{"id":1001,"date":"2010-11-23T13:01:03","date_gmt":"2010-11-23T13:01:03","guid":{"rendered":"http:\/\/localhost\/wp3\/?p=1001"},"modified":"2010-11-23T13:01:03","modified_gmt":"2010-11-23T13:01:03","slug":"the-economic-system-of-islam","status":"publish","type":"post","link":"https:\/\/sunnionline.us\/english\/2010\/11\/23\/1001\/","title":{"rendered":"The Economic System of Islam"},"content":{"rendered":"
\"economic_system_of_islam\"Introduction:<\/strong> As a complete way of life, Islam has provided guidelines and rules for every sphere of life and society.\u00a0 Naturally, a functioning economic system is vital for a healthy society, as the consumption of goods and services, and the facilitation of this by a common medium of exchange, play a major role in allowing people to realize their material and other goals in life.<\/div>\n

<\/p>\n

Islam has set some standards, based on justice and practicality, for such economic systems to be established.\u00a0 These standards aim to prevent the enmity that often occurs between different socioeconomic sections.\u00a0 Of course, it is true that the gathering of money concerns almost every human being who participates in transactions with others.\u00a0 Yet, while these standards recognize money as being among the most important elements in society, they do not lose sight of the fact that its position is secondary to the real purpose of human existence, which is the worship of God.
An Islamic economic system is not necessarily concerned with the precise amount of financial income and expenditure, imports and exports, and other economic statistics.\u00a0 While such matters are no doubt important, Islam is more concerned with the spirit of the economic system.
A society that implements Islamic laws and promotes Islamic manners will find that it bring together all the systems \u2013 social, economic, and so forth \u2013 that it deals with.\u00a0 Islam teaches that God has created provision for every person who He has brought to life.\u00a0 Therefore, the competition for natural resources that is presumed to exist among the nations of the world is an illusion.\u00a0 While the earth has sufficient bounty to satisfy the needs of mankind, the challenge for humans lies in discovering, extracting, processing, and distributing these resources to those who need them.
Islam consists of a set of beliefs which organizes the relationship between the individual and his Creator; between the person and other human beings; between the person and universe; and even the relationship of the person to himself.\u00a0 In that sense, Islam regulates human behavior, and one type of human behavior is economic behavior.\u00a0 Economic behavior is dealt by Muslims as a means of production, distribution, and consumption of goods and services.\u00a0 In Islam, human behavior -whether in the economic area or others – is not value free; nor is it value neutral.\u00a0 It is connected with the ideological foundation of the faith.<\/p>\n

The Sources of Islamic Economics<\/strong><\/p>\n

The fundamental sources of Islam – the Quran and the Sunnah of the Prophet[1] – provide guidelines for economic behavior and a blueprint of how the economic system of a society should be organized.\u00a0 Therefore, the values and objectives of all \u201cIslamic\u201d economic systems must necessarily conform to, and comply with, the principles derived from these fundamental sources.\u00a0 The purpose of these articles is to outline the most salient characteristics of an economic system based on the fundamental sources of Islam.\u00a0 The focus here is on the principal features of the Islamic system.
The Islamic economic system is defined by a network of rules called the Shariah.\u00a0 The rules which are contained in the Shariah are both constitutive and regulative, meaning that they either lay the rules for the creation of economic entities and systems, as well the rules which regulate existing one. As an integral part of the revelation, the Shariah is the guide for human action which encompasses every aspect of life \u2013 spiritual, individual, social, political, cultural, and economic.\u00a0 It provides a scale by which all actions, whether on the part of the individual agents, society, and the state, are classified in regards to their legality.\u00a0 Thus there are five types of actions recognized, namely: obligatory; recommended; permissible; discouraged; and forbidden.\u00a0 This classification is also inclusive of economic behavior.
The basic source of the Shariah in Islam is the Quran and the Sunnah, which include all the necessary rules of the Shariah as guidance for mankind.\u00a0 The Sunnah further explains these rules by the practical application of Prophet Muhammad, may the mercy and blessings of God be upon him.\u00a0 The expansion of the regulative rules of the Shariah and their extensions to new situations in later times was accomplished with the aid of consensus of the scholars, analogical reasoning – which derived rules by discerning an analogy between new problems and those existing in the primary sources – and finally, through textual reasoning of scholars specialized in the Shariah.\u00a0 These five sources – the Quran, the Sunnah, consensus of the scholars, analogical reasoning, and textual reasoning – constitute the components of the Shariah, and these components are also used as a basis for governing economic affairs.<\/p>\n

