Dr.

Mohd Nahar Mohd Arshad

TOPIC 1: ISLAM, ITS WORLDVIEW AND ISLAMIC ECONOMICS

Main References
Muhammad Akram Khan, (1989), An

Introduction to Islamic Economics, IIIT and Institute for Policy Studies, Islamabad. Mohamed Aslam Haneef (1996), `Islam, the Islamic Worldview and the Methodology of Islamic Economics', Journal of Islamic Economics & Management, Vol. 1 No. 1, June. S.M.N. Al-Attas (1975), Islam and Secularism, (Chap. 3,pp. 47-69), ABIM, Kuala Lumpur.

Why Islamic Economics?

Why Islamic economics?

Worldview and ideology Methodology Operational design Problems and shortcomings in

the conventional economic system

Defining Islam
Peace submission, surrender,

obedience ad-din Syed Muhammad Naquib alAttas in Islam and Secularism (p.52)

Islam as ad-Din
Debt From mans point of view =>Allah is

worthy of being worshipped; man must be grateful to Him From Allahs point of view => our existence is according to His iradah and manifestation of His power. Covenant

Covenant (Al-Araf 7:172)

when Thy Lord drew forth from the

Children of Adam - from their loins their descendants, and made them testify concerning themselves, (Saying): "Am I not your Lord (Who cherishes and sustains you)?"- They said: "Yea! we do testify!" (This), Lest ye should say on the Day of Judgment: "Of This we were never mindful.

Why Islam is appealing?

Khurshid Ahmad in Islam: Basic Principles

and Characteristics
Simplicity, rationality and practicality
Unity of matter and spirit A complete way of life

Balance between the individual and society

Universality and humanism Permanence and change

Complete records of teaching preserved

Worldview
is a particular philosophy of life or

conception of the world. Worldview is individuals perception of the world, which on average tend to conform to the norms of what has socially been agreed (Zubair Hasan, Islamization, 1998) Islamic Worldview (Ruyat al-Islam li alwujud)

Islamic worldview vs. secular worldview

Islamic worldview
Islamic worldview is based

on Islam (Aslam, 1996). All worldviews must at least include views on God, Din, Man, Nature, Aim in life and Knowledge

View on God
- Tawhid - Secular
- Atheism is an ideology that claims god does not

exist or irrelevant to human life. - Nietzsche proclaims that "God is dead" - Friedrich Nietzsche. The Gay Science (1882) - Power of the Nature - Invisible hand

View on Religion
Ad-din Secular
Human beings get to decide on

standards and values. Religion has no role in public affairs Only in certain ceremonial events Science and market as the authorities

View on Man (Islam)

Man is equal before Allah

except in taqwa. man as the best creation. Khilafah and abd Best ummah Middle umah

View on Man (Secular)

Neo-Darwinism ideology considers

man as the most highly evolved of all creatures, and man therefore is responsible for directing and aiding the evolutionary process. Man as factor of production Utilitarian

View on Aim in Life (Islam)

Falah Al-Ghazali suggested the following 4 means

to achieve falah:
Al-Fadhaail al-Nafsiyyah (the good of the soul)

iman and good akhlaq Al-Fadhaail al-Jismiyyah (bodily good) - health, strength, long life, beauty (good Impression) Al-Fadhaail al-Kharijiyyah (external good) - wealth, influence, family, noble birth. Al-Fadhaail al-Tawfiqiyyah (divine grace) guidance, leadership, strengthening.

View on Aim in Life (Secular)

Materialism hedonistic

View on Nature (Islam)

repeated numerous times in the Qur'an,

"heavens and the earth and all in between" to describe nature/universe. Seen and unseen Nature is in natural submission to God (Qur'an 7:54; 22:18; 24:41) to contemplate the existence of God, to realize His greatness and to work towards achieving falah.

View on Nature (Secular)

An end in itself To be explored and be

utilized for economic gain Reject the unseen world

View on knowledge (Islam)

Revealed knowledge al-Quran and as-

sunnah.
Acquiring knowledge of prerequisites to revealed

knowledge is fard ayn. Examples: the science of Quran, the science of hadith, Principles of Islam (tawhid, Islam, iman and ihsan), life of the Prophet, ethics and Arabic.

Acquired knowledge
Science fard kifayah upon Muslims.

View on knowledge (secular)

Reject revelation Knowledge is derived

from human reasoning, observation, experiment and historical experience.

Conclusion

Dr. Mohd Nahar Mohd Arshad

ISLAMIC ECONOMICS (IE)

IE
IE is an approach to interpreting and solving man's economic problems based on the values,

norms, laws and institutions found in, and derived from, the sources of knowledge in Islam (Haneef, 1997, p. 50).
Islamic economics aims at the study of human falah achieved by organizing the resources of

the earth on the basis of cooperation and participation (Muhammad Akram Khan, 1989)

Falah
World
Survival Freedom from want Power and honour

Herafter

Conditions of falah
Spiritual condition of falah Economic conditions of falah Cultural conditions of falah Political conditions of falah

Resources
Gift Signs - for man to realize the power of the

Creator (Al-ambiya, 21:30; Az-Zaariyat, 51:47) and also for man to observe the universe as a source of knowledge Means to falah Trust

Resources
Scarcity
Limited resources Unlimited wants Improper use Imbalance distribution

Resources
Scarcity, in essence arises from the two

inherent conflict between wants and ability. The limited resources assumption is made to show that mans ability to exploit resources is limited by his knowledge. In this manner economics looks at relative scarcity and not absolute scarcity.

Resources
no absolute scarcity in Islam - Abraham:32-34
It is Allah Who hath created the heavens and the

earth and sends down rain from the skies, and with it bringth our fruits wherewith to feed you; it is He who hath made the ships subject to you, that they may sail through the sea by His Command; and the rivers (also) hath He made subject to you. And He hath made subject to you the sun and the moon, both diligently pursuing their courses; and the Night and the Day hath He (also) made subject to you. And He giveth you of all that ye ask for but if ye count the favors of Allah, never will ye be able to number them.

Resources
Islam recognizes that human desires are unlimited.
Fair-seeming to men is made the love of desires, of

women and sons and hoarded treasures of gold and silver and well-bred horses and cattle and tilth land: (3:13) And you love wealth with exceeding love (89:20) He thinks that his wealth will make him abide (104:3) Narrated Ibn Abbs and Anas bin Mlik: Allahs Messenger said, If a son of Adam had a valley full of gold, he would desire to have two. Nothing can fill his mouth except the earth (of the grave). Allah turns with mercy to him who turns to Him in repentance. (Al-Bukhri and Muslim)

Resources
Islam provides clear guidance to manage the

resources in terms of:

Acquisition of the resources Utilization of the resources Transfer of the resources

Participation and cooperation

contracts like mudharabah and musharakah

which are greatly encouraged in the Islamic economic system. The distributive schemes such as zakat, sadaqah, maniha and many more are also promoting ties of brotherhood and cooperation in the economic system.