Islamic Economics Books PDF for Free Download

Islamic economics books pdf: Islam, as a comprehensive way of life, encompasses a unique set of moral and ethical standards that guide individual and collective behavior, including economic activities. The Islamic economic system is rooted in these principles, offering a model that integrates ethical considerations into social, political, and economic spheres. It stands apart from other economic systems by placing significant emphasis on morality, fairness, and social justice, aligning economic behavior with Islamic teachings.

The objectives of Islamic economics revolve around promoting social justice, equitable distribution of wealth, and the fulfillment of basic human needs, all while ensuring moral and spiritual development. Unlike conventional interest-based economies, which often lead to the concentration of wealth in the hands of a few, the Islamic model seeks to prevent such disparities, fostering a more balanced and inclusive society where the rights of the poor and needy are safeguarded.

Islamic Economics

Definition

Despite decades of scholarly discourse, a universally accepted definition of Islamic economics has not yet emerged. Several notable scholars have offered varying interpretations:

• Umar Chapra describes Islamic economics as “a branch of knowledge aimed at realizing human well-being through the allocation and distribution of scarce resources in a manner consistent with Islamic teachings, while avoiding undue restrictions on individual freedom and preventing ongoing macroeconomic and ecological imbalances.”
• Monzer Kahf defines it as the “study of human behavior regarding the acquisition and use of resources to satisfy necessities, needs, and desires, but based on the principles of Islam’s worldview concerning life and humanity.”

Principles

From the primary sources of Islam—namely, the Qur’an and Hadith—five fundamental principles of the Islamic economic system can be identified:

1. Divine Guidance: Allah determines what is right and wrong in economic matters, providing moral boundaries for all economic activity.
2. Principles of Use: Resources should be used wisely and ethically, reflecting accountability to both society and God.
3. Moderation: Islam advocates a balanced approach, avoiding both extravagance and extreme frugality.
4. Freedom within Limits: While individuals are granted freedom in their economic pursuits, it is tempered by ethical obligations to others.
5. Justice: Economic justice is a core tenet, ensuring fairness in transactions and distribution of wealth.

Some scholars, however, outline a broader set of seven guiding principles, which provide a more detailed framework for Islamic economic policies and practices:

1. Tazqiya (self-purification) and Taqwa (God-consciousness): Achieving moral and spiritual growth by enjoining good and forbidding evil in all economic matters.
2. Adherence to Sharia Law: All economic activities must conform to Islamic legal and ethical guidelines.
3. Labor and Exchange: Emphasizing labor-based transactions and discouraging exploitative practices like interest (riba).
4. Justice (Adal) and Benevolence (Ihsan): Ensuring fairness and fostering welfare for all members of society.
5. Social Rights in Property: Recognizing the rights of society in the property of individuals, preventing hoarding and ensuring charitable giving (zakat).
6. Balanced Life: Striving for a balanced life that promotes well-being in both material and spiritual realms.
7. Welfare of This Life and the Hereafter: Ensuring the fulfillment of basic human needs while maintaining a focus on eternal prosperity in the hereafter.

Through these principles, Islamic economics aims to foster a more just and ethical economic system, where individual interests are aligned with societal welfare and spiritual goals.

Basic attributive info

• The Middle East region had one of the most vibrant economies in the world from the eighth until the end of the eleventh century, “the Golden Age of Islam.” The prosperity was based, above all, on highly productive agriculture and the gains from long-distance trade.
• During his lifetime – Islam‟s golden age – Ibn Khaldun developed a sophisticated theory of price and value, a theory of production and a modern analysis of the role of government,paves the way of considering him as the father of Islamic economics.
• When examined more specifically, the objectives of Islamic economics include creating economic prosperity guided by moral norms, fostering brotherhood and justice, equal distribution of income, and individual freedom within the context of social welfare.
• Saudi Arabia and Iran lead the way with 25% to 30% market share each, followed by Malaysia (12%), the UAE (10%), Kuwait and Qatar (5.5%), Türkiye and Bahrain (3.5%), Indonesia and Pakistan (2%). These countries drive the growth of Islamic finance, set industry standards and foster innovation.
• Islamic economic system has several features such as interest-free economy, ethic orientation, refusal of absolute ownership and big economic disparities, brotherhood support, a justice as a goal, and attention to the poor.

