Part One — The Seerah’s Lessons

This paper grew out of a Financial Times podcast that approached the Seerah from an unusual angle: the commercial experience of Prophet Muhammad ﷺ and the economic order that developed around the early Muslim community.

The episode, “Mohammed: prophet, trader … and capitalist?”, was published on 19 August 2026 as part of the FT podcast The Story of Money. It was hosted by Gillian Tett and Robin Wigglesworth. Their guest was Benedikt Koehler, a former financier, fellow of the Institute of Economic Affairs, and author of Early Islam and the Birth of Capitalism.

The discussion covers the Prophet’s ﷺ experience of trade, Khadijah’s رضي الله عنها commercial activity, caravan finance, qirad, risk-sharing, the market established in Madinah, price controls, market supervision, zakah, social support and the possible influence of Muslim commercial practices on medieval Europe.

Financial Times transcript: https://www.ft.com/content/926c85f5-846a-4447-b363-854c12f77bbf

The episode can also be found on the Financial Times / The Story of Money YouTube channel under the title “Mohammed: prophet, trader … and capitalist?”

A caution is needed from the start. Terms used in the podcast such as “capitalist”, “Hayekian” and “supply-side economist” belong to Koehler’s interpretation. They are modern economic labels. They should not be imposed upon the Prophet ﷺ as though they were Islamic descriptions of his mission.

The Prophet ﷺ came with guidance from Allah. Capitalism, socialism, libertarianism and the economic schools associated with later centuries are categories created long after his time.

Yet the podcast opens a useful door. Once we look through it, the Seerah gives us a rich body of lessons about enterprise, markets, investment, risk, property, regulation, welfare and, above all, the character of the person conducting business.

That is the subject of this reflection.

1. The Prophet ﷺ knew business from experience

Before Prophethood, Muhammad ﷺ lived in the commercial society of Makkah. He had experienced economic vulnerability as an orphan. He worked. He travelled in connection with trade. He dealt with merchants and was entrusted with the commercial interests of Khadijah رضي الله عنها.

So when Islam later laid down rules concerning trade, contracts, debts, disclosure, weights, fraud, riba and partnerships, these instructions entered a society in which commerce was already central to life.

The Prophet ﷺ knew what it meant to earn.

He knew that business involved uncertainty. He knew the value of reputation. He knew that one person’s money could be combined with another person’s skill. He knew that trade across long distances depended heavily upon trust.

Islam brought Allah-consciousness into this commercial world.

The shop, office, factory and marketplace became places where a person’s iman and character could be tested just as surely as elsewhere.

2. Before financial capital comes character

One of the first business lessons from the Prophetic life appears before any discussion of finance.

Muhammad ﷺ had a reputation for trustworthiness.

That reputation had commercial value.

An entrepreneur normally thinks first about money: How much capital can I raise? Who will invest? What assets do I have?

The Seerah makes us ask an earlier question:

Can I be trusted with somebody else’s money?

Character creates credibility. Credibility attracts trust. Trust opens relationships. Capital can follow.

Money can sometimes be raised in a week. A reputation takes years.

And it can be destroyed in an afternoon.

For an entrepreneur, amanah is therefore an economic asset. It cannot be shown neatly on a balance sheet, yet businesses repeatedly rise or collapse because of it.

3. Capital and entrepreneurial ability need not belong to the same person

The relationship between Khadijah رضي الله عنها and Muhammad ﷺ points to another useful idea.

The person with money does not have to be the person running the business.

One person may have capital. Another may have commercial ability, time, contacts and judgement.

Islamic partnership structures such as qirad and mudarabah later gave legal form to such arrangements.

This deserves attention when we look at the debt-heavy way modern businesses are often financed.

A capable person with little money may be told to borrow first and carry the liability personally.

Risk-sharing asks a different question:

Who has capital, who has ability, and on what fair terms can they do business together?

Capital then participates in the enterprise and its risk rather than merely standing outside it demanding repayment.

4. Business requires risk

Islam did not remove commercial risk from economic life.

A caravan might succeed. It might fail. Goods could be lost. Prices could change. A journey could take longer than expected.

Profit therefore had an economic reason behind it. Someone had placed wealth, effort or property at risk.

This helps explain the Islamic preference for real trade and genuine partnership over arrangements in which one party tries to secure its return regardless of what happens to everyone else.

A sound business arrangement asks who contributes, who takes risk, who has control, and how the result will be shared.

That is quite different from constructing a transaction in which profit is private while losses are pushed onto somebody weaker.

5. Entrepreneurship is the art of putting many moving parts together

The caravan discussion in the podcast is useful for another reason.