Justice<\/strong><\/p>\n

In summary, we can say that the Islamic Economic system is based upon the notion of justice\u00a0 It is through justice that the existence of the rules governing the economic behavior of the individual and economic institutions in Islam can be understood.\u00a0 Justice in Islam is a multifaceted concept, and there several words exist to define it.\u00a0 The most common word in usage which refers to the overall concept of justice is the Arabic word \u201cadl\u201d.\u00a0 This word and its many synonyms imply the concepts of \u201cright\u201d, as equivalent to fairness, \u201cputting things in their proper place\u201d, \u201cequality\u201d, \u201cequalizing\u201d, \u201cbalance\u201d, \u201ctemperance\u201d and \u201cmoderation.\u201d In practice, justice is defined as acting in accordance with the Shariah, which, in turn, contains both substantive and procedural justice[2]\u00a0 covering economic issues.\u00a0 Substantive justice consists of those elements of justice contained in the substance of the Shariah, while procedural justice consists of rules of procedure assuring the attainment of justice contained in the substance of the Law.\u00a0 The notion of economic justice, and its attendant concept of distributive justice,[3]\u00a0 is particularly important as an identifying characteristic of the Islamic economic system.\u00a0 The rules governing permissible and forbidden economic behavior on the part of consumers, producers and government, as well as questions of property rights, and of the production and distribution of wealth, are all based on the Islamic view of justice.
The following topics will be discussed in the following articles:
(a)\u00a0\u00a0 individual obligations, rights, and self-interest;
(b)\u00a0 property rights;
(c)\u00a0\u00a0 importance of contracts;
(d)\u00a0 work and wealth;
(e)\u00a0\u00a0 the concept of barakah;
(f)\u00a0\u00a0 economic justice;
(g)\u00a0\u00a0 prohibition of interest (riba);
(h)\u00a0 competition and cooperation; and
(i)\u00a0\u00a0 the role of the state.<\/p>\n

The Ideological Basis of Economic Activity<\/strong><\/p>\n

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, Lord, and Sovereign of the universe.\u00a0 This implies willingness to submit to God\u2019s will, to accept His guidance, and to have complete and unqualified servitude to Him.\u00a0 This means that Muslims – individually and collectively – should not imitate or emulate any other system if it differs from their particular principles, for example, the system of usury or interest.
The second basic principle is that Islam, as a religion, is a complete way of life; something that guides a person\u2019s life in all its aspects: the moral, social, ethical, economic, political, etc.\u00a0 All of these aspects are based on the guidance of God.\u00a0 Therefore, it is not a question of the person\u2019s acceptance of God\u2019s teaching in one matter and the refusal of acceptance in another.\u00a0 Everything has to be within that basic guidance.<\/p>\n

\u201c\u2026And we have revealed to you\u00a0 in stages this book, a clarification of all things, a guidance, a mercy, and glad tidings\u2026\u201d (Quran 16:89)<\/strong><\/div>\n

A third principle is that God created human beings on earth as His trustees, which means that everyone is created to fulfill a certain responsibility on this earth.\u00a0 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.\u00a0 In addition, Islam provides an opportunity in material progress, thereby combining moral, social, and material progress, all interlinked in harmony.
The fourth principle is that God, in order to help humankind to fulfill the responsibility of trusteeship, has made everything in this universe subservient to them.\u00a0 There are many verses in the Quran that suggest this meaning, such as:<\/p>\n

\u201cGod is He Who made subservient to you the sea that the ships may run therein by His command, and that you may seek of His grace, and that you may give thanks.\u201d (Quran 45:12)<\/strong><\/div>\n

