Adam Smith in the Islamic World

Last night, a learning team in my ground class presented an excellent discussion on Islamic Law. They highlighted some aspects of Islamic law, which adversely affect economic growth in the Islamic world. Certain aspects of Islamic law, like the prohibition on charging interest and the concept that one person should not profit at the expense of another are well meaning, but they are in conflict with very basic economic concepts such as the time value of money and the use of the price mechanism to efficiently allocate economic goods in a society. Adam Smith wrote in the Wealth of Nations: 

It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. 

Smith used the analogy of an “invisible hand” by which an individual’s decisions act to benefit society, as a whole.  

. . . he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.