FOUNDATION OF ISLAMIC ECONOMICS

FOUNDATION
OF

ISLAMIC ECONOMICS

FARIDATUL AKMA BINTI MOHAMMAD BAKI
LATIFAH BINTI SAMSUDDIN

DR. KHAIRUL JANNAH BINTI SAMSUDIN

2021

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No parts of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, mechanical, photocopying,
recording or otherwise without the prior permission of publisher.

Perpustakaan Negara Malaysia

Mode of Access: Internet

eISBN: 978-967-2860-22-8

Publisher:
Politeknik Sultan Idris Shah
Sg. Lang, 45100 Sungai Air Tawar
Selangor Darul Ehsan
Tel. No.: 03-32806200
Fax No.: 03-32806400
https://psis.mypolycc.edu.my

Writers:
Faridatul Akma Binti Mohammad Baki
Latifah Binti Samsuddin
Dr. Khairul Jannah Binti Samsudin

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ACKNOWLEDGEMENT

Firstly, we wish to thank Allah the Almighty for giving us the opportunity to write this book and
share our knowledge with the readers. Our foremost gratitude and thanks go to head of
Commerce Department, Politeknik Sultan Idris Shah (PSIS), the staffs and colleagues that assist
and guide us until we completed this book. Our gratitude also goes to the staffs of PSIS for
providing the facilities, guidance and assistance. We would also like to thank our close friends
and family for their endless support and understanding that led us finished this book. May Allah
swt ease our journey of spreading and acquiring knowledge. Aamiin.

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SYNOPSIS

The world view of Islam is the principles issues with regard to the foundations of Islamic
Economics. The concept of world view is the philosophical idea that discuss man’s perception of
reality and other subject matter therein. Since the world view is one’s view of reality and
existence, world views can be categorized as secular or religious. The secular world view regards
existence through a materialistic and utilitarian point of view, which is only derived through
sense-experience, rationality and empirical observations. These forms the bases of knowledge in
conventional disciplines.
Other than that, this book also discusses the Islamic world view and its core elements from
different perspectives besides establishing the connection between this world view and
economics. The fundamental elements of the Islamic world view include the perspective of God,
His revelation and source of knowledge, His creations including humankind and human soul,
religion as a way of life, and the nature of freedom, virtues and happiness.

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TABLE OF CONTENTS Page
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ACKNOWLEDGEMENT v
SYNOPSIS vi
TABLE OF CONTENTS
1
1.0 Introduction 4
2.0 Definition of Islamic Economic 7
3.0 Core Elements of the Islamic World View 19
4.0 Connections between Islamic World View and Economics 25
5.0 Philosophy and Principles of Islamic Economics 33
6.0 The Sources of Islamic Law
35
REFERENCES

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1.0 INTRODUCTION

Islamic economics has been discussed by a few Islamic scholars and thinkers in the early
days. Realizing the importance of practicing Islamic way of life in a broader scale, plus efforts
from contemporary Islamic scholars that lead to the diversifying Islamic economics in today’s
world. As compared to conventional counterpart that has been existed for decades, the Islamic
economics opens doors for research, development, alliances and cooperation among Muslim
countries. These endeavors are important to ensure Muslims could participate in economic
activities without feeling uncertain with Shariah compliant of products and services offered.

In discussing about Shariah compliance, a Muslim need to has a clear understanding of
what it’s all about. Of course, as a consumer one has to find out on the halal status of a product
or service that he or she has interest in. However, Islamic economics requires comprehensive
knowledge that expand above and under halal status of a product and service. A Muslim needs
to has fundamental knowledge in Islamic economics, such as the maqasid shariah, the primary
and secondary sources of Islamic economics, the principles and philosophies of Islamic economics
and etc.

This book is written as a comprehensive guide on the fundamentals of Islamic economics.
The subtopics covered are the definition of Islamic economics, core elements of the Islamic world
view, connections between Islamic world view and economics, philosophy and principles of
Islamic economics and the sources of Islamic law.

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2.0 DEFINITION OF ISLAMIC ECONOMICS

Economics as a science would observe physical or material or observable realities of
economic phenomena and their interactions (Furqani,H, 2018). He further elucidated the
economics concerned with means or instruments instead of end or values, as the scientific
methods require source of knowledge from a ‘verifiable’ source and not a ‘dogmatic’ or
mythological doctrine or ‘subjective’ emotion and spiritual experiences.

