ECONOMIC INJUNCTIONS IN ISLAMIC INJUNCTIONS
In
this presentation, I define an economic injunction as one that mainly requires
for its fulfillment “an economic decision”. Conventionally, economists have
studied production, exchange, consumption, distribution, employment and growth,
etc., as main topics for economic -
decisions. When any of these
topics is the main tool to achieve a religious injunction, I deem it to be an
Islamic economic injunction.
TYPES OF ISLAMIC INJUNCTIONS
A.
Mandatory
= Waajib – Farz
Non-fulfillment
is punishable in the Hereafter, fulfillment is rewarded
B.
Praiseworthy
= Mandoob = Mustahabb
Fulfillment is rewarded
C.
Permissible = Mubaah
Neither
rewarded nor punished (unless intention (Nyyiah) for good or bad makes
it rewarded or punished
D.
Blameworthy (Makrooh)
Committing it is mild
punishment or blame
E.
Prohibited = Haraam
Committing is punishable
in the Hereafter .
TAQWA
Taqwa
is attained by those who at least do the waajib and avoid the haraam.
SOURCES OF ISLAMIC INJUNCTIONS
Either:
The Law = The Quran or authentic Sunnah of the Prophet (PBUH)
OR:
Ijtihad or reasoning based on the law, and on knowledge of reality and
its causes – effects (e.g., economic analysis).
Famous rule of Ijtihad:
Whatever is necessary to fulfill a waajib ( OR to avoid haraam) becomes a waajib,
Example 1:
Helping the poor is waajib. Providing employment to the productive poor
is one way.
Import
substitution increases domestic employment but increase cost of living and
reduces efficiency.
·
They
are realistic;
i.e., consistent with the individual and
social realities of humans and the physical world.
·
They
are rational,
i.e., amenable to human understanding and
reasoning. This is the commonly held view of almost all jurists regarding
Shariah rules in economic matters (Fiqh Al-Muamalaat). The only exception are
matters of worship (Ibaadat).
Zakat
is ordained by Islamic Shariah on the
wealthy largely for the benefit of the poor.
Zakat
is a major institution of Islamic system of guaranteeing minimum income to
every human. Other institutions: inter-family support among close relatives,
and the public treasury.
Zakat is earmarked in the Quran.
Owners of the following types of assets and output are deemed wealthy
enough to pay Zakat, once they possess a
minimum called nisaab. Gold, silver, cash any currency, current accounts
in banks Stock-in-trade. Short-term monetary claims on others, cattle animals:
sheep, goats, cattle, camels, etc.
Crops
and main land produce: 10% for rain fed + 5% for irrigated.
All
above zakatables must be above a minimum size, otherwise are not subject to
Zakat .
·
House hold items
·
Fixed assets not
offered for trade.
·
Zakat . vs. Taxes
·
Non agricultural land
·
Pension funds
·
Life insurance (
Takaful )
·
Moderation
·
Avoidance of Israf ( profligacy) – its relation to efficiency. Related
terms:, taqteer ( stinginess
and Shuhh (
·
Avoidance of tabzeer (( illegitimate spending) and taraf
·
Moderation generally –
its relation to optimization
Any
stipulated increase over the principal of deferred loan is R. This applies to
loans in money or in kind.
Riba
of debt (riba al-dayn) vs. Riba of barter sale (Riba al-fadl).
Is Riba identical with
“interest”?
Riba
has wider scope. But by and large, what is called “interest” by accountants is Riba,
with minor exceptions. But what is called by economists “implicit interest” is
often NOT Riba.
The
case of leasing and “ conditional sale “
for a deferred price compared to regular sale for a deferred price
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