Sheikh Sadia Inam Usmani Roll No: 24 B.S Final Year Submitted to : Sir Umer ISLAMIC ECONOMICS ISLAMIC ECONOMICS: Islamic economics as a social science is a new discipline in the making. It reflects the Islamic outlook and offers Islamic solutions to economic problems. The economic principles and doctrines have long been researched by Muslim scholars. The convening of the First International Conference on Islamic Economics in 1976 marked a turning point in the development of this new discipline. This Conference triggered the interest of a large number of economists, bankers, Ulema and scholars in the Muslim world. Since then, a number of International Conferences, Seminars, Symposia, Workshops etc. have been held on various themes of this discipline. These intellectually directed efforts have led to the publication of a sizable amount of literature bringing out the Islamic view point in scientific and systematic way in many areas of economics in general and banking and finance in particular. In spite of substantial growth of literature the questions relating to definition, nature and scope of Islamic Economics have not yet been satisfactorily answered. Most of the attempts on the question of definition are abstract. They also fail to connect the economic problems to the violations of particular economic injunctions. Similarly the discussions on the nature and scope of Islamic Economics do not cover the whole spectrum of the issues involved. There is thus, a need to review these issues with a view to focusing the attention of Muslim economists on efforts to remove these deficiencies and for general acceptance of Islamic Economics. The review is organized in two sections. The literature on clef and nature of Islamic Economics is reviewed in Section two while Section three examines scope of Islamic Economics. Section IV presents concluding remarks. Economic System of Islam Islam views life as a compact whole and does not divide it into many separate and conflicting parts. The economic aspect is one of the most important parts of our life, while not being the whole of it. The Islamic system is balanced and places everything in its right place. Islam has given detailed regulations for the conduct of our economic life which concerns mainly the earning and use of wealth. Man needs bread to live but he does not live for bread alone. This means that earning and spending money is essential for our living, but we do not live only for this. We have a greater purpose in life. We are Allah‘s agents (Khalifah) on earth. We not only have a body but we also have a soul and a conscience. Without our soul and conscience, we would be considered little more than animals. Extravagance and waste are strongly discouraged (7:31. 7:85. His actions should be responsible and meaningful. Islam strikes at the root of the evil and wants to establish a just and fair society. work and earnings of an individual provided this freedom is not harmful to the greater good of society. The Islamic state does not interfere with the freedom of speech. It does not at all befit a Muslim to spend money irresponsibly. 19:27-31. Deceitful acquisition of orphans' property has been particularly banned (2:188. 4:2. 9:34-35). b. sale and distribution of alcoholic drinks are unlawful (Haram). System of Zakah (welfare contribution). The economic principle of Islam aim at establishing a just society wherein everyone will behave responsibly and honestly. trust and responsibility. Every individual will be answerable to Allah swt for his or her actions (4:7. deceit. Right to property and individual liberty Islam allows a person to own his earnings. He will be accountable for his actions on the day of judgement. Any earnings from the production. Earnings from brothels and from such other practices which are harmful to society are also unlawful (24:23). The must follow the rules of the Qur‘an and the Sunnah: a. as are earnings from gambling. and not as ‗cunning foxes‘ fighting for as big a share of something as possible without regard for honesty. The Islamic Economic System is based on the following fundamental principles: 1. decency. Islam has prescribed laws to regulate earnings and expenditure. Compulsory payment of Zakah is one of the main principles of an Islamic economy. 17:26. 3. truth. smuggling and the artificial creation of shortages are unlawful (3:180. d. Unlawful expenditure is also not allowed in Islam.Everything in Islam is for the benefit and welfare of mankind. A Muslim must earn his living in Halal ways and he should always bear in mind that what ever he does. c. lotteries and from interest (Riba) transactions (5:90-91. Hording of food stuff and basic necessities. 36:71. 25:68). 83:1-5). He cannot hide anything from Almighty Allah. Muslims are not allowed to earn and spend in any way they like. Earning by falsehood. fraud. 6:152. robbery and burglary is unlawful. Every Muslim who owns wealth more than his needs must pay the fixed rate of Zakah to the Islamic . Earning and expenditure by Halal means. it is known to Allah. 16:111). theft. 2:275). 2. Zakah channels wealth from the rich to the poor while interest takes away wealth from the poor and hands it over to the rich. observe your duty to Allah and give up what remains (due) from interest. . it does not increase with Allah." (3:130). Law of Inheritance (Mirath). Further. The Islamic state is responsible for providing the basic necessities of food. It is a form of social security. 98:5). "O you who believe. doubling and quadrupling. until Islamic state established."(30:39). do not take interest. housing. then you shall have your capital. It is completely opposite to Zakah. The situation is really very complex. Allah swt has not imposed on us something impossible. Suratun Nisa (chapter four) of the Qur‘an deals with the law of inheritance in great detail(4:7-12. Zakah is a means of narrowing the gap between the rich and the poor. But." (2:275). so that you may prosper." (2:278-279). It helps the fair distribution of wealth.state. then be warned of war from Allah and His messenger. The Islamic law of inheritance is a wonderful system of stopping the concentration of wealth. It is a means of exploitation and concentration of wealth. An interest-free economy will be a boon for all peoples of the world. But if you do not do it. No-one should have any fear of insecurity or poverty (9:69. trade is like interest and Allah has allowed trade and prohibited interest. if you are believers. clothing. "Whatever you pay as interest. It provides very detailed laws regarding the rights of dependents over the property of the deceased person. Do not exploit and be not exploited. 4. it will make us feel impossible to solve this Riba (interest) problem. 103. and keep your duty to Allah. The Qur‘an says: "They say. Interest is the basis of modern capitalism. 