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The basis of Islamic economics is enshrined in the spiritual norms of Islam. Unlike the modern economic systems which are based on the mundane philosophy, the Islamic economic system is directly guided by Allah Almighty Himself. As Islamic economic system was passing through its early stages of development, the Quran guided the Holy Prophet (P. B. U. H. ) with regard to its effective enforcement.

Since this system is Divine guided, it is spiritual. Additionally, all important aspects of the Islamic economic system and the applicable norms are thoroughly discussed in the Holy Quran. Whether it is production, consumption, distribution or the financial system, they all have been discussed in this Divine Book sufficiently. Quran itself declares that Allah Almighty created the human being as His Viceroy on this Earth, and as such He created all needed provisions so that they may consume them and may satisfy their wants.

Islam has laid down certain principles and limits for the economic activity of man so that the entire pattern of production, exchange and distribution of wealth may conform to the Islamic standard of justice and equity. Islam does not concern itself with time-bound methods and techniques of economic production or with the details of organizational patterns and mechanisms. Such methods are specific to every age and are evolved in accordance with the needs and requirements of the community and the exigencies of the economic situation.

Islam’s concern is that whatever the particular form of economic activity in operation, its underlying principles should always be the same. According to the Islamic point of view, Allah has created for mankind the earth and all that it contains. It is, therefore, the birthright of every human being o try to secure his share of the world’s wealth and sustenance. Islam does not allow a particular person, class, race or group of people to create a monopoly in certain economic activities: equal opportunities for all is its watchword.

Objectives of Islamic Economics Right of Property Resources which are provided by nature and which can be used directly by man may be utilized freely, and everyone is entitled to benefit from them according to his needs. Water in the rivers and springs, timber in the forests, fruits of wild plants, wild grass and fodder, air, animals of the jungle, minerals under the surface of the earth and similar other resources cannot be monopolized by anyone nor can restrictions of any sort be imposed on their free use by Allah’s creatures to fulfill their own needs.

Of course, people who want to use any of these things for commercial purposes can be required to pay taxes to the state. Or, if there is misuse of the resources, the Government may intervene. But there is nothing to prevent individuals availing themselves of Allah’s earth as long as they do not interfere with the rights of others or of the state. Anyone who takes possession of the earth’s natural resources and puts them to good use acquires a rightful title over them.

For instance, if somebody takes possession of an uncultivated piece of land, on which nobody has a prior right of ownership, and makes productive use of it, he cannot be arbitrarily dispossessed of that piece of land. This is how every right of ownership originated in the world. When man first appeared, everything was available to everyone, and whoever took possession of anything and made it useful in any manner became its owner; that is to say, he acquired the right to use it specifically for his own purpose and to obtain compensation from others if they wanted to use it.

This is the natural basis of all the economic activity of mankind. THE PROBLEM OF EQUALITY Allah has not distributed His gifts and favor equally among mankind but, in His infinite wisdom, has given some individuals more than others. Just as this is true of pleasantness of voice, excellence of physique and intellectual power and so on, so, too, is it the case with the material conditions of life. Human existence has been so ordained that divergence, variety and inequality among men in their ways and standards variety and inequality among men in their ways and standards of living seems to be natural.

Variety is the spice of life, and the driving spirit of behind human endeavour and excellence Islam desires that no legal, functional or traditional handicaps should exist in society, to prevent an individual from struggling for a living according to his capacity and talent nor should any social distinctions subsist with the object of safeguarding the privileges of a particular class, race and dynasty or group of people. And those schemes and ideologies which serve the vested interests or which want to perpetrate the hold of a certain group are repugnant to Islam and can have no place in its scheme of things.

Such movements seek to establish, through force and resort to artificial means, an unnatural inequality in place of the natural limited inequality which feeds the springs of incentive to effort in a society. Hence, Islam aims at wiping them out and putting the economic system on the natural footing so that the opportunities of struggle may remain open to all. At the same time Islam does not agree with those who desire to enforce complete equality in respect of the mean of production and the fruits of economic endeavor, as they aim at replacing, limited natural inequalities by an artificial equality.

Social Justice Islam does not want this economic race to take place in an atmosphere of moral neutrality and social apathy. The participants should be just and kind to one another. Islam, through its moral injunctions, aims at creating a feeling of mutual love and affection among people, through which they may help their weak and weary brethren, and at the same time create a permanent institution in society to guarantee assistance to those who lack the necessary means and abilities to succeed.

People who are unable to take part in the economic race and those who need help to get started in it should receive their share of the blessings of life from this social institution. To this end Islam has commanded that Zakat should be levied at the rate of two and a half percent per annum on the total accumulated wealth [of each individual] in the country, as well as on invested capital; five percent or ten percent, depending on the method of watering, should be collected on agricultural produce; and twenty percent on certain mineral products.