Economics is defined as the study of how people organize dissimilar aspect of production
and distribution of goods and services for the sake of people. While Islamic economics can be
defined as the studies of economics from Islamic perspective (Siddiqui, 2011).

In the Islamic worldview, economics is considered as
part of Islam and a fundamental of one’s life.
Economics is perceived as part of religion where its
spirit, teachings, norms and guidelines embrace all its
dimension. Islamic economics as a body of knowledge
means to understand how economic phenomena is
shaped and founded on the Islamic worldview that
outline perspective, directions, guidelines and goals of
how human beings should arrange their economic life
(Furqani, H, 2018). It is the cornerstone that would
determine the direction of Islamic economics,
simultaneously distinguishes Islamic economics from
‘other economics’.

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Islamic economics can be defined as the knowledge and application of command and
rules of the Shariah that prohibit unfairness in the acquisition and elimination of material
resources in order to bring satisfaction to human and facilitate them to perform their
accountability to god and society (S.M. Hasanuz Zaman,1984).
Other definitions of Islamic economics are as below;
i. Islamic economics focus at the study of human success obtain by managing the resources

in the earth by collaboration (M. A. Khan, 1984).
ii. Islamic economics is the study of Muslim’s act who arrange the resources trusted by God

to man in order to achieve success (M.Arif, 1985).
In discussing on Islamic economic system, it implies a mood of satisfying the economics
needs of the members of organized society in accordance with Quran and Sunnah. Each element
attributes to spending production, distribution and exchange of wealth is determined by the
stipulation in the Quran and Sunnah. Further, there are certain values, such as pity, justice,
benevolence, cooperation, brotherhood and equality that origin from the Quran and Sunnah of
the Prophet Muhammad pbuh.

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3.0 CORE ELEMENTS OF THE ISLAMIC WORLD VIEW

CORE ELEMENTS OF THE ISLAMIC
WORLD VIEW

1. GOD 2. MAN AND 3. AIM 4. NATURE
HIS IN

RATIONALITY LIFE

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1. God
The Islamic world view is fundamentally based on the concept of Tawhid which means unity
of God or monotheism. As Muslims, we must believe that there is no God except Allah
(SWT). God is the central concern of religion. Since, the world view of Islam is based on the
Islamic faith, the position of God in this world view is very fundamental. The first one is to
believe in Allah as the one and only God who is the sole Creator and sustainer of the
universe. The second one is to believe that only Allah deserves to be worshipped and the
third is belief in the unity of the essence and attributes of Allah.

According to concept of tawhid (monotheism), the nature of God can
be contemplated and appreciated through His beautiful names.
One of the names with particular relevance to the perception of
God in economic affairs is His role as al-Malik (the Owner). In the
Islamic world view, this name is importance since God is the
absolute Owner of everything in the universe. As the concept of
ownership and exchange is central to economics, the inclusion of

absolute divine ownership in an economics analysis has profound
implications. For example, when one has the view that God is the Owner
of everything, one’s ownership is basically reduced to a form of stewardship, where God
entrusts His creations to him or her, who has to manage them in a way that pleases God.
Hence, all economic transactions must be in accordance with the will of the Creator.

By being aware of the will of the Creator, humankind is made to abide by rules of exchange
and trade that uphold the values of his Creator. Thus, apart from stewardship, humankind
is also able to understand the basic of private ownership and trade through the name al-
Malik (permissible).

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Another name of Allah is al-Razzaq, namely the Provider of rizq (livelihood).
This name has strong implications on economic activity. All economic
transaction at the micro level are a means to improve one’s livelihood. One’s
effort (labour) and productivity (output) are exchanged for one’s livelihood
and that of family members (goods and services). Although it is through
individual efforts that a person earns a livelihood, that person must still be
thankful to God, knowing that God is the true source of one’s sustenance,
and economic transaction are merely a means to gain God’s blessings in the
form of rizq. That person also believes that the means to expert effort
(talents, skills, access to good parenting, education and opportunities) are a
result of al-Razzaq.

