The Islamic religion is among the world’s religions that have regulations and guidance to faithfulness in all activities of life, including material and spiritual ones. The Quran is, in fact, the source of basic teachings about economics. It is indicated in the Quran that “... your goods which God has made as the very means of your subsistence...” It further orders the adherents of Islam not to neglect their portion of this world” (Q. 28/77). Furthermore, there is an emphasis on the dual composition of man by noting that Allah has given to mankind what he cannot get in the life hereafter. Following these commandments and orders, the Islamic religion has developed a systematic economic structure through which all faithful are guided on how they deal with each other in the society. The provided standards for economic engagement for followers of the Islamic faith are meant to ensure practicality and justice for its society members. The economic practice is also meant to prevent enmity that is likely to occur between different sectors of the society. While Islamic economic system recognizes the gathering of money through social economic activities of every human being and regards this activity as important, it does not lose sight of the fact that human beings exist primarily to worship God. The aim of this paper is to provide a project that explores the Islamic economic system and the way it is practiced in contemporary world.
The Main Concern of Islamic Economic System
The Islamic economic system is based on three major principles of ownership, disposal of ownership, and distribution of wealth among people living in a society. To facilitate how people acquire goods and services, Islam has a set of rules and regulations that define the manner of possessing wealth without encountering social problems with fellow adherents (An-Nabhani, 2002). Legal means of ownership are defined in terms of contracts to possess and, therefore, allow human beings to develop styles and means through which they could earn their income in an acceptable manner. In this way, Islam does not interfere with the process of producing wealth but instead it enhances how people produce wealth. The ownership and contracts are provided in the legal principles and rules from which numerous issues are derived and numerous issues measured by qivas, in which sense means deductions. Islamic economic system also allows the adherents of Islam to accept employment and people allowed to work in legal professionals, such as investors and traders. The legislation of employment is done in a way that allows deductions to include representations. Gifts are also included in the legislations because they are seen as legal means to ownership and may encompass sources, such as grants, charity, rewards, and donations. For this reason, Islamic economic system views ownership and contract through the lens of general guidelines as outlines in the Shariah laws. Because possession is confined to specific means, ownership must be viewed in terms of existing laws regarding the possession of goods, services, and wealth.
Economic systems are primarily concerned with financial income and expenditure of people in a certain society, the imports and exports of countries, and other economic practices of individuals and companies. These issues are critical to the definition of Islamic economic system, but the criticality in this system is emphasized by the fact that Islam is concerned with the spirit of economic system more than the physical economic system, as it is known in the secular world. Islamic economic practice is seen as the ultimate solution to the problems facing human beings, as they seek to enhance their welfare in the society among themselves. This form of practice is derived from the concept of justice, whereby existence of rules and policies that govern the economic behaviors of institutions and individuals in the context of Islam can be understood well. Like many other concepts, justice in Islam is multifaceted concept with the most common facet referring to the Arabic word adl. Adl has meanings that imply fairness, equality, balance, rights, putting things in the correct place, moderation, and temperance. As a result, these implications all form up the Islamic economic system, calling for equity and fairness and the rest of aspects. Therefore, the basic foundations of Islamic economics is justice with is viewed as the foundation of Shariah laws. This concept provides the procedural and substantive justice that cover economic issues that any Muslim is likely to encounter, as they interact with other people in the society. Technically, substantive justice is driven by concepts of justice as the basic foundation of Shariah laws, while procedural justice deals with the rules of procedures that ensure everyone is accessed to economic justice, as defined by the law. Economic justice is thus a concept of distributive justice, particularly concerned with the Islamic economic system.
Islamic economic system is composed of rules that define permissible and prohibited economic behaviors on the part of individual consumers, business people, and governments. It also deals with the issues of property rights and production and distribution of wealth, as defined by the Islamic view. Among the areas that covered in economic system in the Islamic context, including the obligations, rights, and self-interest of individuals, property rights, work and health, prohibition of interest popularly known as riba, the concept of barakah, the importance of contracts, and the role that states play in the Islamic economic system. Islamic teachings are based on the recognition that human beings must survive through economic activities within their social context.
Muslims are permitted to engage in activities of buying and selling, ownership of property, taking loans, agriculture, exchanging currency, setting up a company, among many other economic activities. However, the Islamic religion makes a distinction between economic science and economic system, where the two are viewed as very different practices. This view is guided by the theory that a fundamental difference exists between production of goods and services, which are otherwise known as economic science and the way goods and services are distribbuted throughout a society, which is known as economic system. Thus, for Islamic teachings, the production of services and goods is not derived from any specific viewpoint in life in the sense that a conveyor belt cannot be considered as Islamic, capitalist, or communist. This is pure universality in the way it is practiced. This is the reason why issues of technological, mechanical, and robotic production have not followed any particular viewpoints in modern practice. As a result, the practice of production, marketing, and manufacturing is largely the same, even in the Islamic countries. The Islamic view is that human beings should be classified in terms of economic units and, therefore, be economically evaluated to solve their problems. Islamic economic system is also different from the communist view people, as a part of nature. Instead, the Islamic economic system views people as composed of instincts and organic needs, which must be evaluated and responses should be provided to the people.
The means of possession in Islamic economic system are limited to five. This includes inheritance, work, and obtaining wealth for the sake of life, state granting wealth to its citizens and wealth and commodities, given to individuals without seeking for exchange. These possession means are widely accepted within the practice of Islamic economics in most parts of the world, where Shariah laws are applied. While there is a wide application of Islamic economic principles in various circumstances today, there are basic foundations of Islamic economics that can be seen as general requirements for every adherent of the Islamic faith. For instance, Muslims are not allowed to deal in activities that lead to interest. This is specifically highlighted in the Quran, where it is indicated that Allah has forbidden usury. It is notable that the prohibition is mainly focused on interest based transactions for all people, including non-Muslims. The second basic foundation is that adherents of Islamic faith must not gain property or wealth through deceitful means, fraud, or falsehood. They are commanded to give just measure and weight in a manner that they do not withhold from people what is theirs rightfully. Thirdly, guardians are not supposed to take their properties from orphans. In other words, those who take care of orphans must not demand for payment if orphans have properties left in their name. Muslims are also forbidden to participate in lotteries, gambling, and alcohol proceeds. They should also not engage in hording of food and other important basic needs of the society, hoping to make more profits later. The Islamic requirement for Muslims is also to responsibly spend their money, pay alms, and give constantly to charity work.
The Islamic economic system is a set of rules and policies that define economic engagement of adherents of Islamic faith. The practice is based on the Shariah laws that lay down the activities, permissible for Muslims when they are dealing with one another in the society. The Islamic economic system is mostly based on the concept of justice, where it is assumed that adhering to the rules and procedures ensures that everyone in the society is treated equally and fairly.
Related Economics essays
- Chinese Policy
- Federal Budget
- Marx's Use of Adams Smith's Political Economy to Critique Capitalism
- Factors Influencing Foreign Market Entry Mode
- Deficit Spending
- Essay Questions. Neoclassical Economics and the Contribution of Keynes to Economics
- Functions of the Central Bank of Kenya
- Islamic versus Conventional Banking in the UAE: The Case of DIB & HSBC