This article briefly analyzes the logical arguments that are usually presented in the defense of interest as a price of money capital in loans.
Critical Analysis of Arguments in Favor of Interest
Islamic Economics Project
RESEARCH ON ISLAMIC ECONOMICS AND FINANCE AND ROLE OF FAITH IN MARKETS AND SOCIETY IN POST MODERN SCIENTIFIC AGE
Concept of Wealth in Islamic Economics
Islamic economics enables a Muslim society to achieve certain ends. It is not so difficult to understand that material resources are required in order to achieve the objectives or Maqasid of Shariah namely “preservation and protection” of Deen, Life, Family and Intellect. The purpose of Divine Law is to make mankind successful in Akhirah. Therefore protection of the religious and spiritual status of the mankind is the prime objective of Shariah. The remaining objectives are also meant to help toward achieving this bigger goal.
Material Progress and Islam
Allah asks people to use their intellect and exploit the nature’s blessings. Islamic principles neither stop one’s use of intellect in seeking material progress, nor the pursuit of success in life hereafter conflict in any way with success in this world provided that the ethical filters and Islamic injunctions are observed where they have been explicitly given.
Universal Ethics and Islam
Message of Islam invites people of all faiths, race, color, region and gender towards its message of peace, excellence of character and living in harmony with nature and environment.
Inheritance Law of Islam and Women
Islam has given women a share in inheritance. Before Islam, women were not only deprived of that share, but were considered as property to be inherited by men. In Islam, whether a woman is a wife or a mother, a sister or a daughter, she receives a certain share from the wealth of the deceased close relative.
Consumerism and Credit Cards: Implications for Islamic Finance
It is important to pursue financial engineering in innovative ways, but also keeping in view the Ahkam and Maqasid of Shari’ah.
Forex Trade and Islamic Viewpoint
Currencies are originally a medium of exchange and should only be exchanged for personal use in different countries. To make them a tradable commodity only for earning a profit is also against the basic philosophy of Islamic economics – Mufti Taqi Usmani
Some Observations on User Cost of Capital
Interest based financial system discourages investment in socially optimal profitable projects, but which are not favored because of relative cost comparison from the market interest rate. If sales do not increase, it may lead to business cycle fluctuations with unplanned increase in inventories. With increased pressure to service debt, the environmental degradation and human resource exploitation may become common and secondary concerns.
Consumption Smoothing – An Islamic Economics Perspective
It is an empirical observation that people desire to have smooth consumption throughout their lifetimes. Lifecycle consumption hypothesis (LCH) and permanent income hypothesis (PIH) try to explain that in micro-founded framework. Both negate the Keynes assertion that average propensity to consume (APC) falls as income rises. Some micro-economic evidence is also broadly consistent with LCH and PIH, at least in advanced economies.
Behavior of Firms in Islamic Economic Framework
This article takes a brief look at the theory of the firm in Islamic economics and how a firm’s objectives and governing framework is different in Islamic economic framework as compared to the neoclassical and value-neutral economic framework.
Islamic Economics Project 