What is the Islamic Economics?

Islamic Economics had been developing at both theoretical and implementation level since more than a decade ago. We can see vast literatures  on Islamic economics  and many education institution offer Islamic economic and shari’ah finance as eminent program not only in Islamic country but also in the western country. At the implementation level is the establishment of various Islamic financial institutions. Here below we display what is the Islamic economics? 

According to M. Akram Kan, Islamic economics aims the study of the human falah (well-being) achieved by organizing the resources of the earth on the basic of cooperation and participation. Here Akram envisages two dimensions of economics in Islam namely; normative that aims to get successful of well-being in worldly and hereafter; secondly, positive that organizes the natural resource.  

M.A Mannan defines that the Islamic economics is a social science which studies  the economics problems of a people imbued with values of Islam. Here we can understand that Islamic economics is a social science using Islamic values to solve people economics problem.

M. Umar Chapra points out that Islamic economics that branch of knowledge which helps realize human well-being through an allocation and distribution of scare resources that is in conformity with Islamic teaching without unduly curbing individual freedom or creating continued macroeconomic and ecological imbalances. So, the Islamic economics is knowledge for guiding people to realize human well-being. 

M.N Ash-Sidiqy explains that the Islamic economics is the Muslims thinker’s response to economic challenges of their time. In this endeavour they were aided by the Qur’an and the sunnah as well as by reason and experience. Furthermore, Kurshid Ahmad argue the Islamic economics is a systematic effort to thy to understand the economic’s problem and man behaviour in relation to that problem from an Islamic perspective.

Interestingly, what had been explained by Muhammad Baqir as-Sadr. He divides Islamic economics in two groups namely; science of economics and doctrine of economics. The economics doctrine is an expression of the way which the society prefers to follow on its economic life and in the solution of its practical problems; and the science of economic life, its economic events and its economic phenomena. Islamic economics is not only a science but also a system. Hence the economic science is a science of the laws of production, and the economic doctrine is the art of distribution of wealth. As such every investigation which has to do with production, and its improvement, invention of the means of production and their improvement, is a subject matter of the science of economics. It is of universal nature, by which nations do not differ in respect of it on account of difference between them as to their social principles and concepts, nor is it the appropriation of one principle with exclusion to another.    Economics is often emphasized a positive science, while Islam being a religion is normative. Nevertheless, economics is also consist of normative based on assumptions such as production should be minimum cost, given factor price and a production function. Yet Islam is not devoid of positive economic statement or hypothesis for instance, Allah explains in the Qur’an Surah Ali Imran verse 14 “Beautified to mankind is the love of lust – woman, offspring, heaped – up heaps of gold and silver, horse of mark, cattle and tillage, that is the enjoyment of the present life; but God-with Him is the fairest abode”.

All in all, Islamic economics is an economic system that explains the phenomenon about choice behaviour for making decision in each economic unit by including the shari’ah laws as independence variable that influential all economic decision. So Islamic economics is not pure of science but it’s a tenet which gives us the best solution in our life. Needless to say, the science of economics is an understanding how the economic activity is going on. It is the way Islam prefers to follow in the pursuit of its economics life.