Académique Documents
Professionnel Documents
Culture Documents
(ECON 1710)
TOPIC 1
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ULTIMATE OBJECTIVE
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what will we learn?
DEFINITION OF IE
An approach to interpreting and solving
mans economic problems based on the
values, norms, laws and institutions found in,
and derived from, the sources of knowledge
in Islam.
(Mohamed Aslam Haneef, 1997)
Task, Tools, Sources of tools
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TOPIC 1: ISLAM, WORLDVIEW
AND ECONOMICS
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1. ISLAM, IMAN & IHSAN
Meaning of Islam
Word of origin: salam = peace
Definiton:
Islam = submission to the will of Allah
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ISLAM, IMAN & IHSAN
Islam
Religion revealed to our prophet
Muhammad .
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MEANING OF ISLAM
Definition of Islam
Religion of subservience to Allah, the supreme reality,
from whom all orders of reality issue forth and to whom
everything returns.
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CONCEPTS IN ISLAM
Way of
life
Primordial
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WAY OF LIFE
- all-encompassing; unlike Christianity:
And again I say unto you; it is easier for a camel to go
through the eye of a needle than for a rich man to enter
into the Kingdom of God.
(The New Testament: Matthew, Chapter 19: 24)
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UNIVERSAL
Pew Forum on Religion & Public Life (2005)
Islam is already the fastest-growing religion in Europe.
Driven by immigration and high birthrates, the number of
Muslims on the continent has tripled in the last 30 years.
Most demographers forecast a similar or even higher rate of
growth in the coming decades.
http://www.foreignpolicy.com/story/cms.php?story_id=3835
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ISLAM, IMAN AND IHSAN
Five pillars of Islam:
1- uttering the shahadatain
2- performance of the daily prayers
3- fasting during the month of Ramadan
4- performance of hajj or pilgrimage
5- paying zakah or alms-giving
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ARTICLES/PRINCIPLES OF FAITH (IMAN)
ALLAH
HIS PROPHETS
HIS BOOKS
HIS ANGELS
JUDGEMENT DAY
DIVINE DESTINY
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IHSAN
Means virtue
Muhsin = he who possesses Ihsan
Definition =
worshipping Allah as if one were to see Him or
at least with a deep awareness that Allah sees
man.
implies intensity and perfection of living
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ISLAM, IMAN AND IHSAN
To conclude, al-Din or Islam comprises:
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1. ISLAM, IMAN & IHSAN: SUMMARY
ISLAM
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Why not Conventional Economics?
CE claims that it is a value free discipline
No human endeavor value free
Schumpeter (1954): Analytic effort is of necessity preceded by a pre-
analytic cognitive act, called vision
Analytic work begins with material provided by our vision of things,
and this vision is ideological almost by definition.
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Why not Conventional Economics?
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ECONOMICS: VALUE FREE?
Choice of topic to be pursued
In training, class time, book and
Stage 1 periodical coverage
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Seri Title of the Year Venue Major Theme/ Agenda of the Conference
es Conference
1 First IC on IE 1976 Makkah, General. No specific theme was fixed for the conference
KSA (M.Iqal, 2008: 75)
2 Second IC on 1983 Islamabad Development, Finance and Distribution in Islamic
IE , Pakistan Perspectives
3 Third IC on IE 1992 KL, Financing Development from Islamic Perspective
Malaysia
4 Fourth IC on 2000 Loughbor Islamic Finance: Challenges and Opportunities in the 21st
IEB ough, UK Century
5 Fifth IC on IEF 2003 Bahrain Sustainable Development and Islamic Finance in Muslim
Countries
6 Sixth IC on 2005 Jakarta, Islamic Economics and Banking in the 21st Century
IEF Indonesia
7 Seventh IC on 2008 Makkah,
IEF KSA
8 Eighth IC on 2011 Doha, Sustainable Growth and Inclusive Economic Development
IEF Qatar from an Islamic Perspective
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Worldview in German Philosophy
. worldview expresses a set of beliefs that are foundational
and formative for human thinking and life.
