Islamic economics means the knowledge of economics or economic activities. It refers to the laws and principles of Islam for performing economic activities. Islam has laws and principles which should be kept in mind while conducting economic activities on an individual or social level. In other words, it can be detailed as Islamic Economics is the study of those activities which involve the exchange of money and its transactions according to the teachings of Islam. Islam believes in equality and justice, so Islam teaches that wealth should be distributed equally among all people. The Holy Prophet (PBUH) has said: “Poverty may turn a believer to kufr.” Learn about Islam – Islamic Courses.
PRINCIPLES OF ISLAMIC ECONOMIC SYSTEM:
The primary purpose of Islamic Economics is to maintain social justice, eliminate poverty, and just distribution of wealth among people. Islamic economic system has a set of rules and principles which should be followed strictly to develop a sustainable economic system in a society. Some of the essential factors are explained below to illustrate the idea of the Islamic Economic system:
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- RIGHTS OF LABOURER:
Labor plays an integral part in any growth and development of a country; whether it is physical or mental labor, it has great importance. In the Islamic economy, it is evident to give them their wages soon, and the wages should be enough for the fulfillment of their essential needs. There should not be any delay in paying their salaries, and a burden beyond their capability should not be put on them. The Holy Prophet also stated the importance of labor and taught us to pay them before their sweat dries.
- PROHIBITION OF INTEREST:
Interest is strictly prohibited in Islam. Those who do not follow this principle of Islam are against ALLAH (SWT) and Holy Prophet Hazrat Muhammad (SAW). Islamic economy promotes those activities which are free from interests. Islamic Economy emphasizes on profit-loss sharing system because in this system you to work for your return while in interest there is no such thing.
- DISTRIBUTION OF WEALTH:
Islamic Economy believes in the just and equal distribution of wealth. Islamic system believes that rich people should not keep the wealth, but it should be distributed to society’s poor and needy people. It is the responsibility of the Islamic state to take the money from wealthy people and distribute it to needy and deserving people as well.
The meaning of Zakat is purification. It means the wealth and money should be purified by giving a certain amount of share to the needy people. Zakat system removes the greed of wealth, circulates it, and is an excellent help for deserving people. As Quran says: “And pay the zakat to the poor.”
In the economic system of Islam, individual ownership of objects is allowed but only with some terms and conditions. A person can have ownership of necessities, and he is the owner of only those things that he earns with his own hands. His earning should be honest and within the laws without harming people and society. This particular economic system allows individual ownership.
- SAVING OF MONEY AND HOARDING:
Islam allows us to save our money for bad days and future mis happenings, but hoarding is not allowed in Islam. Hoarding means saving things that are basic for the public. The Islamic system is strictly against hoarding. Saving money and not distributing it among people is against the teachings and principles of Islam. Islam does not promote love for money and other materialistic things. The person who starts hoarding is a criminal for stopping the circulation of wealth. The saving of money and goods can’t save us from the fire of hell.
Islam considers the worldly profit and material rewards but in limits. It should not affect our afterlife. We should save ourselves from greed and the love of money. Islamic Economy teaches us those laws and principles through which we can achieve success in this life and in Akhirah also. The principles of Islamic economics are to develop a sense of accountability, responsibility equality, and social justice. If we see it in a practical way, it is very clear that Islamic Economy and its principles are just for the betterment of humankind.