Islam And Economics

Islam is a way of life and not just a religion in the narrow sense of the word: i.e. moral injunctions for personal conduct. The Qur’an has been revealed f.o Prophet Mohammad (Peace be upon him) to direct the way Muslims, individuals and communities, should organise their social, economic, political, legal and personal lives. It has enunciated definitive ideas as to what is to be done (permissible or ‘Halal’) and what is not to be done, (prohibited or ‘Haram’). The basic aim in life for a Muslim is to Worship God by following His instructions and avoiding His prohibitions both on the material and spiritual planes. There is no separation between those two aspects of life in Islam. The Muslim is required to take that test throughout his life and he is awarded - or punished - for it on earth and in the Hereafter.

This indicates God has endowed mankind with unlimited resources. Thus the economic phenomenon in Islamic philosophy does not stem from scarcity — as in Capitalism — or exploitation of production relationships - as the Marxists claim — but from the utilisation of these resources in accordance with God’s commands. Three basic principles were outlined by Islam as to the way this should be done:

• Ownership of these resources by man is not absolute - it is a social obligation to be undertaken within the limits set for it. God owns these resources and man is only a trustee in its use.
• The way to pursue the acquisition and development of resources - i.e. the economic aspect of man’s life - is also not completely free. There are moral and legal constraints.
• Although individuals are allowed to ‘own’ wealth - in the proper way the final aim is that this wealth should be available to the community as a whole: social solidarity is the justification and aim of the Islamic state, so that Muslims, freed from the pressure of material need, would find it easy to fulfil the aim of their life: worshipping God.

The practical implications of these instructions were not left to Muslims to deduce but were clearly brought out at both the moral and legal levels. The legal ones were enshrined in the Shari’a or the legal code of Islam, which every Muslim had to abide by.

Source: Islamic Banking, Abdur Rahim Hamdi. Republished with permission.