Principles of Islamic Economics According to the Quran and Hadith

1. Unity of Ownership (Tawhid)
   • Allah is the ultimate owner of all resources, and humans are stewards or trustees (Khalifah) of these resources.
   • Reference: “To Allah belongs whatever is in the heavens and whatever is on the earth.” (Quran 2:284)
2. Prohibition of Interest (Riba)
   • Charging or paying interest is strictly prohibited, as it leads to exploitation and inequality.
   • Reference: “Allah has permitted trade and forbidden usury.” (Quran 2:275)
3. Promotion of Justice and Equity
   • Wealth should circulate fairly, and exploitation or oppression is prohibited.
   • Reference: “Do not consume one another’s wealth unjustly.” (Quran 4:29)
4. Wealth Redistribution through Zakat and Charity
   • Obligatory charity (Zakat) and voluntary giving (Sadaqah) are mechanisms to reduce poverty and ensure wealth is shared with the less fortunate.
   • Reference: “Establish prayer and give Zakat.” (Quran 2:43)
5. Ethical and Halal Transactions
   • Trade and business activities must involve lawful (halal) goods and services and must be free from deceit or dishonesty.
   • Reference: “Give full measure when you measure, and weigh with a balance that is straight.” (Quran 17:35)
6. Prohibition of Hoarding and Speculation
   • Hoarding wealth or commodities and speculative trading (e.g., gambling) are discouraged as they harm society.
   • Reference: “And those who hoard gold and silver and spend it not in the way of Allah, give them tidings of a painful punishment.” (Quran 9:34)
7. Encouragement of Work and Production
   • Islam emphasizes earning a livelihood through lawful means and encourages innovation, trade, and hard work.
   • Reference: “And that there is not for man except that [good] for which he strives.” (Quran 53:39)
8. Prohibition of Monopolies and Unfair Practices
   • Monopolistic behavior and exploitation of market conditions are discouraged to ensure fair competition.
   • Reference: The Prophet Muhammad (peace be upon him) said: “Whoever monopolizes is a sinner.” (Sunan Ibn Majah, Hadith 2153)
9. Balanced Material and Spiritual Goals
   • Economic activities should align with spiritual objectives, avoiding materialism and focusing on societal welfare.
   • Reference: “But seek, through that which Allah has given you, the home of the Hereafter; and [yet], do not forget your share of the world.” (Quran 28:77)
10. Environmental Stewardship
    • Economic activities should respect the environment and avoid harm to natural resources.
    • Reference: “Do not commit abuse on the earth, spreading corruption.” (Quran 2:60)
11. Mutual Cooperation and Solidarity
    • Islam encourages economic cooperation and mutual support within the community.
    • Reference: “Help one another in acts of righteousness and piety.” (Quran 5:2)

These principles create a framework for an equitable, just, and sustainable economic system in line with Islamic teachings.