Economics is a social science
concerned with the
production, distribution, exchange, and
consumption of
goods and services. Economists focus on
the way in
which individuals, groups, business enterprises,
and
governments achieve economic objectives
efficiently.
Economics is divided into two major fields.
The first,
microeconomics, explains how the interplay
of supply
and demand in competitive markets creates
a multitude
of individual prices, wage rates, profit
margins, and
rental changes. The second field,
macroeconomics,
deals with explanations of national income
and employment.
Like all other man-made sciences economics
remains
imperfect and that prompts the great thinkers
to say:
If all economists were laid end to end,
they would not
reach a conclusion._George Bernard
Shaw
In our time, the curse is monetary illiteracy,
just as
inability to read plain print was the
curse of earlier
centuries. Ezra Pound, U.S. poet,
critic.
The day is not far off when the economic
problem will
take the back seat where it belongs,
and the arena of
the heart and the head will be occupied
or reoccupied,
by our real problems-the problems of
life and of human
relations, of creation and behaviour
and religion.
_John Maynard Keynes (1883-1946), British
economist.
But it appears that the proponent of Islamic
Economics
do not themselves know how the Islamic
Economics would
differ with the conventional science of
economics.
However, they are certainly correct about
applicability of Islamic code of ethics to economic activities at all levels.
Holy Prophet
(sws) himself set an example of principles
of trading and honest
dealings and disclosure of full facts.
In Islam the maximu 'Let the buyer be Beware" does not apply. It is moral
obligation of the seller to disclose the defects of his product rather
than hiding them.
In the fifth century there was widespread
belief among the
Christians that the Lord Jesus prohibits
Interest and it was banished in many countries. There are moral standards
in Bible also. Will that produce Christian Economics?
The concept of Islamic system as some zealots
of Islamization of
economics appears to be more like Utopian
philosophy inasmuch as they regard alleviation of poverty by fair and equitable
distribution of wealth as an objective
of Islamic system! Although there is great emphasis on charity and helping
the needy and
payment of Zakat and distribution of war
booty, there is no
provision in Holy scriptures for distributing
of wealth and ownership on socialist pattern,
The research on Islamic Banking has been
going on for years.
But neither its parameters have properly
been defined nor any concrete practical steps taken to evolve the standards,
procedures, and to educate the people. Only Arabic terminology is used
to describe old trading practices.
The fact remains that banking is banking
- and economics is economics - whatever name you may give it according
to the policies and practices adopted.
There are a number of commandments and
prohibitions in
Holy Quran and the sayings of the Holy
Prophet (saws)
regarding various financial matters and
the manner in
which the business is to be conducted.
They relate to
Zakat, bequests and inheritance, rights
of widows and
orphans, blood-money, trusts, compensation
for work,
virtues of charity, spending in the way
of Allah for
welfare or help of the poor and needy,
slavery,
trade, weights and measures, loans, trusts,
contracts,
prohibition for professional beggary,
misrepresentation,
profiteering and hoarding etc. All
these must be
followed in developing economic policies
and practices
and modifying the conventional banking
and monetary
practices.
We talk about abolishing interest from
our banking system
without realizing that it would be like
putting the cart before
the horse. We will have to switch over
to a monetary system
under which the purchasing power of currency
does not decline
such as that based on pure gold standard.
But We are following
a monetary system of paper money issued
under the Government
edict without any backing by gold
or other commodity.
Prior to 1970 the paper currency used to
be backed by gold but
after the Arabs started using oil as a
weapon the IMF in 1970
abandoned gold standard altogether for
the currencies and prescribed rules that the members must follow the managed
currency system without any commodity backing which according to some economists
facilitate in marinating economic hegemony of G7 countries who exploit
the exchange rates to their advantage.
The Supreme Court has ruled to abolish
Interest and had
allowed one more year to the Government
to take measure
for interest free banking. However,
this decision has been
revoked by the Supreme Court on the appeal
of the
Government through one of its bank and
the case has been
remanded for further study of inflation
etc. In this regard
please see the article
In 1948 by the father of the Nation Quiade
Azam had advised to
modify the monetary system but State Bank
has ignore his
advice due to the needs of the rulers
for paper money and now after 53 years we find ourselves back in
square one with our
Rupee regressed to paisa level and the
coins of Annas and Pie
are gone leaving us with a grossly mismanaged
and beleaguered economy and heavy burden of foreign debts. Many Governments
have come and gone but none had the will and conviction to
implement the Quaid's advice. On the contrary
each ruler had their own share in robbing its own citizens, wittingly or
unwittingly, in a manner as described by Maynard Keynes (1883-1946),
British economist.
"By a continuing process of inflation
governments
can confiscate, secretly and
unobserved, an
important part of the wealth
of their citizens."
In the 7th century AD at the time
of dawn of Islam,
money consisted of metallic coins
and gold and silver
bars. That was the kind of money
whose purchasing
power was not only stable but also
tended to
appreciate, like the worth of land
or gold. It
was and still is the simplest and
straightforward
method of fulfilling the promise
of the Rulers who
issue coins and currency to give
you the real worth of
the money - not less than what you
acquired when you
took that money in your custody.
In this respect
our Governments have been guilty
of breach of the
trust, as it is incumbent upon the
rulers, according
to Islamic precepts to protect the
interests of his
people. There is need for evolving
standard by Ijtehad
for linking of currency to gold
or some other
commodity and printing of notes
according to the
reserves needed for stability
of the currency.
