If the government doesn't manipulate the market then corporations will swoop in and manipulate it themselves. Which they have. Which is why government stepped in.

I /think/ it's possible to regulate without egregious manipulation.

I do agree that some regulation is necessary, which is a form of manipulation.

If you're referring to monopolies, for example, the government could regulate anti-trust without -- say -- artificially setting treasury yields (interest rates) and corporate bond yields.

Islamic empires did not have a truly free market. Islam imposes quite a few financial and economical restrictions (I'd say, rightfully in many instances)

I do not in anyway claim to be an expert on the Islamic Empire. But Islam (today or even in the past) does not equal the early Islamic Empire.

The religion seems to have evolved considerably from the early Islamic Empire. Which is common. Every major religion seems to have undergone several major metamorphoses.

Not really, no. The Coranic prescriptions have been relatively unchanged since a thousand years. Given the combination of textual and oral traditions, and the low divergence of historic Qurans over a wide area, we can conclude that the Quran did not significantly change.

The Coranic prescriptions about usury and other economic activities are incredibly clearly written.

The only conclusion is that there is no reason to believe that it was in any way different to today, and a lot of reasons to believe the restrictions on free trade are even higher than in the modern Islamic world.

First time I've seen this discussion of Islamic empire in a favorable light here.

What makes you say the Islamic empire had free markets? From the book?

The book says that the original Islamic Empire was highly favorable of merchants.

One of the main ideas (of the Empire, not necessarily the religion) was that gold coinage came from God so that people could easily trade. Instead of everyone acquiring all the skills necessary for sustenance (farming, tool building, carpentry, etc) -- they could become masters of a few skills and trade the fruits of their skills in the open market. The idea was that doing so, humans could advance much faster. This was sort of God's secret sauce. So interfering with the market was like interfering with God. It was a no no.

One could argue that they manipulated the market by banning usury (interest bearing loans). However, before the Islamic Empire, interest was usually VERY high -- 60%+ per year was common. Debt was so cost prohibitive that the constant need for debt Jubilees was its own problem.

It's unclear how the Islamic Empire financed all these merchants without interest bearing loans. I'd love to learn more about how that worked.