GRADUATE SCHOOL OF MUAMALAT

MANAGERIAL ECONOMICS
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ARTICLE REVIEW
Islamic Economics: Notes on Definition and Methodology
by
Monzer Kahf (2003)

Reviewed by : Maryam Khalilah Binti Kadri

Matric No. : 3140356
Programme : Master Of Muamalat Administration (Halal Product)

Islamic Economics: Notes on Definition and Methodology

Monzer Kahf

Reviewed by: Maryam Khalilah Binti Kadri

Dr. Monzer Kahf is known as an eminent economist, counsellor, lecturer
and expert of Islamic Shariah and laws. He has written more than 100
articles, in English and Arabic on Islamic economics, Islamic public and
private finance, Islamic Banking, Zakah, Awqaf, including entries for the
Oxford Encyclopedia of the Modern Islamic World. One of his articles
entitled Islamic Economics: Notes on Definition and Methodology written
in 2003 has appeared.2 This article is beneficial to the economists and will
give a wide knowledge of the definition of Islamic economics and its
methodology but some of its opinion can be argued and totally
unacceptable.
Summary
This paper aims to examine the effects of the different definitions of
Islamic economics suggested by some writers, exploring its scope and
endeavouring to propose its methodology. Dr. Monzer divides this paper
into two sections which are; section one discusses the definition of Islamic
economics and its scope while section two deals with the methodological
issues..
There are various definitions of Islamic economics from some Islamic
economists. According to Dr. Monzer on this article, this economy can be
seen as a subdivision of the science of economics that studies based on
the paradigm of Islam such as axioms, value system and ethics. This
means this economy is same as the study of the capitalist and socialist
economies. He also believes that this economy cannot be patented as a
distinct subdivision of knowledge. However, there are some writers who
have different thought on the definition of Islamic economics.
The writer suggested taking Ibn Khaldun's ilm al-Umran al-bashari wal
ijtima al-insani; The Science Of The Civilization Of Mankind And Human
Socialization as a model to solve the problem of the Islamic economics
definitions among Islamic economists. As a result, this term should be
1 Monzer Kahf (2003), Islamic Economics: Notes on Definition and Methodology,
Review of Islamic Economics, No.13, pp.23-47
2 mer lyasli (September 2011), Dr. Monzer Kahf: The modern Islamic
economists of the world, retrieved from:
http://islamiceconomicsbd.blogspot.my/2011/09/biographydr monzerkahfmodernislamic.html

defined as the study of human behaviour independently and mutually with

honour to the use of resources for the purpose of fulfilling human material
goals.
Five important arguments can be concluded in this discussion. Firstly,
there is a need for a discipline which studies issues usually described as
the subject matter of economics on a worldwide basis. Secondly, there is
no need to add the adjective Islamic to such a discipline. Thirdly,
Muslims have fallen into the shadow or edge of human civilization for
several centuries ago, confirming the growing economic discipline in the
Jewish-Roman culture. Fourthly, the Islamic economic system ought to
occupy its place in the economic discipline on an equal footing with other
economic systems. Finally, the term of Islamic economics is known as the
sub-division of the economy, dealing with the Islamic economic system
and its impact on economic variables and results.
This paper is concluded into two duties of Islamic economists: (a) the
explanation of the Islamic economic system; which consists of two parts:
firstly, the theoretical discovery of all the components of the system and
its internal coherence; and secondly, the investigation of the economic
validity and applicability of the system including the way variables and
behaviours are affected within its framework and (b) the reconsideration
of conventional economic theory. In a nutshell, the derivation
methodologies of the Islamic economic system from the sources of Islam
are very similar to the way in which general theories and methods of Fiqh
have been developed. Historical experience affects the explanation of the
Islamic economic system with other ways by helping understanding of its
principles and claims.
Critique
Based on my understanding, Islamic Economics is a social science that
studies human behaviour in terms of the use and management of natural
resources for the benefit of themselves and the interests of society to gain
the pleasure of Allah. The value of the Islamic economic system is an
integral part of the overall teaching of Islam is comprehensive and has
been declared as perfect guidance as mention in Qur'an, Surah al-Maidah
verse 3;

