Islamic Entrepreneurship: Islamic Economy System

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Islamic economy system

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Islamic Entrepreneurship: Islamic Economy System

  1. 1. Nur Suhaili Ramli, University Of York, UK
  2. 2.  Islam is totally accepting business  The Prophet urged (peace and blessings be upon him) urged, “Be involved in business as nine out of ten sources of income lie in business” (Ihya)  Its role is defined in the Holy Koran and the Hadiths “ … whoever returns to [dealing in interest or usury] - those are the companions of the Fire; they will abide eternally therein…” (Al-Baqarah 2:275)  This shows that it is contrast to communism/socialism which is strongly anti-capitalist.
  3. 3. In Islam the behaviour in business is set with conditions which it must not:  Be greedy  Seek monopoly or manipulate the market  Exploit the poor  Trade in forbidden goods and services such as :  Alcohol / drugs / tobacco  Pornography / gambling  Deal in pork products  Engage in ‘usury’ riba
  4. 4.  Central to Islam is Tawhid  Tawhid is the Islamic way of life , the fundamental of all Islamic civilization, which is process, means and end together.  Tawhid is both the essence of the individual and the society he or she lives in.  Tawhid is acceptance of one creator and His divine guidance of humanity.  Tawhid implies both the mission and morality of humankind on both social and spiritual contexts.
  5. 5.  Fall under two categories – fard’ain, and fard kifayah  Fard’ain means that an individual’s obligation to perform his or her religious studies.  Fard kifayah means that an obligation for man to serve the entire community through services to each other, necessary for the community to live safely and comfortably.  The obligation to improve the Muslim Ummah falls under Fard Kifayah, where undertaking business is the principal method of improving the economy and community.
  6. 6.  Entrepreneurship in Islam – social justice derived through productive work, where equal opportunities exists for all, and everybody can utilize their abilities to work and gain just reward for their efforts.  Most countries adopted concepts of ‘Islamic socialism’ where references to Islam teachings and shariah were only cursory or cosmetic.  There are fifteen general principles of Islamic economy
  7. 7.  Islam provides a supportive value system where a person should seek to achieve economically as well as spiritually  People are expected to earn their own living, if possible.  The pursuit of wealth is legitimate, however moderation in lifestyle is espoused  Prices should be just, based upon competitive markets.
  8. 8.  The inequality of income should not be allowed to become too wide, therefore the state should intervene to ensure that equality is maintained  The needy are protected by society through Zakat  Land and capital are productive factors, only when combined with labour. Therefore income should not just be derived from ownership.  Finance, leases, loans, etc. should be based on the sharing of risk as a basic principle of justice and equity
  9. 9.  Islamic values from upon wasted resources, human skills and idleness.  Human are God’s custodians and only possess resources temporarily. So, they must ensure these resources are passed onto the next generation intact, consequently Muslims have a duty to protect the environment.  Private ownership is paramount within the economy, where the state should only interfere under exceptional circumstances.
  10. 10.  Monetary policy should only be utilized to stabilized prices.  Fiscal policy should only be used to preserve an equilibrium between tax revenue and public expenditure.  The state’s role is solely to provide sufficient infrastructure for society to operate fairly and equitably.  Antisocial practices that damage society are forbidden where monopoly and hoarding and other market distortion are not permitted.
  11. 11.  Islamic economics provides a way of creating equity within a community  Entrepreneurship is the preferred method of agency within an Islamic economy, where high levels of interdependency through clusters based on community are advocated.  Developing entrepreneurship based upon Tawhid principles is empowering to the Ummah and a way to integrate with the world without the need to compromise religious beliefs and values  The Al-Qur’an is not just a book of divinity, it is a practical book of empowerment, largely ignored for its potential in this regard
  12. 12.  Retrieved reading from: http://www.eurasiareview.com/17052013- entrepreneurship-as-a-means-to-create-islamic-economy-analysis/  Al-Quran

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