Islam and Economics
The main aim behind Islam is to achieve equality.
The Islamic economic system is based on the notion which means that whatever exists, belongs to Allah. The Qur’an states, “To Allah belongs whatever is in the heavens and whatever is in the earth.” (2:284) but Allah has given us the permission and right to be own private owners as the Qur’an states, “He has created for you whatever that is in the earth.” (2:29). But Islam has provided such rights with a responsibility and conditions by limiting such rights to acquire and accumulate excessive wealth in particular hands. Allah says, “And the man shall gain nothing but what he strives for” (53:39), indicating that man should only seek what he deserves from his hard work.
The prophet has warned its followers to beware of any injustice and also added that such injustice would be subject to the awards of the day of the judgement. Such warning has created fear in the followers, which guides and shows the path of justice and harmony and brotherhood.
In respect to the employer-employee relationship as identified by Islam, paying of just wages is of utmost importance.
It is identified that every worker should be paid equal and justified pay for his work. Female employees are to be give fair wages too. But Islam also recognises the practicality and states that it is not practical to aim to achieve economic equality in the society. Since there is so much disparity in the society it is still aimed that there should be peace, harmony and brotherhood with equitable sharing of wealth and resources, but due to uncertainties and disparities in the skills, magnitude of work, it is now aimed with utmost importance to provide humane standard of living to every person. This is the Islamic concept of equity in the distribution of income, wealth and resources.
Further, the concept of socialism is a strong point to be understood.
Socialism is a concept where the main emphasis is given to the concept of welfare of the society as a whole. Thus here, the interest of the whole society is preferred over the individual interest of the people living in that society only.
Whereas, Islamic concept of economics and finance relates and gives maximum weight to the individual rights of the people, giving them the complete freedom of transactions.
Further, as earlier mentioned the Qur’an, the concept shows that the nature, the resources and everything is a trust, to which Allah, or the god is the trustee and every person who enjoys such trust is the beneficiary to it.
Therefore, the people who consume the resources, the wealth, the economies are subject to some conditions laid by the trustee. These conditions are to equally share such resources and to promote equality in the society to lead to harmony and brotherhood.
In a capitalist society, the excusive powers are vested with the owner of the property. Thus in such a scenario there comes the power to do whatever the person thinks he wants to do. The owner in such a case, to raise prices might dump or burn his products to raise demand and lessen the supply. Therefore, this capitalism doesn’t put the owner under any moral obligation to not do such an act. But the Qur’an lays down the principle that the god the is owner and the trust conditions have to be fulfilled and no one should do any injustice.
The economic principles laid by Islam-
- Allah is the real owner of the resources.
- To promote equal distribution of the income and wealth, the legal power belongs to the head of the Islamic government, i.e. (Waliy al-Amr), such authority can also limit the rights of the private individuals in the interest of the whole society. The Qur’an states, “O you who have believed, obey Allah and obey the Messenger and those vested with authority among you.” (4:59)
- Practices of acts like wasting and squandering are prohibited (israf).
- Actions which lead to mis-use of any property or that relates to amusements are also prohibited (lahw).
- Promoting Islamic ethical and moral concepts of justice, honesty, sacrifice.
- Payment of various taxes like, Khums, Zakat, Fitrah, Khiraj etc.
- To thank Allah for all the gifts of nature.
- To promote economic equality and also to prevent the practices of monopolies etc.
Thus by the provisions and the concepts laid down by the holy verses, it is clear that Allah has provided with immense resources which are enough for everyone to live under a humane standard but due to selfish nature and behaviour of the people there are occurring economic problems. If the Islamic laws for economics and finance are adhered to, properly then these problems can be tackled with, easily.