Economics (Islamic)

Economics (Islamic)

Economics (Islamic): Promoted as an alternative to neoclassical economics, Marxism, and other Western economic doctrines, Islamic economics is based on the teachings of the Quran (القرآن) and Sunnah (السنّة). This discipline aims to rediscover and revive the economic values, priorities, and mores of the early Muslim community. The movement to establish Islamic economic doctrine originated in India in the decades preceding the 1947 partition. It was part of a broader plan to establish a full range of distinctly Islamic disciplines, with its most prominent promoter being Sayyid Abu al-Ala Mawdudi (سيّد أبو الأعلى المودودي).

Etymology

• Arabic: الاقتصاد الإسلامي, al-iqtisad al-Islami
• Turkish: İslam ekonomisi

Core Principles and Objectives

Economic Justice

Islamic economics strongly emphasizes economic justice and critiques the failures of existing economic systems. Theorists argue that true adherence to Islamic principles explicitly prohibits selfishness, waste, extravagance, competitive behaviors deemed destructive, and immoral activities such as gambling, speculation, and hoarding.

Prohibition of Interest and Encouragement of Profit Sharing

A hallmark of Islamic economics is the strict prohibition of riba’ (interest). Instead, profit sharing and investment activities based on risk-taking are encouraged. This ethical framework seeks to foster fairness and shared responsibility between capital providers and users.

Social Equity and Normative Values

A truly Islamic society prioritizes generosity toward the needy, hard work, fair pricing, and the protection of private property.

Ethical Foundations

1. Tawhid (Unity): The concept of oneness within the Muslim community.
2. Adl (Equilibrium): A balance between supply and demand within the market.
3. Ikhtiyar (Free Will): Ensuring free will of the consumer and investor is respected.
4. Fardh (Responsibility): The individual’s responsibility toward the Muslim community at large.

Key Figures and Literature

• Sayyid Abu al-Ala Mawdudi: A significant advocate for Islamic economics.

Suggested Books for Further Studies

1. “Towards A Just Monetary System” by M. Umer Chapra
2. “Islamic Finance: Principles and Practice” by Hans Visser
3. “An Introduction to Islamic Economics” by Zahid Parvez
4. “The Political Economy of Islamic Development: Decolonization and State-Building in an Islamic Society” by Justin McCarthy

Takeaways and Conclusions

Islamic economics envisions a distinctive economic system uniquely rooted in Islamic principles, advocating for social justice, ethical trading practices, and community welfare. It aims for a balanced, just society, sharply contrasting with assumptions underlying many traditional Western economic paradigms. By returning to early Islamic values, it strives to pave the way for a resurgence of prosperity among Muslim communities.