Download - Topic 2: Introduction to Islamic Economics
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At the end of the lessons, students should be able:
To explain the worldview of Islam.
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Do not incorporate an inherent belief in human brotherhood, socio-economic justice and the trust nature of resources.
Overly exaggerated emphasis on “survival of the fittest” or “material conditions of life”.
Do not motivating system to induce human being to work in the interest of society.
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Unable to realise simultaneously the goals of both efficiency and equity by means of strategies based on the secularist Enlightenment worldview.
Muslim countries need a different economic system – a system able to provide all the elements necessary for human well-being in accordance with the demands of brotherhoods and socio-economic justice.
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Since factors affecting world views differ, different world views exist, leading to different “systems” for different peoples.
Theories explaining human behaviour also differ.
Islamic world view based on ‘Islam’ and its sources of knowledge.
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Literally means peace and submission Muslim - one who submits
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Not equivalent to religion as understood in the west.
Watt (1979)… means a way of spending an hour or so on on Sundays in practices which give him some support and strength in dealing with the problems of daily life, and which encourages him to be friendly towards other persons and to maintain the standards of sexual propriety; it has little or nothing to do with commerce or economics or politics or industrial relationships … or may even look on religion as an opiate developed by exploiters of the common people in order to keep them in subjection.
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Religion reduced to a private matter between and individual and his/her God(s).
no role to play in determining public affairs science replaced religion as authorityreligion for infantile man; science for
modern/nature man Nietzsche proclaims “God is Dead”This understanding of religion is not necessarily
applicable to all societies and civilizations.
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Religion reduced to a private matter between and individual and his/her God(s).
No role to play in determining public affairs.
Science replaced religion as authority.
Religion for infantile man; science for modern/nature man.
Nietzsche proclaims “God is Dead”.
This understanding of religion is not necessarily applicable to all societies and civilizations.
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Watt (1979)… whole way of life … covers both the private and
public/societal lives of man, it permeates the whole fabric of society, and includes theological dogma, forms of worship, political theory and a detailed code of conduct, including even matters which the European would classify as hygiene or etiquette …
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Watt (1979). No shunning this world. Din is for this world. Use this dunya to achieve akhirah.
Al-Qasas : 77 “But seek with the (wealth) which Allah has
bestowed on thee, the home of the Hereafter, And do not forget thy portion in this world. But do good as Allah has been good to thee and seek not mischief in the land, for Allah loves not those who do mischief
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Tawhid or Unity or God.
Kalimah Shahadah.
Beautiful Names of God.Implications for economics.Al- Razzaq (the Provider).Malikal Mulk (the eternal owner of Sovereignty).Al-Muqsit (the equitable).
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Insan. Created good. Body and spirit.
Al-Hijr : 28-29 “Behold! Thy Lord said to the Angels : I am
about to create man, from sounding clay from mud moulded into shape. When I have fashioned and breathed into him of my spirit, fall ye down in obeisance to him”
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Given aql and knowledge.(Al-Baqarah:31)“…And He taught Adam the manes of all things…
Best of creations.(Al-Tin:4)“We have indeed created man in the best of moulds”
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Role of abd and khalifah.(Al-Dhariyat:56)“I have only created Jinn and Man that they may serve me…”
(Al-Baqarah:30)“Behold! Thy Lord said to the angels: I will create a vicegerent on earth…”
Cannot be khalifah unless you are first and foremost an abd.
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Nasr (1990)“There is no more dangerous creature on earth than a khalifah Allah who no longer considers himself to be an abd Allah”.
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Creation of God for man.(Al-An’am: 95-103)Talks of vegetation and fruits, night and
day, heaven and earth, human being, rain.Material world and world of ghayb.Man as trustee to manage nature.Natures as a sign of God.
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Ibadah to achieve falah (ultimate success).
Develop earth to achieve God’s pleasure.
To attain falah we must have knowledge and action
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Ilm and derivatives appear 750 times in the Qur’an.
Fundamental requirement for all Muslims life-long.
Obligation (fard).
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Good action is ibadah.
Good economic action is ibadah.
Good action requires correct intention, correct knowledge and observance of all shari’ah requirements.
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Sub Systems For Various Aspects of Human Life
Political System
Economic System
Social System
Philosophy Principles Goals
TawhidKhilafahAmanah
Tazkiyyah
OwnershipFreedom
Social-Econ. Justice
Economic well – beingUniversal brotherhood
Equitable distribution of income
Employment generation
Worldview
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According to M. Akram Khan:-“Islamic economics aims at the study of human falah achieved by organizing the resources of the earth on the basis of cooperation and participation”
Key concepts in the above definition are the following:-a. Falahb. Resourcesc. Cooperation and participation
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a. Falah Literal meaning; -
to become happy, to have god luck or success, to be successful.
