4 years ago
Islam has had its own economic theory since its advent. It promoted genuine economic development, upheld by vital pillars, namely the prohibition of usury, equitable distribution of wealth, prevention of monopoly, and prohibition of gambling, illicit speculations and fictitious sales transactions. It did not only ordain productive work, but attached great importance to it as a measure of success. Competence and excellence in performance were not just taken into account, but encouraged. Hard workers are promised immense rewards in the afterworld. Capital would complete its cycle whereby possession rotates between the poor and the rich every quarter, such that it would be for the rich solely.
The economic affairs of the Muslim would be organized on prohibition of lavish expenditure and overuse of resources, while disapproving money hoarding and its advocates.
Allah ordains Muslims in the holy Qur’an Surah Al-Araf, verse
Another verse in Surah Al-Isra (17:29) ordains moderation in spending.
Moderation in spending is a vital principle which was missed by positive economic schools such as capitalism and communism. The term “sustenance” substitutes the word “economy” in Islamic jurist jargon.
Islam places emphasis on the value of productive work implemented in earnest as essential for livelihood sustenance. The Prophet (saw) used to teach his companions that, “verily Allah wishes that, a person undertaking a work executes it perfectly.” Likewise Islam emphasizes accountability for output quality, and calls upon followers to undertake genuinely beneficial works. This is the rationale behind the prohibition of gambling as a means of earning living, because it does not rely on serious productive work.In addition, Islam prohibits all forms of speculation and debt factoring, considering it an activity producing no tangible commodities. Those safeguards already in place intend to exclude the possibility of a crisis parallel to those witnessed in the world’s financial circles, which jeopardize its very existence.
Islam only recognizes genuine production attained as a result of earnest hard work. It encourages trade transactions and according to the Prophet (saw),
The Prophet (saw) also encouraged Muslims to adopt prudent practices saying, “Wisdom should always be searched for by Muslims, and once it is made available they should consider themselves most deserving of it.” He also encouraged his companions to pursue their quest for knowledge as a lifetime objective, “Sustain your quest for knowledge from the cradle to grave. Pursue knowledge even to China,” i.e. distant and involving formidable travel.
The Islamic economic theory is based on the prohibition of usury. This clearly stated in the holy Qur’an Surah Al-Baqarah, verse 275,
Furthermore, usury is considered a manifest act of injustice, which is strictly prohibited. Those who perpetuate injustice are warned of infliction of divine nature, in this life and in the hereafter. Usury is subversive to genuine production, and inhibits the incentives to work by reliance on easy-earned, illicit income. Its consequences are witnessed in today’s western economy which is based on making money by speculating instead of trading on commodities.
The prohibition of usury extends to prohibition of all its forms of gambling such as debt factoring, stock market sales and insurance. All these activities are causes of economic destruction, and uncontrollable inflation that inhibits genuine economic development. This is the reason why the Islamic economy is based on the exchange of tangible commodities, such that money keeps a genuine value, in addition to its monetary value, thus safeguarding itself against economic collapse and inflation.
On the basis of the above, it is clear that the Islamic economy is based on wealth in the form commodities rather than monetary values. In other words it’s based on concrete fact rather than abstract concepts. Economy is inseparable from the real state of affairs. It is simply a translation of the actual production in Muslim countries.
The Islamic principle checks the heads’ of states authority in handling financial resources in aspects of collection, dispersion allocation and upper limit of amounts. No government has a free hand to secure resources by unjustifiable imposition of tax, which is unaffordable by the poor population. The judicious dispersion of state resources is spelled out in the economic principles. Money shall be dispersed for the public, even if the beneficiary society doesn’t hold the same beliefs as the sect, which the rulers in power are affiliated with. The government, in the Islamic perspective, is a government for all the population, and funding shall not be confined to Muslims. All are expected to work and produce, and it’s the duty of the state to empower citizens to earn a living.
Islamic teachings also provide employee rights to lead a stable life in a manner that has no parallel in all other human civilization. The basic requirements of a stable life are spelled out in a saying by Prophet Muhammad (saw). He was quoted addressing officials,