9. *Futuwwa* and *Hisba*: Professional Conscience, Market Oversight, and Support for Innovation
A healthy market cannot be built solely on the hope that individuals will act with integrity. Most people want to think of themselves as honest, fair, and trustworthy, but economic activity takes place amid profit incentives, competitive pressure, limited information, and opportunities for concealment. Someone who acts fairly under ordinary conditions may make a different choice under the pressure of losses, scarcity, or fear of being pushed out of the market.
Conversely, no market can be run solely through layers of regulation and inspection. If every transaction requires direct supervision and every commitment is honored only for fear of punishment, the cost of economic activity rises. Instead of understanding their responsibilities, people learn to move as close as possible to the boundary of provable misconduct and stop only where detection becomes likely.
A healthy economy moves between these two levels: individuals should place internal limits on their conduct, while external structures should ensure that deception, monopoly, and betrayal are not easy and costless. In the Iranian-Islamic tradition, these two levels can, with due caution, be considered alongside two concepts: futuwwa and hisba. Futuwwa placed greater emphasis on the professional’s character, stewardship, fidelity, and javanmardi; hisba was more closely associated with oversight of public conduct and the marketplace.
This comparison does not mean that modern regulatory institutions are the legal or organizational continuation of hisba. The Competition Council, consumer protection associations, regulatory bodies, courts, and standards systems rest on modern laws, jurisdictions, and institutional structures. The expression “modern hisba” in this article is an analytical description of the need for public oversight, not the legal title of an existing institution or a claim of direct historical continuity.
What Was Hisba?
In the history of Islamic cities, the muhtasib was an official responsible for aspects of public order and market supervision. The scope of the office was not identical in every period and territory, but inspecting markets, checking weights and measures, countering certain forms of fraud, and supervising visible public conduct are among the duties described for the muhtasib in legal sources and hisba manuals.[1][2][3]
One important primary source in this field is Ibn al-Ukhuwwa’s Maʿālim al-Qurba fī Aḥkām al-Ḥisba, a medieval treatise written to explain the duties of the muhtasib. A scholarly edition of the text was published in 1938 by Reuben Levy. Rather than serving primarily as a moral handbook for artisans, the work is a guide for the person charged with supervising the market and certain public affairs.1
This difference clarifies the boundary between a futuwwa manual and a hisba manual. A futuwwa manual asked how a professional should cultivate themselves; a hisba manual asked more often which violations, professions, and situations a public overseer would encounter and what should be inspected. The former emphasized self-restraint and the ethical identity of professional people; the latter focused on conduct with observable effects in public space and the market.
Hisba texts should not, however, be treated as exact reports of what was actually enforced in every city. There could be a gap between what treatises prescribed for the muhtasib and what officials did in practice. Willem Floor’s study of the office of muhtasib in Iran likewise shows that the office did not take one uniform form across periods and regions; its status, duties, and power changed over time.2
The scope of hisba was not limited to product quality and the accuracy of scales either. In some periods, the muhtasib also addressed public behavior, cleanliness of urban spaces, medical professions, construction, or religious observance. The boundaries among public space, private life, and the overseer’s authority were not always clear or fixed; the study by Roy Mottahedeh and Kristen Stilt also examines this complexity in works concerning the muhtasib.3
For this reason, rereading hisba for the present must be selective and critical. Not every power held by a premodern official can serve as a desirable model for modern oversight. Contemporary regulation requires clear law, limited jurisdiction, a right of defense, avenues of appeal, institutional independence, and protection of privacy. The historical value of hisba for this article lies in a different principle: the market was not understood solely as a sphere of private agreement between seller and buyer; its health was also a public concern.
Why Is Individual Conscience Alone Insufficient?
In many market violations, the benefit of wrongdoing goes directly to the wrongdoer while the cost is dispersed across many people. A seller profits by secretly reducing quality, while each customer bears only part of the loss. A dominant firm preserves its position by restricting a competitor’s entry, while the cost is spread throughout the market in the form of higher prices, fewer choices, or stalled innovation.
In such circumstances, even if most economic actors are honest, a few opportunistic players can change the rules of the field. A responsible firm must compete against a rival that does not pay the costs of quality, safety, or workers’ rights. If misconduct remains more profitable, ethics gradually becomes a cost borne only by responsible actors.
Public oversight should change this equation. The goal is not only punishment after harm occurs; it is to build a market in which responsible conduct can survive. Suppliers should know that secretly lowering quality, deceiving customers, or excluding competitors through improper means is not merely ethically objectionable but may also lead to investigation, an order to stop, compensation, or legal sanctions.