Means: This day I have perfected for you your religion and completed My
favour upon you and have approved for you Islam as religion. But whoever

is forced by severe hunger with no inclination to sin - then indeed, Allah is

Forgiving and Merciful.
According to Muhammad Abdul Mannan, Islamic economics is a social
science which studies the economics problems of a people filled with
the values of Islam. In general, the definition by Hasanuzzaman is more
accurate and comprehensive; Islamic economics is the knowledge and
application of injunctions and rules of the shari'ah that prevent injustice in
the acquisition and disposal of material resources in order to provide
satisfaction to human beings and enable
them to perform their
obligations to Allah and the society (hasanuzzaman, 1984).3
Indeed, there are four important sources of Islamic systems firstly, Quran;
such a divine sources. Secondly, Sunnah; the sayings and practices of the
Prophet Mohammed (PBUH). Thirdly, Ijma; the consensus of religious
scholars. Fourthly, Qiyas; personal opinions based on analogy and
religious doctrines.
Indeed, in some ways, the Islamic economic system is a compromise
between the two systems, but in many ways the economic system of
Islam is totally different from the two systems. The Islamic economic
system has the properties of both capitalism and socialism but in spite of
the bad character such as riba, gambling and so on.
Here are some significant differences between the Islamic and the
capitalist system such as Capitalism considers human beings as being
selfish but Islam considers human beings as being selfish as well as
altruistic. Moreover, under capitalism, materialism is the supreme value
but Islam holds that materialism should be controlled. Furthermore,
capitalism advocates absolute private ownership but Islam prescribes
private ownership within a moral framework.4
Islam in economic activity is considered as one of ibadah and it is a trust
from God to those who believe. Economic activity has an impact on
spirituality and faith of the Muslims. The Islamic economic objectives are
to eliminate and overcome poverty.5 Other than that is to create sufficient
3 Hasanuzzaman. (1984). Definition Of Islamic Economics. Journal Of Research In
Islamic Economics.
4 Shaikh A. Hamid, Philosophy And Practice Of Islamic Economics And Finance,
Southern New Hampshire University, pp. 14
5Jazeel Abdul Wahid (2014), Islamic Economics, INCEIF, pp. 3

job opportunities and also to maintain optimal growth rate in accordance

with the material and spiritual progress of society and much more.6
Conclusion
Islamic Economic System is a system that is not a human invention like
capitalist and socialist and it is a perfect system. The use of this economic
system within a country will be able to create a more organized national
economy and safety with the guidance of the Qur'an and Sunnah.

References
Al-Quran, Surah Al-Maidah verse 3
Hasanuzzaman. (1984). Definition Of Islamic Economics. Journal Of
Research In Islamic Economics.
Jazeel Abdul Wahid (2014), Islamic Economics, INCEIF, pp. 3
Monzer Kahf (2003), Islamic Economics: Notes on Definition and
Methodology, Review of Islamic Economics, No.13, pp.23-47
mer

lyasli (September 2011), Dr. Monzer Kahf: The modern Islamic

economists
of
the
world,
retrieved
from:
http://islamiceconomicsbd.blogspot.my/2011/09/biographydrmonzerkahfmodernislamic.html

Shaikh A. Hamid, Philosophy And Practice Of Islamic Economics And

Finance, Southern New Hampshire University, pp. 14
Umer chapra, The Future of Islamic Economics: An Islamic Perspective,
Islamic Foundation, 2000, pp. 202-206.

6 Monzer Kahf (September 2011), The Economic Objectives of the Islamic State,
Retrieved from: http://www.onislam.net/english/reading-islam/researchstudies/politics-and-economics/453907-the-economic-objectives-of-the-islamicstate.html?Economics=