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Various WORLDVIEWS
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3. Worldview
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3. The ring of worldview
Religion
Aim in
God
life
WORLDVIEW
Nature Man
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Islamic Worldview
Centered on the principle of Tawhid or unity of God
Unity of creation and purpose
Unity of sources of knowledge and action
Pursue material gain with a view that existence in this world and
hereafter is important
ISLAMIC VS WESTERN WORLDVIEW
Is Islamic worldview different from conventional worldview?
Since factors affecting worldviews differ, it is natural to also have different
worldviews, thus different theories to explain human behaviour
Secular
Secularization
Secularism
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SECULAR
Secular as a word: From Latin saeculum=time and
location= now + world=> events in this world
Secular activities: deal with the here and now or
activities on this world in our lives
Secular concept = the condition of the world at
this particular time => (historical connotation)
spatio-temporal notion in relativity of human
values.
Secular worldview concerns with worldly life ONLY.
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Islamic Worldview
Islamic worldview encompasses this life & hereafter
Not anti-this world.
Islam has clear guidelines to undertake life in this world:
But seek, with that (wealth ) which Allah has bestowed on you, the
home of the Hereafter, and forget not your portion of legal
enjoyment in this world, and do good as Allah has been good to you,
and seek not mischief in the land. Verily, Allah likes not the
Mufsidun (those who commit great crimes and sins, oppressors,
tyrants, mischief-makers, corrupts).
(Al-Qasas: 77)
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SECULARIZATION
= The process of rescuing mans reason and language; first
from religious and then from metaphysical control.
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ISLAM IS DIN
The term din used to denote religion in the Quran
Comes from root word dana
Mentioned 92 times in the Quran
Meaning debt, obedience, judgement / way / custom; inter-connected to explain
religion
3 aspects of TAWHID
Oneness of the lordship of Allah: to believe that there is only one
lord for entire universe
Oneness in the worship of Allah: to believe that none has right to be
worship but Allah
Oneness of the names and qualities of Allah: none can be qualified
with the Names/qualities of Allah
2. ISLAMIC VIEWS ON GOD
Thus, as a Muslim (one who submits) is to do as
God has directed and for His sake
(Al-Maidah: 114)
NAMES OF ALLAH
AL-MALIKUL MULK (the eternal owner of sovereignty)
Know you not that it is Allah to Whom belongs the
dominion of the heavens and the earth? And besides Allah
you have neither any Wali (protector or guardian) nor any
helper.
(AL-BAQARAH:107)
NAMES OF ALLAH
AL-GHANI (the rich)
And your Lord is Rich (Free of all wants), full of Mercy, if He
will, He can destroy you, and in your place make whom He
will as your successors, as He raised you from the seed of
other people
(AL-ANAM: 133)
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3. ISLAMIC VIEWS ON MAN
Arabic: INSAN from root word NASIYA means he forgot:
and remember when your Lord brought forth from the children of Adam, from their loins, their
seed and made them testify as to themselves (saying): Am I not your Lord? They said:Yes!We
testify, lest you should say on the day of resurrection:verily, we have been unaware of this.
