Objective: The ancient Arab economy developed in the second half of the first millennium BC. Its glory peaked in the first century until the early second century AD, with trade routes to North Arabia and Syria. Nabataean kingdom in North Arabia was established, with two major cities as trading centers: Petra, and Palmyra. using the sociological perspective of education and commercialization theory, the ancient Arab economy has a mode of merchant capitalism.
Theoretical Framework: Ancient Arab trading capitalism revived in the pre-Islamic Arab period, from the end of the fourth century AD. Mecca became the center of international trade, side by side with Yathrib and Taif. Two types of markets were born, the inner market and the outer market. New institutions related to culture, politics, and economy were established, including the division of labor institutions and institutions that regulate traders' interaction from inside and outside Makkah.
Method: This research uses an interpretative paradigm with a qualitative approach, case study type, and multicase design. Data were collected using observation, interviews, and documentation. Data validity using triangulation of sources, methods, and theories. Next, an interactive model analysis is carried out. The research object was carried out in the Yogyakarta and Surakarta regions of Indonesia.
Results and Discussion: Merchant capitalism during the early Islamic era underwent characteristic changes, similar to social capitalism. Referred to as Religious Capitalism, because its inspiration comes from religious teachings. The state regulates the market: the prohibition of exaggerating the quality of goods, bidding new prices, intercepting goods before they reach the market, hoarding goods, and silent trading. State revenues have also increased, including spoils of war, income from the agricultural and industrial sectors, kharaj, endowments, 'ushr, jizya, redemption money, loans, alms, and gifts. The state is involved in public affairs, for example by establishing the Diwan.
Research Implications: The reconstruction of Islamic civilization should follow the model of Religious Capitalism, which is one of the main legacies of the early Islamic period. Social capitalism is also gaining momentum. Apart from that, a development model with a mode of peaceful revolution is also proposed: dialogue and cooperation with the dominant civilization. The geopolitics of the world are also shifting.
Originality/Value: Three technical requirements are needed, namely political democracy, economic cooperation, and active participation in global institutions. The main attention is directed to the development of knowledge and science, with critical and conventional madzab models.