Importance, Purpose and Success of Islamic  Economics

In our daily life as a Muslim, it is necessary to obey Allah’s commandments in terms of faith and deeds, similarly, it is necessary to obey Allah’s commandments in terms of earning and spending money and conducting business. In order not to disturb the balance in economic life, the provisions of halal and haram have been introduced. Zakat, Ushar, Kharaj, etc. have been laid down to prevent the poor from dying of hunger and starvation. Similarly exploitative activities like usury, gambling, lottery, black market, hoarding, underweight, adulteration etc. are prohibited. Basically, there is no room for oppression, exploitation, deprivation and discrimination in Islamic finance. Its reality can be seen in the Islamic state of Medina. The inhabitants of Arabia, who were once victims of discrimination and poverty, within a few years of the Islamic economy changed their socio-economic conditions to such an extent that it was difficult to find anyone to accept Zakat money.

Fiqh and Islamic Economics

Fiqh (Islamic law) and Islamic economics are deeply related to each other. Islamic economics under Fiqh is structured around various rules and principles, derived from the Qur’an and Hadith and based on religious values. Key concepts of Islamic economics include zakat, riba (interest), gharar (uncertainty), and kimar (gambling), which emphasize morality and fairness in economic activities. Main Concepts: Zakat: It is a compulsory charitable tax, which requires the wealthy to give part of their wealth to the needy. The Qur’an prescribes the expenditure of this tax on eight specific sectors, which are mainly intended to establish social justice. Riba: Riba refers to usury, which is prohibited in Islamic economics. Current Islamic economists interpret it as any kind of excess earnings rather than just interest, which causes financial injustice.

• Gharar: Uncertainty or risk in economic transactions is prohibited. In fiqh, gharar is prohibited because it creates disharmony between the parties and hinders fair trade.
• Kimer: It applies to gambling and any contract or transaction similar to gambling. Kimar is also prohibited in Islamic economics.

Islamic Economics Books Pdf (See Below)

 

• Reward

Prizes awarded in Islamic Economics:

• Islamic Development Bank Award

The Islamic Development Bank Prize (IsDB Prize) is a prestigious award presented by the Islamic Development Bank (IsDB) in Jeddah, Saudi Arabia, recognizing outstanding contributions in the fields of Islamic economics, banking, and finance. It is the highest accolade for advancements in global Islamic economics. The award celebrates both knowledge creation and the implementation of innovative development solutions that align with the principles of Islamic economics.

 

~ Award Categories

The prize is currently awarded in two categories:

1. Achievement in Development: This recognizes significant contributions to development in line with Islamic economic principles.
2. Knowledge Contribution: This honors outstanding knowledge creation and contributions that further Islamic economics and finance.

~ Prize Distribution

The award is given in alternating year cycles between the two categories. For example, in 2022, the award was granted for Knowledge Contribution, while in 2023, it will be awarded for Achievement in Development.

• Development Achievement Category (prize money):
• 1st Place: $100,000 (~₹1.27 crore)

2nd Place: $70,000 (~₹80 lakh)

3rd Place: $50,000 (~₹51 lakh)

Islamic Economics & Financial Dealings

The principles of Islamic economics offer an alternative model to conventional banking and financial systems, which are often seen as incompatible with the ethical and legal framework of Shariah. Islamic scholars have worked diligently to create a banking system that aligns with the principles of Islam, free from interest (riba) and rooted in justice and fairness.

