Philosophy of Islamic Economics – By: Qurroh Ayuniyyah

What is Islamic Economics?

 • Definition of Islamic Economics from various
scholars
Outline • The paradigm of Islamic Economics
• Foundation and Sources of Islamic Economics
1. Definition of Islamic Economics from
Various Scholars
 • Islamic economics is the knowledge
and application of injunctions and rules
of the Shariah that prevent injustice in
the acquisition and disposal of material
1. Definition of resources in order to provide
satisfaction to human beings and
Islamic enable them to perform their
obligations to Allah and the society. (S.
Economics M. Hasanuzzaman, 1984, p.52).
• Islamic economics is a social science
which studies the economic problems
of a people imbued with the values of
Islam. (M. A. Mannan, 1986, p. 18).
• Islamic economics is a systematic effort to try to understand the economic problem and
Iman's behaviour in relation to that problem from an Islamic perspective. (Kurshid
Ahmad, 1992, p., 19).
• Islamic economics is the Muslim thinkers' response to the economic challenges of their
times. In this endeavour they were aided by the Qur'an and the Sunnah as well as by
reason and experience. (M. Nejatullah Siddiqi, 1992, p. 69).
• Islamic Economics is a branch of knowledge which helps realize human well-being
through an allocation and distribution of scarce resources that is in conformity with
Islamic teachings without unduly curbing individual freedom or creating continued
macroeconomic and ecological imbalances. (M. Umer Chapra, 1996)
• Islamic economics aims at the study of human falah {well-being} achieved by organizing
the resources of the earth on the basis of cooperation and participation. (M. Akram
Khan, 1994, p. 33)
• Islamic economics is the representative Muslim's behaviour in a typical Muslim society.
(Syed Nawab Haider Naqvi, 1994, p. 13)
Didin Hafidhuddin (2019): Islamic economics is an economic science which based on:
• Tawhid (the Oneness of God)
• Akhlaq (Islamic behavior): honesty, amanah.
• Always follow obligation to Allah (not to forget prayer QS An Nur: 37)
• Blessing aspect: needs iman (QS Ar-Rum: 39, riba vs zakat)
• Transparency (QS. An-Nisa: 29)
• Support the needy and the poor (QS. Al-Hasyr: 7)
In one hadith: if you help the poor and the needy, Allah will help you.
• Ta’awun (Help one to another, E.g. Tabarru’ fund)
 Justice

Islamic values and perspective

Iman

Keywords Balancing between Qur’an and Sunnah and other Islamic

primary sources of knowledge with the Reasoning
Falah (human well-being)

Islamic behavior (akhlaq)

Thus Islamic economics is about to restore our behavior

towards economic problem based on Islamic values.
 To be a blessing To promote the
for mankind well-being (‫)ﻓﻼح‬
(‫)رﺣﻣﺔ ﻟﻠﻌﺎ ﻟﻣﯾن‬ of all

The Vision of
Islam Yes! The
difference lies in
Isn't this the
the concept of
goal of all
well-being and
societies?
how it is to be
realized.
2. The paradigm of Islamic Economics
 • The absolute sources of knowledge: Quran
and Hadith. And supported by reasoning
(al-’aql).
• Islamic economics is based on a paradigm
which has socio-economic justice as its
2. Paradigm of primary objective (Qur'an, 57:25).
• “We have already sent Our messengers
Islamic with clear evidences and sent down with
them the Scripture and the balance that
Economics the people may maintain [their affairs] in
justice. And We sent down iron, wherein is
great military might and benefits for the
people, and so that Allah may make
evident those who support Him and His
messengers unseen. Indeed, Allah is
Powerful and Exalted in Might.”
• This objective takes its roots in the belief that human beings are the vicegerents of the One God, Who is the
Creator of the Universe and everything in it (Quran, 2:30): To realize human well-being.
• Without neglecting the role of human as ‘Abdillah (to worship Allah SWT) (Quran, 51:56)
• It requires a balanced satisfaction of both the material and the spiritual needs of the human personality.
Negligence of one aspect could hinder and violate the realization of human well-being.
• Spiritual needs also include: realization of maqashid shariah.
• The paradigm of Islamic Economics according to Chapra (1992): socio-economic justice and human well-being.
Human Well-
Being
according to
QS Al-Quraisy
Maqasid Al-Shariah (Objectives of the Shariah)
‫ ﻓﻛل ﻣﺎ ﯾﺗﺿﻣن ﺣﻔظ ھذه‬،‫ وھو أن ﯾﺣﻔظ ﻋﻠﯾﮭم دﯾﻧﮭم وﻧﻔﺳﮭم وﻋﻘﻠﮭم وﻧﺳﻠﮭم وﻣﺎﻟﮭم‬،‫ﻣﻘﺻود اﻟﺷرع ﻣن اﻟﺧﻠق ﺧﻣﺳﺔ‬
١٩٣٧ ،‫ اﻟﻣﺳﺗﺻﻔﻲ‬:‫ ودﻓﻌﮭﺎ ﻣﺻﻠﺣﺔ )اﻟﻐزاﻟﻲ‬،‫ وﻛل ﻣﺎ ﯾﻔوت ھذه اﻷﺻول ﻓﮭو ﻣﻔﺳدة‬،‫اﻷﺻول اﻟﺧﻣﺳﺔ ﻓﮭو ﻣﺻﻠﺣﺔ‬
‫ ص‬،١ ‫ ج‬، (١٣٩
(Al-Ghazali, al-Mustasfa, 1937, Vol. 1, p.139; see also al Shatibi.(d.790/1388), n.d.).
"The objective of the Shariah is the well-being of the people, which lies in safeguarding
their faith (Din), their self (Nafs), their intellect ('Aql), their posterity (Nasl) and their
wealth (Mal). Whatever ensures the safeguard of these five principles serves public
interest and is desirable, and whatever hurts them is against public interest and its
removal is desirable" (al-Ghazali, 1937, Vol. 1, p.139 and al-Shatibi, Vol. 1, p.38.
 Other • Two ways of filters: Moral Filter and Price
Market Filter
important 1. Moral Filter: to solve the problem of
unlimited claims on resources at the very
aspects of source - the inner consciousness of
individuals - by changing their preference
Paradigm of scale in keeping with the demands of
normative goals.
Islamic 2. Price Market Filter: to ensure the
effectiveness in creating a market
Economics equilibrium that is consistent with
normative goals.
(Chapra, • Motivation
1996) • Socio-economic and political reform
 Paradigm of Islamic Economics: Way Forward