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3. ISLAMIC VIEWS ON MAN
Created as vicegerent (KHALIFAH) on earth:
(SURAH AL-BAQARAH: 30): and remember when your Lord said to the angels: I am going to
create a vicegerent on earth
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(Al-Mulk: 1-2)
4. ISLAMIC VIEW ON NATURE
Nature/universe in the Quran:
Comprise of heavens and earth and all in between
( SURAH
MAIDA; 5:17)
Mention about vegetation and fruits, night and day, heavens and earth, human
being, rain
Another sign to direct man to worship Allah, the Creator
Nature is a bounty from God
Must be utilized in the best way possible, in accordance with Gods will,
remembering that it is part of Gods creation
Man as trustee to manage nature
2 types of nature
Material world (visible)
Unseen world (ghayb or invisible): believe in the existence of God, angels, hell and
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paradise
5. ISLAMIC VIEWS ON AIM IN LIFE
Primary aim of life for human as described by Islam
To achieve happiness (falah)
Ultimate success and pleasure of Allah
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ATTAINING FALAH
Al-kharijiyyah external good (surrounding)
Useful for happiness
Wealth, influence, family and noble birth (family in which knowledge and piety are
instilled to all members)
Primary means of achieving falah are goods of the soul, that can be
acquired with help of bodily and external goods, if he is given divine
grace.
HOW TO ATTAIN TAWFIQ?
And Allah increases in guidance (hidayah)those who
walk aright [true believers in the Oneness of Allah-
who fear Allah much (abstain from all kinds of sins
and evil deeds which He has forbidden), and love
Allah much (perform all kinds of good deeds which
He has ordained)]. And the righteous good deeds that
last, are better with your Lord for reward and better for
resort.
(Maryam: 76).
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HOW TO ATTAIN TAWFIQ?
Make dua (invocation): Allah ask us to do
And when My slaves ask you (O Muhammad SAW)
concerning Me, then (answer them), I am indeed
near (to them by My Knowledge). I respond to the
invocations of the supplicant when he calls on Me
(without any mediator or intercessor). So, let them obey Me and
believe in Me, so that they may be led aright.
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In conclusion,
Islamic Worldview Secular Worldview
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4. ISLAMIC ECONOMICS
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ECONOMICS AND ISLAMIC ECONOMICS
Islamic economics:
Economic pursuit must be derived from Islamic worldview
Economic goals do not contradict the shariah
Shariah constraints to be observed in making choices
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ISLAMIC VIEW ON SCARCITY
SCARCITY
Existence Availability
Factors Choice
Knowledge Consumption
Effort Production
Time Distribution
ABSOLUTE SCARCITY CONCEPT
Unlike western secular economics, Islamic economics
rejects absolute scarcity because:
(Hasan, 1995: 581, cited in Wahb al bari Amir Ahmed. 2009.The concept of scarcity
and its implication on human behaviour: a Quranic perspective. Unpublished IIUM
Master Dissertation.)
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RELATIVE SCARCITY: Islamic View
Relative scarcity is related to a given present situation regarding the
availability of resources.
Factors that affect the supply side are knowledge, time, and effort
while factors that affect the demand side concerns about the choices
that man makes in consumption, production and distribution
decisions.
This situation where the supply side is lower than the demand side
raises the issue of relative scarcity from the Islamic economics view.
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RELATIVE SCARCITY: How to Resolve?
This problem can be resolved by improving knowledge, time, and
effort on existing resources; and relook at CPD (consumption,
production and distribution activities) with the aim of putting less
pressure on the presently available resources.
For instance, the reducing of consuming impermissible (haram) or
luxurious goods and services would allow the channeling of resources
to the production of permissible and more important types of goods
and services. [ Trade off]
The simple act to prevent wastage would also help in addressing the
relative scarcity problem. [food wastage]
Waste not, want not
The tool can inform policy by examining to what extent a nation uses more (or
less) than is available within its territory, or to what extent the nation's lifestyle
would be replicable worldwide.
The footprint can also be a useful tool to educate people about carrying
capacity and over-consumption, with the aim of altering personal behavior.
Ecological footprints may be used to argue that many current lifestyles are not
sustainable.
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ISLAMIC FINANCE
To finance the economic activity in an Islamic framework = fuel to the
economic engine of a country
Must have institutions using instrument according to rules and
regulations which are all bound by the shariah
Observe basic prohibitions in business transaction: riba (usury), gharar
(speculation) and maysir (gambling)
Underlying exchange involved must be halal
Profit should come from trading transactions and other permissible contracts.