5. "O you who believe. Unless people fight against the tyrant rulers and establish an Islamic state -the problems will still be there. Islam prohibits all transactions involving interest. so that it may increase in the property of (other) men. and if you repent.Interest is neither a trade nor a profit. Modern economics are so inter-linked with interest that people may think it is impossible to go without it. Prohibition of interest (Riba). 4:176). we must aim at getting rid of interest. medicine and education to every citizen. An Islamic economy is free of interest. their causative role needs to be thrashed out and developed in the form familiar to both economic profession and general readers. Mohsin Khan like other writers also proposes a wider role f Islamic Economics. the system of economic decision-making and the proper role of government.. their integration with one another and the economy is important task which still needs to be done. extension of the scope occurs. Akram Khan also visualizes a broader scope of Islamic Economics. firstly. noneconomic. ‗it deals with a wide-ranging set of issues. motives. ethical and moral factors. Islamic Economics also offers fairly precise guidelines on. In his view. tastes. mutual cooperation at moments of distress are great virtues and accepted as norms of behaviour. such as property rights. The extension has occurred through the introduction of normative. the scope of Islamic Economics seems to become the administration of scarce resources in human society in the light of the ethical conception of welfare in Islam. However. Mannan argues that in one sense Islamic Economics is more restricted one in other sense it is more comprehensive than modern economics. types of economic freedom.‖15 Secondly. tax policy and the orientation of government expenditure‖. Its approach has to be more global and holistic. Arif restricts the scope of Islamic Economics to the studying of the behaviour of a true Muslim in falah maximizing framework. allocation of resources. social. considerations for Hereafter extends the perspective of an economic agent to infinity. and al-Akhira (Hereafter) factors into the subject matter. Additionally. preferring others over one‘s own interest. it deals with both positive and policy areas with a view to achieving overriding goal of the Islamic economic system such as social justice and specific patterns of income and wealth distribution. He notes. hospitality to guests.‖ Aside from the issue of zero interest rate. he precludes behaviour of non-practicing Muslims or non-Muslims from its scope. looking after orphans. the incentives system. Besides their identifications. He writes. Horizontal as well as vertical or inter. The foregoing discussion clearly shows extended boundary of Islamic Economics relative to secular economics. According to him. According to Ahmad. due to the inclusion of a high content of normative economics. these factors are quite relevant for the individuals of an Islamic economy. ―The scope of Islamic Economics is wider than that of secular economics. ―In a Muslim society.. and social customs as amenable to policy manipulations. He writes‖ it is restricted because it is concerned only with those people who have faith in Oneness of Allah and His moral teachings as reflected in the Holy Quran and the Sunnah. widows and invalids. It is comprehensive because Islamic Economics takes cognizance of non-economic factors like political. Of course. He writes. for example.temporal‖. caring for others. . Thus.Scope of Islamic Economics Most of the Muslim economists have proposed relatively wider scope for Islamic Economics on the basis of comprehensive and integrated viewpoint of human life. The widening of the scope takes place at both levels. He opines. It is also restricted because Islamic state cannot encourage any and every economic actively. the scope of Islamic Economics is wider because it treats cultural factors like attitudes. Islam regulates the needs of society. and ways of earning and spending. Economic system of Islam has its own philosophy which is neither Capitalism.' said the Prophet. Islam still maintains the balance between exaggerated opposites. Hence. while Judaism set. but makes one condition that he should not be unmindful of his brethren-in-want. 'Be moderate. it calls upon the rich to give in addition to Saket or poor-due. Gibb of the University of Oxford: Within the Western world. nor even European Socialism but a harmonious blend of the material with the spiritual. The talent itself which man applies to the process of production is but a gift from God. And. Christianity holds that 'it is difficult for a rich man to enter the realm of Heavens' and prefers the life of a cave. It is significant to note that Buddhism hated wealth. the economic system of Islam is mainly based upon the Quran and the Sunnah or traditions of the Prophet. 'whatever is surplus' to the poor and the needy (2: 219). nor Communism. It postulates the principle that God is the Creator of all things and wealth intrinsically belongs to Him. in its own way. Wealth is to serve useful purposes and not to be accumulated in a few hands (59: 7). it has not yet succumbed to that obsession with the economic side of life which is characteristic of present-day Europe and present-day Russia alike. therefore. for wealth. prescribed in the pursuit of wealth. It makes a distinction between a Jew and a non-Jew in that it allows usury with a non-Jew and forbids it to a Jew. The economic system of Islam demands an equitable distribution of wealth. The balance maintained by Islam between Capitalism and Communism is aptly described by Prof. while Islam prohibits monasticism and lays stress on active life. High moral standards are. God claims a share in what is produced and declares that His share must go to those in want. Opposed equally to the anarchy of European nationalism and the regimentation of Russian Communism. means of livelihood.The economic system of Islam is mainly based upon the Quran and the Sunnah Unlike other economic systems which are the products of human mind. 