develop rules and regulations that all producers must follow. I believe this impacts the united nations sustainable development goals because environmental protection and maintaining good among the people are priorities.

Ibn Taimiyah argued on the significance of having a leader in the society to maintain order because human beings need to be controlled to follow specific rules. He believed that the prosperity of religion in any state would require effective leadership. (Al-Foul & Soliman, 2006) Ibn contribution has a connection with the sustainable goals because the united nations sustainable goals advocate for political stability in all nations to promote their economic activities and the well-being of the citizens. Ibn Khaldun believed in business ethics, and that is why he did not discuss public funds conventionally. He advocated for low taxes to get motivated to work and pay their taxes willingly (Mujahidin, 2018). Maintain low taxes is an ethical value that states have to maintain to enable citizens to conduct business comfortably. The Islamic moral economy is important in ensuring that the market is fair to everyone. They get to achieve this by incorporating their religious beliefs into the market. Ibn Khaldun view on taxation can be integrated into the united nations sustainable development goal of economic growth. When the taxation process in a country is fair, the economy grows decently because people can engage in business activities and pay their taxes comfortably and willingly.

Conclusion

To sum up, the Islamic religion advocates for a free lucrative system guided by an ethically sustainable code of ethics designed to protect and discipline human demeanor in social and economic activities before going astray. Hisbah institution promotes good behaviour and condemns all misdeeds in society, resulting in inequality and encourages people to avoid all types of transgressions and offences. Ibn Taimiyah advocated for the development of governments to maintain order in the community. He believed that religion could not succeed without a government institution because people cannot understand their good without consolidation; hence consolidation requires authority. Al-Mawardi stated specific strategies the government undertakes to maintain a sustainable economy. He also advocated for state policies that should consider citizen protection, military management, revenue administration, and country development. To establish a state, military, religious and economic resources are essential. Al-Ghazali believes ethics is an example of practical science, and if a person cannot manage one soul, they cannot sustain a good relationship with others. He wrote numerous articles, but only two are essential in understanding his ethical opinion on business ethics application. One article constituted his view on ethics, and the other one the criterion of action. Additionally, Ibn Khaldun was one of the best Muslim economists recognized by western economics. He was the founder of the economist theory, and he applied two approaches to determine the economic condition of a state that is social and historical approach. All these contributions by the Islamic economic scholars strived to make the economy friendly to the nation and the business people.

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