Economic System of Islam, or sharia is currently much discussion in Indonesia. Many among the people who insisted that the Indonesian government immediately implement the Economic system of Islam in Indonesian Economic system along with the destruction of Capitalism Economic systems. This paper will discuss about what the economic system of Islam / sharia it.
Definition of Islamic Economics / Syariah Islam according to some economists
- M. Abdul Mannan
- M.M Metwally
History of Islamic Economic System
With the collapse of communism and the socialist economic system in the early ’90s praised the system of capitalism as the only valid economic system. But in fact, the capitalist economic system and the negative consequences even worse, because many poor countries grow poorer and the rich countries are relatively few get richer.
In other words, capitalists failed to improve the life of the people’s dignity, especially in developing countries. In fact, according to Joseph E. Stiglitz (2006) failure of the U.S. economy’s 90 decades since this capitalist greed. Full failure of economic systems that have caused their respective economic systems have weaknesses or deficiencies are greater than their respective strengths. Weakness or lack of each economic system is more pronounced than the excess.
Because of weaknesses or flaws more apparent than the good cause that’s what new ideas emerge about the economic system, especially among Muslim countries or countries with majority Muslim population that is Islamic economic system. Countries that the Muslim majority population to try to establish an economic system based on the Qur’an and Hadith, the Islamic economic system that has managed to bring Muslims on the Prophet’s time improve the economy in the Arab Zazirah. Of thinking based on the Qur’an and the Hadith, they are developing Islamic Economics and Islamic Economic System in many Islamic countries including Indonesia.
Islamic Economics and Islamic Economic System is a manifestation of the Islamic paradigm. Economic development of Sharia and Islamic Economic System not to compete with capitalist economic system or a socialist economic system, but rather intended to seek an economic system that has advantages to cover the deficiencies of the economic system that already exists. Islam was lowered into the earth is intended to regulate human life in order to realize peace and happiness of life in the world and the Hereafter as the highest economic value. The people here are not merely Muslims but, all the people on the face of the earth. Peace is not merely life can meet the needs of abundant life in the world, but also can satisfy the soul as the provision of peace in the hereafter. So there must be a balance in fulfilling the needs of life in the world with the need for the afterlife.
Three Principles Concerning the economic system according to the Islamic Sharia
- Tawhid, it reflects the principle that the ruler and the sole owner of this universe is God Almighty.
- Khilafah, to present that man is the caliph or representative of God on this earth with a set endowed with spiritual and mental potential and completeness of the material resources that can be used to live in order to spread the mission of his life.
- ‘Adalah, is an integral part with the goal of sharia (maqasid al-Sharia). The consequences of the principle of Khilafah and ‘It is demanding that all resources are of God’s mandate should be used to reflect sharia among other purposes, namely: the fulfillment of needs (need fullfillment), to appreciate the source of income (recpectable source of earnings), income distribution and welfare are equal (equitable distribution of income and wealth) and the stability and growth (growth and stability).
2. Balance (equilibrium)
3. Freedom (free will)