Concept of Business
in Islamic Perspective
ECIE603002
Islamic Business
Evony Silvino Violita
Basic Concept in Islamic Business
See Al-Qur’an:
• Islam negates all class-distinction among humans 1. Al-Baqarah (2): 62
2. At-Taubah (9): 105
and makes ‘amal an obligation to be carried out by 3. Al-Ghaafir (40): 40
everyone according to his/her capacity. 4. Fussilat (41): 46
5. Az-Zalzalah (99): 7-8
• All activities are inherently religious 6. Al-Baqarah(2): 198
• ‘amal is mentioned 50 times in Qur’an 7. An-Nisaa (4): 29
8. Al Fatr(35): 29
• Fi’l (al meaning work and action) is mentioned 109 9. As-Shaaf (61): 10-11
times in Qur’an. 10.Asyarh (94): 6-7
11.Al-An’am (6): 32
• Islam enjoins upon a Muslim to keep working and 12.An-Najm (53): 39-41
struggling and forbids laziness and idleness. 13.Al-Jum’ah (62): 10
14.An-Nisa’ (4): 124
• See Al-Jumu’ah: 10
• ‘amal is the sole determinant of man’s status.
2
Exhortation to ‘Amal
Allah promises abundant reward for
the worker and providing him with
incentives for improving quality and Allah promises abundant reward for
quantityu of his work. (QS29:6,69; the worker and providing him with
3:172; 4: 95; …) incentives for improving quality and
quantityu of his work. (QS: 34:10-11;
57:25)
Hadith: “It is far better for one even to
The Qur’an calls on every able- take his rope, cut wood, pile it up and
bodied person to work in order to sell it in order to eat and give charity
earn his living for himself. than to beg others.
3
Business = Tijarah
• Business should comply to syariah regulation to be
recognized as ‘amal.
• Shariah: regulation as guidance to towards Allah by
doing everything in Allah’s way
• Definition:
– Literally: the way towards a souce of water
– Technically: to get hidayah (guidance) ; all the
directions, prohibitions, and values stated by Allah
through Qur’an and hadits
• Shariah is more than “Islamic regulation”. Instead, it
contains norms, values, and rules that direct to Islamic
way of life.
4
Allowed
Shariah
5
Gainful Business in Qur’an
1. Best investment
– rahmat Allah is far better than all the riches of this world.
– Objectives of all activities is mardhat allah (the pleasure of Allah)
– real example: granting ease or respite one’s debtor, qard al hasan
(benevolence loan)
2. Sound judgment (QS7:85; 11: 85-86)
– ‘Adl (justice), full weight, full measure
– Refraining from all fraudulent practices corrupting the land
– Preference of thoyyib (good), halal (lawful), against khabits (bad) and
haram (unlawful)
3. Right conduct (QS: 33:21, 68: 3-4)
– Good deeds as real gainful investment – emulate Rasulullah SAW
– Guard trusts, keep promises, moderate in dealing with Allah as well as
with fellow humans
– Wealth and children are crucial test for the integrity of man
6
Losing Business
All such dealing that might bring a small profit
momentarily, but eventually result in a tremendous and
irreparable loss
• The worst investment: the trade that not only gains nothing
but also suffers the loss (QS 2:86)
• Unsound judgement: to prefer the life of this world to that of
the hereafter (31:33; 13:26)
• The evil conductinvolvement in any activity that is prohibited
by Allah (QS 2:121; 2:174)
7
Akuntabilitas dalam Islam
QS 36:65; 41:18-21
Man are being vigilantly monitored and accurately
recorded.
The Qur’an is very explisit in speaking about the rewards and
punishments based on the conduct of man in this life.
8
Approved Business Conduct
2:275 17:35
4:29 7:35
9:119 55:7-9
5:1 24:37
17:34 2:280
23:8-11
9
Freedom of economic pursuit (QS: 4:29)
• Recognition and regard for personal property
– Allah is the absolute/ultimate owner
– However, personal ownership is not ruled out
• Legality of trade
– Qur’an envisages complete freedom of trade, internal or
external
– However, it does not mean as abolition of all restrictions
– It should be ethical: honest, mutually beneficial
• Mutual consent
– Consent, concurrence, and agreement
10
Justice/Equity
• Fulfilment of promises and contracts
• Exactness in weights and measures
• Work, wages, payments
• Truthfulness, sincerity, honesty
• Efficiency and competence
• Selection on merit
• Investigation and verification
• ‘adl
11
Safeguard
• Writing of a cotract
• Witnesses
• Rahn
• Individual responsibility
12
Manners
• Politeness
• Forgiveness
• Compensation
• Removal of hardships
• Providing help
• Consideration of others’ needs and interest
13
Form of Approved Business
• Barter, Cash trade, credit trade
• Partnership
14
Disapproved Business Conduct
Unjustified consumption of appropriation of
other’s wealth and rights
(al-bathil-unjustified consumption, zulm-injustice)
15
1. Riba
• Literally: increase or addition
• Technically: the addition in the amount of loan in
consideration of the time for which it is advancd or of
the time for which the repayment of loan is deferred
16
Rationale of Prohibiting Riba
• Riba is a cause of injustice and exploitation
• Riba leads to the creation of materialistic society
• Riba discourage productive work
• Riba impedes healthy economic development
(encourage security oriented rather than growth
oriented)
• Riba increases the disparities in income and wealth
• Riba discourages partnership
17
2. Fraud
Fraud and cheating is the characteristic of the
hypocrites
• Tatfif (engaging in fraud)
• Dishonesty
• Falsehood and breach of pacts/promises
18
3. Other disapproved Practices
• Unjustified appropriation of others’ wealth
• Disregards for merit
• Dealing in prohibited commodities
• Invalid partnership
• Delinquency in payment of wages and debts
• Hoarding
• Price fization (tas’ir)
• Protectionism
• Monopoly
• Measures causing price-hike
• Infliction of harm
19