Long-distance trade required investors, merchants, goods, animals, routes, security, timing and information about distant markets. Accounts eventually had to be settled.

This is entrepreneurship in a form we still recognise.

The entrepreneur does not merely have an idea. He makes many separate things work together.

A camel caravan and a modern company look nothing alike. The management problem underneath them is surprisingly familiar.

Someone must decide what to sell, where to sell it, how to finance it, whom to trust and what risks are worth taking.

Execution matters.

6. A good entrepreneur can turn an adversary into a participant

The podcast discusses Hāshim and arrangements with tribes along caravan routes. The economic logic is interesting.

If a tribe could gain from the caravan’s success, raiding it became less attractive.

A threat could become a trading relationship.

This is a useful business habit. When faced with resistance, the entrepreneur need not always ask, “How do I defeat this person?”

Sometimes the better question is:

“Can I structure this so that both of us gain from its success?”

Many business problems are really incentive problems.

Change the incentive and the problem itself may change.

The Madinah model

7. People in distress need a route back into economic life

The Muhajirun arrived in Madinah after leaving homes, property and commercial connections behind.

They needed help.

The Prophetic response included generosity and brotherhood, but it did not freeze them permanently into the position of recipients.

They entered economic life again.

That distinction matters whenever we think about poverty, displacement or financial collapse.

Immediate assistance may keep a person going. Access to work, markets, capital and relationships can restore independence.

Dignity grows when a person can earn again.

8. The mosque and the market both mattered

The mosque was established in Madinah. So was a marketplace for the Muslim community.

There is a lesson here that deserves far more attention in Muslim institutions.

Religious development cannot ignore mu’amalat.

A community needs people who understand worship. It also needs people who know how to trade honestly, write contracts, manage partnerships, lend responsibly, settle debts and deal fairly with employees and customers.

We have sometimes treated business ethics as a small chapter at the back of religious education.

The Seerah gives economic conduct much more weight.

A businessman may be regular in salah and still have serious defects in his dealings. His mu’amalat remain part of his deen.

9. Market access should not become private property for gatekeepers

The Madinah market also raises a question about access.

When a small group controls entry, charges people simply for access, reserves advantages for insiders or uses political influence to block newcomers, the market stops being genuinely competitive.

The Prophetic approach favoured open commercial participation while restraining abuse.

That gives us a useful test for business policy:

Does this rule protect fair trade, or does it protect the people already inside?

The two are often confused.

Prices, competition and regulation

10. The refusal to fix prices deserves careful reading

The podcast discusses the report that people asked the Prophet ﷺ to fix prices after prices rose, and he declined.

A crude reading would turn this into a slogan for deregulation.

The wider Sunnah will not allow that.

Prices can rise because goods are scarce. Demand can rise. Supply can fall. Those movements are real. An authority cannot create wheat merely by ordering merchants to sell it cheaply.

Yet Islam also prohibited conduct that corrupts the price itself.

A sensible reading is:

Leave genuine price formation alone where possible. Intervene against fraud, manipulation and injustice.

The market is allowed to work. People are not allowed to rig it.

11. Islam accepts competition and polices cheating

The Sunnah contains prohibitions against commercial practices that distort a fair market: deception, false bidding, dishonest weights, concealment of defects, manipulative hoarding and exploiting traders who do not yet know the local market price.

Freedom to trade came with rules.

There is no contradiction here. Rules against cheating make genuine competition possible.

Commerce needs freedom, but freedom cannot become permission to deceive.

12. Information carries responsibility

The prohibition on intercepting incoming traders before they reached the market is especially interesting.

One party knew the local price. The other might not.

The knowledgeable trader could profit from that ignorance.

Modern economists call this information asymmetry. The name is modern. The human problem is ancient.

The lesson reaches far beyond a market in Madinah.

A banker knows more about a financial product than the customer.

A property developer knows more about the building than the buyer.

A mechanic knows more about the car than its owner.

A company knows more about the small print than its customer.

Knowledge gives bargaining power. Islam does not turn that power into an unrestricted right to exploit.

13. A signature does not make deception honest

Modern business culture often treats signed consent as the end of the moral discussion.

Islam asks what happened before the signature.

Was the defect disclosed?

Did both parties understand what they were agreeing to?

Was important information hidden?

Was the buyer deliberately given a false impression?

A contract can be legally clever and morally rotten.

This is where barakah enters economic thought.

Two companies may make the same accounting profit. One earned it through clean dealings. The other earned it through half-truths, pressure and concealed facts.

The spreadsheet records the same number.

Islam does not.

