Principles of Economics

 

In the Name of Allah, the Gracious, the Merciful

 

In Islam, these principles are encapsulated withìn a part of the Qur'aanic Verse 2:275, which is و احل الله البيع و حرم الربا (and Allah has permitted business, and prohibited Ar-Riba).

 A business is an activity to facilitate convenient availability of a variety of needful things to people. 

 The neighborhood shopkeeper arranges for and provides to me things conveniently for my day-to-day use. For this service, he is charging some extra money over and above the cost of the things to him. He is engaged in business permitted in the Qur'aan. 

My neighborhood electrician comes and fixes the lighting problems at my house. He is charging me something extra over and above the things used by him for the purpose. He too is engaged in business permitted in the Qur'aan. 

My neighborhood bank keeps my money in its safe custody and allows time-to-time withdrawal therefrom for my personal use. It also provides loans to me for my necessary expenses which I am unable to meet within my savings. For this service, the bank charges me interest which includes the bank's overhead expenses plus a reasonable profit margin for itself. This bank is also engaged in business permitted in the Qur'aan.

But, as noted elsewhere in the same Verse 2:275 (قالو انما البيع مثل الربا), some people, under Satanic spell, insist that such bank business is like Ar-Riba!!

Please click here to understand what Ar-Riba really is.

 

Mohammad Shafi 

Friday, the 25th of June 2021.