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DEFINITION OF ISLAMIC ECONOMICS

But what is Islamic economics? How does it differ from the conventional capitalist and

socialist economic models? What are its axioms and principles? How will Islamic

economics replace the dominant economic orders in Muslim societies? One of the first

points emphasized by author after author is that Islamic economics is not capitalism

minus interest plus zakah or socialism minus state control plus God.

It is something unique and different and exclusive to Islam.

How unique and how different is essentially the key issue.

S. M. Hasanuz Zaman offers the following definition: "Islamic economics is theknowledge and application of injunctions and rules of the Sharia (Islamic Jurisprudence)

that prevent injustice in the acquisition and disposal of material resources in order to

provide satisfaction to human beings and enable them to perform their obligations to

Allah (God) and society.

M. Akram Khan considered that "Islamic economics aims at the study of human falah

(Salvation) achieved by organizing the resources of earth on the basis of cooperation

and participation.

The role of the Sharia (Islamic Jurisprudence), the notion of adl (justice) and falah

(salvation), cooperation and sharing are central to Islamic economic philosophy of the

total system of Islam." Siddiqui(2) sums up this philosophy as follows:

"The key to economic philosophy of Islam lies in man's relationship with God, His

universe and His people, i.e. other human beings, and the nature and purpose of man's

life on earth.

Man-God relationship is defined by Tawhid (Oneness of God).

The essence of Tawhid is a total commitment to the will of Allah (God), involving both

submission and mission to pattern human life in accordance with His will.

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The will of Allah (God) constitutes the source of value and becomes the end of human

endeavour.

Life on earth is a test, and its purpose should be to prove successful in the test by doing

Allah's (God's) will.

The entire universe with all the natural resources and powers is made amenable to

exploitation by man, though it is owned by Allah (God) alone.

Life on earth being a test and all the provisions available to man being in the nature of

trust, man is accountable to Allah (God) and his success in the life hereafter depends

on his performance in this life on earth."

But how is this economic ibadah (worship) performed?

There are a host of Islamic concepts and values which define the extent and nature of

economic activity.

There are many positive values such as iqtisad(moderation), adl(justice), ihsan

(kindness par excellence), amanah (honesty), infaq (spending to meet social

obligations), sabr (patience) and istislah (public interest).

Similarly, there are a number of values which are negative: zulm (tyranny), bukhl

(miserliness), hirs (greed), iktinaz (hoarding of wealth) and israf (extravagance).

Economic activity within the positive parameters is halal (allowed and praiseworthy) and

haram (prohibited and blameworthy) which has to be moderated, production which is

regulated by the halal-haram code, and distribution which must adhere to the notion of

adl (justice).

Collectively, these values and concepts, along with the main injunctions of the Qur'an,

provide a framework for a unique, just and contemporary economic system.

Develop by

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