According to Raghib al-Isfahani:-Falah is a both-worldly concept.
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a. Falah In this world it represents three things:-
i. survival,ii. freedom from want,iii. power and honour
In the hereafter it stands for:-i. eternal survivalii. eternal prosperityiii. everlasting gloryiv. knowledge free of all ignorance
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a. Falah According to Qu’ran , the ultimate goal of
human life should be the achievement of falah in the hereafter, but it would be reward for one’s deeds during his stay in this world
Conformity to the Islamic way of life is a means to achieve falah both in this world and hereafter
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Micro-level Macro level
Falah Survival Biological survivali.e. Physical health, freedom from disease
Ecological balance, hygienic environment , and medical aid for all
Economic survivali.e.Having means of livelihood
Management of natural resources to generate employment for the entire population
Social survival i.e.Brotherhood and harmonious inter-personal relationship
Inner social cohesion; absence of conflicts among different groups
Political survivali.e. freedom and participation in the affairs of the state
Independence and self-determination as an entity
Freedom from want
Alleviating poverty Provisioning for the entire population
Self-reliance i.e. work rather than parasitic idleness
Generating resources for the coming generations
Power and Honour
Self-respect Economic power and freedom from debt
Civil liberties, protection of honour and life
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a. Falah In Qur’an the uses of the term falah
its derivatives occur at forty places
A perusal of these verses leads us to determine the conditions of falah i.e.i. Spiritualii. Economic iii. Culturaliv. Political
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a. Economic Conditions of Falahi. Infaqii. Prohibition of interest iii. Fulfillment of covenants and trustsiv. Justicev. Enterprise
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b. Resources of earth Studies human behavior towards
resources of earth and investigates those modes of utilisation which may lead to falah
Resources of earth are meant to provide livelihood to the creatures of God
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b. Resources of earth The Qu’ran informs us that God has
created sufficient resources for his creatures (41:10)
Hence, scarcity may be either due to lack of proper utilisation of natural endowments or an imbalanced distribution
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b. Resources of earth IE studies resources from the point of view
of ‘adequacy’ rather than scarcity
It starts from the premise that the resources of earth are adequate to achieve falah
If some scarcity is being encountered man must be doing something wrong, and ways and means should be found t restore the natural state of adequacy
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b. Resources of earth This may be broadening the productive
base, improving technical know-how, and re-distribution of resources
There is moral dimension to this question as the man is accountable for his deeds in the akhirah.
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c. Cooperation & participation Inter-personal relationship in Islam are
based on the universal brotherhood (ukhuwah) of all human being (4:1).
The Qu’ran has explicitly ordained Muslims to help one another in furthering God-consciousness (taqwa) and virtue (birr) (5:2).
Thus mutual help rather than conflict should be the basis of all economic relationship.
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i. Tawhid Foundation of Islamic faith Oneness and Unity of God It means that universe has been consciously
designed and created by the Supreme being Quranic verse
(3:191; 38:27; 23:15) Everything created by Him has a purpose which
gives meaning and significance to the existence of Universe
After creating this world, the Supreme being did not retire
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ii. Khalifah (Vicegerancy) Quranic verse:-
(2:30; 6:165; 35:39; 38:28; 57:7) Man endowed with:-
a. Spiritualb. Mental characteristicsc. Material resources
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As a khalifah man is free which enable them to think and reason to choose between right ad wrong
By nature man is good and noble(15:29; 30:30; 95:4)
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iii. Amanah
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iv. Tazkiyah
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IE is further supported with the following principles:-i. Ownershipii. Freedomiii. Social-economic justice
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i. Ownership A social (including legal) relationship of an individual
or group with an object involving a system of rule of access to, and control of resources.
86 times in the Qu’ran. Absolute owner is God. Man as khalifah and ‘abd has relative and
conditional ownership. Man is responsible to society and accountable to
God for his property. Labour and need are both legitimate bases of
property ownership.
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ii. Freedom In Islam, man is free but still subject to the
guidelines in the form of shari’ah
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iii. Social-economic justice
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With proper understanding of definition, philosophy and principle Islamic economics outline to achieve the following goals:-i. Economic well-beingii. Universal brotherhoodiii. Equitable distribution of income and wealthiv. Employment generation
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i. Economic in general.
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Sub Systems For Various Aspects of Human Life
Political System
Economic System
Social System
Philosophy Principles Goals
TawhidKhilafahAmanah
Tazkiyyah
OwnershipFreedom
Social-Econ. Justice
Economic well – beingUniversal brotherhood
Equitable distribution of income
Employment generation
Worldview
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THANK YOU…
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