'in this pursuit' which implies that 'one should take what is lawful and avoid the unlawful' (Bin Majah). The Quran gives man full sanction to harness the forces of Nature. . a racial basis. as such. the system of usury or interest. in order to help humankind to fulfill the responsibility of trusteeship. social. London. has made everything in this universe subservient to them. nor greedy grasp of wealth. political. again. it is not a question of the person‘s acceptance of God‘s teaching in one matter and the refusal of acceptance in another. The second basic principle is that Islam. God has entrusted human beings with free will in order that they live their lives according to the moral and ethical values that He Himself provided. For details. all interlinked in harmony. and to have complete and unqualified servitude to Him. thereby combining moral. In addition. something that guides a person‘s life in all its aspects: the moral. Economics and Islam. to accept His guidance. All of these aspects are based on the guidance of God. The Ideological Basis of Economic Activity The ideological basis in Islam may be summarized into six basic principles: The cornerstone is that everything has to start from the belief in God as the Creator. a guidance. and glad tidings…” (Quran 16:89) A third principle is that God created human beings on earth as His trustees. Islam provides an opportunity in material progress. “…And we have revealed to you in stages this book. Everything has to be within that basic guidance. ethical. a clarification of all things. to state loans. and material progress.Social ethic has been admirably summed up by Professor Massignon: Islam has the merit of standing for a very equalitarian conception of the contribution of each citizen by the to the resources of the community. This implies willingness to submit to God‘s will. which means that everyone is created to fulfill a certain responsibility on this earth. every member of which is a keeper unto other and accountable for the entire fold'. is a complete way of life. etc. as a religion. for example. but it holds to the rights of the father and the husband. Here. p. it occupies an intermediate position between the doctrine of bourgeois capitalism and Bolshevist Communism' (Gibb. a mercy. to private property and to commercial capital. 1932. Whither Islam. There are many verses in the Quran that suggest this meaning. social. such as: . The social ethic of Islam is embodied in the Prophet's conception of mankind as 'a fold. The economic system based on such conception is necessarily humane and good. It is hostile to unrestricted exchange. The fourth principle is that God. Under such conception there can be neither exploitation. 379). Lord. to indirect taxes on objects of prime necessity. and Sovereign of the universe. economic.should not imitate or emulate any other system if it differs from their particular principles. to banking capital. nor selfishness. Therefore. This means that Muslims individually and collectively . we refer the reader to our work. and tilth with produce of all kinds. God says: “And then on that Day (the Day of Resurrection) you will be called to account for every comfort and delight [we bestowed upon you]. and dates. there are many verses that urge humankind to harness the various resources that God has made available to them on this earth responsibly. and that you may seek of His grace. that humans are given free reign to use and abuse the resources God has provided us however we choose. But waste not by excess: for God loves not those who waste. like poverty. similar (in kind) and different (in variety): eat of their fruit in their season. Doing so is not regarded as sinful as long as it follows His path and does not transgress His limits. This means that every single person will be questioned on the Day of Judgment as to how he or she behaved whilst enjoying his or her earthly life. “Indeed God increases provision to whom He pleases and straitens it [in regards to others]…” (Quran 13:26) Affluence. poverty and affluence are in the total control of God Who.“God is He Who made subservient to you the sea that the ships may run therein by His command. out of His Infinite Justice and Wisdom. and that you may give thanks. God in the Quran narrates that Solomon said: “…This is from the bounties of my Lord. His measure of honor is the piety of the hearts. but rather. God says: “Your wealth and your children are only a trial. Humans are encouraged to enjoy of the good things that God has created.” (Quran 45:12) This does not mean.” (Quran 102:8) The sixth principle is that the variation in wealth among people in itself does not give a person either inferiority or superiority. has specified these things for whom he chooses. to test me whether I will be thankful or ungrateful…” (Quran 27:40) God is not concerned with the amount of wealth a person may have amassed. Rather. includes our economic behavior. God says: “It is He Who produces gardens. is also seen as a trial from God. of course. their beauty or color. This. with trellises and without. one through which it is seen what one will do with their wealth – indulge oneself or use constructively in ways legislated in the religion. Rather. but render the dues that are proper on the day that the harvest is gathered.”(Quran 64:15) After being bestowed with numerous gifts and bounties and a kingdom incomparable to any other on the earth. God says: .” (Quran 6:141) The fifth principle is the principle of accountability in the Hereafter. however. and olives and pomegranates. God has given human beings trusteeship and resources. whereas God! With Him is a great reward (Paradise). but they are to do so within the boundaries that He has given. institution of sadaqat and Zakat.Allah is the Sustainer One of the major features of Islamic economic system is the concept that Allah. We will elaborate and discuss some features of Islamic economy in this chapter as follows: 1. Modern capitalism. Allah provides livelihood and subsistence to all of His creatures in the universe. in fact. and we made you different nations and tribes. which has emerged as a reaction to capitalism. but rather your hearts and deeds.” (Saheeh Muslim) As one can immediately surmise from these principles that the Islamic economic system is radically different from others. The same may be seen in communist. striking balance between personal benefit and the benefit of society as a whole. the man is God‘s viceroy or deputy in overall divine scheme and he has been given limited rights of ownership of means of production. believes in justice and fairness in the economic field. which has emerged due to rapid industrialisation facilitated by unprecedented human advancement in science and technology. Indeed the most honored amongst you are the most Godconscious. has committed to feed. Socialism. According to it. is based on free market economy. It recognises intervention of state in the economic activity for the purpose of ensuring welfare of its citizens. From the principles mentioned in these articles does the Islamic system of economics spring. due to the difference of the values upon which it is based. which form its foundation and from which it can be distinguished and recognised. on the other hand. concern for well being of the poor are the distinctive features of the Islamic economic system. as well as mundane profits and spiritual gains. . Abolition of interest. the Almighty God of universe.