ISLAMIC SYSTEM OF ECONOMICS

 ISLAMIC SYSTEM OF ECONOMICS

 1. Introduction of Islamic System of Economics:

                                                                                                   Islam is the religion of sagacity, and it presents code of life. It has clear commands to fulfill all religions, social, cultural and economic needs. We have discussed in detail the two major economic systems of the world i.e. capitalism and socialism. Taken in view the salient features of both these systems, it can be declared that in comparison to Islamic thoughts and ideology these systems are worthless. Because capitalism encourages the lust for money, monopoly, feudalism, over production and depression, which result in unequal distribution of wealth. The society is divided into two groups rich and poor. Due to which jealously, rivalry, processions, strikes and massacre accurse. In socialism and communism all the resources are govt. property People are deprived of the right of personal freedom, self-confidence and self-determination Due to loss of sense of ownership people lose their interest in work which slows down pace of economic development Islamic economic system is a moderate economic system between these two extremes, which is based on the teachings of Quran. This teaches us sympathy, brotherhood, justice, sacrifice, truth, moderation and about earning and spending of money by fair means. Moreover, it emphasizes not only on the satisfaction of material requisites but also on height of moral values, maturity in character and purity of spirit. So the society may transform into welfare state in real terms. 2. Salient Features of the Economic System of Islam:

 Following are the salient features of an economic system of Islam:

 1) Resource Allocation:

                                                    First of all we discuss about resource allocation, land, forests, animals, minerals, water, mountains and climate are bestowed by God. All these resources are used in different ways to earn livelihood. According to Quranic teachings, all human can equally utilize these resources, nobody can be deprived of the utilization of these resources and no one have the right of monopoly As Allah says in Surah-al-Baqra: “He (Allah) is who has created everything for you, which is available in the earth (land).” Therefore, all human beings have the right to use them.

2 Ownership Rights:

                                               Allah is the creator and owner of the whole universe and He has given all natural and other resources to humans so that, they may utilize them according to the teachings of Allah and His Prophet (S.A.W) to fulfill all types of needs. Beside this, Islam also gives the right of ownership to human, to spend on his basic needs and also to help the poor and needy. As Allah says in Sura Tauba: "Oh, Prophet collects Zakat (sadquat) from their (people) belongings." Similarly Allah says in Sura Nisa: "Don't use (snatch) each other belongings through Prohibited (Haram) ways. These verses show that ownership rights are according to the Islamic system. They are the owner of everything. They can earn through legal and halal means. Hazrat Muhammad (S.A.W) has been asked to collect charity and sadquat from their income for the poor and needy.

 3) Production of Wealth:

                                                    In Islamic teachings, it is clearly mentioned that the money must be earned and spent in legal and ethical ways Illegal and unethical ways like robbery, smuggling, theft, interest, gambling and prostitution are forbidden in Islam. Zakat must be paid by sahib-i-Nasab, 10 help the poor, orphans and needy persons. Hence, Islam emphasizes on legal income which does not disturb peace of that society It also emphasizes on giving wages to him worker well in time and treats them kindly Moreover, Islamic system also provides a method of pricing but humans can make changes in that system according to social and economic requirements for the betterment of society. Price mechanism has role in Islamic society but it is not a priority.

 4) Consumption of Wealth:

                                                         About consumption of wealth Islam emphasizes to live a balanced simple life and to spend money to fulfill at the basic needs. But one should take care of his neighbors and other human beings and should help them with charity, zakat, usher and other means. Several things are forbidden in Islam For example alcohol, meat of dead animals, pig, utensils of gold and silver and ornaments of gold for men etc. As Allah says in Surah Al-Baqra "And what so ever you (people) spend on noble cause you will receive in fall form (complete) and you will never be tortured" .

5) Discouragement of Accumulation of Wealth:

OR Circulation of Wealth:

Accumulation of wealth has been discouraged in Islam because it badly affects the circulation of wealth and disturbs the equal distribution of wealth. The person who accumulates the wealth not only indulges in social injustice but also commits social crime. As Allah says in Surah Al-Imran Those who become miserly with God given wealth and blessings should not think that such an act is good for them. In reality it is worst for them And according to Surah Tuba "And those people) who go on adding gold and silver and do not spend in the name of Allah, inform them about a big punishment (Azzab) Many basic economic principles are discussed in Ours such as Zakat, Ushar Charity Taking "Khumas from booty (Mall-c-Ghanimat) etc. Interest is forbidden (haram) in Islam. Hence, we can stop accumulation of wealth of everybody pays Zakat and usher, which reaches the poor and needy.

 6) Natural Inequality:

 Because different people have different abilities, capabilities and efficiencies so, the equality in earnings and wealth is un-natural. Some people get more wealth and other less Allah says in Surah Aal-e-Imran "God has given priority some above others God gives unlimited wealth and money (Rixa) to whom He chooses and at another place, Allah says "He (Allah) holds keys of sky and earth in His handa. He expands blessings (Rizq) for whom he chooses and restricts for others."

 7) Interest free Banking:

Interest is forbidden in Islam and Islam favors interest tree financial systems. For doing business Islam provides a fair system for investment in the form of Mudraba ego provides capital and other person is doing business by utilizing that money and putting efforts as a result, in case of profit it will be shared by both, in case of loss, it will be bome by the investor only because the other person will face loss in the form of the wastage of labor and time. Like some other Islamic countries, Pakistani banks have also started PLS Accounts.

8) Zakat major source of Government Revenue:

Zakat, usher and jazia are major sources of revenue in an Islamic economic system. Zakat is one of the basic five principles of Islam and it is paid on different items which are held by someone for a period of one year: 2.5% on 7tola gold 52 nova salver will be paid us Zakat Similarly, on the items used for trade in certain number, animals, e.g. camels, goats, sheep, cow, buffalo and also on minerals Usher is also paid by agricultural producers. Due to payment of Zakat and Usher, accumulation of wealth is discouraged while, poverty and hunger is alleviated, Brotherhood and co-operation with each other flourishes. Capital remains in circulation and many crimes are eradicated.

 9) Welfare states and responsible Government:

 Although in an Islamic economic system, a common man has social, religious and business freedom. It is the responsibility of the state to implement Islamic principles and to provide incentives for an honest, simple and fair business and to economic activities, which are free from fraud, bribery, hoarding, black marketing, and other illegal means. Moreover, government must also provide basic needs, health and education facilities, social security and justice to her people.

10) Ethically strong society:

Islamic economic system is based on religious preaching. In this system we cannot separate economy from religion. Fear of God makes government as well as common man to avoid any crime or injustic