Islamic Economics is a term often referred to as a sub branch of Islamic jurisprudence; fiqh in Arabic. The term ofIslamic Economicsliterally translated from Arabic word al iktisatul Islam, or rarely al fiqhul Iktisat.To give a more professional definition; referring Umar Chapra; that branch of knowledge which helps to realize human well being through an allocation and distribution of scarce resources that is in conformity with Islamic teachings without unduly curbing individual freedom or creating continued macroeconomic and ecological imbalances.Also according to Chapra and many other Scholars; there are 4 sources of Islamic systems; they are;1-)Quran, such a divine sources2-)Sunnah, the sayings and practices of the Prophet Mohammed (pbuh)3-)Ijma, the common belief of Muslim scholars4-)Qiyas, the other principles that are compared to those three sources.These resources are widely accepted as the main sources of Islamic sciences. We will break down each and every one of them later on InshAllah.***Islam, a religion born in a territory where the agricultural potential is limited but commercial possibilities were great; such as trade and tourism. Prophet Mohammed (pbuh)himself had been a merchant; and very successful businessmanactually; so We can see that Islam always regarded merchants with honor and esteem. Along with Prophet (pbuh); many of His Sahabah were also merchants; Abu Bakr, Usman and many others were successful merchants.After the death of Prophet (pbuh); Muslims continued that tradition of successful trade. Many of that era Scholars were successful merchants as well, like Abu Hanifa. They faciliated in a really wide location; between Mediterrenian an China.It is an interesting point that people of those countries like Malaysia and Indonesia were converted to Islam not without war but with the efforts of that brilliant Muslim merchants like Abu Hanifa.During the Middle Ages, with that remarkable success in making converts; Muslims were started to seen as worlds leaders in business, science, medicine and philosophical thought. Many ancient Greek authors are known to us today only through Arabic translations.Modern mathematics is based on the Arabic system of notation, and algebra was an Arab invention.During the intellectual revival of Western Europe in the eleventh and twelfth centuries many Christian scholars went to Cordoba and other Muslim intellectual centers to study classical philosophy and science. The word ofcollege was derived from Arabic word of klliye; and the oldest college of English speaking Europe, the Oxford College was founded as a copy of those klliye system. At the same time, Christian merchants learned Muslim commercial practices and techniques.As a matter of fact, the word of cheque (literally means a printed form, used instead of printed money) was invented by Muslim merchants of that time; and its original Arabic word was akk. Many other advanced finance techniques were also being used during that time period.In short; it can be clearly seen that Islamic economic system of that time is very close to todays free market and so called capitalism or liberal economy. However; Islam has two main and very important differences when compared to those other economic systems. Islamic Economics is based on prohibition of interest (usury or riba in Arabic) and presence of zakat (almsgiving). Those two point can be regarded as indispensible points of Islamic economics. Prohibition of interest and obligatory alsmgiving could be sounded like somewhat socialism, but; its not. Islamic economics is so much different than capitalism and socialism. However, I think it should be a good implication thatdynamism of capitalism and equality of socialism are combined in the economics system of Islam. Moreover, it embraces both this and other world as a whole; direct

One of the overriding concepts of Al Ghazali based upon Shara which encompasses all human activities, including economic, ismalaawhich promotes social welfare of community7. All matters and activities of human being have to be seen as a means to achieve goals in increasing the social welfare. The institution ofmalaais well defined by Al Ghazali, concerning individual as well as social needs.According to Al Ghazali there are five compulsory Shara based foundations or components for a proper and just individual and social life: 1.dn(religion), 2.nafs(life of soul), 3.nal(family) 4.mal(wealth) and 5. aql( intellect, reason).8Malaaas a public good is inextricably related to Shara, which key objective is advocating what is according to the Quran perceived as good in the mundane and in the Hereafter (malaaal dn wa al duny). Thus the noblest deed in the sight of Allah is the promotion of general (public) good in the society. Al Ghazali discusses three aspects ofmalaain a hierarchical form: necessities (arurt), conveniences or comforts (ajt), and refinements or luxuries (tasint).9These foundations have to be constantly revised by the people themselves. The second foundation comprises all activities and things that are not vital to the preservation of the five foundations, but, rather, are needed to relieve or remove impediments and difficulties in life10, whereas the third foundation includes activities that are perceived as a surplus or additional to the basic necessities.Islamic economics, the notion of Hereafter (ira), basic needs, sharing and just conductSince Al Ghazali positions economic activities within the parameters of the Islamic worldview, the Hereafter