“On humankind! Indeed We created you from a male and female. Allah. Fundamentals of Islamic Economic Systems Every economic system has its own peculiar features.” (Quran 49:13) The Prophet also said: “Indeed God is not concerned with your appearances nor your wealth. Islam. one may see certain rules of economics which take precedence over moral and ethical values due to the intrinsic nature and values of that system. believes in complete control of state on economy and full ownership of means of production by the state or community. Feudalism stands for ownership of land by few persons or families and makes majority of people tenants or serfs who work on lands either as servants of the landlords or for meagre share in the produce of land. non-intervention or very limited intervention of state in economic affairs. In a capitalist society. equitable distribution of wealth. prohibition of hoarding and stress on circulation of wealth. interest and banking. concept of lawful and unlawful. sustain and nourish all creatures including human beings. It is Allah who expands or curtails rizq (sustenance). that you may come to know one other. is the sustainer and provider. all which ensure that one gain the Pleasure of the Lord of the Worlds. socialist and other societies as well. It is Allah who has created all means and resources through which man earns his livelihood. -(29 : 62) 5. Ibn Majah) 2. He would have certainly given you provision as He supplies provisions to birds who get up hungry in the morning and return with full belly at dusk. -(67 : 21) Ahadith of Muhammad (PBUH) : 1Omar-b-al-Khattab reported : I heard the Messenger of Allah say : If you all had relied on Allah with due reliance. He knoweth its habitation and its repository. and straiteneth it (for whom He will). O‟ mankind! Remember Allah‟s grace towards you! Is there any creator other than Allah Who provideth for you from the sky and the earth?……. Abu Darda‟a reported that the Messenger of Allah said: Certainly provision seeks a servant just as his death seeks him. He is the Hearer. -(11 : 6) 2. the Knower. He was ever Knower. -(35 : 3) 6. -----(Tirmizi.To explain and elaborate this concept further. and straiteneth it for whom (He will) Lo! Allah is Aware of all things. Have ye seen that which ye cultivate? Is it ye who foster it.And there is not a beast in the earth but the sustenance thereof dependeth on Allah. -----(Abu Nayeem) . All is in a clear record. let us reproduce the relevant verses of the Holy Qur'an and Ahadith of the Prophet of Islam. Lo. And how many an animal there is that beareth not its own provision! Allah provideth for it and for you.. Allah maketh the provision wide for whom He will of His bondmen. Seer of His slaves.. -(17 : 30) 3. -(29 : 60) 4. or are We the fosterer? -(56 : 63-64) 7. Or who is he that will provide for you if He should withhold His providence?……. Verses of the Qur’an: 1. Lo! Thy lord enlargeth the provision for whom He will. every thing has been created by God for service of man. for Allah loves a believer who is a craftsman. This concept only emphasises some basic truths. namely: God provides sustenance to all His creatures by placing sufficient and infinite resources in the earth. the Mighty and Glorious. Instead of giving up struggle. Islam rather inspires a person to do his best in order to earn his livelihood by using all lawful (Halal) and fair means. Take whatever is lawful and leave whatever is unlawful.” -----(Masnud Zaid bin Ali) 5.‟” -----(Masnud Zaid bin Ali) The conception of God‘s Dispensation does not.3. Ahadith of Prophet Muhammad (PBUH) also emphasis the importance of struggle and hardwork put in for earning livelihood for oneself and one‘s family. will be under the shade of Allah‟s Throne‟. However. however. „Ali (Allah be pleased with him) said: “I heard the Messenger of Allah (may peace be upon him) saying: „(on the Day of Resurrection) when there will be no shade except that of the Throne of Allah. al-though He has given some rights to man for use of things required by the latter for his existence on the earth. the real position of man being that of a trustee and a beneficiary. Jabir b. fear Allah and cut your ambitions in search of livelihood.God is Real Owner of Everything and Man is merely a Trustee The heavens and the earth and everything in the universe belongs to Allah. The Qur‘an encourages struggle when it says: ―And that man hath only that for which he maketh effort. the rights given to man are very limited. 2. So. the person who undertakes a journey to earn his livelihood and then returns with it towards his dependents. „Ali (Allah be pleased with him) said: “A person came to the Prophet of Allah (May peace be upon him) and asked: „O Messenger of Allah: What type of earning is best?‟ The Prophet (may peace be upon him) said: „A man‟s work with his hand and every business transaction which is approved.” -----(Ibn Majah) 4. Abdullah reported : The Messenger of Allah (may peace be upon him) said: “O people. The revealed book of Islam encourages its followers even on Friday to disperse in the land after finishing their prayer and seek of the bounty of God (62:10). A person who suffers pain to feed his dependents is like a person who fights in the cause of Allah. for a man will not court death unless he is provided full sustenance (decreed) for him even if he restrains himself from it. and man should exploit these resources and things in lawful manner to earn his subsistence without violating the rights of others. suggest that one should sit idle and wait for sustenance which would automatically come to him. Fear God and cut your ambitions of livelihood. God is the real owner of everything. and that his effort will be seen‖—(53 : 3940). Some of the relevant verses of the Qur‘an which highlight this concept are given as under: . metals. water. and fashioned it as seven heavens. sea. Many economic benefits have been placed by God in these things for man. This principle has been made more clear when the Qur‘an says : ―……. -(57 : 7) This limited ownership or trusteeship bestowed on man by Allah in respect of the wealth which is given to him is not without significance. air. and bestow upon them of the wealth of Allah which He has bestowed upon you……” (24 : 33). Lo! Thy Lord is swift in prosecution. We have detailed our revelations for a people Who have Knowledge. river. and unto Allah all things are returned. plants. Allah ever surroundeth all things. Then turned He to the heaven. -(3 : 109) 2. And He is Knower of all things. and even sun. and lo! He is Forgiving. Animals. theirs will be a great reward. He it is Who hath placed you as viceroys of the earth and hath exalted some of you in rank above others. Believe in Allah and His messenger. Unto Allah belongeth whatsoever is in the heavens and whatsoever is in the earth. minerals. -----6:Al-An‟am:97 . The Qur‘an brings this fact to light in its following