Overview of Islamic Economics

Islamic Economics Overview

• Islamic economics is a system rooted in the view of life espoused by members of a society
• A close study of economic systems in history reveals a strong link between economic systems and the view of life
• The goal is to discover the view of life that meets all human needs and aligns with universal truth

Two Concepts of Life

• Materialistic: Views humans as animals focused solely on satisfying physical needs
• Moral: Views humans as God's vicegerents responsible for using resources according to God's will

Moral Concept of Life in Islam

• Man is responsible for all actions and accountable to God
• Man should utilize resources in the universe for his own good
• The ultimate goal is acquiring success in the Hereafter
• This leads to a sense of community, sympathy, cooperation, and charity

Sources of Islamic Economics

• Quran: Basic principles regarding lawful actions, spending, prohibited actions (e.g., usury, gambling)
• Sunnah (Prophet's example): Practical guidelines and actions on specific economic issues; provides theoretical and practical guidance
• Ijtihad: Reasoning and interpretation in the absence of direct guidance from the Quran or Sunnah, requires specialized knowledge and piety
• Ijma: Consensus among qualified scholars on a matter requiring Ijtihad
• Qiyas (Analogy): applying existing rulings to similar cases

Differences Between Islamic and Western Economics

• View of the universe: Islamic economics believes in a Creator, whereas Western economics sees the universe as matter
• Concept of man: Islamic economics views humans with a moral conscience surpassing physical needs, Western economics sees man driven by instincts and self-interest
• Economic scope: Islamic economics considers the hereafter, whereas Western economics focuses only on this world
• Economic goals: Islamic economics seeks wealth for both worlds; Western economics is focused on this world
• Mode of research: Islamic economics relies on divine revelation alongside empirical evidence, Western economics prioritizes empirical evidence only

Explore the foundations of Islamic economics, its moral versus materialistic views of life, and the sources that guide this economic system. Understand how these principles are designed to meet human needs while aligning with universal truths and moral accountability.