is seen as the ultimate goal of human beings. Quranic verseL tansa nabaka min al-duny, (do not forget your share in the world)11can be understood in the light of not neglecting ones share/contribution/effort in this world for the Hereafter. On the other hand,dunyor mundane is not seen primarily as a temporal place but rather a struggle and preparation for the salvation, and this struggle has to be utilized through human endeavours and affairs, which include also the economic pursuits. Thus, economic activity is a prerequisite for the salvation.In accordance withfiqhAl Ghazali has analyzed three elements of trade: agreements of buyer and seller, commodities of the transaction, and the content of the agreement.12He criticised those who believe that economic activities are related only to the substance of survival or living.13He states that Cities have been destroyed, the places turned into dust, bodies decayed, and sjulls are all rolling in dust. The world is a brilliant bowman, of which man is a target. Take only that much of goods from the world as are absolutely necessary for your earthly sojourn. If you want to be saved from the mischief of the world, then consider your wealth and dust as equal.14Level of consumption thus has to range between necessity and extravagance.15Whilst necessity has to be fulfilled by the consumer for it is perceived as a religious obligation, extravagance isarm. According the Al Ghazali all economic activities have to provide basic human needs food, clothing, and shelter.16These basic human needs are consistent with Shara, thus Al Ghazali tries to deliver information from his economic inquiry of various material matters that relate to provide and please human conditions, as part of the idea of Islamic social welfare. InMizn al Amal, Al Ghazali mentions three levels of consumption: the lowest, the middle, and the highest, and each of the basic things can be applied to each of the three levels as a necessity, convenience or luxury. His discussion on need and surplus of material things is linked with the percept of the relation between wealth and poverty. Abu Hazem pointed out that that the basic human needs are what one needs in order to reach the state of content: If you seek in this world what suffices you, then the least of this world will suffice you. And if you seek what fulfills you and you cant be fulfilled by what suffices you, then nothing in this world will fulfill you.17Acquiring wealth is intrinsic to human nature and a means for providing wellbeing for society. Al Ghazali recognizes that Man loves to accumulate wealth and increase his possessions of all kind of property18. And the reason behind it is according to him high aspirations, an infinite luck men strive for the percept that the wealth will last. He is also critical towards the disproportionate upsurge of income in a society. He maintains that theummah(Islamic community with its spiritual features) ought to exercise also humanitarian charity endowment (waqf). He mentions three stages of sharing: 1. A lower stage where a person sacrifices for his brother without expecting anything in return, 2. A higher level, presupposes that a person considers his brother as himself and spends upon him as if he would spend on himself, whilst the highest level indicates that brothers need are to be preferred over ones own needs.If voluntary (humanitarian) sharing and feeling of brotherhood is not intrinsic constituent of Islamic belief, meant for those who are in a material (financial) need, two culpable consequences are likely to emerge in the society: extravagance and miserliness or avariciousness.19Both are in clear opposition to the Shara, for excessive activity (wasting, spending etc.) is illicit: Make not thy hand tied to thy neck, nor stretch it forth to its utmost reach, so that thou become blameworthy and destitute. (Quran 17:29) Those who when they spend are not extravagant and not niggardly, but hold a jus (balance) between these extremes. (Quran, 25:67). Thus, Al Ghazali states that money (ml) has been created for a specific purpose in order to fulfil needs of human beings. Miserliness means that where money should be spent is restricted, whilst extravagance suggests the opposite, where money should not be spent, there is an excessive expenditure of it. Utilization of wealth should be therefore in accordance with Islamic jurisprudence, which would secure not only ones welfare but rather the procedure of spending on lawful products in a lawful way. By following Islamic principles misuse of monetary activities would be minimized due to the regulations of Shara. Nevertheless, the ultimate goal is the remembrance of the Hereafter. The Qurn encourages the acquisition of wealth20, along the strict rulers of Shara, but does not advocate the lust of money or spending and fulfilling personal goals over the needs of community and those in need. Therefore, as indicated by Al Ghazali, an individual should realize the objectives of wealth and money as indicated by the Shara; follow the righteous means of acquiring income; earn and spend no more than one needs; and not forget about the truthful intention behind ones economic activities all stages have to be realized not for the sake of acquiring wealth but in the name of Allah. This is the Islamic idea of the piousness (taqw). Most of his ideas on economics are to be found inIya Ulm al-Dn. Seven requirements have to be met by a human being for an overall preservation of thednor religion, while