in category Economics

How does Islamic economics benefit a nation?

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The following is a list of Islamic rules that promote productivity and wealth circulation within the context of an Islamic civilisation or polity as per the Qur'anic injunction:

"... so that wealth does not merely circulate among your wealthy" (Quran:59:7)

1. The state is permitted to seize land that is unproductive or under-utilised for a period of three years and redistribute it to those who will make use of it.

2. Individuals can acquire ownership of dead (mawat) lands by through cultivation or construction - lands are not owned by anyone until they are acquired legitimately.

3. Interest is prohibited as lenders do not assume risk nor engage in productive activity.

4. It is prohibited to engage in economically unproductive activities such as gambling and speculation.

5. Hoarding is prohibited as it removes wealth and assets from productive processes.

6. Zakat and other asset based taxes discourage hoarding or concentration of wealth by encouraging utilisation of wealth for productive purposes.

7. The use of alcohol, drugs and other illicit substances that impair people's productive capacities are prohibited.

8. Islamic inheritance laws ensure wealth is distributed among predefined heirs rather than concentrated. A person cannot reduce the number of beneficiaries or deny the shariah-designated heirs their inheritance, thereby ensuring wealth distribution and subsequent production.

9. Extravagance is discouraged in Islam, which thereby encourages the productive use of income instead of consumption.

10. Grazing and pasture lands, forests, above or underground minerals, water and energy sources are all public assets that cannot be privatised for shareholder interest.

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