As a complete way of life, Islam provides guidelines and rules for every sphere of life and society. Naturally, a functioning economic system is vital for a healthy society, as the consumption of goods and services, and the facilitation of this by a common medium of exchange, play a major role in allowing people to realize their material and other goals in life.
Islam has set some standards, based on justice and practicality, for such economic systems to be established.
These standards aim to prevent the enmity that often occurs between different socioeconomic sections.
Of course, it is true that almost every human being is concerned with accumulating of money. Yet, while these standards recognize money as being among the most important element in society, they do not lose sight of the fact that its position is secondary to the real purpose of human existence, which is the worship of God.
An Islamic economic system is not necessarily concerned with the precise amount of financial income and expenditure, imports and exports, and economic statistics. While such matters are no doubt important, Islam is more concerned with the spirit of the economic system.
A society that implements Islamic laws and promotes Islamic manners will find that it brings together all the systems – social, economic, and so forth – that it deals with.
Islam teaches that God has created provision for every person who He has brought to life.
Therefore, the competition for natural resources that is presumed to exist among the nations of the world is an illusion.
While the earth has sufficient bounty to satisfy the needs of mankind; the challenge for humans lies in discovering, extracting, processing, and distributing these resources to those who need them.
Islam consists of a set of beliefs that organizes the relationship between the individual and his Creator, between the person and other human beings, between the person and universe, and even the relationship of the person to himself. In that sense, Islam regulates human behavior, and one type of human behavior is economic behavior.
Economic behavior is dealt with by Muslims as a means of production, distribution, and consumption of goods and services.
In Islam, human behaviour – whether in the economic area or others – is not value-free; nor is it value-neutral. It is connected with the ideological foundation of the faith.
The fundamental sources of Islam – the Qur’an and the Sunnah of the Prophet – provide guidelines for economic behavior and a blueprint of how the economic system of a society should be organized.
Therefore, the values and objectives of all “Islamic” economic systems must necessarily conform to, and comply with the principles derived from these fundamental sources.
In summary, we can say that the Islamic Economic System is based upon the notion of justice.
It is through justice that the existence of the rules governing the economic behavior of the individual and economic institutions in Islam can be understood. Justice in Islam is a multifaceted concept, and there several words exist to define it.
The most common usage, which refers to the overall concept of justice, is the Arabic word “adl.” This word and its many synonyms imply the concepts of “right”, as equivalent to fairness, “putting things in their proper place”, “equality”, “equalizing”, “balance”, “temperance” and “moderation.”
The rules governing permissible and forbidden economic behavior on the part of consumers, producers and government, as well as questions of property rights, and of the production and distribution of wealth, are all based on the Islamic view of justice.