An individual who believes that God provides for him through his effort in the economy,
also believes that God provides to others through him. As such, an individual with such a
conception of God,would provide for others from his own wealth and give others economic
opportunities. In other words, the perfection of God as al-Razzaq has the potential to curb
greed and encourage feelings of altruism. Although there are other names of God which
are associated with economics, the names al-Malik and al-Razzaq are sufficient to convey
how the beautiful attributes of God can significantly influence our outlook and economic
behaviour. The following Surah further elaborates on this:

Allah SWT says in the Quran, Surah Al-Baqarah verse 25
And give good tidings to the ones who have believed and done deeds of righteousness
that for them are Gardens from beneath which Rivers run. Whenever they are
provided with any produce therefrom (once) as a provision, they will say, “This is the
(same) as we were provided earlier.”And they are brought (them) in (perfect)
resemblance; and therein they will have purified spouses and they are therein
eternally (abiding) [2:25]

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2. Man and his rationality

Man, in the world view of Islam, is not only a rational being, but it is also a spiritual being.
In fact, in the Islamic world view, rationality is not separated from spirituality. According to
Imam al-Ghazali’s Ihya Ulum al-Din, aql (intellect or mind) and ruh (soul) are of the same
spiritual origin. The difference between the two is only in their function and role in human
soul. The difference between the two is only in their function and role in the human soul.

In conventional economics, the rational man is a being who is not
spiritually or socially inclined, but is motivated by self-interest. Self-
interest takes a very material form, where its pursuit entails
material acquisitions and accumulation. Morality, emotion, and
empathy have no place in the rationality of the economic man in
the conventional context since they will lead human to sacrifice
self-interest.

In direct contrast to this view, the Islamic worldview requires that
man be seen as one of the finest and noble creation of God. The Quran firmly describes
man as being created in the best stature. Man is both the khalifah in earth and abd of God.
The role of Khalifah implies that nature, the universe and other creations are entrusted to
man for his utilization, while the role of ‘abd means that man does not have any ultimate
authority or absolute rights other than to follow the will of God. Both of these roles have
to be lived simultaneously and any neglect of either one would not be enable man to
function as his true self.

A human being is of two inclinations; a material one that yearns for wealth, and a spiritual
one that seek the pleasure of the creator. These two roles check and balance each other,
whereas man is given authority over other creations to secure his own well-being, he must

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not forget that as a servant of God, he is accountable at all times, and therefore must not
give in to his personal desires.

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3. Aim in Life

Man’s aim in life is related to his rationality, in that, his aims in life are aligned with how he
rationalizes a successful life to himself. The most intuitive determinants for success is how
a person perceives happiness. In other words, a person’s success is often equated with how
satisfied or happy a person is with his life. Thus, a typical person’s aim in life will be to attain
success, which is defined in terms of happiness or satisfaction. Thus, the key to
understanding one’s purpose in life is to understand how that very person defines success
and happiness.

Aim in life for conventional economics man is to maximize material gain and
minimize pain, this would be the definition of success or the ultimate dream
according to conventional economics. According to the Islamic world view,
the same principles of success and happiness applies. However, the definition
of success and happiness is very different as it is grounded in both the material
and spiritual world.

The Arabic word falah connotes success in this world and hereafter. In order
to be successful, one must orient his or her material undertakings in a way that
maximizes his spiritual satisfaction. Spiritual satisfaction is akin to attaining the goodwill or
favour of God. Happiness should therefore be oriented according to falah.

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4. Nature

Allah SWT created nature and entire universe for mankind to see and learn.
People are therefore responsible for the proper management of the resources
for the benefit of all humanity. Nature is the origin of economic resources. It
is the source of economic and non-economic goods (free-goods). An economic
good is defined as a good that has utility and to a certain extent has a degree
of scarcity in relation to its demand, and therefore has an opportunity cost.
Non economic goods or free goods, on the contrary, are goods that are
abundant, and therefore can be used without limits as their usage imposes no
opportunity costs on society. Examples of non-economic goods include sea
water, air and sunlight.

The categorization of goods into economic and non-economic goods implies that the
concept of economic goods is a relative concept because over time, economic goods are
derived from non-economic goods. Sunlight, for example, is originally a free good that is
abundant. Initially, humankind lacked the capability and technology to harness the sun’s
energy. However, the development of solar panels now allows us to
convert sunlight into an energy source. Thus, relative scarcity can be
viewed as a motivating mechanism to address temporal resource
shortcomings.

