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Islamic Economics

Islamic Economics – Introduction
“Islamic economics is rooted in Islam’s particular worldview and derives its value-premises from the ethico-social teachings of the Quran and Sunnah.” (Khurshid Ahmad)1

Islamic and Christian approaches to economics bear some similarities as well as some differences. As a facet of the Islamic approach to sociology, Islamic economics is “an evolving discipline” in the modern world.2 While Islam ruled parts of the world for centuries, in more recent times Muslims have faced the trials of Western colonialism. “The Muslim society of today is not yet a society on its own,” explains Syed Nawab Haider Naqvi. “It is still under the shadow of the Western system: and, as such, it is doubtful how ‘representative’ of the Islamic ethos its current behavior can be.”3 Naqvi implies that the contemporary economic practices and systems in Muslim nations might not finally accord with Islamic scripture, the Qur’an, or tradition.

Muslims insist that human nature, motivation, and work must reflect the ethical convictions of Islam. Thus, as Naqvi explains, “Islamic economy is part of the religion of Islam which covers the various branches of life.”4 Because of this, Muslim scholars insist that their approach to economics is superior to both the capitalism of the West and the socialism or communism of the East, precisely because both systems lack a sound religious ethic. In Islam there is neither separation nor distinction between religious and secular facets of life.

Islamic Economics – Under God
Muslims believe that human beings are created by God, were delegated authority over creation, and one day will give an accounting of how they have used the good resources God has provided (see Genesis 1:28). Abdalati explains, “The actual and real owner of things is God alone of Whom any proprietor is simply an appointed agent, a mere trustee.”5 Like the Christian view of economics, we term this approach to economics as stewardship of one’s property and resources.

The belief in final judgment, one of the five pillars of Islam, places all actions under divine scrutiny: no action is hidden from God (Qur’an 9:105), and he is the most just of all (95:8). God expects Muslims to feed the poor, give alms, help orphans, provide loans without interest (to Muslims), not hoard food, and not gamble. Islamic economics, however, is not just a series of prohibitions. Muslims are to work hard and share their wealth with fellow Muslims in need. They can earn income, amass wealth, and enjoy all good things.

Islamic Economics – Four Foundational Principles
Naqvi, the National Professor in Economics of Pakistan, presents four foundational principles for the Islamic approach to economics (several of which are discussed at greater length in other disciplines, as we will note): unity, equilibrium, free will, and responsibility.

In Islamic theology, God is a stark unity, a single divine person without partners. He is the Creator of all things, the one to whom all humans will give account. As such, all humans should submit to God, which is nothing other than being a Muslim (i.e., one in submission to God). This submission entails aligning all desires, ambitions, and actions with God’s will, a will expressed in His commands. “My service and sacrifice, my life and my death, are all of them for God, the creator and Lord of all the worlds” (6:162). Corresponding to the unity of God is the unity of humanity. Though divided by national boundaries, fractured by war, distinguished by religious convictions, all humans are intended to be Muslims and the whole world an Islamic state. Thus, a Muslim’s actions toward others bear on his or her status in the final judgment. Economic resources must never be used contrary to this vision of universal unity of the Ummah, the Muslim community.

“Verily God has enjoined justice and kindness” (16:90). Muslims must reflect justice and kindness in all social institutions, including economic life. Justice and kindness relate not only to economic transactions but also to the care of the less fortunate members of society. As such, “the needs of all the least-fortunate members in Muslim society constitute the first charge on the real resources of the society,” observes Naqvi.6 Islam affirms the value of private property, as well as the inevitable economic disparity among people. But Islam also affirms that there is a basic standard of living (e.g., food, clothing, shelter) due to all people. Thus regular warnings are given to the wealthy (59:7; 70:24–25).

Free Will
Muslims believe we are responsible for our beliefs and actions. Such responsibility presupposes that we have wills that allow us to choose to do right or wrong. Muslims see free will as a gift from God to be used only for good. Muslims deny that we are born with a sinful nature, but affirm that we are capable of virtue as well as of vice. Thus greed, selfishness, gluttony, exaggerated materialism and the like are expressions of our nature gone astray. Naqvi summarizes the role of free will in the following way: “In the final analysis, we can say that, notwithstanding the differences of emphasis, there has been a tacit agreement among theologians that man is responsible for his acts, and that God, by His very nature, is just in deciding man’s fate according to his deeds. Concomitantly, therefore, man must have freedom of will in shaping his destiny.”7

Islamic Economics – Responsibility
Corresponding to free will is responsibility. Not only are we responsible to God, we are also responsible to our fellow humans. Almsgiving is central to being responsible in our economic activities and “mostly takes the form of giving to the poor and the needy.”8 Hoarding our wealth at the expense of the well-being of other Muslims is prohibited. “You will never come to piety unless you spend of things you love” (3:92). Muslims believe that by giving we become better people and fulfill our moral responsibility to God, ourselves, and our fellow human beings. Some even believe that generosity can atone for sins.

As a final note, economic justice requires economic well-being for all believers. To accomplish this, instituted within Islam are zakat (almsgiving for the sake of the poor), jizrah (taxes levied against unbelievers within the Islamic community), and laws regarding inheritance.

Islamic Economics – Conclusion
While the principles underlying Islamic economics are well-noted and set forth by Muslim scholars such as Abdalati and Naqvi, current economic policies and practices in Muslim nations might not (indeed, do not) bear out the ideal vision presented. “A small wealthy class rules many Muslim nations while the masses are extremely poor,” observes George Braswell, Jr. “In some countries the government collects zakat; many people resent the zakat and question how the money is used. Islam prohibits usury, yet this prohibition is seldom followed either on an individual or national level.” But even if these conditions are not supposed to pertain in Muslim societies, the oppression, alienation, terror, and death, and expulsion of non-Muslims remains characteristic among almost all Muslim nations.9

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Rendered with permission from the book,Understanding the Times: The Collision of Today’s Competing Worldviews(Rev. 2nd ed), David Noebel, Summit Press, 2006. Compliments of John Stonestreet, David Noebel, and the Christian Worldview Ministry at Summit Ministries. All rights reserved in the original.

1 Syed Nawab Haider Naqvi, Islam, Economics, and Society (London, UK: Kegan Paul International, 1994), xiii.
2 Ibid., xiv.
3 Ibid.
4 Ibid., 2.
5 Hammuda Abdalati, Islam in Focus (Indianapolis, IN: American Trust Publications, 1977), 128.
6 Ibid., 27–8.
7 Ibid., 35.
8 Ibid., 32.
9 The Voice of the Martyrs illustrates this observation with impressive regularity (

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