What is Islamic Economy?

To better understand the definiton of Islamic Economy, it is required to define both terms individually which are Islam and economy. Islam has been defined in question 1. The term 

economy refers to the process of production, distribution and consumption of goods and services in a given society. Economy here is referred to the macro level.

Islamic economy is the process of producing, distributing and consuming the goods and services according to Islam.

However the best definiton I have found for Islamic economics was given by Asad Zaman when said: “ Islamic Economics is the EFFORT/STRUGGLE to implement the orders of

Allah pertaining to economic affairs in our individual lives (Micro), in our communities (Meso), and at the level of Ummah (Macro).

In an Islamic economy, what is produced by the society  must be permissible in Islamic. In such society, alcohol, cigarettes, pork, pornograhph, gambling, impermissible financial instruments etc, cannot be produced because in Islam one of the general rules of jurisprudence is “ what should ne be distributed should ne be produced”. Logically, it is a waste of time, efforts and ressources to manufacture what cannot be sold. 

Regarding distribution, let assume that impermissible goods and services have been produced in a different economy, the society or country which applies the principles of Islamic economy will not allow the distribution and selling of any prohibited goods and services. It should be taken into account that what should be produced or distributed in a particular society or country is a collective choice.

With reference to consumption, what a specific society or country consumes must be permissible by Islam. So, in Islamic economy, all prohibited goods and services, like intoxicated substances; gamling; riba instrument etc,  are illigal to consume, so illigale to distribute because what should not be consumed should not be distributed.

What differs Islamic economy from the mainstream economy? 

There are many differences between Islamic economy and mainstream economy and the main and the biggest distinction is that the former aims to achieve the command of Allah in the process of production, distribution, and consumption because it believes that everything belongs to Allah, humans are only agents and an agent must behave according to the instruction of the principal. In other words, in Islamic Economy, Allah is always at the centre of the decision making process. On the contrary, the mainstream economy does not have such aim and presumes to place human beings and freedom at the centre of decision making.    

Another dissimilarity is that Islamic economy considers not only the long term but also the infinity and protects individuals and societies from any harmful action in this life and hereafter meanwhile mainstream economy generally has this motto: “ give individuals and societies what they want”. 

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