Origins, Evolution and the Future
- Studies in Islamic Finance, Accounting and Governance series
Chapter 2: Basic Principles of Islamic Capitalism
2. Basic principles of Islamic capitalism In this chapter we will observe the basic principles upon which Islamic capitalism is based. It is from these principles that Islamic economic institutions have been designed. Basic axioms of Islamic capitalism In this book, Islamic economics will be understood as capitalism practised by Muslims, which is based upon the following axioms: 1. The unity and oneness of the creator (Tawhid). This means that all creation has only one omnipotent creator – Allah. 2. Muhammad is the last and the final messenger of Allah. 3. Allah will call forth all mankind for a final, definite and complete account, followed by a judgement. At that point each person will see the results of his/her actions and will have to live forever with the consequences in the form of either rewards or punishments in the hereafter. This axiom introduces the concept of ‘life hereafter’ and extends the time horizon of a believer beyond the short span of life on this earth. 4. A Muslim is constantly aware of the presence of Allah, who is believed to be ‘closer to him than his jugular vein’. This awareness extends to his day-to-day relationship with others. He knows his actions will be judged in the Day of Judgement and it is through this fear that he can distinguish between what is right and what is wrong.1 5. A primordial contract between Allah and the mankind is believed to exist, according to which man agreed to serve and worship no one...
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