Trust as economic infrastructure

14. Low-trust societies pay a hidden tax

Business depends on trust far more than we notice.

Suppose nobody trusts anyone.

Every payment needs security. Every promise needs a guarantee. Every transaction needs pages of legal drafting. Every employee needs surveillance. Every partnership anticipates betrayal.

Business becomes expensive.

Courts, contracts and regulators remain necessary. Yet they cannot replace character.

A society of trustworthy people can transact faster and with less friction than a society in which everyone assumes everyone else is trying to cheat.

Honesty therefore has an economic return beyond the reward of the Akhirah.

15. Taqwa creates a regulator inside the businessman

External regulation has a permanent weakness.

The regulator cannot be everywhere.

Taqwa addresses the moment when nobody is watching.

The businessman knows the defect that the buyer cannot see.

The partner knows about the private expense buried in company accounts.

The manager knows why a contract was awarded to his friend.

The borrower knows whether he genuinely cannot pay or is merely avoiding payment.

Law may never discover these things.

Allah knows.

That belief changes economic behaviour more deeply than another hundred pages of regulation.

This is why an Islamic economy cannot be built merely by renaming financial products.

If the person remains dishonest, the Arabic terminology changes very little.

16. Character is part of economic policy

This may be the largest lesson missing from many discussions of Islamic economics.

We talk about banking structures, sukuk, mudarabah, regulation and zakah systems.

All of these matter.

But who is operating them?

If greed, dishonesty and misuse of trust remain untouched, every structure will eventually be bent around them.

The Prophet ﷺ spent years building people.

That investment in character later appeared in their dealings with money, power, family and society.

Economic reform therefore begins earlier than economics.

It begins with the human being.

Wealth in the Prophetic model

17. Islam has no quarrel with honest wealth

Some of the Prophet’s ﷺ closest Companions became very wealthy.

Their wealth did not disqualify them from spiritual greatness.

The issue was the source of the wealth, its hold upon the heart and what the owner did with it.

A wealthy Muslim need not apologise for success honestly earned.

He does, however, have to answer for it.

That accountability changes the meaning of ownership.

18. The Prophet ﷺ separated wealth from display

The Prophet ﷺ had access to resources, especially in the later Madinan period, yet his personal life remained remarkably simple.

At the same time, wealthy Companions were not ordered to become poor.

This is a difficult balance and perhaps one of the most useful for entrepreneurs.

A person can build a large company without making luxury the purpose of the company.

He can enjoy lawful wealth without turning wealth into his identity.

He can control money without allowing money to control his decisions.

19. Wealth has work to do

Once zakah, sadaqah, family obligations, debts and the rights of others enter the picture, wealth stops being purely private.

Islam recognises ownership. It also places claims upon the owner.

Zakah is especially instructive because it is not dependent upon the rich person feeling generous that morning.

There are rights attached to wealth.

The Muslim owns his wealth, but Allah will ask him what he did with it.

Khadijah رضي الله عنها and investment

20. Khadijah رضي الله عنها belongs inside any serious discussion of Muslim entrepreneurship

The podcast rightly gives considerable attention to Khadijah رضي الله عنها.

She had wealth and commercial interests. She deployed capital through others. She recognised ability. Her business relationship with Muhammad ﷺ preceded their marriage.

This should make us cautious about importing cultural assumptions into Islam and then calling those assumptions religious.

A Muslim woman owning wealth, investing it and making commercial decisions is hardly alien to the earliest history of Islam.

Khadijah رضي الله عنها is there from the beginning.

21. Investors should study the person as carefully as the proposal

There is another lesson in Khadijah’s رضي الله عنها choice of Muhammad ﷺ.

Investors spend enormous effort analysing the business.

They should spend at least as much time analysing the person who will control their money.

Can he be trusted?

How does he behave when nobody can check him?

Does he disclose bad news?

Does he keep commitments when keeping them becomes expensive?

A mediocre idea in the hands of an exceptional person can change.

A wonderful business plan in the hands of a dishonest person is dangerous.

Character belongs in due diligence.

Social capital after Hijrah

22. Mu’akhah was more than charity

The brotherhood between the Muhajirun and Ansar shows how communities can respond to economic displacement.

Money is only one part of recovery.

A person who has lost everything may also have lost contacts, customers, premises, information and standing in society.

Opening one’s network can sometimes be more useful than opening one’s wallet.

The Ansar opened their community.

That gave the newcomers a chance to participate again rather than remain permanent outsiders.

Modern rehabilitation programmes for people ruined by war, debt or business collapse could learn a great deal from this.

