1-Introduction to Islamic Economics

Course Instructor :Yousuf Ibnul Hasan

Islamic Economic System

Chapter 1


Subject : Essentials of Islamic Finance

Year : 2009


Islam


Islam means Invitation.

The basis of Islam is Tawhid which is the

Relationship between Allah and Man


It is total commitment to the will of Allah by submission &

mission to mould human life in accordance with Allah’s will.

Tawhid (Oneness of Allah)


4 Great ways of accepting Tawhid

1st Look back and thank Allah.2nd Look forward and trust Allah3rd Look Around and believe Allah4th Look within you and find Allah


Islamic Economics


What is Islamic Economics ?

•Islamic economics is as old as Islam itself”•It is a complete political, social, financial & economic system for the Islamic & Non Islamic Community.•Islam is “Deen” that totally differ to the religion because of the definition, depth and details


Islamic economics is an independent system,

It enjoys a separate identity. It is a self-contained system with its own

economic policy, It covers interests at

Private or Public Material or Spiritual


Islamic EconomicsFor

Economists


20th Century Economistsdefine Islamic Economics

Hasan-uz-Zaman

Islamic economics is the knowledge and application of injunctions and rules of the

Islamic Jurisprudence that prevent injustice in the gaining and disposal of material

resources in order to provide satisfaction to human beings and enable them to perform

their obligations to Allah and society.


Muslim contribute for Economics

Ibn Khaldun Muslim Philosopher, Scholar & Economist.

Respected as father of Economic System of all times

Authenticated name in Islam for defining different fields of knowledge, specially science of civilization,

Contributed theories and concept in economics that placed him above-board in the history of economic

thought as a major predecessor.

Adam Smith accepted him as the "father," of economics.


M. Akram Khan

Islamic economics aims at the study of human

recovery achieved by organizing the resources of

earth on the basis of cooperation and participation.


Dr. Najatullah Siddiqui

Role of Shariah define the belief of justice and freedom, cooperation and sharing that are fundamentals to Islamic economic philosophy with the total Islamic system.

Key to economic philosophy of Islam lies in man's relationship with Allah, His universe and His people.

i.e. other human beings are the nature and purpose of man's life on earth


Islamic Economic system is based on four principles

All wealth belongs to Almighty Allah Man is the trustee of the wealth Hoarding of wealth is prohibited Wealth must be in circulation at all

time


3 Principles of Islamic Economics, which performs the basis of the above principles

1 - Ijma (Gathering),2 - Qyas (Discussion)3 - Amal (Act).


Islamic Economic eliminate monopoly of a group or individual who

Keep a control on world monetary polices. Who gets most out of these resources. Blocks wealth to cross their jurisdictions Remain in between privileged society.

This is classified as Capitalist form of Economy that protects the class of

influence and privileged.


It does not impose any limits on amount of wealth that an individual can acquire.

It guides maintaining of wealth in proper form of distribution & incentive on work and efforts.

It show opposition & defend against misuse of exploitation in getting hold of wealth through unfair means.

It clearly denies "free" market of Capitalism, which has led to the situation of survival of the large part of the society.

Islamic Economic eliminate monopoly of a group or individual who………………………Contd


In Islamic Economics public revenue from natural resources used to secure needs of community and not to fill pockets of casino owners.

State to provide public, essential resources to cover needs of every individual and family.

………………………Contd


It forbids monopolies by outlawing hoarding of wealth and eliminating copyright or

patent laws that would open avenue for

potential monopoly to develop.

………………………Contd


It protects the ownership of businesses and companies by restricting it only to those who

contribute both capital and effort to the company or business and effectively putting the seal on such concepts as "corporate takeover"

from ever becoming a reality.

………………………Contd


It classify wealth in a systematic way that protects rights of individuals to access wealth.

It protects the society and secures the needs of the people.

It mandates vital and natural resources as public property while allowing for unlimited access to luxury items.

It protect society by defining certain needs as “prohibited needs” .

………………………Contd


It disregard corrupt man-made systems and protect honor, rights of woman, minor and orphans.

It ban all forms of prostitution, pornography or any activities that exploit charms and physical attractiveness of women.

It prohibit alcohol, gambling, spiral of corruption, social turmoil and moral devastation

………………………Contd


3 Components of Islamic Economic

The principle of adaptable ownership

The principle of economic freedom within a defined limit

The principle of social justice.


Islamic law permits three types of ownership,

The individual ownership.The state ownership.The public ownership.


Principle of Economic Freedom within a Defined Limit Islamic law is the source that that

prohibits all such social and economic activities that differ to the teaching of Islam and the principles and values that are approved by Islam. Such social and economical activities fall under the categories of Riba, like holdings, monopoly, gambling and speculation


It clearly define principal on which ruler of an estate sworn in for the supervision of general activities and intervene in anti Islamic economic activities.

The state must protect and safeguard the public interest through the control on individual freedom in the illegal and non-permitted actions they involve due to which the economic activity of the community and society suffer.

Principle of Economic Freedom within a Defined Limit……………………..Contd.


Men have no right to possess unlimited wealth and desire to obtain wealth by any means and way he may choose of his like.

Right is given to every member of the society by appointing each one is a guardian of the public trust and the ownership is limited for the public welfare and in the betterment of mankind.

……………………………………..Contd


2 Principles of Social Justice

Principle of give-and-take responsibility Principle of social balance


Islamic Finance : Planted seeds of classical economics in

production, supply and cost Pioneered in consumption, demand, and

utility, the bases of modern economic theory

Believer in free market economy. Introduced labor theory of value.

Reasons to Study Islamic Finance


Free economy & for freedom of choice.

Analyzed relationship of economic study, which are demand, supply, prices and profits

First to put seed of modern demand theory which was further developed by Thomas Robert Malthusian, Alfred Marshall


Logically role of cost of production on supply and prices

Theory of profit as a reward for undertaking risk in a future of uncertainties

Concept for traders maximize profits, "Buy cheap and sell valued,"

Concept of macroeconomics “Theory of Growth” based on capital accumulation

through man's efforts


Economic Development through Migration Tax Theory in history Theory for the best Rate of Taxation Explain advantages of trade among nations

through foreign trade with people's satisfaction, merchants' profits, and country’s wealth and how all increased.


Thank You

1-Introduction to Islamic Economics

Documents

yousuf ibnul

human beings

economic system

islamic economics

defined limit

economic freedom

natural resources

social justice