The term Islamic economics is used to refer to Islamic commercial jurisprudence. It is an economic ideology based primarily on the teachings of Islam and takes a middle ground between the system of Marxism and capitalism. Islamic law, the Shari’a, establishes what is encouraged, prohibited or desired in economic activity. Many scholars have provided different definitions for the term, but no single definition has been universally accepted. In this article, we discuss the applications and evolution of the Islamic economy.
History and principles of the Islamic economy
The branch of Islamic economics emanated from a series of traditional Islamic concepts. One of the key concepts included Zakat which referred to the charitable taxation of certain assets. The proceeds of the fees are channeled into eight expenses that are expressly mentioned in the Koran. The other concepts include Taa’won (mutual competition) and the doctrine of correctness in every negotiation. Qamar (gambling), Riba (interest) and Gharar (high degrees of uncertainty) are very discouraged in Islam.
The economy of Islam is as old as the religion of Islam but has been formally recognized in 20 thCentury. The Sunni branch of Islam saw no need to study economics because their predecessors, including Prophet Muhammad, had never been interested in this. However, Shiite Muslims thought it was important to incorporate the topic into their religion. Some of the Shiite thinkers have brought some very important answers to contemporary economic problems in their books. They include Mahmud Taleqani (author of Our Economy ), Abolhassan Banisadir (author of The Economics of Divine Harmony ) and Habibullah Perman. These writers have described Islam as a religion that values social justice and a fair distribution of resources.
The Islamic economic field is widely used today by members of the Muslim community in making financial decisions. For example, Sharia-compliant banks do not charge interest on loans or money deposited in their accounts. The Koran states that all properties belong to God and that it is only entrusted by God to take care of property. According to scholars of Islam, property can be divided into three forms, namely being private property, public property or state property. He also supports market regulation to protect consumers and solve health problems. Some countries like Pakistan that use Sharia law to govern have tried to have a controlled market economy. It is said that Islamic banking institutions are the only feasible and feasible application of Islamic economy. These banks charge zero interest on loans and deposits. According to Islam, the interest is Haram (not allowed).
Evolution over time
This field has developed over time to become a way of making financial decisions in everyday life for those living in the Muslim community. It has also become one of the most sought after academic fields. As in 2008, there were over a thousand unique titles on the subject and on those of 200 who had graduated with a Doctorate in Philosophy (PhD) in Islamic economics. The people of Moe are showing a lot of interest in learning on the subject.
Praise and criticism
Economists have argued that most concepts in the Islamic economy are not practical, and many have even claimed that they are driven by religious fanaticism rather than trying to solve existing problems. Others have criticized the idea of market controls claiming that it is more efficient to allow market forces to dictate the market trend and protect consumers. Supporters of the idea, on the other hand, have argued that it has led to a more equitable society that protects the less fortunate. However, the principles of the economic model are totally impractical and only wishful thinking.