Overview of Islamic Economics

8/16/2019 Overview of Islamic Economics

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“ The Global University in IslamicFinance”

PRE-EXAM QUESTIONSPES

Overview of Economics

Worldviews and Economics

Sources of nowled!e


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Overview of Economics

Q "# $iscus %&e 'ro(lem of economics from(o%& secular and Islamic 'ers'ec%ives#


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Scarci%) of Resources *Economic resources are limitedrelative to wants)

Unlimi%ed Wan%s *People’s desires to use goods andservices that provide satisfaction.

+&oice *Scarcity of resources requires choices to be

made)

he Economi!ing Problem

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Scarci%) means that people want more than isavailable.Scarcity limits people both as individuals and as a

society.

"s individuals# limited income# time and ability#restrict people from doing or having "$$ what theyli%e.

"s a society# limited resources such as manpower#machinery# and natural resources limit the amountof goods and services that can be produced.

Scarcity

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People must choose which of their desires theywill satisfy and which they will leave unsatisfied.

&hen people# either as individuals or as a

society# choose more of something# scarcityforces them to ta%e less of something else.

Economics is sometimes called the study ofscarcity because economic activity would note'ist if scarcity did not force people to ma%echoices.

Scarcity (equires hoice

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People ma%e choices about what goods and

services they wanted.

People wor% harder and do business to earn

income or ma%e profits in order to satisfy theirunlimited wants.

ommodities# money and profits constitutetheir happiness.

hoice

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W&a% is our main o(,ec%ive in %&isear%&

.ow %o wors&i' Alla& %&e w&ole da)

Economics from Islamic Pers'ec%ive

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Islamic Economics is a social science hichstudies the economic !roblems of !eo!le

imbued ith the values of Islam"

It is the study of social science hich

enables !eo!le to !erform their obli#ationto $llah and to their society

*efinition of +slamic Economics



I% s%udies man no% onl) as an isola%ed individual (u% ofa social individual &avin!/

fai%&0 e%&ics *(elievin! in %&e si1 ar%icles0 &is deeds is

accoun%a(le %o Alla& as i% is !uided () Shari’ah# &e is also re2uired %o 'ro'a!a%e !ood doin! and

'ro&i(i% (ad doin! al-Amr bil Maruf wa al-Nahy anil Munkarin %&e socie%) *wa%c& &is (usiness e%&ics3

+on%# $efini%ion of Islamic Economics

%&



A4&ira&, the hereafter for accountability#and for getting the outcome of all deedsincluding economic activities# in an eternal

life.Economic and Non-Economic well-

(ein! for leading a good life and

discharging socio-+slamic obligations in thisworld and for achieving the home ofhereafter.

Islamic Economic

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.ow Islam views %&e

Economic Pro(lems Scarcity of (esources

nlimited &ants / hoice



(esources in +slam

"llah 0swt) 1as created resources in abundant.1owever recourses in the eyes of mans is

scarce2limited due why3due to lac% of means to reach this resources

0which is the results of man’s choice such aslac% of %nowledge# s%ills# etc.)



+slam recogni!es that human desires areunlimited. his is e'plained in the 4uranand in the 1adith.

nlimited &ants

%4


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567 89 8: ; 8?@ 8 A B


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0M) NO QR ?T,

5 678 9 :;;7? @B @CD F :GH8 JKLB H B 67 ? H 6 G 8 9 :V7:= >;7? @B :;


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1ence scarcity of means necessitateschoice which can provide higher valuesbut at same time performing one’s mission

in this life.

hoice in +slam should be ran%ingaccording to need fulfillment and not togreediness

hoice in +slam

%


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"cquiring &ealth in +slam+s it prohibited 3

_es`No


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&hen a man dies he will be as%ed on four,H- 1is youth how he spend it3

V- 1is age how he spend it3K. 1is wealth how he acquires it3 /J. 1ow he spends it3

8bG 7 Z8 >;ZL [ YZ [ 6 :g :g hH7 J L jk :; >: L B L pqG Y\ F:;7 6G L :Fg

>tq\ G F >7:F L8 j: :; j]L L8

Cont. Acquiring Wealth in Islam


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WOR$xIEW AN$ E+ONOMI+S

Q y# .ow can Islamic economics (ee1'lained wi%&in %&e con%e1% of Islamicworldview#

Q z{# $iscuss %&e conce'% of 4&alifa& in %&e'roduc%ion0 alloca%ion and dis%ri(u%ion ofresources from %&e Islamic 'ers'ec%ive#


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&orldview e'plain how man perceives this world. +tdenotes “a set of implicit or e'plicit assumptionsabout the origin of the universe and the natureof human life”.