• Need to develop an Islamic economic vocabulary; Qur’an, Hadith and Fiqh; Need to build
coherent frameworks that embody ‘Islamic viewpoint on different economic
issues/concepts’----------- Islamic economic vision and conceptual framework (Aslam
Haneef)
• Epistemology and Methodology of Islamic Economics need to be done.
3. Foundation and Sources of Islamic
Economic Law
Foundation and Sources of Islamic Economic
Law
a. Al-Quran
Al-Quran is the revelation that has been sent to mankind through
Rasulullah SAW. Reading Al-Quran is a part of worship to Allah SWT.
b. Al- Hadist/ As-Sunnah
a record of the words, actions, and the silent approval of the Propeth
Rasulullah SAW.
c. Ijma’ Ulama is the consensus or agreement of Islamic scholars on a
point of Islamic law, after the demise of Rasulullah SAW.
d. Qiyas (Analogy) is the process of deductive analogy in which the
teachings of the hadith are compared and contrasted with those of
the Qur'an, in order to apply a known injunction (nass) to a new
circumstance and create a new injunction.
Ijtihad
• Ijtihad is an Islamic legal term referring to independent
reasoning or the thorough exertion of a jurist's mental faculty
in finding a solution to a legal question.
• Muadz ibn Jabal ra reported that when the Propeth SAW sent
him to Yemen, the Prophet asked: "What about you if you are
faced with legal problems? He said: "I judge by the book of
Allah". The Prophet said: "If it is not in the book of Allah" ?, he
said: "I will judge with the sunnah of the Prophet
Muhammad." The Prophet said: "If it is not in the sunnah of
the Prophet"? he said: "I will do ijtihad and not excess (in
ijtihad)". So Rasul Saw beat Muadz in the chest and said:
"Praise be to Allah who has agreed with him(Muadz) with what
Rasulullah Saw pleased with."
Position of Al-Quran and Al-Hadits
• The most supreme source of law
• Aql à to confirm the truth revelead in Al Quran and Hadits
Authenticity of Al-Quran