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The fact that Allah SWT has provided for the sustenance of every living thing in this world
has been explicitly explained Surah Huud (11) verse 6 of the Holy Quran:

And there is no creature on earth but that upon Allah is its provision, and He knows
its place of dwelling and place of storage.1 All is in a clear register [11:6]

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EXERCISE
Solve the puzzle below.

Hint:
1. Islamic economics is the study of social science which enables people to perform their

_________ to Allah s.w.t. and to their society.
2. The concept of ___________, the Lord and the creator of the world, is the essence of the

Islamic world view.
3. The name of Allah sw.t. that carries the meaning of the provider of rizq

(livelihood).
4. The Arabic word that connotes success in this world and the hereafter.

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5. _________________ is the origin of economic resources. It is the source of economic
and non-economic goods (free-goods).

6. In the world view of Islam, man is not only a rational being, hence a _____________
being.

7. Relative _________ can be viewed as a motivating mechanism to address temporal
resources shortcomings.

8. Spiritual ___________ is obtained when the innerself is able to strengthen his or hel
belief in God.

9. All economics transactions at micro level are means to improve one’s
________________.

10. The name of Allah s.w.t. as al-Malik (the owner) is relevant to be associated with
_________ affairs.

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4.0 CONNECTIONS BETWEEN ISLAMIC WORLD VIEW AND ECONOMICS

Islamic economics experienced the reemergence following the revival of Islamic banking
and finance over the last few decades. While many aspects are still in progress, the conventional
counterpart is already blooming, hence really well-developed. The sophisticated, theoretical
discipline in conventional economics is undeniable as it involves a long, rigorous process and
development throughout centuries.

The differences between Islamic economics and conventional economics originate in their
different world views. While Islamic economics includes considerations for metaphysical and
afterlife welfare, conventional economic theory is concerned only with the temporal world. This
extra dimension of the Islamic world view has additional bearings on various aspects of the
economic discipline in terms of the interpretation of economics phenomena, its terminologies
and methodology, and the construction of the discipline itself. In fact, to fuse the Islamic world
view into economics, a systematics process is necessary. This involves reinterpreting the key
economic phenomena from an Islamic perspective.

The quality and nature of the interpretation of economic phenomena depends on the world
view of the interpreter. For instance, conventional economists are convinced that the
explanation of economic phenomena is based on observing them the way they occur in an
economy. Islamic economics accept this, but also acknowledge and realize that faith in God and
metaphysics have direct impacts on people’s behavior and cause certain visible economics
phenomena; hence, Islamic economics interpretations might differ. Once these phenomena are
interpreted, the next step requires developing economics models that will be utilized for
theoretical analysis and making predictions and also involves setting the economics goals,
objectives and priorities that define ‘what shall be’ which comes from the world view.

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Chapra, M (2008) discussed the difference between Islamic and conventional economics in
terms of the spiritual versus material aspect. Conventional economics bind maximum importance
to the material aspect of human well-being and tend to ignore the spiritual aspect. The maximum
material well-being is attached to unhindered freedom in pursuing their self-interest and
maximization of satisfaction to keep an individual’s tastes and preferences. To the extreme, they
left behind the Divine guidance in human life and rely heavily on the ability of human beings to
chalk out a proper strategy with their own reasoning. In contrast, Islamic economics give
attention to both material and spiritual aspects of human well-being. They recognized the role of
reasoning in human development, thus, complement it with Divine revelation. The need of self-
interest and individual freedom are served through the application of moral values and good
governance to ensure everyone’s wellbeing, social harmony and family integrity are uphold
(Chapra, M, 2008).

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The Differences between Islamic Economics and Conventional Economics

Attributes Islamic Economics Conventional Economics

Right to Ownership Ownership is belongs to God Private ownership – the

while some rights only given production, distribution and

in man so that he may fulfil exchange are managed and

the purpose of God, which is controlled by individuals or

by acting as a trustee for group of individuals for

those in need. private profit.