verses: 1.1. stars. -(4 : 126) 3. Merciful. -----2:Al-Baqarah:29 2. Rather the surplus wealth of man must go to his fellow beings who are in want. and such of you as believe and spend (aright). mountains. and spend of that whereof He hath made you trustees. land. Thus the whole scheme of circulation of wealth through charity and Zakat and distribution of wealth through other equitable means envisaged by Islam is based on man‘s limited rights as a trustee of wealth which has been bestowed on him by His Lord. The divine wisdom underlying this principle of trusteeship is that man should not hoard his wealth treating it as his absolute ownership and deprive others from its use. that He may try you by (the test of) that which He hath given you. are all for service to man. -(6 : 165) 4. moon. etc. 3.Everything Created for Service and Use of Man It is God who has created everything in this universe. day and night. And He it is Who hath set for you the stars that ye may guide your course by them amid the darkness of the land and the sea. Many of the things created by God in the earth are of benefit to man directly or indirectly. Unto Allah belongeth whatsoever is in the heavens and whatsoever is in the earth. He it is Who created for you all that is in the earth. fire. swine flesh and animals slaughtered in the name other than that of Allah. Thus doth He perfect His favours unto you. In fact the foundations of the Islamic economy have been laid on this concept. gambling and games of chance. and hath given you places of refuge in the mountains. Therewith He causeth crops to grow for you. tent-houses which ye find light (to carry) on the day of migration and on the day of pitching camp. . and the stars are made subservient by His command. business malpractices. and of their wool and their fur and their hair. narcotics. -----16:An-Nahl:80-81 5. of that which He hath created. and the olive and the date-palm and grapes and all kinds of fruit. blood. lotteries and gambling are strictly inadmissible. caparison and comfort for a while. and coats (of armour) to save you from your own foolhardiness. And whatsoever He hath created for you in the earth of diverse hues. Now let us glance through relevant verses of the Quran and Ahadith of Muhammad (PBUH). and by the star they find a way. lo! therein is indeed a portent for people who take heed. And Allah hath given you in your houses an abode. whence ye have drink. And He hath constrained the night and the day and the sun and the moon to be of service unto you. shelter from the sun. prostitution. etc. And He hath cast into the earth firm hills that it quake not with you. and whence are trees on which ye send your beasts to pasture. And Allah hath given you. Similarly in the field of consumption certain items of food are unlawful such as dead animals. Even expenses on certain items such as drinks. And He it is Who hath constrained the sea to be of service that ye eat fresh meat from thence. things that promote obscenity and vulgarity. pornography. short weighing and short measuring. and have given you coats to ward off the heat from you. speculation. and hath given you (also). Unlawful means of earning are strictly forbidden and a follower of Islam is permitted to earn through lawful and fair means.Concept of Halal and Haram Islam has introduced concept of Halal (lawful) and Haram (unlawful) in its economic system. and that haply ye may give thanks. to highlight in brief the concept of halal and haram. He it is Who sendeth down water from the sky. Lo! herein is indeed a portent for people who reflect. Lo! herein indeed are portents for people who have sense. and streams and roads that ye may find a way. of the hides of cattle.3. and thou seest the ships ploughing it that ye (mankind) may seek of His bounty. This concept reigns supreme in the realm of production as well as consumption. -----31:Luqman:20 4. bribery. debauchery. See ye not how Allah hath made serviceable unto you whatsoever is in heavens and whatsoever is in the earth and hath loaded you with His favours both without and within? Yet of mankind is he who disputeth concerning Allah without knowledge or guidance or a Scripture giving light. Certain means of earning livelihood and wealth have been declared unlawful such as interest. the Prophet of Islam. And landmarks (too). in order that ye may surrender (unto Him). -----16:An-Nahl:10-16 4. (Bukhari. Lo! he is an open enemy for you. it is no sin for him.Muslim) . Lo! Allah is Forgiving. Jabir reported that the messenger of Allah…. its payer. Abu Masud Al Ansari reported that the messenger of Allah forbade the price of dogs. and that which hath been immolated to (the name of) any other than Allah. Merciful. He does not accept but what is pure ….Then he mentioned about a man disheveled in hair and laden with dust.. and swine flesh. and its two witnesses. neither craving nor transgressing. his drink unlawful. And eat not up your property among yourselves in vanity. (2:168) 2.forbade the sale of wine. and follow not the footsteps of the devil. Jabir reported that the messenger of Allah cursed the devourer of usury. (2:188) Ahadith of Prophet Muhammad (PBUH): 1. making his journey long and extending his hands towards heaven: O Lord! O Lord! while his food was unlawful. And he said that they are equal (in sins) (Muslim) 4. But he who is driven by necessity. (Abu Daud) 5. O ye who believe! Eat of the good things wherewith We have provided you. nor seek by it to gain the hearing of the judges that ye may knowingly devour a portion of the property of others wrongfully. (Bukhari.Muslim) 3. (2:172-173) 3. dead animals. and render thanks to Allah if it is (indeed) He Whom ye worship. How he can be responded for that? (Muslim) 2. He hath forbidden you only carrion. earnings of prostitute and foretelling of a soothsayer. and blood.. Abdullah-bin-Amr reported that the messenger of Allah cursed the bribe taker and the bribe giver.Verses of the Quran: 1O mankind! Eat of that which is lawful and wholesome in the earth. pigs and idols……. Abu Hurairah reported that the messenger of Allah said: Verily Allah is pure. its scribe. his dress unlawful and he was nourished with unlawful things. they are the wrong-doers. The disbelievers. nor intercession. and be not cast by your own hands to ruin. donations to charitable cause. and bow your heads with those who bow (in worship). Concentration of wealth in few hands is discouraged and the gap between the rich and the poor is bridged. sadaqatul Fitr. They ask thee what they shall spend. games of chance. The system of sadaqat ensures equitable distribution of wealth in the Muslim community and makes it certain that the wealth does not remain hoarded in idle channels. Circulation of wealth in productive channels is ensured by enhancing the purchasing power of the poor. lo! Allah