The annual Zakat should also be levied, at a specified rate, on cattle owned by anyone who has more than a certain minimum number. The amount of Zakat thus collected is to be spent on the poor, the orphans and the needy. This system provided a means of social insurance where by everyone in an Islamic society is provided with at least the necessities of life. No worker can ever be forced, through fear of starvation, to accept conditions of employment which may be unfairly imposed on him by employer.

And nobody’s physical health is allowed to deteriorate for lack of proper medical care and hospitalization. Just as political and social freedom is essential for the individual, economic freedom is necessary for a civilized moral existence. Unless we desire to eliminate completely the individuality of man, our social life must have enough freedom for an individual to be able to earn his living, to maintain the integrity of his conscience and to develop his moral and intellectual faculties according to his own inclinations and aptitudes.

Living on the dole or on charity at the hands of others cannot be very satisfying, even if the sums involved are generous: the retardation of mental, moral and spiritual development which it ultimately leads to can never be counteracted by mere physical welfare and prosperity. Characteristics of Islamic Economic Production of Wealth: In order to fulfill the daily needs and requirements, Islam permits the Muslims to produce and manufacture such things which are quite essential for human lives. Such things are of two categories. 1) One, which is naturally produced.

It includes all the natural wealth which is related with land, seas, mountains, forests and minerals etc. 2) The other things are human made. They include all the manufactured goods and things which the human labour can produce. But here, again Islam puts a ban on the production of such things which are injurious for human health and have been prohibited by Islam Distribution of Wealth: Perhaps in no religion of the world, the distribution of wealth has been emphasised so much as in Islam. Islam disdains poverty in any form chiefly because man has been created on this earth as a viceroy of Allah, and.

He does not like His viceroy or his progenies should pass poor life. But it was the kings, monarchs and the capitalists who took possession of all resources of production and left the people to become impoverished. Law of Demand and Supply: The question of demand and supply stems from the fact that all human beings have been given the natural instinct of hunger and thirst and other requirements of life. The things which are most essential for human life, have been supplied by Nature quite abundantly, such as, air, water and food etc.

To fulfill other demands, they have been asked to manufacture their own essential goods. Quran declares, ‘There is nothing for human beings than what they endeavor for. ” This clearly shows that to fulfill other demands they will have to labour hard in all walks and branches of life. But for this purpose they have only been allowed to create or produce such things which have been declared as “Halal” (lawful) by Islamic Shariah. The “Haram” (unlawful) things have totally been banned to be produced or manufactured. (Their details have been given in full in Islamic jurisprudence).

Hence, the question of “Halal” and “Haram” comes first in Islamic economics and is a basic, qualitative guidance with regard to supply and demand. Halal and Haram: The question of ‘Halal’ and ‘Haram’ (lawful and unlawful) is an important principle of Islamic economics as briefly described above. It was introduced in Islamic economics quite gradually because at the time of Islamic Revolution the people were illiterate and they did not know what was ‘Halal’ and ‘Haram’. The question of ‘Halal1 and ‘Haram’ at that time, was related with three aspects of life:

Conclusion Some people think that Islam has no economic system of its own, but it is purely their whim. Islam came, in this world, as the last Divine religion (or ideology of life) for the whole mankind. How could it have been that it had not given requisite guidelines for the economic system of its believers? It is known that for any revolution, whether religious or secular, four pillars, are quite essential for success, namely faith, political system, economic system and social system. It is these four pillars on which the edifice of a nation’s life stands.

Islam as an universal religion for the whole mankind could not have ignored this most vital and essential aspect of human life. It is due to this reason that the Holy Quran provides guidance for the Islamic economic system. The basic facts of the Islamic economic system whether it is the law of demand and supply, the theories of production, distribution, consumption, organisation, financial system and the social system have been laid down in this Divine Book. The practical shape of this system was given by the Holy Prophet himself (P. B. U. H. ).

His practice, actions and sayings are spread in numerous books of Hadith. If one is not aware of his practice and actions, it is his fault, and not the fault of Islam.

Refrences 1-http://www. islam101. com/economy/economicsPrinciples. htm 2-http://www. witness-pioneer. org/vil/Books/MF_ICIT/islam_principle. html 3-http://www. ediscoverislam. com/About-Islam/Islamic-Law-and-legal-Systems/economics-principles-of-islam 4-http://www. friendsmania. net/forum/b-com-part-1-economics-notes/27028. htm 5-http://www. financeinislam. com/article/1_36/1/531