Lakhasly

Introduction The Islamic Economic system is a system which is in conformity with the rules of Shariah.This point has been clarified more explicitly in the following verse: "And seek the (betterment of the) Ultimate Abode with what Allah has given to you, and do not neglect your share from this world, and do good as Allah did good to you, and do not seek to make mischief in the land." (28:77) This verse fully explains the Islamic point of view on the question of property. It places the following guidelines before us: (1) Whatever wealth man possesses has been given by Allah. (2) Man has to use it in such a way that his ultimate purpose should be to seek the bounties and blessings of Allah in this world and hereafter. (3) Since wealth has been given by Allah, its use by man must necessarily be subject to the commandment of Allah. Now, the Divine Commandment has taken two forms:- a) Allah may command man to convey a specified production of "Wealth" to another man.It comes to mean that so long as the means of livelihood are being used only as a path leading towards thefinal destination, they are the benevolence of Allah, but as soon as man gets lost in the mazes of this pathway and allows himself to forget his real destination, the very same means of livelihood turn into a "temptation" or into a "trial": "And be aware that your possessions and your children are but a trial." ( 8:28). The Holy Quran has enunciated this basic truth very precisely in a brief verse: "And seek the (betterment of the) Ultimate Abode with what Allah has given to you."(28:77) This principle has been stated in several other verses too.This attitude of the Holy Quran towards "the economic activity" of man and its two aspects would be very helpful in solving problems of man in Islamic economics. 2. The real nature of wealth and property The other fundamental principle, which can help solve the problem of the distribution of wealth, is the concept of 'wealth' in Islam. Allah delegates the right of His property over a thing, which accrues to man, to Him. The Holy Quran explicitly says: Give to them from the property of Allah which He has bestowed upon you."(24:33).

Introduction
The Islamic Economic system is a system which is in conformity with the rules
of Shariah. Shariah can be explained as a "Pathway to be followed" and can
further be explained as a set of divine injunctions and laws that regulates
every aspect of human beings in their individual and collective lives.
All aspects of individual and collective life of a human beings can be divided
into five categories. Thus, Shariah provides a pathway to be followed in all
these five categories.
The five categories are:

1. Beliefs (Aqaid)


2. Acts of Worship (Ibadaat)


3. Dealing with others (Muamlaat)


4. Manners (Ikhlaqiat)


5. Economics (Maishat)
   The nature of Shariah rulings are as follows


6. Halaal - All those acts that are permitted and declared lawful by
   Shariah.


7. Haraam - All those actions that are prohibited and declared unlawful
   by Shariah and their impressibility is derived from either the Holy
   Quran or Hadiths Mutawatir or Ijma. Sunnah e Mutawaatirah as
   the strongest narrations of the Holy Prophet in terms of their
   narrators, i.e. the narrators are in such a large number that it is
   impossible for all of them to have agreed on a false issue.


8. Faraiz - All those actions that are declared mandatory by either
   Quran or Sunnah e Mutawaatirah or Ijma.


9. Wajibaat - All those actions that are declared mandatory on Muslimsby the narrations which are not as strong in terms of narrators
   as Sunnah Mutawaatirah.


10. Sunnah - All those actions that are recommended to be performed
    by Muslims, based upon the association of those actions with Holy
    Prophet .


11. Nawafil (All those actions that are made optional and reward able
    on Muslims by Shariah).
    Sources of Shariah
    The rules and regulations laid down by Islamic Shariah are derived from
    the following sources:


12. Quran


13. Hadiths


14. Ijma


15. Qiyas


16. Ijtihad
    Quran
    Quran is the word of Allah Ta’ala revealed over Prophet Muhammad
    . The Holy Quran is the primary source of knowledge and Shariah
    rulings for Muslims. The injunctions mentioned in the Holy Quran are
    mandatory to follow and anyone who denies express injunctions of
    the Holy Quran is regarded as Non-Muslim. Most of the injunctions
    mentioned in the Holy Quran are prescriptive in nature such as Order
    for offering Salah but information about method and other descriptive
    information about offering Salah may be obtained from other sources
    of Shariah such as Sunnah:
    “And obey Allah and His Messenger, if you are believers.” (8:1)
    Sunnah
    Sunnah is defined as a word spoken or act done or rectified by the HolyProphet .The Sunnah provides detailed information about the code
    of conduct for every spheres of life and is also considered as Divine
    Revelation. The details about Sunnah are preserved in the form of
    Ahadiths. On the basis of clear injunctions of Holy Quran, Sunnah can
    thus be regarded as the second source of Islamic Shariah after Quran
    e.g. Rules for Riba al Fadal has been extracted from Sunnah.
    Ijma
    Ijma means consensus of scholars of Ummah on a particular
    issue. It is one of the most authoritative sources of Islamic Shariah
    since it encompasses the unanimous opinion of the scholars of
    a particular era over the interpretation of Quran and Hadiths on
    some particular issue. The status of Ijma as an authoritative
    source of Shariah has also been ascertained from the following
    saying of Holy Prophet :
    "My Ummah shall never be combined on an error."
    Qiyas
    Qiyas means to apply a recognized rule of Shariah expressly
    mentioned in the Holy Quran and Sunnah, to a similar thing or
    situation by way of analogy.
    Ijtihad
    Ijtihad litrary means “Utmost Effort” and technically it means to
    exert utmost effort to discover the ruling of Shariah regarding a
    particular situation. The practice of Ijtihad has been duly endorsed
    by the Prophet Muhammad in following narration:
    “When the Holy Prophet intended to send his
    companion Mu'adh , to Yemen as a ruler and
    as a judge, He asked him: How will you adjudicate
    a matter when it will come to
    e said, "I shall decide on the basis of Allah's Book
    (the Holy Quran)."
    The Holy Prophet asked, "If you do not find it
    in Allah's Book (what will you do)?”
    He said: "then, on the basis of the Sunnah of Allah's
    Messenger".
    "If you do not find it even in the Sunnah of Allah's
    Messenger (what will you do)?” The Holy Prophet
    asked.
    He replied: "I shall make Ijtihad on the basis of my
    understanding and will not spare any effort (to
    reach the truth).”
    On this, the Holy Prophet tapped the chest of
    Hazrat Mu'adh with happiness and said, "Praise
    be to Allah, who has let the messenger of the
    messenger of Allah to do what pleases Allah's
    messenger". (Abu Dawood, Hadith No. 3592).
    It is an important and often misunderstood question whether
    the doors of Ijtihad are still open or not. For all those issues
    where there are clear injunctions of Holy Quran, Sunnah and
    Ijma, Ijtihad cannot be done on those issues. Ijtihad can only be
    done on those new issues and situations where no explicit
    injunctions of Shariah are available or there are some meticulous
    changes that require further exploration of the issue by the
    Scholars.
    It is also important to note that Ijtihad is not merely one’s own
    opinion based on rational judgment but it is indeed the result ofun-biased and utmost effort of Mujtahid on the basis of principles
    laid down by Shariah and it must not contradict with any clear
    defined rule of Islamic Shariah. On the basis of complex nature
    of Ijtihad, not every scholar can perform Ijtihad but only the most
    learned, senior and the pious of the scholars are eligible for the
    role of Mujtahid who have indepth knowledge and understanding
    of Quran, Tafasir, Arabic, Background of the revelation of verses
    of Quran, Ahadiths, Usool e Fiqh etc.
    Introduction of Islamic Economics
    One of the forms of capitalism, that has been flourishing in non-
    Islamic societies of the world is the interest-based investment.
    There are normally two participants in such transactions. One is
    the Investor who provides capital as on loan against interest and
    the other is the Manager who runs the business. The investor
    has no concern whether the business runs into profit or loss, he
    automatically gets an interest (Riba) in both outcomes at a fixed
    or variable rate on his capital. Islam prohibits this kind of business
    and the Holy Prophet enforced the ruling, not in the form of
    some moral teaching, but as the law of the land in Islam.
    It is very important to know the definition and forbiddence of
    Riba and the injunctions relating to its unlawfulness in all respects.
    On one hand, there are severe warnings of the Qur'an and Sunnah
    against it and on the other, it has become an integral part of the
    world economy today. The desired liberation from Riba seems
    to be infested with difficulties as the problem is very complex,
    detail oriented and has to be taken up in all possible aspects.
    First of all, we have to deliberate into the correct interpretation
    of the Quranic verses on Riba and what has been said in authentic
    ahadith and then determine what Riba is in the terminology of
    the Quran anand Sunnah, which transactions it covers, what is theunderlying wisdom behind its prohibition and what sort of harm
    it brings to the society. We will start by looking at the economic
    philosophy of Islam vis-a-vis interest.
    The economic philosophy of Islam vis-a-vis Interest
    The economic philosophy of Islam has no concept of Riba because
    according to Islam, Riba is that curse in society, which causes
    wealth to accumulate among handful of people and it results
    inevitably in creating monopolies, opening doors for selfishness,
    greed, injustice and oppression.
    In an interest based economy, deceit and fraud prosper in the
    world of trade and business. Islam, on the other hand, primarily
    encourages highest moral ethics such as universal brotherhood,
    collective welfare and prosperity, social fairness and justice. Due
    to this reason, Islam renders Riba as absolutely haram and strictly
    prohibits all types of interest based transactions. The prohibition
    of Riba in the light of economic philosophy of Islam can be
    explained vis-a-vis distribution of wealth in a society.
    Distribution of wealth
    The distribution of wealth is one of the most important and most
    controversial subjects concerning the economic life of man, which
    has given birth to global revolutions in today's world and has
    affected every sphere of human activity from international politics
    down to the private life of the individuals. For many a centuries
    now, this question has not only been the center of fervent debates,
    but also of armed conflicts. The fact, however, remains that
    whatever has been said on the subject without seeking guidance
    from Divine Revelation and relying merely on human reason has
    had the sole and inevitable result of making the confusion worse
    confounded.
    Islamic perspective of distribution of wealth
    Here we convey the point of view of Islam regarding distribution
    of wealth as extracted from the Holy Qur'an, the Sunnah and
    the writings of the Shariah research scholars. But before explaining
    the point, it is imperative to clarify certain basic principles which
    distinguish the Islamic point of view about economics from the
    non-Islamic point of view.