Economic Freedom Islam allows economic Unrestricted economic

freedom to an individual who freedom and non-

is at right to earn wealth at his interference of the state in

will, but the freedom given by such freedom. Every

Islam in economic range is individual is permitted to

limited. Islam makes initiate, organize and

distinction between halal and establish any enterprise,

haram in every economic business, trade, profession,

activity. Similarly, etc. People has right to earn

consumption of wealth on income and spend their

luxurious living, haram things wealth as much as they can in

and extravagant spending is every ways they likes.

also forbidden.

Monopoly Shariah law forbids unhealthy Competition, which is

competition and bans all the another feature of capitalism,

ways which lead to it. Islam leads to the destruction of

also prohibits establishments minor enterprises and firms

of monopolies. The Prophet that encourages merger of

Muhammad (pbuh) is smaller business into major

reported to have said that organizations and established

whoever monopolies is a monopolies in the economy.

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Institutions of Interest sinner. Especially monopolies Monopolies kill free
over food-stuffs or articles of competition and cause
daily use such as groceries inflation that further results
and daily necessities are in increasing unemployment
forbidden by Islam. rate in the economy and
Commodities and services other economic problems.
which are of the common
interest of the community are
never allowed to be
monopolized.
In Islam, interest is the most The institution of banking and
exploitive institution for interest is the important
humanity and has eliminated aspect of capitalistic form of
it root and branch in its every economy. For business or
form and manifestation. It is industry to have a big project
call Riba in Shariah law. the need of huge fund is a
According to al-Quran taking must that leads to
of interest is biggest sin while establishment of banks that
according to Prophet create heavy interest in their
Muhammad (pbuh) interest is borrowing and lending.
equivalent to committing
incest with the man’s bother.

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EXERCISE
Differentiates between Islamic economics and the conventional one.

What are other differences between
Islamic economics and conventional
economics?

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5.0 PHILOSOPHY AND PRINCIPLES OF ISLAMIC ECONOMICS

PHILOSOPHY AND PRINCIPLES OF ISLAMIC ECONOMICS

Tauhid Tauhid Purification Judgment Day Human as A
Uluhiyyah Rububiyyah concept Caliph

(Tazkiyyah)

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Philosophy

i. Tauhid Uluhiyyah
Allah is the true existence and everything else, including man exist because of Him. Thus,
Man’s prayers, other acts of worship, life and death should all be for the sake of Allah. All
man activities, if done for the sake of Allah, are considered ‘Ibadah. (al-’amal ‘badah).

ii. Tauhid Rububiyyah
Allah is Rab (the Authority to make regulations to protect and sustain the lives of so many
creatures). This concept is explained that Allah swt is the creator and sole owner of the
entire source in the universe. So Allah entitled to lay down the law and regulations on
human life to be observed and obeyed. In an economic context, Rububiyyah the Divine
rules for organizing human livelihood and economic activities in peace. Economics must
use the divine rule.

iii. Purification concept (Tazkiyyah)
This concept is a means of purification and human development agent. The concept of
tazkiyyah forming soul and moral purity in a relationship with God, man and nature.
Purification of property is done through charity and alms. Economic development
according to this concept can also be done by avoiding the practice of usury. As a result of
the concept of tazkiyyah, born al-Falah, the success attains in this world and the hereafter.

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iv. Judgment Day
Judgment Day is the day on which all activities in the world will be judged and rewarded.
This makes life including economic activity continues on the right path (according to
Shariah). All actions and human behavior will always be analyzed in terms of its impact on
life in the hereafter. Therefore, people will be carrying out economic activities that do not
conflict with Islamic law.

v. Human as A Caliph
Khilafah refer to the role, status as well as the man kind’s responsibilities to themselves
and to the ummah as a whole. Khilafah are the relationship between man and god, man
and his fellow men, man and other elements and creatures of the universe man and his
innermost self. Human principally has been
assigned to safe guard this world which belongs to
Allah (Quran, 2:30). On the day of judgment every
human being will be accountable for his or her
conduct in this world which will determine their
true end whether to the heaven or to the hell.