is Aware of it. (2:195) 3. and voluntary contributions such as alms-giving. (2:245) 5. card-playing and Gobairah and he said: Every intoxicant is unlawful. (2:254) . Who is it that will lend unto Allah a goodly loan. Some of the verses of the Qur‘an and Ahadith regarding system of sadaqat are reproduced as follows: Verses of the Qur’an: 1. etc.System of Sadaqat and Zakat Islamic economic order has introduced a comprehensive system of sadaqat which comprises: compulsory contributions like Zakah. Spend your wealth for the cause of Allah. Islam has declared that the poor and destitute have due share in the wealth of the rich and the rich are bound to return the share of the poor without stint. Charity and alms giving is sometimes called by the Qur‘an a goodly loan to God Who Himself would compensate the giver manifold and also reward him in the Hereafter. Unto Him ye will return.6. O ye who believe! Spend of that wherewith We have provided you ere a day come when there will be no trafficking. spending in the way of Allah on the poor. And what so ever good ye do. nor friendship. and do good. Lo! Allah loveth the beneficent. (2:215) 4.Establish worship. (Abu Daud) 5. so that He may cause it increase manifold? Allah straiteneth and enlargeth. pay the poor-due. monetary atonements. waqf. Abdullah-bin-Amr reported that the messenger of Allah prohibited intoxicants. (2:43) 2. Say : That which ye spend for good (must go) to parents and near kindred and orphans and the needy and the wayfarers. And whatsoever ye spend. male and female. If they submit to that. teach them that Allah has made obligatory upon them prayer for five times a day and a night. and lend unto Allah a goodly loan. although his companions are routed. Lo ! those who give alms. young and old from among the Muslims. If they then obey that. A man who gets up at night to read the Book of Allah. and a man giving alms with his right hand which he conceals (I consider that he said) from his left hand. (Ahmad) 4. -(Bukhari . (Tirmizi) 2. 57:18 Ahadith of the Prophet: 1. and theirs' will be a rich reward. Allah is aware thereof. Muslim) .6. and a man. teach them that Allah has made obligatory over them Zakat which will be taken from the rich and will be given to the poor among them. Call them to bear witness that there is no God but Allah and that Muhammad is the Messenger of Allah. Marsad bin Abdullah reported: Some of the companions of the Holy Prophet informed me that he heard the Prophet say: Surely the shade of the believer on the Resurrection Day will be his charity. Ibn Abbas reported that the Holy Prophet sent Mu‟az to Yemen saying: Certainly you will come across a people. There are three whom Allah loves. being in a battalion. Ye will not attain unto piety until ye spend of that which ye love. If they submit to that. the People of the Book. (3:92) 7. Abdullah bin Masud raising the tradition reported. 51:19 8. it will be doubled for them. He directed its payment before the people go out for the (Eid) prayer. avoid taking the best part of their property and fear the invocation of the oppressed. both men and women. because between it and Allah. And in their wealth the beggar and the outcast had due share. Ibn Omar reported that the Messenger of Allah made obligatory the charity of Fitr one Sa‟a of dried dates or one Sa‟a of barley upon the slave and the free. (Tirmizi) 3. -(Bukhari and Muslim) 6. there is no veil. Anas reported that messenger of Allah said: verily charity appeases wrath of the Lord and removes pangs of death. encounters the enemies. And he said that they are equal (in sin). then ye have your principal (without interest). (Ahmad. whereas Allah permitteth trading and forbiddeth usury. Wrong not and ye shall not be wronged.6. That is because they say : Trade is just like usury. And if ye repent. that ye may be successful. Verses of the Qur’an : 1Those who swallow usury cannot rise up save as he ariseth whom the devil hath prostrated by (his) touch. (2:275-276) 2O ye who believe ! Observe your duty to Allah. Allah hath blighted usury and made almsgiving fruitful. if ye are (in truth) believers. and his affair (henceforth) is with Allah. and give up what remaineth (due to you) from usury. Observer your duty to Allah. Charging of interest is a major sin and the usurers have been given the notice of war from God and His messenger. doubling and quadrupling (the sum lent). 7. Darqutni) We would. (3:130) Ahadith of Muhammad (PBUH): 1Jaber reported that the Messenger of Allah cursed the devourer of usury. he shall keep (the profits of) that which is past. -(Muslim) 2Abdullah-bin-Hanjalah reported that the Messenger of Allah said: A Dirham of usury a man devours with knowledge is greater than thirty-six fornications. They will abide therein. Following are some of the verses of the Qur‘an and Ahadith of Muhammad (PBUH) dealing with interest. Allah loveth not the impious and guilty. focus on the subject of interest and elaborately discuss it in an independent chapter in this book.Ban on Hoarding of Wealth . As for him who returneth (to usury). insha Allah. then be warned of war (against you) from Allah and His messenger. And if ye do not. which forms the foundation of capitalistic system of economy and which has not been eliminated even in the socialist system. (2:278-279) 3O. He unto whom an admonition from his Lord cometh and (he) refraineth (in obedience there to). and its two witnesses. Such are rightful owners of the Fire. ye who believe ! Devour not usury. its scribe. has been completely abolished by Islam. its payer.Prohibition of Interest Interest. Following verses of the Qur‘an and Ahadith of the Prophet of Islam throw light on this subject. that it become not a commodity between the rich among you. They who hoard up gold and silver and spend in not in the way of Allah. And keep your duty to Allah. The two extremes of every action are bad and moderation between them is the best policy according to Islam. and those who hoard wealth and do not spend it for good cause have been threatened with painful doom. Baihaqi) 8. Therefore. take it. That which they hoard will be their collar on the Day of Resurrection………… -(Al-Imran 3:180) 2.. (Ahmad.. And whatsoever he forbiddeth. Verses of the Qur’an : 1And let not those who hoard up that which Allah hath bestowed upon them of His bounty think that it is better for them. And whatsoever the messenger giveth you. it is worse for them. unto them give tidings (O Muhammad) of a painful doom. abstain (from it).Hoarding of wealth has been condemned by Islam in very clear terms. it is for Allah and His messenger and for the near of kin and the orphans and the needy and the wayfarer. and a property for one who has got no property. Now taste of what ye used to hoard! -----(9:At-Taubah:34-35) 3That which Allah giveth as spoil unto His messenger