Islamic economics is firmly grounded in the teachings of the Qur’an and the Sunnah (the practices of the Prophet Muhammad). It is not only a theoretical model; rather, the Prophet himself established an Islamic economic system in Medina, demonstrating the practical implementation of these principles. This dual foundation—both theory and practice—offers a comprehensive framework for establishing a just economic order.

Core Principle: Prohibition of Usury (Riba)

One of the cornerstones of Islamic economics is the prohibition of usury (riba), or commercial interest, which is considered a grave sin in Islam. The Qur’an explicitly warns against dealing in usury:

“O you who believe! Fear Allah, and give up what remains of your demand for usury, if you are indeed believers. If you do it not, Take notice of war from Allah and His Messenger. But if you turn back, you shall have your capital sums: Deal not unjustly, and you shall not be dealt with unjustly.”
(Surah Al-Baqarah, 2:278-279)

Usury undermines the very purpose of Islamic economics, which is to promote moral development, social justice, and the equitable distribution of wealth. In an interest-based economy, wealth tends to accumulate in the hands of the rich, while the poor are left without access to resources. By prohibiting interest, Islam seeks to foster a more inclusive system that ensures the circulation of wealth and the provision of basic needs for all.

 

In fact, the severity of dealing with riba is highlighted in a well-known Hadith:

“Riba is of seventy different kinds, the least grave being equivalent to a man marrying (i.e., having sexual intercourse with) his own mother.”

(Ibn Majah, Baihaqi)

Economic Justice and Zakat

Economic justice is at the heart of Islamic financial dealings, aiming to bridge the gap between different socio-economic classes and create a more balanced world. One of the fundamental mechanisms for achieving this is Zakat, an obligatory form of charity required from every Muslim whose wealth exceeds a certain threshold (equivalent to 85 grams of gold). Zakat requires individuals to donate 2.5% of their wealth annually to those in need. This system ensures the redistribution of wealth and helps alleviate poverty, making it a viable solution not only for Muslims but for society at large.

Many people may not notice the small amount deducted from their wealth for Zakat, but for the less fortunate, it can mean the difference between life and death. Even in the realm of economics, Islam prioritizes improving the quality of life for its followers, ensuring that financial dealings are not only fair but also beneficial to society as a whole.

Islamic Financial Dealings

Islamic finance offers several types of financial transactions that adhere to Shariah principles. These financial tools and contracts are designed to facilitate trade and investment without involving interest. Below are some key forms of Islamic financial dealings:

1. Bai Salam (Advance Payment Sale)

In Bai Salam, the buyer makes full payment upfront for goods that will be delivered at a later date. The quality of the goods must be specified, and the payment is made in full at the time of the contract.

2. Bai Muajjal (Deferred Payment Sale)

Bai Muajjal allows for the sale of goods where the payment is deferred to a future date, either as a lump sum or in installments. The price and payment date must be clearly agreed upon.

3. Bai Murabaha (Cost-Plus Financing)

This transaction involves the purchase of a commodity at a certain price, which is then resold with an agreed-upon markup. The key difference between Bai Murabaha and riba is that this transaction involves real goods rather than currency.

4. Sharakat (Partnership)

In a Sharakat, two or more parties agree to pool capital for a business venture, sharing both profits and losses in a pre-agreed ratio. The business must be lawful, and the partners must mutually agree on all key aspects, including profit-sharing arrangements.

5. Modarabah (Profit-Sharing)

Modarabah involves one party (the investor or rabb-ul-maal) providing capital to another (the entrepreneur or modareb) for a business venture. The profit is shared according to a pre-agreed ratio, while any loss is borne by the investor unless it results from the entrepreneur’s negligence.

6. Ijara (Leasing)

Ijara refers to leasing or renting. In this contract, one party leases an asset or service to another party for a specified period in exchange for rent or wages. The lessee benefits from the use of the asset, while the lessor retains ownership.

What are the 4 principles of Islamic economic system?

