With the collapse of communism in Eastern Europe and in its heartland, the Soviet Union, the world is yet again dominated by the practices and laws of capitalism. Today's world economy is shaped according to Adam Smith. No other alternative routes for economic development are envisaged but to let "the laws of the market" play their course in the marketplace. The "invisible hand" of the market is more visible now than at anytime as the determining and decisive factor in the lives of nations and men. Consequently, the self-interest of members of society is to be the driving force of economy, and the law of supply and demand the regulating mechanism of profiteers in society. Even economists in what used to be the Marxist bloc are subscribing to such economic behaviour as the only alternative to remedy the ills of the economies of their nations.
Not quite true, say many Muslim thinkers and political activists. They believe that Islam provides humanity with solutions to problems created by imperfect man‑made political systems and moral values. Islam, according to them, is a divinely ordained social framework that should guide humanity to peace and tranquillity in all aspects of life, physical and metaphysical. One of these thinkers and political activists was Muhammad Baqir al‑Sadr of Iraq. Sadr was executed because he led a revolutionary movement against the Ba'thist regime in Iraq in 1980. He had conceived an Islamic political system to replace the existing regimes in the Muslim world, which he considered corrupt. His programme for the future is to create a new socioeconomic order that would replace the capitalist and socialist orders which are the dominating systems in the Muslim world. This paper intends to focus on his views and the basic principles of the Islamic economic system, which he believes is more capable of solving the contradictions of the capitalist system and, therefore, more able to satisfy human needs; more importantly, it has the capacity to develop and progress in accordance with human potentials.
As an Islamic jurist, Sadr derives his basis of argument from Islamic tenets and sacred sources. Here our purpose is to present his conceptual argument and economic engineering of society and to see how applicable these views and programmes are to reality. The aim of the study here is to highlight his argument and try to understand the structure of the Islamic economic system. His views in economics are part of his general political theory designed for the establishment of a complete Islamic social system. The behaviour of the Islamic economic system should be judged after the creation of an Islamic State, where the whole realm of socioeconomic human behaviour is determined according to Islam. Sadr's major work in economics was written in 1960‑61, and aside from the pamphlet that he wrote later in his life, the main argument of his thought is contained in one work, Iqtisaduna(`Our Economics').
The economy of the Islamic State, according to Sadr, is divided between that of the individual as the vicar of God (khalifah), and the ruler as the witness (shahid) who presides over the application of the laws of God. The economic structure of the Islamic State thus consist of private property and public property. However, one should not think that the economic structure of the Islamic State is some sort of combination of capitalism and socialism. Sadr strongly rejects this misconception. He argues that the juxtaposition of private and public right of ownership stems from the fundamental beliefs of Islam.  This is similar to the way that private ownership is advocated in the capitalist system, or public ownership by socialist: as the logical conclusion of their ideological and philosophical beliefs. To justify private ownership and public ownership in Islam, one must understand the right and obligations of the individual and the State in Islam. Sadr's detailed description of economic relationships in the Islamic State and it economic structure represent the best available argument for the notion of Islamic economics.
. Al‑Sadr, "al‑Janib al‑'iqtisadi min al‑nizam al‑'Islami," (The Economic Perspective of Islamic System) in Ikhtarnalak, 112‑113.