IN the name of Allah, Most Gracious, Most Merciful.
The Islamic economic system is based on the principles of Sharia, which is derived from the teachings of Islam. This unique economic system differs pragmatically from conventional economic systems in so many ways.
The Islamic economic system consists of organisations, institutions and social values. Muslims are encouraged to lead a life that shows respect and concern for others. Although some tendencies in the Islamic economic system may tend to mirror certain practices of the conventional systems such as capitalist and socialist, these tendencies are unique in many ways that define Islam in a positive light. It is a unique approach to managing and organising an economy which is based on the principles of equity, justice and social responsibility. It offers a balance between individual freedom and communal welfare, providing a framework for sustainable development and ethical business practices.
Fundamental to the aforementioned is the superiority of Allah’s laws over and above manmade rules and regulations. Manmade laws are influenced and manipulated on the bases of race, religion, social and other primordial factors of biases. Policies are enforced only when those biases and interests are involved. But the laws made by Allah (SWT) are superior and certified against all manner of prejudice, class, status and rivalry. The mission of Islam is very clear.
Islam created a divine contract between Muslims and non-Muslims and the Islamic economic system. It generates the spiritual strength to achieve human well-being in all aspects of our lives, social, economic, political and moral. Allah (SWT) would not literally come down onto the planet of earth to feed the hungry directly but does so through the agency of humans. The Islamic social order established to enforce Divine laws makes itself responsible for the discharge of this responsibility.
The dual concepts of halal and haram are pivotal to Islam-based economy. Halal means ‘lawful’ and Haram means ‘unlawful’. In Islam, certain means of earning livelihood and acquisition of wealth have been prohibited as Haram.
Muslims should not venture into economic trade or commercial interactions, contract and transaction in which interest, bribery, gambling, games of chance, speculation, short-weighing, short-measuring, and other business malpractices are involved. They constitute parts of financial and economic Haram.
The other parts include aspects of consuming and expending on items considered unlawful. They include certain specifications of food and drinks trading in alcoholics, narcotics, debauchery, prostitution, pornography, obscenity, vulgarity, lotteries etc. Allah (SWT) states categorically in Surah al-Baqarah, Qur’an 2:163, “O mankind! Eat of that which is lawful and good on the earth, and follow not the footsteps of Shaitan (Satan). Verily, he is to you an open enemy.” Hadith of the Prophet (SAW) as reported by Hazrat Abdullah bin Umar (R.A.) that ” Messenger of Allah prohibited intoxicants, games of chance, card-playing, and Gobairah, and he said: Every intoxicant is unlawful.”
Islam teaches that we must do our things with total moderation, that we should neither be extremely monastic nor materialistic. Muslims are recommended to adopt the middle course between these two extremist ways of life. Islam teaches us moderation in every aspect of life. For example, moderation, as prescribed in Islam, can bring about achievement of success (‘Falah’, and enviable spiritual, moral and socio-economic well-being in this world and success in the Hereafter).
Moderation also engenders fair and equitable distribution of wealth, income and economic resources. Allah (SWT) warns the Muslims in Surah Al-Isra, Qur’an 17:29, “And not let your hand be tied (like a miser) to your neck, nor stretch it forth to its utmost reach (like a spendthrift), so that you become blameworthy and in severe poverty.” The Prophet (SAW) also reported in one of the Hadiths, that “Moderation in expenditure is half of the livelihood, and love for people is half of the wisdom, and good questioning is half of the learning.”
Basic consumption of goods and services is a fundamental part of all economies, including the Islamic economic system. Both the masses and the affluent in the society have needs and business to fulfill either through goods or services.
Activities that are considered haram and unlawful such as the black market, gambling, smuggling and similar activities do not thrive under this system of economy. The poor have their basic life necessities such as food, health, and clothing. In addition, there is a guarantee for equal opportunity and employment security such that everyone has a chance to work and prosper.
The financial system runs without the negative impacts of ‘riba,’ bribery and gratification which comes through interest as part of the ending procedures when running their banks and financial institutions. Allah (SWT) warns the believers strictly on the consequences of ‘Riba’ in the Noble Qur’an, Surah Al-Baqara, Chapter 2 verses 278 and 279.
Private property is encouraged, although the property itself can never be used against the interest of the public as we currently witness in the Nigerian society where the rich are getting richer at the expense of the poor.
The Nigerian Muslim ummah, whose multitude are wretched of the earth get poorer by the day, and paradoxically, the larger chunk of the capitalists divide who take parasitic advantage of the socio-economic and political disorder of the nation are fellow Muslims as well, but getting richer and richer. In an ideal Islamic economic system, which we are not, the payment of zakat, an obligatory charity for the ownership of the property is mandatory.
As with capitalist system, production is an essential element as it does not only address the needs of consumers but also provides employment and opportunity. Under the principles of the Islamic economic system, production is part of the social fabric, which makes it vital to society and includes a price system. Acquisition of wealth is not discouraged, although it attracts payment of Zakat. It should be stressed that purchasing luxuries is not encouraged either, so the focus on wealth is more along the lines of the greater good for the family and community.
In Islam, rich Muslims are bound to spend on the needy in several ways. This spending is generally called “Sadaqah.” It means a good loan to Allah (SWT), Who Himself would compensate and reward a cheerful giver in this life and the Hereafter.
Sadaqah ensures equitable distribution of wealth in society. Through Sadaqah, Islam discourages concentration of wealth in a few hands so the gap between the rich and the poor is substantially bridged.
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