The Islamic economic system is based on several key principles that align with Islamic teachings. Four fundamental principles are:

1. Prohibition of Interest (Riba): Charging or earning interest (riba) is prohibited in Islam, as it is considered exploitative. Instead, the system encourages profit-sharing and risk-sharing in financial transactions through models such as Mudarabah (profit-sharing) and Musharakah (joint partnership).
2. Zakat (Almsgiving): Zakat is a mandatory charitable contribution, typically 2.5% of one’s wealth, which is intended to redistribute wealth and reduce inequality. It ensures that the wealthy contribute to the well-being of society, particularly the poor and needy.
3. Ethical Investment and Trade: Economic activities must be ethical and based on halal (permissible) Investments in businesses involving alcohol, gambling, pork, or other prohibited activities are forbidden. Trade is encouraged, but it must be fair and based on mutual consent.
4. Equitable Distribution of Wealth: Islam promotes a just and balanced distribution of wealth in society. This is achieved through various means such as inheritance laws, Zakat, charity (Sadaqah), and the prohibition of monopolistic practices. It seeks to prevent extreme wealth concentration and ensure that resources are shared more equitably.

These principles aim to create a just and ethical economic system that benefits the entire community.

What does the Quran say about economics?

The Qur’an contains numerous teachings on economics that emphasize justice, fairness, ethical behavior, and the equitable distribution of wealth. The verse you referenced (Qur’an 59:7) highlights one of the core principles of Islamic economic policy: ensuring that wealth does not remain concentrated among the rich but is distributed fairly throughout society.

Here’s an overview of key economic principles derived from the Qur’an:

1. Wealth Distribution and Social Justice:

• The Qur’an stresses the importance of wealth circulation across all segments of society. In Qur’an 59:7, it is stated:

“… so that this (wealth) may not circulate solely among the rich from among you…”

• This verse emphasizes the need for economic systems that prevent the accumulation of wealth by a small group and promote the redistribution of resources to achieve broader societal well-being.
• This is reinforced through mechanisms like Zakat (obligatory alms-giving), which is intended to redistribute wealth and reduce poverty by ensuring that the wealthy give a portion of their income to the less fortunate.

2. Prohibition of Riba (Interest):

• One of the strongest prohibitions in Islamic economics is against Riba (usury or interest), which is seen as exploitative and unjust.
• Qur’an 2:275:

“Those who devour usury will not stand except as one whom Satan has driven to madness by his touch… but Allah has permitted trade and forbidden usury.”

• The prohibition of interest promotes ethical financial transactions and encourages profit-sharing models like Mudarabah (partnerships) and Musharakah (joint ventures), where both risk and reward are shared between parties.

3. Encouragement of Charity and Helping Others:

• The Qur’an places a strong emphasis on charity and helping the poor. Beyond the obligatory Zakat, Muslims are encouraged to engage in Sadaqah (voluntary charity), which can help alleviate poverty and create a more balanced society.
• Qur’an 2:177:

“It is not righteousness that you turn your faces towards the East or the West, but righteousness is in one who… gives his wealth, in spite of love for it, to relatives, orphans, the needy, the traveler, those who ask, and for freeing slaves…”

4. Fair Trade and Honesty in Business:

• Islam emphasizes honesty, transparency, and fairness in business transactions. Fraud, cheating, and exploitation are strictly prohibited.
• Qur’an 83:1-3:

“Woe to those who give less [than due], who when they take a measure from people, take in full, but if they give by measure or by weight to them, they cause loss.”

• This principle encourages ethical practices in trade and commerce, fostering trust and justice in economic dealings.

5. Ownership and Stewardship:

• While Islam recognizes private ownership, it also emphasizes that wealth and resources ultimately belong to Allah, and humans are merely stewards of these resources.
• Qur’an 24:33:

“But give them from the wealth of Allah which He has given you…”

• This view encourages the responsible use of wealth and resources, ensuring that they are not hoarded or misused, but rather utilized in ways that benefit society.