1. The importance of the economic goals
   No doubt, Islam is opposed to monasticism, and views the
   economic activities of man quite lawful, meritorious, and some
   times even necessary and obligatory. It acknowledges the
   economic progress of man, and considers a lawful and righteous
   livelihood an obligation on every individual. Notwithstanding
   all this, it is no less a truth that it does not consider "economic
   activity" to be the basic purpose of man, nor does it view economic
   progress as the be-all and end-all of human life.
   Many misunderstandings about Islamic economics arise just from
   the confusion between the two facts i.e. considering economics
   as the ultimate goal of life and further considering it as a necessity
   in order to have a prosperous life through lawful means. Even
   human logic can comprehend to show that an activity being
   lawful, or meritorious or necessary is different from it being the
   ultimate goal of human life and the center of thought and action.
   It is, therefore, very essential to make this distinction as clear
   as possible at the very outset. In fact, the profound, basic and
   far-reaching difference between Islamic economics and
   materialistic economics can be summarized as:
   According to materialistic economics:
   "Livelihood is the fundamental problem of manand economic developments are the ultimate end
   of human life."
   While according to Islamic economics:
   "Livelihood is necessary and indispensable, but
   cannot be the true purpose of human life."
   So, while we find in the Holy Quran, the disapproval of
   monasticism and the order to:
   "Seek the grace of Allah."(62:10)
   At the same time, we also find in the Quran to restrain from the
   temptations of worldly life. And all these worldly things in their
   totality have been designated as "Ad-Dunya" ("the mean") - a
   term which, in its literal sense, does not have a pleasant
   connotation.
   Apparently, one might feel that the two commands are
   contradictory, but the fact is that according to the Quranic view,
   all the means of livelihood are no more than just stages of man's
   journey, his final destination lies beyond them. The success in
   this ultimate destination is achieved by good intentions and
   through rightful means of earning livelihood in this world.
   The real problem of man and the fundamental purpose of his
   life is the attainment of these-two goals. But one cannot attain
   them without traversing the path of this world. So, all those
   things too which are necessary for his worldly life, become
   essential for man. It comes to mean that so long as the means
   of livelihood are being used only as a path leading towards thefinal destination, they are the benevolence of Allah, but as soon
   as man gets lost in the mazes of this pathway and allows himself
   to forget his real destination, the very same means of livelihood
   turn into a “temptation” or into a "trial":
   “And be aware that your possessions and your children are but
   a trial." ( 8:28).
   The Holy Quran has enunciated this basic truth very precisely in
   a brief verse:
   “And seek the (betterment of the) Ultimate Abode with what
   Allah has given to you.”(28:77)
   This principle has been stated in several other verses too.
   This attitude of the Holy Quran towards "the economic activity"
   of man and its two aspects would be very helpful in solving
   problems of man in Islamic economics.