Market supervision

23. Regulation should protect the market from abuse

The podcast discusses the muhtasib, the market supervisor. The formal institution developed over time, but supervision of market conduct has clear roots in the early Islamic period.

Someone had to stop cheating.

Weights had to be honest. Traders could not manipulate buyers with fraud. Public commercial space could not simply become the private entitlement of whoever captured it first.

This gives regulation a clear purpose:

Protect the conditions in which honest trade can occur.

Once regulation becomes a business in itself, protecting insiders and creating opportunities for corruption, it has defeated its own purpose.

What the podcast says about Europe

24. Did Europe borrow Islamic commercial practices?

Koehler argues that several institutions and commercial ideas moved from the Muslim world into medieval Europe.

He discusses qirad and the Italian commenda, waqf and the later trust, commercial vocabulary, mathematical knowledge and other forms of transmission through Mediterranean trade.

Robin Wigglesworth pushes back on the stronger version of the claim. Similar institutions can arise independently, and some had earlier Roman precedents.

That disagreement is useful.

We do not need to prove that every European commercial institution came from Muslims to recognise the historical importance of Islamic commerce.

Muslims, Christians and Jews traded across the Mediterranean. Ideas travelled with goods.

The sensible position is intellectual confidence without historical exaggeration.

Muslims should neither claim every useful invention as Islamic nor accept a history in which Islamic civilisation contributed nothing.

Why successful economic orders decline

25. Trade routes can destroy yesterday’s advantage

Koehler gives considerable weight to the opening of Atlantic and sea routes around Africa at the end of the fifteenth century.

Once European merchants could sail directly around Africa to India, the old overland and eastern Mediterranean trading position lost part of its advantage.

Whatever weight historians assign to this factor, the business lesson is clear.

A successful method can become obsolete even when the people using it have done nothing obviously wrong.

Technology changes the route.

Geography loses value.

A new competitor removes an old advantage.

This applies to companies as much as civilisations.

Islamic principles do not expire. Business methods do.

Confusing the two is dangerous.

Was Prophet Muhammad ﷺ a capitalist?

The FT title is clever because it provokes curiosity.

As a description, however, “capitalist” is too narrow.

Capitalism is a much later intellectual and economic category. So are socialism and libertarianism. Reading any of them backwards into seventh-century Arabia risks distorting the subject.

There are parts of the Prophetic economic order that a free-market economist will recognise: private property, trade, competition, profit, investment and resistance to arbitrary price fixing.

There are other parts that modern capitalism often finds inconvenient: the prohibition of riba, compulsory zakah, inheritance rules, restrictions on speculation, duties towards debtors and the poor, and strict limits on how profit may be made.

Islam permits wealth creation and surrounds it with accountability.

That is a better starting point.

A working model for Muslim entrepreneurs

From the podcast and the wider Prophetic example, I would draw these principles:

1. Build a name people can trust before chasing capital.
2. Match people who have money with people who have ability.
3. Prefer genuine risk-sharing to pushing risk onto the weaker party.
4. Make money by creating or exchanging real value.
5. Treat reputation as an asset that takes years to build.
6. Keep markets open to newcomers.
7. Let real prices communicate scarcity and demand.
8. Stop fraud and manipulation when they corrupt those prices.
9. Never use superior information as permission to exploit ignorance.
10. Disclose what the other party has a right to know.
11. Keep personal appetite from swallowing business purpose.
12. Give wealth work to do beyond personal consumption.
13. Teach mu’amalat alongside worship.
14. Build institutions that make honest business easier.
15. Change business methods when circumstances change.

The larger lesson

The question raised by the podcast is bigger than whether Muhammad ﷺ can be described as a capitalist.

The more useful question is what happens when commerce is placed under Tawhid.

Profit remains lawful. Ownership remains real. Competition remains possible. Wealth can grow.

None of them is sovereign.

The businessman remains answerable to Allah.

That changes the questions asked before a transaction.

Where did this money come from?

What exactly am I selling?

What does the other person know?

What am I concealing?

Who carries the risk?

Whose right may be injured?

What happens if the debtor genuinely cannot pay?

Am I using a position of strength to extract something unfair?

Would I conduct the same transaction if every fact became public tomorrow?

And beyond all of these lies the question a believer cannot remove from economic life:

How will I explain this transaction before Allah?

Modern economics can measure price, profit, productivity, debt and return on capital.

It cannot put barakah into a spreadsheet.

The Prophetic model brings that missing dimension back into business. A transaction has an economic result. It also has a moral record.

Perhaps that is the strongest lesson to take from the Financial Times discussion.

The market matters. Enterprise matters. Wealth matters.

But the person who enters the market matters even more.