practicing the economic purchase.21First is the good intention at the very beginning of economic activity, in order to free oneself from envy and assistance from others, as well as to provide for ones own household. In this respect one has to have in mind the state of other Muslims, adlandisn(equity and good-heartedness), andamr bi al-marf wa nahy an al-munkar(leading the path of rightness). Secondly, human being has to fulfil the requirement of social utility also in trade and commerce, otherwise the repudiation of economic activities can become a threat for human kind. Thirdly, economic activities should not renounce humans from the Islamic principles, therefore the pursuit of the mundane market should be in reliance with the Hereafter. Fourth, remembrance of Allah (s.w.t.) should be present in the market or trading processes. Further, humans should not be greedy, albeit economic engagement is permited in Islam.22Apart from legal opinions (fatw) a Muslim should listen to his/her own voice in order to achieve resonance in trading along with the Islamic principles23. The last constituent is a fair trade and behaviour.Voluntary exchange, trade and evolution of marketsFor Al Ghazali markets evolve naturally, since self-motivated human desire to satisfy economic needs exist. Al Ghazali explains how people from different walks of lives come together in order to exercise products exchange: Peoples own needs and interests create the need for each other and for transportation. Then, a class of professional traders who carry goods from one place to another is created. The motive behind all these activities is the accumulation of profits, no doubt.24The necessity of division and specialization of labour is thus seen in the light of covering all aspects of human (economic) activities and providing different ways of trading with respect to people. Mutuality and interexchange of economic activities necessitates division of labour25, which has to rest upon the business or trade ethics.According to Ghazanfar, Al Ghazali indicated the relation between the market and price relation correctly when stating that the farmer sells his product at a low price due to the necessity of not having enough buyers. Further, he suggests that seller should out of his benevolence not accept high profit of particular product just because the buyer is anxiously interesting in buying it. The limit of the profit is not clear by Al Ghazali, nevertheless given the role of benevolence and overall injunction of Shara, the rate should not exceed 5-10 % of the price of a good26.Since food is perceived as a basic human necessity27trading in food should not be motivated by profit but rather to fulfil the needs of the community. Profit itself is not a necessity28, but rather a surplus of living conditions. Food has to be thus available at low prices so that everyone could afford it. The emphasis is put on the exploitation of prices of food, which is in Al Ghazalis perception clearly illicit. Other necessities e.g. clothing, shelter and medicine are also placed in the same category of basic needs for which no extra profit should be extracted from the price. Although Al Ghazalis intentions are indeed noble and praiseworthy, according to Ghazanfar and Islahi he does not consider certain negative effects of supplying such necessities. However, detailed and sufficient description of those effects is not provided by them.Market has to function according to moral standards and basic ethical principles of Shara which would be beneficial for society as a whole. The example of hoarding foodstuff in order to increase food price is prohibited, as everyone has the right to buy food directly from the market at the affordable prices. If there are enough supplies in society then hoarding might be allowed under certain conditions and Hoarding of medicines and other items which are not part of food and nutrition and not part of general needs is not quite arm.29The price of products is a very sensitive matter and that is why Al Ghazali is very affected by the notion of truth when declaring the price of a good or in a transaction. Economic truthfulness is a prerequisite and a significant component of a Shara-based economic conduct. Since prices are set by the market activities, economic engagement should thus reflect Islamic values, attitude and benevolence (isn), as an activity which transcends pure material exchange of goods. Markets therefore ought not to function freely30and not according to set prices. Benevolence in market should be exercised through the advertisement of the fair price of a product; leniency when purchasing from a poor seller; fair repayments; paying ones debt; and extension of credit or delay of payment when selling to the poor.31In order to achieve the Hereafter from an economic perspective, the following guidelines should be taken into consideration32: the trader ought to act in accordance with Islamic principles of correctness and pure intentions; one should desire business in order to contribute towards public good (malaha); succession of material should not precede the succession of spiritual (desires of thedunyvs. the Hereafter); and one should restrict oneself from the unlawful manners.Bibliography1. Al Ghazali, Abu Hamid.Iya Ulm al-Dn(The revival of religious sciences). Beirut: Darul Nadwah, n.d., 4 Vols.2. Ali-Karamali, Shista P. & Fiona Dunne (1994), The Ijtihad controversy, Arab Law Quarterly 9, 238-2573. 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