Nature of Islamic Economics

1 January 2017

Economic problems started with the birth of men and become more complicated with the development in the wants of men as the men is surrounded by wants. According to western scholars economics is the study of wants and scarcity and the reaction towards the ends and wants of the people. Adam Smith is regarded as the Father of economics due to his famous book ,’’The wealth of nations ‘’ in 1776 A. D. But five centuries before Adam Smith Madan’, and ‘Al-Muash’ etc. ur well known economists are Muhamad bin Hassan tossi (1274 A. D), Ayatollah Mahmoud Taleghani (1911 – September 9, 1979), Ibne Khaldun (1332 A. D to 1406 A. D).

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The industrial resolution have given an edge I almost every field to western nations. Due to the advancement of western arts and science and more and new concepts that the modern institutions in Islamic countries has started providing education and training in those areas. The awareness of the need to re orientate the arts and science has risen among Muslim academicians and educationists of the countries which have won independence in the 20th century.

Difference between Islamic and Modern economics’ Islamic economics and modern economics both deals with same subjects but there approaches are different well there is a basic difference between them in the modes of study ,goals, lines of approach and in several other respects. Islamic economics can also be justified as an identification of an area of studies that is based on the assumption of the existence of Islamic axioms in the socio-political-cum –legal environment and the system of values and the ethics which guide the economic behavior of men and women in an Islamic society.

While Modern economics deals with the systematic relations among individuals involve in production of wealth ,distribution of and exchange of wealth and the use of commodities and services. Some points of important points of difference are noted below. Difference in basic Assumptions: Every science natural or social is based upon some assumptions every system and religion has its own rules and regulations we will see the conflicts between both under the headings below. (a) Views of the Universe:

Western economics: * Universe is made of matter and and has its attributes of matter its is finite and indestructible. * Study of ends and scarcity and there relationship. * This cause aggressive selfishness, competition and mutual conflict among individuals due to shortage of resources. * The strong and more resourceful individuals accumulate vast surplus means of livelihood while the weak lag far behind in the economic race and face deprivation. | Islamic economics: * It is based on the doctrine that the universe is the creation of an All Knowing Creator.

He proclaims Himself as the Lord of the worlds and so it becomes His Majesty to supply food and others necessities of life in full measure for His creature whom He calls His family. * He has created man in the best form and endowed him with all those intellectual and practical faculties which are needed to exploit the treasures of the universe. | (b) Concept of man:Western economics: * Regards men as an animal like other animal species in the universe.

All principles and laws govern the life of animals aply also to the life of man. * Its main concern is how to fulfill the physical and material needs of man. The animal nature of man holds the greatest importance. | Islamic economics: * Regard man as the vicegerent of Allah on Earth. * Man is the best of the whole creation and holds a position far above other animate. * He deserves a high and beneficent treatment. * The most suitable system for the economic struggle of man is that which is keeping with his social status guarantees him a lawful and decent livelihood.

The Supposition of the Economic man: Western economics: * Within the human animal their lives an economic man in whose nature qualities of selfishness and self-love are deeply ingrained. Seeks self-pleasure ,interest and profit from his means. * Man is viewed as utterly devoid of the spirit of selflessness, sympathy ,mercy and co-operation. | Islamic economics: * Regards men as the masterpiece of the lord’s creation. * Within the man of flesh and blood lies a moral man. * Follows that greater attention should be paid to awaken and elevate the moral man. * The moral man can create a plesant and amicable society which will satisfy all the wants of its members. | |

Difference in the operation of Moral values:Islamic economics is a normative science and studies human behavior with reference to a set of moral values while judging the behavior of men as good or evil. According to the moral principles of Islam we can drive peaceful methods of consumption , production, distribution of wealth transactions of exchange ,trades and other matters of life. Western economics basically hada positive approach so they holds that moral values are unnecessary and irralivent to he to the study of economic behavior.

That is why despite un precedent economic process and super-abundant production of consumer goods a vast majority of human beings are still deprived of economic wellbeing. Difference of Aims and Scopes: Western economics is materialistic. They aims for the material prosperity and welfare of the individuals. Western economists Marshall and cannon and their followers emphasizez of the material welfare of the economy. That difference in aims causes difference in scope of economics they only try to limit the activities of man which results in his material welfare.

They focuses on the effects of market variables or economic variables and their scope revolves around on the materialistic concepts. Islamic economics agrees that the aim of economic struggle is to achieve welfare but its concept of welfare does not ends up at the material welfare. According to Islamic views of life they not only focuses on the eternal welfare but also the world here after. Islamic economics deals with such activities of men’s activities conforn to the moral values of the Quran and Sunnah.

Difference in mode of research and Emphasis on sector of study: Western economists believe that their mode of research is empirical and objective they judge the human in the light of facts and do not allow any moral values to influence their analysis and study. They only focuses on the production of wealth and scarcity and they do not discuss the other major aspects of an economy. So they keeps on concentrating on the production and growth of wealth. Islamic economics too derives its material from the facts of economic life and it is an important feature of its mode of research to judge human behavior in light of experience.

It studies every thing under the guidance of Divine revelation. Islamic economics deals evenly with all aspects of life production , distribution, exchange and distribution of wealth. ‘Need for Islamic Economics’The nature of Islamic economics is different from western economics. Therefore, there is need of a separate discipline of knowledge. * Modern economics is evolved in western societies. Since the spiritual, social, politics and cultural set up of a Muslim society is different from the western societies so their concepts are not suitable of Muslims. There is a need for a discipline which studies issues usually described as the subject matter of economics on a universal basis.

This need is similar to that which was felt by Ibn Khaldun when he invented ‘Ilm al Imran. In other words, even if there were no economics at our time, Islamic economists should feel the urge to create it. * Western economists assumes maximization of utility and maximization of profit as a rational behavior. This behavior is shown by selfish and different attitudes towards others. Muslim sacrifices for others. There is no need to add the adjective “Islamic” to such a discipline, this addition is not required by our religion, and Muslim scholars did not do it when they were leading culturally and otherwise. It is also misleading because it may denote that the economic “laws” of “Islamic economics” are not universal and generic to all human beings and human socialization.

The objective of economic agents in western framework is a satisfaction of their wants for material goods and services while the objective in Islamic framework is Achievement of ‘Falah’, which is a two worldly concept. The unfortunate historical incident, that Muslim fell in the shadow or periphery of human civilization for the last few centuries, allowed the discipline of economics, unlike ‘Ilmal ‘Imran, to be developed under the Judo-Roman culture. This stamps the science with a restrictive cultural imprint that deprives it from becoming fully universal. Zarqa, rightly, points out the need to clean our discipline from the value loaded postulates incorporated in it by economists of the Jude Roman Heritage as well as the results from the effects of such postulates on the descriptive permises of the discipline.

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