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CH 3 Islamic Economics (Islamic Economics Principles (Two Main Components …
CH 3 Islamic Economics
Definition of IE
Ahmad 1981
To study of human behavior in order to satisfy needs
To maximize benefit itself & society
Akram 1983
To study of human being
How cooperate & participate with each other
Mannan 1986 - To inject the Islamic values
S.M Ghazali - Do the human activities which follow the law to perform their obligations to Allah
Overall from the scholars
1) Happiness/Tawhid
2) Resources
3) Cooperation & Participation
Important concept
Islamic Economics: The market place must follow the shariah guidelines
Islamic Economics System : The system show how people,institutions & society make economics choice.
Islamic Economics principles: Rules & regulation that are observed when solvig economics problems & based on syariah.
Islamic Economics Principles
Two Main Components
1) The economic systems - governed primarily by revelation and shariah
2) The economic theory - Based on reasons & senses
Allah determines right & wrong
In Islamic Economic make distinction between what is permitted being lawful (halal) & what is forbidden.
Follow the syariah compliance
Principle of Use
Keep moderation in use & prudence
Restrain oneself/forbid from the enjoyment of lawful
Principle of moderation
Islam discourages his followers to cross the limits & follow extremes
Muslim should exercise restraint & earn wealth to meet his lawful needs.
Economic freedom: Individual has been allowed liberty by God to earn welath
Principle of justice - Ensure nobody is exploited by others - Nobody acquire wealth by unjust, unfair, unlawful and fraudulent
Philosophy of IE
Philosophy of Tawhid (Oneness of God)
Economically: Equally & cooperation, that natural resources belong to the whole & they share equal right.
Philosophy of Khilafah
The best creation to serve god & him alone
The only creature having been endowed with the qualities of conscience, intelligence,thinking, & choice in order to fulfill his mission.
Philosophy of ownership
Man's ownership is limited, borrower
Man involve production, consumption must accordance with the regulation given by Allah
Philosophy foundation : Najatullah Siddiqi (1981) - Main concern about the relationship with Allah, family, friends & peers because limited resources which how to handle it through limited resources reflect of principle of use/moderation
Objectives of IE
Achievement of Falah
Aim to achieve economic well being and betterment of the people through equitable distribution of material resources & through establishment of social justice.
Fair & Equitable distribution
The distribution of economic resources, wealth & income must be fair & equitable
whether equity or equally
Provision of basic Human Needs
Importance purpose & objective of the Islamic economic system that basic necessities life like food, clothing & shelter should be provide to all citizen
Have distribution of zakat , NGO,
Help homeless.
Achievement of moral & material development
It achieves this objective through it system of taxation & fiscal management through zakat
In Islamic economics, Individual and social must reformed moral uplift first which will change the behavior, taste & preferences compared to conventional economics which only focus on the behavior, taste, & preference of individual as given.
Elimination of exploitation
Eliminate the exploitation of human by another by prohibiting the riba & and hoarding activities
Values Of IE
1) Values brotherhood and justice
2)Equitable distribution of income
3) Individual freedom within the context of social welfare
Characteristic of Islamic Economics
Alliance with syariah ( Al Quran & As Sunnah)
Based on equality - Everyone has equal opportunity to use the resources include education, skills, & technology
Property Rights - Allah S.W.T has absolute ownership - Second property is for muslim to achieve Al Falah
Possession of wealth - Wealth can acquired when we have a lot of effort and it reflect the third values which is the individual freedom within the context of social welfare
System of Zakat - To help the poor & needy at least by distribute 2.5% from our wealth - 8 Asnaf are fakir , miskin , amil ,muallaf,riqab,gharimin,fisabillah,ibnu sabil