Islamic Economic System:

Economics as an applied social science and is not separated from religion, not only in Islam, but also in another parts of the world, in fact in the west the economic activities were limited by the church council as a strict and obligatory regulation, the church was responsible to collect taxes from citizens. when science is separated from church in the past few centuries, social sciences became purely rational and logical, all what a man can prove is right, what a man cannot is not right, eventually it rejected all revelation related knowledge claiming that it is not logical, though economic as a social science became without manners and values, ethics became a secondary issue as self interest is what matters the most. If we claim that religion matters in all our aspects of life, we should agree to apply an economic activity that is not against the religion, so for an Islamic economic system there are a lot of objectives that the government should regulate.

Islamic Economic Methodology:

The Islamic principle of economics comes from certain aspect on the human worldview of life and the hereafter, for example the Muslim economist has to fulfill the below requirement: -Tawhid -Kilafah -Tazkiah (purification)

The Tawhid principle of Islam believes of the one god, and human will be asked for what they have done, unlike the conventional economics which justifies self satisfaction by any means, Islamic economic system however does not allow the unjust way to accumulate wealth either by individuals or by organizations, as believing in god and believing that god has make us as human beings a khalifah on earth, this belief system will make a person think twice before he does any action in the market, as fear of punishment of god is a good reason to limit the unethical behavior of humans. The conventional economic system is based purely on human reasoning and intellect, it neglects all other religious beliefs, unlike the concept of economics in Islam which has two axes, the first axis is the fixed axis which is revelation that cannot be changed, the second one is the flexible human reasoning, as a Muslim you should not neglect human reasoning, but you reason should be binding to the fixed revelation. As discussed above, religion is not separated from economic activities, the concept of regulating such activities is binding to the Islamic Shariah law, there are two ways to establish and Islamic economic system, one it to start from the beginning, the other way is to Islamize the western concept and theories about economics, most Muslim economists prefer to Islamize however due to the long process of creating a new field.

Islamic economics in the real life

One of the most controversial issue between both the Islamic economic system and the conventional one is the concept of Interest (RIBA), Interest is the exchange of money with its time value, as Muslims we believe that it a big sin and unjust to do such activity, either on a

small scale or in long term investment, either between individuals or organizations, theoretically as a conventional economic system Interest serves the role of self-interest, because this what matters in the conventional economic system (Capitalism), believing that money has a time value, and money should increase faster than time, though the interest rate should exceed the rate of inflation.

Allah S.W.T said: 572

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One of the most important characteristics of the Islamic economic system is the concept of (Zakat) purification, Zakat is an obligatory on every applicable Muslim, the normal Zakat rate is 2.5% of the personal money, the Zakat plays a vital role in the Muslim society, it makes the funds circulates around the different layers of the society, unlike capitalism which the rich may get richer while poor people get poorer.

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The concept of ownership in Islam is not absolute, as scholars agree that an individual or partners can own certain properties, but the owners actions upon those properties is limited, as a matter of fact the limitation on such ownership is binding on not harming others, for example, a house owner may not rise his building up if this causes the sunlight not reaching neighbors house, unless of course the neighbors agree to do so, an investor may not build a factory that will pollute the air or water of a village and may cause harm to the harvested goods.

The Islamic economic philosophy cares about both the individual rights as well as the public good, an individual may not in a way or another harm the society to benefit himself/herself, on the other hand, the society may not harm an individual in any way, this is why the concept of (AL Hisba) was created. (Al Hisba) is a government institution that regulates and monitors the market from any unjust activity, such as sale of unauthorized goods, price war, monopoly, and as discussed above on ownership, (Al Hisba) will not allow any kind of misuse of ownership if doing so will harm the society or will badly affect the others in the market. To conclude this, an Islamic economic system is a full system that regulates and controls peoples behavior towards justice and harmony, as any other economic system, it will require a socio-cultural support from all the parts of a country, such economic system will guarantee a just market, remove hatred between different layers of the society, decrease the power distance between the rich and poor people, protects everybodys right, and spread harmony and wealth among the society.

A comparison between Islamic economic system and conventional economics:

Conventional Economics Interest Pure self interest Islamic Economic System Balance between public good and self interest Sources of regulation Pure human reasoning Fixed revelation plus flexible human reasoning Co-operation Wealth accumulation Competition By any means Competition and co-operation Binding to Islamic law

Articles of references:

-Material Progress And Islam, Salman Ahmed Shaikh -Concept of Wealth in Islamic Economics, Omar Javaid Islamic economic project (word press)