One hesitates to posit a basic principle of a just non-usurious economy since the history of ‘principles’ and most particularly ‘Islamic principles’ as interpreted by modernists, has been a dismal one. Thus, in their view, very wide principles, both usul and qawa’id, over-rule actual fiqh judgments. Bearing that in mind, one principle we might mention is equity, most often symbolised by the scales of justice. Usury and injustice occur when the scales are out of balance and one party takes more than the other. Riba is simply an increment.
Thus the forms of Muslim trade – which is the last living representative of a lived, non-usurious, commercial modality and which operated globally for more than a millennium until the fatal infatuation with modernity, albeit a fascination that was often enforced with the help of cannon and slaughter – meant that transactions had no unjustified increment in them, and there was equity in exchanges.
Partnerships, for example, can be in wealth (money – gold dinars and silver dirhams) or in labour (in the professions, and practical skills). Professional partnerships in work, skills and labour are within a single skill. A python programmer cannot partner with a graphic designer. There are other ways for them to work together. But one may not mix the two types of partnership, that involving capital, and the other involving skills and industry. That is because if one partner supplies capital and the other labour and industry, it is hard for the suspicion to creep into the heart of one of them that the other is not pulling his weight.
There is an exception, which is known as qirad or mudarabah, the profit-sharing transaction for the purposes of trade. But not only is it inadmissible for use in manufacture and business in general, but its terms, which are well documented in the fiqh, preclude it being any use there. For example, there can be no term set for it, the active agent who receives the capital may not have the item to be traded in determined for him, nor where he goes to trade in it, he may take for his accommodation and upkeep on the journey within reason, but he cannot buy machinery and other things demanding great capital outlay. When a deal is done, he must return the capital, and divide up any profits with the owner of the capital, and not before. Each venture is a single instance. There is, of course, no reason that the two parties may not strike up another deal, but the investment doesn’t rest with the active party returning an income to the other party year after year.
So how would Muslims finance things such as manufacture? One means is through partnerships involving money. It is perfectly legitimate for two or more people to pool their resources to buy equipment, stock, materials etc. and to employ people to work for them, remembering that Muslim employment is a contract between two free parties and not a covert form of serfdom as is often the case in today’s world.
A wider source of capital would be the professional guild associations. Often a partnership may be two or three people, but a guild can draw on a larger body of people and thus potentially can help its members with capital costs, i.e. by non-usurious loans. Necessarily such matters, rather than being corporate in nature, reflect the nature of umma as community. That is why ‘Islamic economics’ is not separable from deen and from community, even though loans and commercial enterprises are necessarily regulated by legally constituted qadis (judges). This was a commercial civilisation spanning the earth for almost a millennium and a half that worked.