What is Islamic Economics?

Islamic Economics

Islamic Economics

Islamic Economics” is a term often referred to as a sub – branch of Islamic jurisprudence; fiqh in Arabic. The term of Islamic Economics literally translated from Arabic word “al iktisat’ul Islam, or rarely “al fiqh’ul Iktisat.”

To give a more professional definition; referring Umar Chapra; ” that branch of knowledge which helps to realize human well – being through an allocation and distribution of scarce resources that is in conformity with Islamic teachings without unduly curbing individual freedom or creating continued macroeconomic and ecological imbalances.” Also according to Chapra and many other Scholars; there are 4 sources of Islamic systems; they are;

1-) Quran, such a divine sources
2-) Sunnah, the sayings and practices of the Prophet Mohammed (pbuh)
3-) Ijma, the common belief of Muslim scholars
4-) Qiyas, the other principles that are compared to those three sources.

These resources are widely accepted as the main sources of Islamic sciences. We will break down each and every one of them later on InshAllah.

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Islam, a religion born in a territory where the agricultural potential is limited but commercial possibilities were great; such as trade and tourism. Prophet Mohammed (pbuh) himself had been a merchant; and very successful businessman actually; so We can see that Islam always regarded merchants with honor and esteem. Along with Prophet (pbuh); many of His Sahabah were also merchants; Abu Bakr, Usman and many others were successful merchants.

After the death of Prophet (pbuh); Muslims continued that tradition of successful trade. Many of that era Scholars were successful merchants as well, like Abu Hanifa. They faciliated in a really wide location; between Mediterrenian an China. It is an interesting point that people of those countries like Malaysia and Indonesia were converted to Islam not without war but with the efforts of that brilliant Muslim merchants like Abu Hanifa.

During the Middle Ages, with that remarkable success in making converts; Muslims were started to seen as world’s leaders in business, science, medicine and philosophical thought. Many ancient Greek authors are known to us today only through Arabic translations. Modern mathematics is based on the Arabic system of notation, and algebra was an Arab invention. During the intellectual revival of Western Europe in the eleventh and twelfth centuries many Christian scholars went to Cordoba and other Muslim intellectual centers to study classical philosophy and science. The word of “college” was derived from Arabic word of “külliye”; and the oldest college of English speaking Europe, the Oxford College was founded as a copy of those “külliye” system. At the same time, Christian merchants learned Muslim commercial practices and techniques. As a matter of fact, the word of “cheque” (literally means a printed form, used instead of printed money) was invented by Muslim merchants of that time; and its original Arabic word was “şakk”. Many other advanced finance techniques were also being used during that time period.

In short; it can be clearly seen that Islamic economic system of that time is very close to today’s free market and so – called capitalism or liberal economy. However; Islam has two main and very important differences when compared to those other economic systems. Islamic Economics is based on “prohibition of interest” (usury or riba in Arabic) and “presence of zakat (almsgiving)”. Those two point can be regarded as indispensible points of Islamic economics. “Prohibition of interest” and obligatory alsmgiving could be sounded like somewhat socialism, but; it’s not. Islamic economics is so much different than capitalism and socialism. However, I think it should be a good implication that “dynamism of capitalism” and “equality of socialism” are combined in the economics system of Islam. Moreover, it embraces both this and other world as a whole; directed to obtain both worlds.

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Omer ILYASLI
islamiceconomy1@gmail.com

10 Comments

  1. Ahmed Anees
    Apr 17, 2013 @ 13:03:11

    Islamic economics or Islamic banking or any science or system with the term Islamic before it means nothing different from that without it except it should comply with Islamic principles. Economics is about the management (allocation and distribution) of scarce resources in different socio-poitical systems. Islamic economics is precisely the same, but in accordance with Islamic teaching. The economic resources, in Islamic economics, will belong to God instead of capitalists in capitalist systems, or to government in social systems or by both in a mixed system. This is the basic difference, so there need not be a discussion of Islamic economics. It must be left to the Fiqh Academy to decide economic or any other issue, else the economist shall also be an Islamic scholar for everything must be decided in accordance with Islamic principles.

    Reply

  2. Islam and Muslim
    Apr 18, 2013 @ 02:41:16

    JazakAllah. It is very informative. Please keep those articles coming..

    Reply

  3. Nasir
    Apr 18, 2013 @ 23:29:48

    To @Ahmed Anees; If I have anything to say, Islam is not only an economic doctrine like many capitalist or marxists think or not a matter of faith anyway. Islam is a way of life, view of world and civilization which has a view of economics as well. So We cannot say that economics and Islam so much different but, yes, I think We need to have Islamic economics in accordance with fiqh.

    Reply

  4. Nasir
    Apr 18, 2013 @ 23:30:17

    And, to the author; many thanks for the post. It is an eye-opener.

    Reply

  5. niaz
    May 06, 2013 @ 10:35:01

    thank u so mach that u write so nice topic about Islamic please continua

    Reply

  6. shabiq
    Oct 13, 2013 @ 07:18:17

    very useful

    Reply

  7. Khan
    Nov 21, 2013 @ 08:18:13

    We have read many articles about Islamic Economics and Islamic Finance techniques but articles like this which deals with the history of Islamic Economics are rare. JazakAllah for posting brother..

    Reply

  8. Alper Yakupoğlu
    Dec 01, 2013 @ 20:25:10

    SA. I think you should’t use the term “scarce resources” because this is a part of the definition of the economics in Classical, Neo-Classical and the modern Neoliberal economic ideology.

    Reply

  9. AbdiRazaq
    Feb 19, 2014 @ 22:47:38

    We muslim although we are cherished with comprehensive Divine Guindence in every sphere of life but we are so accustomed to relate or try to get acceptance of islamic principles in the sight of corrupt western system, whether it be democracy, economics or other. In other words though we are chosen to lead the world it seems we preferred to follow to the extent that when we observe in islam some issues the westerners discovered we run into saying this what exactly described in our islam. Don’t get me wrong, i certainly accept the existance commonalities yet Allahmdulilah Islam is far supperior. For instance, why we term islamic economics adding prefix islam to theirs. some islamic economists are trying reinvent the wheel- wasting efforts in trying to discover western mode of economics quoting from islam. However; dear brothers let us exert effort in devising purely islamic sytems that can save humanity from econ. & financial system by formatting western phylosphy, teachings that preoccupied are thought. For surely does in islam is a solution for all of the problem of mankind. Let not measure advancement by space exploriation, nuclear fision bla bla but by sticking to truth & self-mastery as prescribed in Quran and Sunnah. My Allah Guide us all and make us those who benefitted from Perfect Way of Life He ,the Exalted made for us. Amiin! Jazakalah kheyran.

    Reply

  10. What is Islamic Economics | Çarşamba Yazıları - Ömer İLYASLI Kişisel Blog
    Feb 28, 2014 @ 10:08:48

    […] (This article is originally published at www.islamiceconomy.net . To see original; go What is Islamic Economics? ) […]

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