Islamic Economical Jurisprudence

Islamic Economical Jurisprudence

Islamic economics refers to the body of Islamic studies literature that "identifies and promotes an economic order that conforms to Islamic scripture and traditions," and in the economic world an interest-free Islamic banking system, grounded in Sharia's condemnation of interest (riba). The literature has been developed "since the late 1940s, and especially since the mid-1960s." The banking system developed during the 1970s. The central features of Islamic economic literature have been summarized as the following: "behavioral norms" derived from the Quran and Sunna, zakat tax as the basis of Islamic fiscal policy, and prohibition of interest.

Islamist movements and authors generally describe an Islamic economic system as neither socialist nor capitalist, but as a "third way" with none of the drawbacks of the other two systems.

To reduce the gap between the rich and the poor, Islam encourages trade, discourages the hoarding of wealth and out laws Usury (the term is riba in Arabic).. Therefore wealth is taxed through Zakat, but trade is not taxed. Usury allows the rich to get richer without sharing in the risk. Profit sharing and Venture Capital where the lender is also exposed to risk is acceptable. Hoarding of food for speculation is also discouraged Grabbing other peoples land is also prohibited.