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Principles

i. Individual freedom
Islam recognizes the freedom of individuals to do and say anything. However, Islam has laid
down guidelines that should be followed by every individual in life. Quran was revealed as
a reference for all peoples through the ages.

ii. Property ownership
Surah al-Baqarah, 2: 22;
“Who has made the earth a resting place for you, and the sky as a canopy, and sent down
water (rain) from the sky and brought forth therewith fruits as a provision for you. Then
do not set up rivals unto Allah (in worship) while you know (that He Alone has the right
to be worshipped).”
Based on the word of Allah swt in Surah al-Baqarah, verse 22, Allah is the sole owner as He
is the Creator and Ruler of all His creation. People are only temporary owner or trustee of
the wealth they have and they are allowed to enjoy and develop it for the benefit.

iii. Social justice and equality
Justice is the principle message of the Prophets and messengers to humans to create a just
society and mankind away from acts that transgress. Justice in Islam covers the various
aspects of the spiritual, moral, social and economic.

iv. Social security
Government has a responsibility to ensure every individual in the country got its
fundamental needs. Therefore, every individual is entitled to livelihood.

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v. Prohibition of anti-social institutions
Islam prohibits the practice of anti-social and dangerous activity such as gambling, alcohol,
drugs addiction, hoarding, prostitution, video, cd or porn magazines, black market and so
on.

vi. Individual and social welfare
Islam ensures both interest but when there is a clash between the interests of the individual
and the community, then prioritized the interests of society.

vii. No element of gharar and tanajusi
Gharar is uncertainty whether the price, the goods and the time when they can be
obtained.
Al-tanajusi is confidential agreement element in the manipulation of a price either in the
market or the sale of common stock that is intended to raise prices.

viii. No tadlis al-aib, ghalat and al-ghabnu al-fahsi
Tadlis al-aib is when the detail of an item is not explained until the buyer does not know
the defects of the goods. Contract or contracts must be clean from this element. Ghalat
element (error) may impair the market. Obvious mistake is prohibited. Elements of al-
ghabnu al-fahsi is too high or too low bidding that results in too high profit to the seller will
buyer suffers huge losses.

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EXERCISE

Find suitable matches between Part A and Part B.

PART A PART B
The concept forming soul and moral purity Tauhid Uluhiyyah
in a relationship with God, man and nature. Judgment Day
The role, status as well as the man kind’s Al-tanajusi
responsibilities to themselves and to the Al-ghabnu al-fahsi
ummah as a whole.
Allah is the true existence and everything Tazkiyyah
else, including man exist because of Him Tadlis al-aib
Confidential agreement element in the Khilafah
manipulation of a price either in the market Tauhid Rububiyyah
or the sale of common stock that is
intended to raise prices.
The detail of an item is not explained until
the buyer does not know the defects of the
goods.
The concept explained that Allah swt is the
creator and sole owner of the entire source
in the universe.
Too high or too low bidding that results in
too high profit to the seller will buyer
suffers huge loses.
All actions and human behavior in this
world will be judged and rewarded.

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6.0 THE SOURCES OF ISLAMIC LAW
SOURCES OF ISLAMIC LAW

1. QURAN 2. SUNNAH 3. IJMA’ 4. QIYAS

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1. Quran
Quran is the foundation of Islam and is primarily a book of religious and moral principles.
Quran is derived from the word Qaraa which means reading or recitation. Therefore, Quran
in technically is the book containing the words of Allah revealed to the Prophet Muhammad
(SAW) in Arabic language and transferred to us by Tawatur or continuous testimony.

The Quran as the main reference and complementary to the Muslims life. It describes the
realities of nature, the creation of a human life and the orbit of the earth, the sun, the
moon, and the stars. Quran also contains laws and rules on how to regulate political, legal,
economical, social and moral matters in society.

The Quran has several criteria. It is divided into 114 chapters, which is known as Sura. It is
also divided into 30 sections or juz and have 6236 verses of different lengths that called
ayath. The verses are meant as guidance for all Muslims. The Quran begins with surah Al-
Fatihah and ends with surah Al-Nas. The shortest chapter or sura consists of 3 verses and
known as al-Kauthar, while the longest sura is al-Baqarah that consists of 286 verses.

The Quran revelation started the words from surah al-Alaq: “Read! In the name of your Lord
and Cherisher who created” (al-‘Alaq: 1) and ended with “And fear the day when you shall
be brought back to Allah, then shall every soul be paid what it earned, and none shall be
dealt with unjustly” (al-Baqarah: 281). The Quran was revealed within a period of 23 years
that took place in Makkah and Madinah. The first revelation began on the 15th night of the
month of Ramadhan. While the last verse was revealed on 9th Zulhijjah in the10th years of
Hijrah.