2. The real nature of wealth and property
   The other fundamental principle, which can help solve the problem
   of the distribution of wealth, is the concept of ‘wealth’ in Islam.
   According to the illustration of the Holy Quran, ‘wealth’ in all its
   possible forms is a thing created by Allah, and is, in principle His
   "property". Allah delegates the right of His property over a thing,
   which accrues to man, to Him. The Holy Quran explicitly says:
   Give to them from the property of Allah which He has bestowed
   upon you.” (24:33).
   According to the Holy Quran, the reason for this philosophy is
   that all a man can do is invest his labor into the process of
   production. But Allah alone, and no one else, can cause this
   endeavor to be fruitful and actually productive. Man can do no
   more than sow the seed in the soil, but to bring out a seedling
   from the seed and make the seedling grow into a tree is the work
   of someone other than man. The Holy Quran says:
   “Well, tell Me about that (seed) which you sow:[63] Is it you who
   grow it, or are We the One who grows?[64]” (56:63-64)
   And in another verse:
   "Did they not see that We have created for them cattle, among
   things made (directly) by Our hands, and then they become their
   owners?” (36:71)
   All these verses throw ample light on the fundamental point that
   "wealth", no matter what its form, is in principle "the property
   of Allah", and it is He who has bestowed upon man the right to
   exploit it. So Allah has the right to demand that man should
   subordinate his exploitation of this wealth to the commandments
   of Allah.
   Thus, man has the "right of property" over the things he exploits,but this right is not absolute or arbitrary or boundless, it carries
   along with it certain limitations and restrictions, which have been
   imposed by the real Owner of the 'wealth'. We must spend it
   where Allah has commanded it to be spent, and refrain from
   spending it where Allah has forbidden. This point has been
   clarified more explicitly in the following verse:
   “And seek the (betterment of the) Ultimate Abode with what
   Allah has given to you, and do not neglect your share from this
   world, and do good as Allah did good to you, and do not seek to
   make mischief in the land.” (28:77)
   This verse fully explains the Islamic point of view on the question
   of property. It places the following guidelines before us:
   (1) Whatever wealth man possesses has been given by Allah.
   (2) Man has to use it in such a way that his ultimate purpose
   should be to seek the bounties and blessings of Allah in this
   world and hereafter.
   (3) Since wealth has been given by Allah, its use by man must
   necessarily be subject to the commandment of Allah.
   Now, the Divine Commandment has taken two forms:-
   a) Allah may command man to convey a specified
   production of “Wealth” to another man. This
   Commandment must be obeyed, because Allah has
   done good to you, so He may command you to dogood to others – “do good as Allah has done good
   to you.”
   b) He may forbid you to use this “wealth” in a specified
   way. He has every right to do so because He cannot
   allow you to use “wealth” in a way which is likely to
   produce collective ills or spread disorder on the earth.
   This is what distinguishes the Islamic point of view on the question
   of property from the Capitalist and Socialist point of view. Since
   the mental background of Capitalism is (theoretically or practically)
   materialistic, it gives man the unconditional and absolute right
   of property over his wealth, and allows him to employ it, as he
   likes. But the Holy Quran has adopted an attitude of
   disapprobation towards this theory of property, in quoting the
   words of the nation of Hazrat Shu’aib . They used to say:
   "Does your Salah (prayer) command you that we should forsake
   what our fathers used to worship or that we should not deal with
   our wealth as we please?" (11:87)
   These people used to consider their property as really theirs or
   "Our property", and hence the claim of "doing what we like" was
   the necessary conclusion of their position. But the Holy Quran
   has, in the chapter "Light" substituted the expression “Our
   possessions” for the term "the property of Allah", and has thus
   struck a blow at the very root of the Capitalistic way of thinking.
   And at the same time, by adding the qualification "what Allah
   has bestowed upon you", it has cut the roots of Socialism as well,
   which starts by denying man's right to private property. Similarly,"thus they acquired the right property over them."

• a verse in the Chapter "Seen", explicitly affirms the right to
  private property as a gift from Allah.
  Difference between Islam, Capitalism and Socialism
  Now we are in a position to draw clear boundary lines that
  separate Islam, Capitalism and Socialism from one another.
  Capitalism affirms an absolute and unconditional right to private
  property, whereas Socialism totally denies the right to private
  property.
  But the truth however, lies between these two extremes - i.e.
  Islam admits the right to private property but does not consider
  it to be an absolute and unconditional right that is bound to
  cause "disorder on the earth".