from the people of the townships.. Nay.. Hoarding of wealth is a great evil as it tantamounts to obstruction of flow of God-given wealth from the rich to the poor who are in genuine need of it. -(Tirmizi) 2Ayesha reported that the Messenger of Allah said: This world is an abode for one who has got no abode. Islam discourages hoarding of wealth and instead encourages circulation of wealth among all the sections of society.. Lo! Allah is stern in reprisal. -----(Al Hashr 59:7) Ahadith of Prophet Muhammad (PBUH): 1Abu Hurairah reported that the Messenger of Allah used to store up nothing for the morrow. . On the Day when it will (all) be heated in the fire of hell and their foreheads and their flanks and their backs will be branded therewith (and it will be said unto them): Here is that which ye hoarded for yourselves.Policy of Moderation Islam follows policy of middle way or moderation and avoids extremes. and one who has got no wisdom hoards for it. and love for people is half of wisdom. who believe ! Forbid not the good things.Following verses of the Qur‘an and Ahadith of Muhammad exhort the Muslims to follow the way of moderation. Allah loveth not transgressors. -(17 : 110) 4Be modest in thy bearing and subdue thy voice. Lo. denuded. -(Mishkat-ul-Masabih) 2Abu Hurairah reported that the Messenger of Allah said: Moderation in expenditure is half of livelihood. The principle of moderation propounded by the above mentioned texts equally applies in economic field specially in the field of acquisition of wealth and consumption. A spiritual or a monastic lays all the emphasis on moral and spiritual aspect of life and ignores completely material aspect. -(5 : 87) 2And let not thy hand be chained to thy neck nor open it with a complete opening. and good questioning is half of learning.Condemnation of Monasticism and Materialism Islam condemns Monasticism as well as Materialism and recommends its followers to adopt middle way between these two extremist ways of life. but follow a way between. -(17 : 29) 3………… And thou (Muhammad) be not loud voiced in thy worship nor yet silent therein. -(Bukhari) 3Matref-b-Abdullah reported that the messenger of Allah said: The best of affairs is their mean. He regards all economic activity as a vice and . Lo! the harshest of all voices is the voice of the ass. delay and moderation form a part out of twenty-four parts of Prophethood. The verses of the Qur’an : 1O ye. and transgress not. lest thou sit down rebuked. 9. which Allah hath made lawful for you. (31 : 19) Ahadith of the Prophet : 1Good manners. For self-control. pass the night in worship.2 Some other traditions on the same subject relate that the Holy Prophet (peace be on him) once learned regarding a companion that it was long since he had gone in to his wife and was engaged in prayer day and night. I both keep and omit fasts. and keep fasts in Ramadan. The Qur‘an. to acquire wealth and comforts of this life and utterly disregard moral values. It is the remnants of these people that you see in monasteries and convents. . Look at me. Their home will be the Fire because of what they used to earn. Worship Allah and do not associate naught with him. ‗I am fasting‘. good food. which Allah has made lawful for them. Thereupon he (peace be on him) delivered a sermon in the course of which he observed : ―This is not my creed. So whoso does not subscribe to my way. Once he learnt that some companions had taken a vow to fast during the day. the revealed scripture of Islam. Your body has rights over you. should be enjoyed as enjoyment of them is piety and renunciation of them is transgression. perfume.But of mankind is he who saith: “Our Lord ! Give unto us in this world” and he hath no portion in the Hereafter. All the advantages of asceticism can be had from the Jihad of Islam.economic struggle as a sinful act. is passion for wealth and worldly pleasures: 1……. I sleep and I pray also. The Holy Prophet (peace be on him) summoned him and ordered that he should go in to his wife at once. On the other hand Islam has expressed in unequivocal and unambiguous terms its condemnation of Materialism as well. sleep and worldly pleasure? I have never taught you to be a monk or a priest. but sleep also. You should fast. I enjoin fast. he is not of mine. The people who came to ruin before you met this fate because they were hard on themselves and Allah was hard on them too. ―What has happened to people that they have renounced women. I eat both meat and fat.3 Thus Islam does not subscribe to the view of monks and ascetics that satisfaction of physical urges is an impediment in spiritual development. Perform Hajj and Umra. In my Deen (Creed) there is not provision for renunciation of women or meat nor for abandoning the world. ―Break your fast and proceed. Materialists are those who lay the entire stress on the material aspect of life. Pray at night. expresses its dislike explicitly for the monastic way of life in its following verses: s The Prophet of Islam has also discouraged the monastic way of life among his followers. in fact. pay Zakat. Establish Namaz.‖ the Holy Prophet (peace be on him) told him. and those who are neglectful of Our revelations. Rather Islam enjoins upon its followers that the things. right or wrong. noble causes and human virtues. but eat and drink also. -(2 : 200) 2Lo ! Those who expect not the meeting with Us but desire the life of the world and feel secure therein. They ignore moral aspect of life and devote their entire time and energy to the attainment of material ends. He (peace be on him) then said. Following verses of the Qur‘an reject materialism which. abstain from meat and fat and renounce intercourse with women. They justify every means. submitted the companion. The Qur‘an highlights these inequalities in its following verses: . Ah. and therein they will not be wronged. However it recognises that like other natural things there is no equality among human beings as regards the economic means and possession of worldly wealth. Taking the existence of inequalities as a part of divine scheme. the Qur‘an advises its followers not to covet those things in which Allah has made some of them excess others. Until ye come to the graves. -----(17 : 18) 5Rivalry in worldly increase distracteth you. He thinketh that his wealth will render him immortal. These are they for whom is naught in the Hereafter save the Fire. fairness and justice in the production and distribution of wealth. 10.