Islamic Economics: Wāqiʿiyyah (Practicality) Principles

Wāqiʿiyyah (Practicality)

• Islamic economics combines Sharīʿah rules with practical considerations, such as market research, to understand and explain real-life economic realities.
• It emphasizes the importance of efficiency in using and handling resources entrusted to humans by God.

ʿĀlamiyyah (Universality)

• Islamic economics is not limited to Muslims, but aims to benefit all humanity and contribute to global economic stability and prosperity.
• It studies economic behavior, institutions, and policies of both Muslims and non-Muslims, and critically reviews accumulated human knowledge.

Normative Vs. Positive Economics

• Positive economics deals with facts (what is), while normative economics concerns values (what ought to be).
• The two are linked, with positive economics informing normative judgments, such as managing inflation.

Islamic Economics Definition

• Conventional economics definitions are insufficient for Islamic economics, which incorporates divine guidelines from the Qurʾān and Sunnah.
• Islamic economics studies human choices within Sharīʿah boundaries, using sources including divine revelation, empirical data, and rational inquiry.
• It covers all humans, including non-Muslims, in their economic behavior, institutions, and policies, even when incompatible with Sharīʿah.
• Islamic economics is a holistic, multidisciplinary approach that prioritizes values and world view over wealth maximization and utility optimization.
• A comprehensive definition of Islamic economics is: "A social science that studies the economic problems of humanity, and evaluates their solutions from the perspective of the Islamic world view and values, as well as human reasoning and experience."

Explore the importance of practicality and efficiency in Islamic economics, considering the realities of life and the responsible use of resources. Learn how Islamic economics balances divine guidance with reason and facts to understand economic realities.