Oversight is credible, however, only when it too is limited and accountable. A body empowered to inspect a market gains access to sensitive business information, contracts, and internal processes. If such information is used against its owners or decisions are influenced by personal interests, the regulator itself becomes part of the problem.
The Law on the Implementation of the General Policies of Article 44 of the Constitution prohibits members of the Competition Council and the Appeals Board, and employees of the National Competition Center, from disclosing businesses’ internal information or covertly using it for their own or others’ benefit. The same law also places restrictions on conflicts that could affect members’ decision-making.[4] The rule illustrates that market oversight cannot be trusted without ethical conduct and confidentiality on the part of the regulator itself.
Healthy Competition Is Not the Same as Leaving the Market Unregulated
It is sometimes assumed that a free market means every firm should be able to use any method to defeat its competitors and that the ultimate outcome will automatically benefit consumers. But competition can improve quality, price, and innovation only when participants have genuine opportunities to enter, choose, and compete.
If several firms jointly set prices, divide the market, or restrict others’ access, the appearance of multiple companies remains while real competition disappears. Article 44 of the Law on the Implementation of the General Policies of Article 44 of the Constitution prohibits contracts, agreements, or understandings capable of disrupting competition. Direct or indirect price fixing, restrictions on production or sales, imposition of discriminatory conditions, market division, and restricting others’ access are among the examples listed in the article.[4]
Article 45 of the same law also prohibits, where they lead to disruption of competition, conduct such as hoarding and disruptive refusal to deal, discriminatory pricing, discrimination in transaction terms, predatory pricing, misleading statements, and certain forms of tying or compulsory purchase and sale.[4]
These restrictions do not mean that every discount, price difference, or refusal to deal is prohibited. Each legal category has its own elements and conditions, and determining whether conduct constitutes an anticompetitive practice falls within the competence of the legal authority. A price difference may reflect transport costs, different quality, or contractual terms; a discount may be legitimate competition. The problem arises when conduct leads to improper exclusion of a competitor, unjustified discrimination, or impairment of the possibility of competition.
Professional ethics is broader than law but different in its means of enforcement. Conduct may not yet reach the threshold for proving an anticompetitive practice and still be ethically opportunistic—for example, spreading a rumor that is legally difficult to assess or using market power to impose a condition that the weaker party has little real ability to reject. Conversely, any legal finding must be accompanied by proper procedure, evidence, and a right of defense; dissatisfaction with a competitor alone does not justify accusing it of anticompetitive conduct.
The Competition Council’s Role Is Not Merely Punitive
Effective oversight is not limited to imposing fines. Restoring competition may require stopping a contract, terminating an anticompetitive agreement, publishing information for market transparency, or restructuring aspects of a firm.
Article 61 of the Law on the Implementation of the General Policies of Article 44 of the Constitution permits the Competition Council, after establishing anticompetitive practices under Articles 44–48, to order—depending on the case—cessation or non-repetition of the conduct, termination of an anticompetitive agreement, disclosure for market transparency, recovery of excess revenue through judicial proceedings, or other corrective measures.[4]
Article 62 identifies the Competition Council as the authority for examining anticompetitive practices and allows proceedings to begin either on the Council’s own initiative or on complaints from various persons and institutions. The parties have the right to appear, appoint counsel, or submit a written defense.[4]
This legal structure is not the same as historical hisba. The muhtasib operated within a different political and legal order, and the limits of authority, methods of adjudication, and conception of a right of defense differed from those of today. The similarity is limited to this point: the health of competition and the market cannot be left entirely to private agreement among market actors.
A regulatory body must be able to hear complaints, but it should not become a weapon competitors use to damage one another. The same law provides consequences for knowingly baseless complaints intended to harm a party’s commercial or professional reputation. The rule reflects an important balance: a violator should not be shielded, but a responsible firm should not be harmed by unfounded accusations either.[4]
Consumer Protection Is Part of Market Regulation
Healthy competition is not always enough to protect consumers. A market may be competitive while customers still cannot identify a product’s true quality or find that the cost of pursuing a right exceeds the loss they suffered. In that situation, an individual consumer may lack sufficient incentive or capacity to act even when the aggregate of many small losses is very large.
In addition to imposing duties on suppliers, the Law on the Protection of Consumer Rights provides for consumer protection associations. Article 9 creates such associations to organize public participation in implementing consumer-protection policies, while Article 12 assigns them functions such as educating consumers, providing advisory opinions, reviewing complaints, offering advisory and legal services, and referring disputes to relevant authorities.[5]
This part of the law reminds us that oversight is not exclusively the work of government and courts. Civil-society organizations, professional associations, the media, and consumers themselves also play a role in revealing repeated patterns of misconduct. One complaint may look like an individual problem; hundreds of similar experiences taken together may reveal a structural defect in a product or sales practice.
