Table of Contents

Handbook on Islam and Economic Life

Handbook on Islam and Economic Life

Edited by M. Kabir Hassan and Mervyn K. Lewis

Handbook on Islam and Economic Life is a unique study, one of the first of its kind to consider Islam within a broader economic sphere. Covering a wide breadth of topics and research, it explores how Islam impinges upon and seeks to shape major aspects of economic life including economic organisation, business and management, finance and investment, charity, mutuality and self-help, and government. It concludes by analysing the link between religion and development, the present economic situation in Arab countries and the causes of underdevelopment in Muslim countries.

Chapter 14: Economics and morality from an Islamic perspective

Rodney Wilson

Subjects: asian studies, asian economics, economics and finance, asian economics, islamic economics and finance

Abstract

Morality involves differentiating right from wrong and making judgements. Islamic teaching can guide these judgements, enabling the faithful to appreciate what is halal and avoid the temptations of the haram. This moral code can be applied to economic choices, with Islamic teaching providing guidance for policy makers. In particular those framing economic policy should be aware of the social consequences of their decisions. Economic power, like political power, brings responsibility, and ultimately policy makers will be accountable to the Almighty for their actions. Economic policy making has moral implications and cannot be considered value free. There will inevitably be winners and losers from fiscal policy choices, but it would be unjust if the rich gain at the expense of the poor. Islam provides for wealth redistribution through zakat and has strict rules on inheritance, but the faithful should also be concerned with wider tax and government spending policies in the realm of macroeconomics. Similarly at the microeconomic level competition policy and the workings of markets should be viewed through a spiritual prism. Where the poor get priced out of markets, should prices be reduced through subsidies or is it better to provide social security payments to empower the excluded? If the choices can be validated as being consistent with Islamic teaching, this may make the unpalatable involving sacrifice and short-term hardship more acceptable provided in the longer term the policies bring social justice.

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