6. Moderation and Avoiding Waste:

• The Qur’an encourages moderation in consumption and discourages both extravagance and miserliness.
• Qur’an 17:26-27:

“And give the relative his right, and [also] the poor and the traveler, and do not spend wastefully. Indeed, the wasteful are brothers of the devils…”

7. Work and Earning an Honest Living:

• Islam promotes the dignity of labor and encourages individuals to earn an honest living through permissible (Halal) means.
• Qur’an 62:10:

“And when the prayer has been concluded, disperse within the land and seek from the bounty of Allah, and remember Allah often that you may succeed.”

Summary of Islamic Economic Policy:

The economic policy of Islam, as outlined in the Qur’an, centers around fair distribution of wealth, ethical business practices, social responsibility, and economic justice. The overarching goal is to create a balanced and equitable society where:

• Wealth is not concentrated in the hands of a few.
• The poor and needy are supported.
• Exploitative practices like usury are prohibited.
• Economic activity is carried out in a manner that is ethical, fair, and socially responsible.

The ideal economic system in Islam does not aim for complete material equality, as variations in wealth are natural, but it seeks to ensure that everyone has sufficient means to live with dignity and that the excess wealth of the rich benefits the broader community.

 

What are the 4 pillars of Islamic economics?

The four pillars of Islamic economics are fundamental principles that guide economic practices within the framework of Islamic teachings, which are derived from the Qur’an and the Sunnah (the practices and sayings of Prophet Muhammad). These pillars focus on ethical, social, and moral guidelines aimed at ensuring economic justice, fairness, and the well-being of society. The pillars are:

1. Private Property with Limits (Al-Milkiyyah al-Khassa)

• Concept: While Islam recognizes the right to private property, it imposes limitations to ensure it is used for the benefit of the individual and the community. Wealth must be acquired through lawful means (Halal), and property owners must not hoard wealth or use it in ways that harm society.
• Role: It promotes responsible ownership and ethical wealth accumulation.
• Policy Priority: Encouraging fair business practices, prohibiting monopolies, and ensuring access to property and resources for all.

2. Economic Justice (Al-‘Adl)

• Concept: Justice is a core value in Islamic economics. It ensures that wealth and resources are distributed fairly, without exploitation. This principle condemns practices like interest (Riba), which is seen as exploitative, and promotes profit-sharing (Mudarabah) and joint ventures (Musharakah).
• Role: Ensures fairness in economic transactions, reducing wealth inequality and promoting social justice.
• Policy Priority: Implementing policies to eliminate Riba (interest), ensuring fair wages, promoting wealth redistribution through taxes like Zakat, and supporting charitable giving (Sadaqah).

3. Social Welfare (Al-Takaful)

• Concept: Islamic economics emphasizes the importance of social welfare and collective responsibility. This includes mechanisms like Zakat (obligatory alms-giving) and Waqf (endowments for public good), which are used to support the poor, orphans, and other vulnerable members of society.
• Role: It creates a system of social security, ensuring that wealth is redistributed to support those in need and prevent extreme poverty.
• Policy Priority: Establishing robust Zakat systems, supporting public welfare institutions, and encouraging voluntary charity (Sadaqah).

4. Prohibition of Interest (Riba) and Ethical Trade

• Concept: Islam prohibits the charging of interest (Riba) on loans, as it is seen as exploitative. Instead, it promotes risk-sharing and trade that is based on mutual benefit. This encourages ethical investments and business practices that do not exploit one party at the expense of another.
• Role: Ensures ethical business practices and discourages exploitation, leading to a more stable and fair economy.
• Policy Priority: Supporting interest-free financial institutions (Islamic banking), encouraging trade based on real assets, and promoting transparency and fairness in contracts.

Supporting Economic Infrastructure:

• Labor: Islamic economics promotes the dignity of labor, fair wages, and the protection of workers’ rights.
• Benefit: Through Zakat and charitable acts, Islamic economics supports a social safety net for the disadvantaged.
• Protection: By prohibiting exploitative practices like Riba and upholding justice, Islamic economics protects against economic inequality and exploitation.
• Equity: Social justice is central, ensuring wealth distribution is balanced through mechanisms like Zakat and fair trade.

