BELIEF OF ISLAMIC ECONOMICS

The core of Islamic economics rests on theological foundations – “Falah” is valued above
material gain and heavy emphasis is placed on a strong belief in and faithful obedience to
God. Its literal meaning is to thrive, to become happy, and to have luck or success. While
technically It implies success in the ’Akhirah (hereafter). Al-falah presumes belief in one God,
prophet hood of Muhammad (PBUH), life in the ’Akhirah and compliance with the shari‘ah
standards in everyday behavior. The Islamic state is responsible for creating such conditions,
which should facilitate achievement of the al-falah at individual and collective levels.
ECONOMIC CONDITIONS OF FALAH
Economic conditions of Falah are:

1. Infaq
2. Prohibition of Riba
3. Fulfillment of covenant (promises) and trust
4. Justice
5. Enterprise

1. INFAQ
The word infaq has a very broad meaning. General meaning constitutes all kind of expenditures
for the sake of Allah. It is a type of charity in Islam that is given without any expectation of reward
or return. One gives Infaq for the betterment of society, their family and to please Allah. Infaq is
an individual obligation on the Muslim (Zakat is a form of Infaq), a religious-based circumstantial
obligation, a religious-based voluntary obligation; and a social obligation.
2. PROHIBITION OF RIBA
Interest, or riba, is defined as the excess over and above the principal amount lent or
borrowed. Islam prohibits riba in all of its forms as it amounts to exploitation of the weak, usury
and allows wealth to accumulate in the hands of a few, thereby increasing the gap between the
rich and the poor. The Holy Quran strictly prohibits the use of riba in commercial transactions.
(Riba has been prohibited in all revealed religions for being exploitative and the prime cause for
injustice in economic distribution, leading to grave effects on human societies.)
3. FULFILLMENT OF COVENANT (PROMISES) AND TRUST
The cornerstone of success of any relationship is the timely fulfillment of promise/s, which then
creates trust in that relationship. A socio-economic relationship is a contract, and contracts in
Islam are legally binding on all parties to the contract. If promises made by all parties in a contract
are fulfilled in letter and spirit in a timely manner, the contract becomes trustworthy and the
relationship flourishes. If promises and obligations go unfulfilled, trust and confidence are dented
and the socio-economic relationship flounders. In its true sense, this concept underlies the
fulfillment of our spiritual obligations – taqwa and belief in Allah (huququllah) – and fulfillment
of our social obligations – equity and justice (huququl-ibad).
4. JUSTICE
Islam provides every individual with some basic socio-economic rights, such as the right to access
factors of production – land, labour and capital (economic justice), the right to be heard and
redress of grievances (legal justice), and the right to safety, education, satisfaction of basic needs,
access to public property, etc. (social justice). It is incumbent upon the rulers of the time to ensure
that the socio-economic rights of individuals are respected and fulfilled.
5. ENTERPRISE
Islam discourages financial transactions which do not generate economic activity. Every financial
transaction must be based on a gainful and halal underlying economic activity, which is capable
of creating incremental wealth for oneself (self-enrichment) and benefiting the society at large
(generating jobs, improving the environment).
Islam prohibits hoarding of all commodities, including capital, as it creates poverty and deprives
society of its basic rights (clear violation of huququl-ibad). Money is potential capital and
lifeblood of the economy; therefore, it must remain in circulation for the economy to grow and
remain vibrant. Hence, Islam discourages idle balances and encourages capital deployment in
halal businesses.
CULTURAL CONDITIONS OF FALAH
Cultural conditions of falah are:
1. System of prayers
2. Knowledge
3. Sexual chastity
4. Prohibition of drinking and gambling
1. SYSTEM OF PRAYERS
It covers the establishment of mosques, arrangements for congregational prayers – both daily
and weekly- and the appointment of mosque staff, etc. The Islamic system of prayers five times
a day is a manifestation of highly disciplined activity. People line up behind the leader and offer
prayer in an organized manner. It seems that besides other benefits, the obligatory prayers are a
mechanism to teach discipline and organization to the individuals. It sets our lifestyle and is way
of social interaction.
2. KNOWLEDGE
The Qur’an repeatedly says that the fabricators of lies would not attain falah. This explains the
emphasis of Qur’an on inquiry and pursuit of knowledge. The Qur’an has also condemned sorcery
and remarked that sorcerers would not achieve falah. The Qur’an visualizes a society where
people would base their actions on knowledge rather than superstitions and myths. In the same
vein, Qur’an condemns lottery and idolatry. It is obvious, that a society which ignores the pursuit
of knowledge will not attain falah.
3. SEXUAL CHASTITY
The Islam has enumerated sexual chastity and modesty as the characteristics of those who attain
falah. Legitimate sexual relations are a foundation stone of a stable family life. However, when
sexual desire exceeds its legitimate limits, it leads to anarchy, broken homes, juvenile
delinquency and venereal diseases.
Islam has defined a proper system of Parda for men and women. It is obligatory for both to cover
their Sattar. Islam recognizes the human psychological need and for this Islam has defined a
proper way that is marriage. Marriage in Islam is a complete family system.
4. PROHIBITION OF DRINKING AND GAMBLING
Drinking of alcohol and other intoxicants and playing games of chance lead to numerous social
evils. The Qur’an holds them to be obstacles to falah.