The language in Quran is pure Arabic of the highest standard. The recitation of Quran is
considered as an Ibadah (act of worship). By Allah (SWT) speech it meant that Quran is
exact words of Allah (SWT). It was revealed to Muhammad (SAW) as it exists today. By

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Tawatur method meant that it’s conveyed to us by such a large number of people and it is
impossible that they would agree upon a lie.
The Quran has many challenges due to arguments from the Meccans during the
Prophethood of Muhammad (SAW) on the authenticity of its words as those from Allah
(SWT). Then, the Quran challenged them saying, “Or do they say” He invented it? Say: Then
bring ten surahs like it that have been invented and call upon [for assistance] whomever
you can besides Allah, if you should be truthful” (Hud: 13).
The Quran could not be duplicated due to its originality and uniqueness, as Allah (SWT) has
promised to preserve the Book until the end of the days. Allah (SWT) says, “Say: If mankind
and the jinn gathered in order to produce the like of this Quran, they could not produce the
like of it, even if they were to each other assistants” (al-Isra’: 88).

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2. Sunnah

The second sources of Islamic law and its coequal with Quran is the Sunnah. Sunnah in its
literal meaning means ‘clear path’, stands for the ‘well known path’ which is followed again
and again. In terms of its technical meaning, Sunnah preferably refers to the practice of the
Prophet (SAW). It was applied by the Prophet Muhammad (SAW) as a legal term to
represent what he said, did and agreed to. Sunnah also can be defined as ‘what was
transmitted from the Messenger of Allah of his words, acts and approvals (tacit)’.

Sunnah it is divided into three categories:
i. Sunnah al-qawliyyah refers to the saying of the Prophet (SAW) through which he
intended the laying down of the law or the explanation of the ahkam. For example,
when Prophet Muhammad (SAW) said, “Pray as you see me pray”.
ii. Sunnah al-fi’liyyah refers to the acts of the Prophet (SAW) having a legal content, like
his prayer, fasts, or hajj. As mentioned in sunnah al-qawliyyah, the Prophet
Muhammad (SAW) asked the Muslims to follow how he pray. Hence, the physical
movement in salat could only be completed through watching the movement of the
Prophet. The same applies to the methods of taking ablution (wudu’), pilgrimage
(hajj) and etc.
iii. Sunnah Taqririyyah is defined as the commission of certain acts, by word or deed, by
some companion and the maintenance of silence by the Prophet without expressing
disapproval. For example, after the adhan (call to prayer) for Maghrib, some
companions used to perform two raka’at additional prayer before the obligatory
Maghrib prayer, in which the Prophet himself did not perform, nor stopped the
companions to do so. The silent agreement is known as Sunnah Taqririyyah.

Instead of the Quran, Sunnah by itself, acts as independent source of Islamic law. Quran
and Sunnah are primary sources of Islamic law and are called as absolutely sure arguments

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or infallible proof. This is because these sources contain absolute truth and the undoubted
fundamental doctrines of Islam. The following are among the roles of Sunnah:

i. Explaining the general rules as mentioned in the Quran
Sunnah explains and further elaborates the meaning of the Quran. The best examples
are in the case of salat, wudu’ and hajj discussed earlier.

ii. A restriction of a ruling generality in the Quran
Sunnah placed a restriction on a general rule as described in the Quran. For instance,
it is mentioned in the Quran about the payment of legacy that need to be settled
before the distribution of an estate. The Prophet (SAW) clarified that only one-third
of the portion can be given away as a legacy.

iii. Insertion of additional ruling to the existing rule expounded in the Quran
Sunnah, in certain cases, functions as additional rule to an existing rule as stated in
the Quran. For instance, it is stated in the Quran that a man is prohibited from
marrying certain categories of women: “Forbidden to you are your mothers,
daughters, paternal and maternal aunts, nieces, foster mothers and sisters, mothers-
in-law and step daughters….” (al-Nisa’: 23). The Prophet (SAW), in a hadith, imposed
additional restriction: “No woman can be married to a man who is already married to
her sister of her maternal/paternal aunt” (narrated by al-Bukhari and Muslim).

iv. Originating new principle
Sunnah can create new legislation that is not stated in the Quran. For example, the
Prophet (SAW) said: “People share three things: the water, the graze (kala), and the
fire (resources relating to power) (narrated by Abu Dawud). Restrictions on individual
ownership for natural resources is not stated in the Quran, yet, it is solely based on
the hadith of the Prophet (SAW).