This does not mean, however, that humans are given free reign to use and abuse the resources God has provided us however we choose.\u00a0 Rather, there are many verses that urge humankind to harness the various resources that God has made available to them on this earth responsibly.\u00a0 Humans are encouraged to enjoy of the good things that God has created, but they are to do so within the boundaries that He has given.\u00a0 Doing so is not regarded as sinful as long as it follows His path and does not transgress His limits.\u00a0 God says:<\/p>\n

\u201cIt is He Who produces gardens, with trellises and without, and dates, and tilth with produce of all kinds, and olives and pomegranates, similar (in kind) and different (in variety): eat of their fruit in their season, but render the dues that are proper on the day that the harvest is gathered.\u00a0 But waste not by excess: for God loves not those who waste.\u201d (Quran 6:141)<\/strong><\/div>\n

The fifth principle is the principle of accountability in the Hereafter.\u00a0 God has given human beings trusteeship and resources.\u00a0 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.\u00a0 This, of course, includes our economic behavior.\u00a0 God says:<\/p>\n

\u201cAnd then on that Day (the Day of Resurrection) you will be called to account for every comfort and delight [we bestowed upon you].\u201d (Quran 102:8)<\/strong><\/div>\n

The sixth principle is that the variation in wealth among people in itself does not give a person either inferiority or superiority.\u00a0 Rather, poverty and affluence are in the total control of God Who, out of His Infinite Justice and Wisdom, has specified these things for whom he chooses.<\/p>\n

\u201cIndeed God increases provision to whom He pleases and straitens it [in regards to others]\u2026\u201d (Quran 13:26)<\/strong><\/div>\n

Affluence, like poverty, is also seen as a trial from God, one through which it is seen what one will do with their wealth \u2013 indulge oneself or use constructively in ways legislated in the religion, God says:<\/p>\n

\u201cYour wealth and your children are only a trial, whereas God! With Him is a great reward (Paradise).\u201d(Quran 64:15)<\/strong><\/div>\n

After being bestowed with numerous gifts and bounties and a kingdom incomparable to any other on the earth, God in the Quran narrates that Solomon said:<\/p>\n

\u201c\u2026This is from the bounties of my Lord, to test me whether I will be thankful or ungrateful\u2026\u201d (Quran 27:40)<\/strong><\/div>\n

God is not concerned with the amount of wealth a person may have amassed, their beauty or color, but rather, His measure of honor is the piety of the hearts.\u00a0 God says:<\/p>\n

\u201cOn humankind! Indeed We created you from a male and female, and we made you different nations and tribes, that you may come to know one other.\u00a0 Indeed the most honored amongst you are the most God-conscious.\u201d (Quran 49:13)<\/strong><\/div>\n

The Prophet also said:<\/p>\n

\u201cIndeed God is not concerned with your appearances nor your wealth, but rather your hearts and deeds.\u201d (Saheeh Muslim)<\/strong><\/div>\n

As one can immediately surmise from these principles that the Islamic economic system is radically different from others, due to the difference of the values upon which it is based.\u00a0 In a capitalist society, 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.\u00a0 The same may be seen in communist, socialist and other societies as well.\u00a0 From the principles mentioned in these articles does the Islamic system of economics spring, striking balance between personal benefit and the benefit of society as a whole, as well as mundane profits and spiritual gains, all which ensure that one gain the Pleasure of the Lord of the Worlds.<\/p>\n

********************************
Footnotes:<\/strong><\/p>\n

[1] The Sunnah is general body of narrations of the speech, deeds, and tacit approvals of the Prophet.
[2] \u201cSubstantive justice means reaching the \u2018right\u2019 result. Procedural justice means getting the result in the \u2018right\u2019 way.\u201d\u00a0 (A speech entitled \u201cEffective Arbitration Techniques in a Global Context\u201d delivered by the Secretary for Justice of Hong Kong ,Ms Elsie Leung)
[3] \u201cNormative principles designed to allocate goods in limited supply relative to demand.\u201d\u00a0 Stanford Encyclopedia of Philosophy: (http:\/\/plato.stanford.edu\/entries\/justice-distributive\/)<\/p>\n

Source: IslamReligion.com<\/em><\/div>\n","protected":false},"excerpt":{"rendered":"

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