Policy Options and Stakeholder Priorities:

• Development of Islamic financial institutions: Supporting interest-free banking and finance.
• Strengthening Zakat and Waqf systems: Promoting poverty alleviation and welfare programs.
• Encouraging ethical trade: Ensuring transparency, fairness, and justice in markets.
• Promoting profit-sharing and risk-sharing models: Encouraging partnerships and investments that distribute wealth more equitably.

Together, these principles work to create a balanced, ethical economic system focused on fairness, sustainability, and the well-being of all members of society.

 

Who is the father of Islamic Economics?

The father of Islamic economics is often considered to be Ibn Khaldun (1332–1406), a renowned Arab historian, sociologist, and philosopher from the Islamic Golden Age. Ibn Khaldun made significant contributions to economic thought through his comprehensive works, particularly in his monumental book, “Muqaddimah” (Introduction to History), where he laid out foundational ideas about the economy, society, and the role of the state.

Contributions of Ibn Khaldun to Islamic Economics:

1. Theory of Price and Value: Ibn Khaldun developed a sophisticated understanding of how prices and value are determined. He recognized that prices were influenced by supply and demand, as well as the effort required for production. He also differentiated between necessities, comforts, and luxuries, noting how each category affects market value.
2. Theory of Production: Ibn Khaldun highlighted the importance of labor as a key factor in economic production. He observed that the prosperity of a state depends on the productive capacities of its people and the proper management of resources. His work anticipates later theories of labor and productivity in modern economics.
3. Role of Government: Ibn Khaldun provided a detailed analysis of the government’s role in the economy. He argued that while the state should collect taxes and provide essential services, excessive taxation or government intervention could lead to economic stagnation and societal decline. This concept of the state’s limited economic role remains influential in contemporary discussions about government and the economy.
4. Cyclical Theory of Civilizations: Ibn Khaldun proposed a cyclical model of the rise and fall of civilizations, where economic factors, including taxation, trade, and public spending, played a critical role. He emphasized that economic prosperity is a key indicator of a society’s overall strength and stability.

Islamic Economics Books Pdf

Introduction to Islamic Economics By HOSSEIN ASKARI ZAMIR IQBAL ABBAS MIRAKHOR

An Introduction to Islamic Economics

ISLAMIC ECONOMICS (An Introductory Analysis ) By M.A. Hamid

Fundamentals of Islamic Economics and Finance

Introduction to Islamic Economics: Theory and Application

Principles of Islamic Economics

First Principles of Islamic Economic By Sayyid Abul A’la Mawdudi’s

Islamic Economics: A Short History By AHMED A.F. EL-ASHKER AND RODNEY WILSON

Influence on Islamic Economics:

Ibn Khaldun’s insights laid the groundwork for later Islamic economic thought. His work continues to be referenced in discussions of Islamic finance, economic justice, and the role of the state in managing economic resources. His ideas on labor, taxation, trade, and wealth distribution reflect key principles in modern Islamic economics, such as the emphasis on social justice, ethical economic behavior, and a balanced role of government.

Conclusion

Islamic economics and finance are based on ethical principles that prioritize justice, fairness, and social welfare. By prohibiting interest, promoting wealth redistribution through Zakat, and offering various types of Shariah-compliant financial dealings, Islam provides a comprehensive economic system that seeks to balance individual freedom with collective responsibility. This system not only fosters economic prosperity but also aligns financial activities with spiritual and moral values, contributing to the overall well-being of society.

Source:

1.  https://eh.net/encyclopedia/islamic-economics-what-it-is-and-how-it-developed/

2. https://en.wikipedia.org/wiki/Islamic_economics

3. https://www.sukuk.com/education/islamic-economic-system-financial-dealings-islam-276/#/?playlistId=0&videoId=0