Civic oversight also requires responsibility. Publishing an unverified allegation against a firm can damage people’s reputation and employment. Consumer reports should, as far as possible, rest on documentation, a specific experience, and a distinction between fact and personal interpretation. The media should not treat a complaint as established fact merely because it is newsworthy, nor should they suppress it without examination in response to advertising pressure from a business.
The law also establishes minimum rules on compensation. Article 16 of the Law on the Protection of Consumer Rights places responsibility for compensating damage, as determined by the adjudicating authority, on the person who caused the loss; Articles 18–20 provide enforcement measures relating to defective goods, breach of certain obligations, and the possibility of recalling goods for correction and repair.[5]
Such remedies have preventive effect only when the complaint process is understandable, the cost of pursuing a claim is reasonable, and decisions can actually be enforced. A right that exists only on paper does not change market behavior as much as one that can be claimed and enforced.
Unfair Competition Is Not Only About Price
Unhealthy competition does not always take the form of price collusion or overt monopoly. A firm may spread false information to harm a competitor, make its product look so similar to another that customers are misled, or use misleading advertising to benefit from a competitor’s reputation and effort.
The Industrial Property Protection Act adopted in 1403 SH devotes a separate chapter to unfair competition. Article 129 includes among unfair competitive practices false statements about a competitor that damage confidence in the firm or its products, creation of misleading similarity between goods and services, false advertising about the nature or quality of a product, misleading comparative advertising, and certain forms of collusion designed to exclude competitors.[6]
The article distinguishes professional criticism from destructive conduct. A note to it excludes, within the scope of lawful authority, an expert opinion issued by the competent specialist body from the category of unfair competition. Protecting a business’s reputation therefore should not become a ban on evidence-based criticism, independent product testing, or specialist evaluation.[6]
Healthy competition requires the possibility of comparison. Customers should be able to know which product is better, cheaper, or more reliable. The problem arises when comparison is based on fabricated data, selectively chosen criteria, or a misleading picture. Professional ethics likewise asks a firm not to distort the reality of another product merely to establish its own superiority.
The 1403 SH Act provides criminal sanctions, in addition to compensation, for certain acts classified as unfair competition. Determining whether a criminal offense has been established, who is responsible, and the amount of damage depends on the circumstances of the case and the decision of the competent authority.[6]
Supporting Innovation Is Not Supporting Endless Monopoly
Innovation needs security. If a firm or researcher knows that every achievement can be appropriated immediately and without cost, the incentive to invest in research, design, and testing is reduced. Legal protection for inventions, works, software, and trade secrets can provide part of that security.
But protecting innovation is not the same as eliminating competition indefinitely. Exclusive rights generally have defined conditions, durations, and scopes. Trade secrets are protected only while the legal conditions of secrecy continue to exist. Public knowledge, independent development, and lawful methods of obtaining information should not be blocked in the name of protecting innovation.
Alongside its protection of trade secrets, the Industrial Property Protection Act does not treat independent development of certain information as trade secret infringement, and Article 129 protects competition against deception and destructive practices. Together, these rules show that the law is not designed to eliminate competitors; it seeks to draw a boundary between legitimate use of knowledge and improper use of another person’s reputation, mark, or information.[6]
The ethics of innovation should preserve the same balance. An idea-holder cannot treat every similarity or every competitor entering the same field as theft. Conversely, a competitor should not treat the absence of registration or difficulty of proof as permission to use information acquired through confidentiality or professional trust.
Excessive regulation can also harm innovation. If rules are ambiguous, permits are unnecessarily slow, or multiple institutions issue inconsistent decisions, an innovative firm must devote a large part of its energy to navigating administrative processes. Good regulation should protect public rights and competition while creating clear, predictable rules proportionate to risk.
How Is Law Circumvented Without Ethics?
Every rule has boundaries. Instead of honoring the purpose of a law, an economic actor may search for the weakest point in its text, a lack of documentation, or the difficulty of proof. Decisive information may technically be written somewhere but practically remain unseen; an anticompetitive agreement may never appear on paper and instead operate through informal coordination.
For this reason, the Law on the Implementation of the General Policies of Article 44 of the Constitution does not limit collusion to written contracts. Article 44 refers to written, electronic, oral, or practical agreements and understandings. The outward form of a relationship should not conceal its anticompetitive nature.[4]
No legislature, however, can list in advance every future form of deception, technology, and covert coordination. Professional character matters in the space between conduct that is expressly prohibited and conduct about which no clear rule yet exists.