(10 : 7-8) 3Whoso desireth the life of the world and its pomp. We shall repay them their deeds herein. God in fact tries and tests the human beings whether they are thankful to Him in good circumstances and patient in bad circumstances. It advises its followers that their success lies neither in monasticism nor in pure materialism. and in ownership of means of livelihood. By exalting some of you over others in rank or by favouring some of you over others in provisions. Therefore. -----(11 : 15-16) 4Whoso desireth that (life) which hasteneth away. condemned.Equity and not Equality Islam establishes equity. who hath gathered wealth (of this world). And afterward We have appointed for him hell. and arranged it. kindled. nor they should go to the other extreme and judge everything by the materialistic point of view. they should neither give themselves up entirely to monasticism or spiritualism disregarding the importance of material means of life. (All) that they contrive here is vain and (all) that they are wont to do is fruitless. They should strike balance between these extremes and follow middle path. The Qur‘an does not consider these inequalities in the distribution of Divine sustenance as punishment or reward and does not try to eliminate them. but verily he will be flung to the Consuming One. The Muslims have been called by the Qur‘an the people of the middle way and. -(104 : 1-6) Islam adopts middle way between these two extremist views of life. We hasten for him therein that We will for whom We please. -(102 : 1-2) 6Woe unto every slandering traducer. This inequality has been presented by the Qur‘an as a part of Divine Economic order. he will endure the heat thereof. they should not be extremists. Nay. because no two individuals have been blessed with hundred percent equal mental and physical abilities. what will convey unto thee what the Consuming One is! (It is) the fire of Allah. rejected. therefore. teaches the people to regard the existence of differences in wealth as a test by which God tries them in this world. -(43 : 32) The existence of economic inequalities among the people is not only natural but is also a blessing for the purification of human soul and development of human personality. in fact. The Prophet of Islam has said : If anyone spent a night in a town and he remained hungry till morning. . Islam does not permit the difference in possession of wealth to assume such proportions that few lucky persons live in ease and luxury controlling major portion of community‘s wealth while the vast majority of people possessing negligible share in community‘s wealth lives a life of abject poverty.1- And covet not the thing in which Allah hath made some of you exceed others. misery and hunger. -(4 : 32) 2- He it is Who hath placed you as viceroys of the earth and hath exalted some of you in rank above others. to be kind and benevolent to the poor and to sacrifice their possessions for the cause of God. Unto men a fortune from that which they have earned. -(17 : 30) 5- Is it they who apportion their Lord‟s mercy? We have apportioned among them their livelihood in the life of the world. However. because if it happens the community invites wrath of God and meets its natural end of self-destruction. while those who have abundant resources should thereby learn to be grateful to God. and the mercy of thy Lord is better than (The wealth) that they amass. Islam. God observes how they spend it.. whether they consider it as their personal property denying the poor any share in that or they consider themselves as trustees in respect of the wealth bestowed by God and spend it in the way of God for the welfare of their poor brothers. Those who have scarce means of sustenance should thereby learn to be patient and contented and not to be jealous. And God tries the poor by straitening their sustenance whether they lose their trust in God and become jealous of the rich or whether they keep their faith in God and remain patient in the adverse circumstances. and raised some of them above others in rank that some of them may take labour from others. That He may try you by (the test of) that which He hath given you……… -(6 : 165) 3- And Allah hath favoured some of you above others in provision…… -(16 : 71) 4- Lo ! thy Lord enlargeth the provision for whom He will. and straiteneth it (for whom He will)……. difference in wealth must not exceed natural and reasonable limits. By granting abundance of wealth to some. and unto women a fortune from that which they have earned……. According to Islam. modesty.) to have a good grasp of this important aspect of our life.html file:///C:/Documents%20and%20Settings/Adnan/Desktop/isl%20eco/398.wikipedia. Islam encourages simplicity. Here.com/bc3/johnsonuk/eng/dawa/economic.com/newmuslims. we have discussed the main points of the Islamic economic system and we have no scope to go into the details in depth. Here we can safely conclude that Islam believes not in equal distribution but in equitable and just distribution of resources and wealth.php?title=Special%3ASearch&search=Islamic+economic+ http://islam. water resources and minerals. does not allow the difference between the rich and poor reach an uncontrollable limits so as to disturb the peace of society. yet it perfectly stands for socio-economic justice. Islam. It discourages miserliness. extravagance and unnecessary waste.htm#CHAPTER%202 http://www. mutual help and cooperation.com/shaufi/b16/b16_2. It would be better for you to study some standard books on Islamic Economic from reliable sources (ie Islamic book shop etc. Conclusion In addition to the above basic principles Islam has laid down many more rules about economic life. therefore.muslimtents. An Islamic state must bring all productive resources into use. charity.php?id=590 http://www.about.com/shaufi/b16/b16_1. REFERENCES : http://www. Individual freedom may have to be sacrificed for the social good.muslimtents. Although it does not believe in complete equality in possession of economic means. including unemployed manpower.the promise of God‘s protection for that town comes to an end. It believes in fair and equitable distribution of incomes and wealth and ensures that the Islamic state should provide for basic human needs to all of its citizens.com/od/business/a/economics. Many legal and economic measures have been provided to bridge the gulf between the rich and the poor and to establish Islamic welfare state which guarantees provision of social security and secures basic needs to its less fortunate citizens.angelfire.htm http://en. greed.htm . unused land. These aspects of Islamic economy we shall study in subsequent chapters of this book.org/w/index. An Islamic stare must take steps to root out corruption and all harmful pursuits even if they are economically lucrative.thedeenshow.htm http://www. 995. . 2:8290398 .42. :1.8. -. -* 92!% # 995. . 90/00384 .42. 302:828 55/ 995. . 42. .30170 . .-. 43843:. 03. /.. 0.4342. 92 10. . . . :20398 .4.3/ $09938. /3.3. 08945. 4.8 0. 92 995. . 42. 2:8290398 . :1.8. -. -* 92 995. . 03 50/. 47. . 0.$0.2.7..3/0 55990$50.7. 995.4342.8. 80. . -4:9 .42.8.2 . 4/. -:83088. 0.4342.8 92 . .
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