Hence, there are several acts done by the Prophet that differs from other human beings.
The first one is the acts that are specific to the Prophet (SAW) and the rest of the ummah
is not to follow him in such acts, such as number of his marriages.

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3. Ijma’
Ijma’ is the verbal noun of the Arabic word ajma’ which has two meanings; the first meaning
is to determine and the second meaning is to agree upon something. The difference
between the two literal meanings is that in the first meaning, it is possible from one person,
but in the second, it requires two or more persons. The consensus of the jurists in
understanding, interpreting and applying the teachings of the Quran and the Sunnah forms
the third basic source of the Syariah.

Technical meaning, ijma’ is defined as ‘the consensus of mujtahidun (independent jurists)
from the ummah of Muhammad (SAW) after his death, in a determined period upon a rule
of Islamic law (hukm Shari’i)’. Ijma or consensus is the agreement of qualified legal scholars
in a given generation and such consensus of opinion is deemed infallible.

In other word, ijma’ is the consensus of opinion of the qualified legal scholars among
Muslims in a particular time after the death of the Prophet Muhammad (SAW) regarding
the legal position of a matter or problem. As such ijma is a unanimous consensus among
jurists.

Essential Requirements of Ijma’
For an ijma’ to be valid, several conditions must be fulfilled:

i. That there are a number of Mujtahidun available at the time when the issue is
encountered.

ii. According to the majority of ulama, unanimity is a prerequisite of Ijma’.
iii. The agreement of the Mujtahidun must be demonstrated by their expressed opinion

on a particular.
iv. Ijma’ consists of the agreement of all the Mujtahidun and not a mere majority among

them.

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4. Qiyas
Qiyas means analogy. Qiyas can be literally defined as measuring or ascertaining the length,
weight or quality of something. The technical meaning of Qiyas is the extension of Shariah
value from the original case, or asl, to a new case, because the latter has the same effective
cause (‘illah) as the former. The original case is regulated by a text of the Quran or Sunnah
and Qiyas seeks to extend the original ruling to the new case. Qiyas defined as comparison
of a case not covered by the text with a case covered by the text on account of their
common legal ‘illah (cause).
The emphasis of Qiyas is identification of a common cause between the original and new
case. The application of Qiyas is based on the Quran and Sunnah because new rulings are
based on the ‘illah (cause) discovered in the legislation of Quran and Sunnah. In Qiyas,
personal opinion (ra’y) is kept subservient to divine revelation, where the ‘illah is
discovered from the text of the Quran and the Sunnah. Personal opinion (ra’y) is guided by
the shariah rules of Qiyas. Qiyas does not change any law of the text from Quran or Sunnah.
Qiyas as a methodology means that the jurists accept that the rules of Shariah follow
certain objectives (maqasid) which are in harmony with reason.

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THE ELEMENTS OF QIYAS

The original The new case The effective The rule
case (asl), on (far’), on cause (‘illah), (hukm),
which a ruling which is an governing the
is given in the which a ruling original case
is needed. attribute which is to be
text and (wasf) of the extended to
analogy seeks original case
to extend it to and it is found the new case.

a new case. to be in
common
between the
original and
the new case.

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EXERCISE
1. List FIVE attributes of Al-Quran.
2. Differentiate between sunnah al-qawliyyah and sunnah al-fi’liyyah.
3. Based on your understanding on ijma’ ulama and qiyas, give example of cases that

clarifies the sources of law.
*Refer your answer to lecturer

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REVISION QUESTION
1. Discuss FOUR core elements of the Islamic world view.
2. Islamic economics differs from the conventional counterpart as the former is embedded

with a comprehensive framework of jurisprudence, philosophy and principles. Based on
what you have learned, explain THREE types of Islamic economics philosophy.
3. Elaborate Islamic economics principles below;
i. Individual freedom
ii. Property ownership
iii. Social justice and equality
iv. Social security
v. Individual and social welfare
4. Explain FOUR main sources used in Islamic law.

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