An ethical professional does not ask only, “Can I do this without being convicted?” They also ask whether the conduct destroys informed choice, fair competition, or the other party’s trust. This question does not replace law, but it prevents the legal minimum from becoming the maximum of responsibility.
How Is Ethics Harmed Without Law?
Conversely, reliance on javanmardi alone can leave an ethical person defenseless. Someone whose confidential information has been disclosed or whose business has been excluded from the market through competitors’ collusion cannot recover their rights through moral advice. They need documents, a competent authority, a right to object, and enforceable remedies.
A culture that treats contracts and complaints as signs of distrust usually benefits the stronger party. The weaker person remains silent to preserve the appearance of friendship; by the time the harm becomes clear, they may also lack sufficient documentation. Mature ethics is not inconsistent with recording rights and responsibilities.
Law also clarifies the boundary between personal moral judgment and public adjudication. A person may consider conduct dishonorable, but that feeling does not give them the right to impose punishment or destroy another person’s reputation. Legal proceedings should depend on evidence, jurisdiction, and a right of defense.
For this reason, the best relationship between futuwwa and hisba should not be imagined as choosing one and eliminating the other. Futuwwa asks what a person does when no one is watching; public oversight asks how society will investigate and protect rights if those rights are violated.
The Regulator Must Also Be Accountable
A regulatory institution can be as exposed as a business to conflicts of interest, error, or abuse. If rules are enforced selectively, confidential information is given to competitors, or decisions cannot be appealed, oversight will not build trust.
The law provides the Competition Council with independence, procedures for adjudication, powers of investigation and inspection, and a path of appeal. Some searches and investigations also depend on judicial authorization. These limitations matter because a proper objective does not make every means permissible.[4]
Transparency in the regulator’s own operation is also part of its legitimacy. Article 69 of the Law on the Implementation of the General Policies of Article 44 of the Constitution requires the Competition Council to provide public access to relevant rules, regulations, and guidelines and to publish an annual report on implementation of that chapter.[4]
Fair oversight must also draw a boundary between public information and trade secrets. Society has a right to know the basis of public rules and decisions; firms have a right not to have confidential information disclosed unnecessarily. Concealing everything in the name of confidentiality and publishing everything in the name of transparency can both cause harm.
Today’s Hisba Is Not a Single Institution
In a modern economy, tasks that may once have been concentrated in the office of the muhtasib are divided among different institutions. One authority supervises competition, another addresses standards or safety, another adjudicates contractual disputes, while professional and consumer associations perform educational or advisory roles.
This division of labor is necessary. Today’s economy includes capital markets, data, software, platforms, pharmaceuticals, financial services, intellectual property, and contracts whose review requires different forms of specialist knowledge. Placing all these fields under one official with broad authority would be neither practical nor compatible with modern principles of governance.
Accordingly, the expression “modern hisba” should refer to a network of functions: prevention, public information, lawful inspection, complaint handling, protection of competition, consumer protection, and assurance of access to remedies. The quality of this network depends not only on the number of institutions but also on their coordination, expertise, independence, and accessibility.
A multiplicity of institutions without clear responsibility can leave a complaint circulating among agencies. Each authority may declare itself incompetent, while the harmed consumer or firm does not know where to begin. Effective oversight should be understandable to citizens, not only to lawyers or administrative specialists.
A Healthy Economy Needs Enforceable Law and a Living Conscience
Futuwwa and hisba respond to two different failures. Futuwwa addresses the professional’s internal failure: the moment when a person could act properly but places benefit above right. Hisba addresses an external failure of the market: the point at which misconduct affects others and the victim cannot be expected to restore public order alone.
Modern law is not the historical form of hisba, but it continues the same public question in another language: Who protects the customer from deception, the firm from collusion, the innovator from appropriation, and the market from monopoly power?
The answer is not simply “the government.” A firm needs internal ethical mechanisms. Professional bodies should protect the reputation of the profession. The media should scrutinize claims. Consumers should have access to information and the ability to complain. Courts and regulators should be independent, specialized, and accessible.
Conscience without structure can fail; structure without conscience can turn into a game of rules. An economy that relies only on javanmardi leaves honest people unprotected against opportunism. An economy built only on punishment reduces responsibility to fear of detection.
A healthier path connects the two: professionals remain trustworthy even where no one is watching, while structures ensure that deception, monopoly, and betrayal are not easy or profitable.
The next section of the article turns to a logic that erodes both conscience and law: an instrumental, self-interested outlook that turns every relationship into an opportunity, every trust into a resource to be extracted, and every difficult route into a shortcut to be circumvented.