WORLDVIEW


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SE+UAR WOR$xIEW

Every community or system is controlledor influenced by its own worldview. hedifferent worldviews among communitiesor among system lead to dissimilar end

means of human life.


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- separation between religion and otheraspects of life#

- materialistic#- individualistic#- less socio economic Wustice

- less public relations#- less concern with the hereafter life

SE+UAR WOR$xIEW*Man’s Way of Life)


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- belief in a dual worldviews, this world / thehereafter

- religion is part of his2her daily life- maslahah of the ummah 0public benefit)#- accountability#

- trustworthiness#- transparency etc.

ISAMI+ WOR$xIEW*Man’s Way of Life)


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Islamic WOR$xIEW

To understand the Islamic orldvielet us 'rst de'ne the folloin#s(

%" Islam) Iman, A’mal, Ihsan.*" +elationshi! beteen $llah) man)

nature) reli#ion"3" The nature and characteristics of

man, man-s role as ‘abd and khalifah


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Lan as a Xhalifah./ice#erent and 0lave1

Y Lan is the khalifah of "llah or vicegerenton earth and the resources at his disposalare a trust 0 Amanah).

Y 1e must utili!e them according to the willof the reator and he will be held

accountable for any misuse of %&eseresources. +t thus# follows that theseresources are means to attain falah.

d l h ( i


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‘ Adalah (Justice

Everyone is a khalifah) unity and brotherhood ofman2ind" This brotherhood ould remain ahollo conce!t devoid of all substance if it is notaccom!anied by ‘adalah .ustice1"


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Zature

Zature is the creation of "llah for man. "ll resources in nature are means for man to

attain his falah 0happiness) in this world and in

the hereafter.


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Lan’s aim in life

Lan’s aim in life is to achieve happiness not

in this world alone but in the hereafter too# i.e.to achieve falah 0success2prosperity).


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ont. he +slamic &orldview

1ence the +slamic worldview can bedescribed as a dual worldview# comprisingboth %&is world and %&e .ereaf%er .

he +slamic worldview is based on +slam. "ll worldviews must include concepts on "llah2Tawhid, Lan2Khilafah, Zature# Lan’saim in life# [ Adalah


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Luslim believe that this world is atemporary place for them to be

tested in order to determine whetherthey will get the reward orpunishment in the 1ereafter.

ont. he +slamic &orldview


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Q |# $ifferen%ia%e (e%ween secular and Islamicsources of 4nowled!e in rela%ion %o economics#

SOUR+E O} NWOE$~E

IMPORTAN+E O} NOWE$~E IN


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Y o see% %nowledge is a holy duty\ it is

obligatory on every Luslim# male andfemale.

Y he first revealed word in the 4ur’an was]IQRA] (E"* i.e. it encourages man tosee% %nowledge# to be educated.

IMPORTAN+E O} NOWE$~E INISAM

SOUR+ES O} NOWE$~E IN


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SOUR+ES O} NOWE$~E INISAM

Xnowledge can be classified into two%inds with respect to the sources of%nowledge\

H. (evealed Xnowledge and

V. "cquired Xnowledge


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WESTERN SOUR+E O}NOWE$~E

&estern source of based upon acquired%nowledge# i.e. upon cultural tradition reinforcedby strictly philosophical premises based uponspeculations.

here can be no certainty in philosophicalspeculations in the sense of religious certaintybased on revealed %nowledge understood ande'perienced in +slam.

Overview of Islamic Economics

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