“That is indeed a noble Quran. Inscribe in a well-guarded Book (Lauhil

Mahfuz); which none but the pure may touch.” (QS. Al-Waqiah (56): 77-
79)
• “As for the Admonition, indeed it is We Who have revealed it and it is
indeed We Who are its guardians.”. (al-Hijr (15): 9)
• “Surely it is for Us to have you commit it to memory
and to recite it. And so when We recite it, follow its
recitation attentively.” (al-qiyamah (75): 17-18)
• “So when the Quran is recited, listen carefully to it,
and keep silent so that you may be shown mercy.” (al-
’Araf (7): 204)
• “Nor does he (Muhammad) speak out of his desire.
This is nothing but a revelation that is conveyed to
him.“ (an-Najm (53): 3-4)
TAFSIR and TAKWIL
• Tafsir literally means ‘explanation’, and in terms of its terminology it
means is a critical explanation or interpretation of a text, particularly
a religious text.
• A Quranic tafsir attempts to provide elucidation, explanation,
interpretation, context or commentary for clear understanding and
conviction of God's will.
• Takwil explains the essence of the intended purpose of tafsir.
Method of Tafsir
• Tafsir bi ar-Riwayah or bi al-Matsur is to draw tafsir of Al-Quran with
Al-Quran or Al-Hadist, or from the statement of the companions.
• Tafsir bi Al-dirayah or bi al-Ra’yi, is to draw tafsir of Al-Quran from
the mufassir (Ijtihad).
• Tafsir bi al-Isyarah, tafsir of Al-Quran done by tasawuf people who
attempts to understand and dig up the vague meaning and wisdom
content of the Quran.
Tafsir of Al-Quran with Contemporary
Knowledge
The interpretation of the Quran can use modern sciences or
contemporary knowledge, where modern science includes astronomy,
medicine, economics, etc. This method is included in the Tafsir bi Ar-
Ra’yi
Thematic Tafsir (Maudu’i)
• Tafsir maudhu’i (thematic) means choosing one theme in the Quran
and then compiling all the verses of the Qur'an related to that specific
theme and interpreting it to explain the meaning of that theme.
• Thematic Tafsir is included in Tafsir bi ar-Riwayah or bi al-Matsur
Classification of Hadist relating to the number
of narrators in an isnad
1. Hadist Mutawatir
The first category is mutawatir ( ,‫ﻣﺗواﺗر‬Mutawātir; meaning: successive) narration. A successive
narration is one conveyed by narrators so numerous that it is not conceivable that they have
agreed upon an untruth thus being accepted as unquestionable in its veracity. The number of
narrators is unspecified. A hadith is said to be mutawatir if it was reported by a significant, though
unspecified, number of narrators at each level in the chain of narration, thus reaching the
succeeding generation through multiple chains of narration leading back to its source. This
provides confirmation that the hadith is authentically attributed to its source at a level above
reasonable doubt. This is due to its being beyond historical possibility that narrators could have
conspired to forge a narration. In contrast, an ahaad hadith is a narration the chain of which has
not reached a number sufficient to qualify as mutawatir.
2. Hadist Ahad
The second category, ahaad ( ,‫آﺣﺎد‬Marfūʻ; meaning: singular) narration, refers to any hadith not
classified as mutawatir. Linguistically, hadith ahad refers to a hadith narrated by only one
narrator. In hadith terminology, it refers to a hadith not fulfilling all of the conditions necessary to
be deemed mutawatir. Hadith ahad consists of three sub-classifications also relating to the
number of narrators in the chain or chains of narration
 Classification of Hadist Mutawatir

• Hadits Mutawatir Lafzi (Mutawatir in Wording)

A hadith whose words are narrated by such a large number as is required for
a mutawatir, in a manner that all the narrators are unanimous in reporting it with
the same words without any substantial discrepancy.
• Hadits Mutawatir Ma’nawy
A hadith which is not reported by multiple narrators using the same words. The
words of the narrators are different. Sometimes even the reported events are not
the same. But all the narrators are unanimous in reporting a basic concept, which
is common in all reports. This common concept is also ranked as
a mutawatir concept.
• Hadits Mutawatir Amaly
Sesuatu yang mudah dapat diketahui bahwa hal itu berasal dari agama dan telah
mutawatir di antara kaum muslimin bahwa Nabi melakukannya atau
memerintahkan untuk melakukannya atau serupa dengan itu
Classification of Hadist Ahad
• Hadits Masyhur
This refers to hadith conveyed by three or more narrators but not
considered mutawatir.
• Hadits ‘Azis
Any hadith conveyed by two narrators at every point in
its isnād (chain of narrators).
• Hadits Gharib
One conveyed by only one narrator.
Classification of Hadith relating to the
authenticity of a hadith
1. Hadits Sahih
Ibn Hajar defines a hadith that is ṣaḥīḥ lidhātihi ("ṣaḥīḥ in and of itself") as a
singular narration (ahaad; see below) conveyed by a trustworthy, completely
competent person, either in his ability to memorize or to preserve what he
wrote, with a muttaṣil ("connected") isnād ("chain of narration") that
contains neither a serious concealed flaw (ʻillah) ‫ﻋﻠﺔ‬nor irregularity
(shādhdh). He then defines a hadith that is ṣaḥīḥ lighairihi ("ṣaḥīḥ due to
external factors") as a hadith "with something, such as numerous chains of
narration, strengthening it
2. Hadist Hasan
A hadith whose authenticity is not as well-established as that of ṣaḥīḥ
hadith, but sufficient for use as supporting evidence.
3. Hadist Dhaif
the categorization of a hadith as "weak". Ibn Hajar described the
cause of a hadith being classified as weak as "either due to
discontinuity in the chain of narrators or due to some criticism of a
narrator." This discontinuity refers to the omission of a narrator
occurring at different positions within the isnād and is referred to
using specific terminology.
4. Fake Hadist
Hadist which made by someone who has no basis of isnad and
narrators.