OPERATIONALIZING AL-GHAZALI’S ETHICS IN GOLD TRADING: Shariah-Compliant Governance and Policy Pathways in Aceh

Abstract

Purpose: This study addresses a critical gap in Islamic finance literature by empirically operationalizing Imam Al-Ghazali’s ethical framework (Maslahah wal Mursalah) within Aceh’s gold trading sector, moving beyond theoretical discourse to examine how classical principles translate into Shariah-compliant governance. It investigates tensions between ethical imperatives and market practices in Indonesia’s only Shariah-governed province.

Method: Employing a qualitative case study design, we conducted semi-structured interviews with 9 key informants (3 gold shop owners, 6 consumers) in Langsa City, supplemented by 120 hours of participant observation and document analysis of Aceh Shariah Board guidelines. Thematic analysis using identified patterns in ethical adherence and governance gaps.

Findings: While traders consistently applied ‘Adl on fixed pricing to eliminate Gharar, and anti-riba practices for the interest-free installments for low-income buyers, a cooperative ethics remained underutilized. Acehnese Qanun in social harmony both facilitated trust and obscured non-compliance with Maslahah wal Murshalah, by avoiding consumer education on gold purity. Yet, only 33% of shops pursued formal Shariah certification    

Limitations and Theoretical Implications: The small sample limits generalizability but provides depth for theory-building. Findings challenge idealized models of Islamic ethics by revealing Adat-Shariah hybridity, advancing Maqasid al-Shariah scholarship through empirical validation of Al-Ghazali’s context-dependent ethics  

Practical Implications: We propose a three-tier policy pathway: (1) mandatory gold purity certification via Aceh Shariah Board, (2) Maslahah-driven consumer education modules, and (3) integration of interest-free schemes with zakat institutions to advance SDG 1. This operationalizes ethical governance for Asia’s informal Islamic finance sectors