Inequality is on the rise across developing and developed countries and that is the manifestation of social injustice. Conflicts and wars have resulted in loss of lives, livelihoods, poverty and unplanned migration. Environmental injustice has resulted in people facing floods, heatwaves, droughts, food crisis, other natural disasters and diseases.

Issues such as poverty, inhumane working conditions, inadequate wages, social insecurity and an unhealthy labour market continue to persist. Many states are also unable to produce policies capable of resolving these problems. The characteristics of the capitalist system currently render it unable to provide social justice. In fact, on the contrary, the system reinforces these injustices and prevents economic and social welfare from reaching the masses.

This book argues that an alternative and more equitable theoretical and practical economic order can be developed within the framework of Islamic principles. On the other hand, the experiences of societies under the rule of Muslim governments do not always seem to hold great promise for an alternative understanding of social justice. In addition, the behaviours of Muslim individuals within their economic lives are mostly shaped by the necessities of daily economic conditions rather than by the tenets of Islam that stand with social justice.

The book uniquely connects social justice and Islamic finance and economics on this topic. Theory, practice and key issues are presented simultaneously throughout this book, which is based on the writings of a number of eminent scholars.

In the fourth Islamic Economy Workshop (IEW) in 2016, a number of papers were presented in English as well in Turkish. All of these papers discussed social justice in the system of Islam. Different dimensions related to social justice were reviewed, for example, the theory of justice under the umbrella of Islam, behavior of the market, the role and policies of the government, contractual freedom, the role of Islamic financial institutions, social aid and its impact on the labour market, Islamic institutions like Waqf, Zakat, Islamic insurance (Takaful), an interest-free economy and its role in establishing social justice and decreasing the level of poverty. This book is a compilation of the papers presented in the workshop and revised in the light of the expert feedback received in the prestigious conference.

One chapter in the book explains social justice in Tawhidi methodology as the balance of complementarities between the life-sustaining elements and socio-scientific systems with which the human order interacts.

Another chapter discusses whether existing laws and social understandings broadly benefit everyone or only work well for the wealthy and powerful segments of society. It discusses how do the members of a society consider the rights of the deprived segments of that society? Is it possible for the market, government and society to promote the voluntary sector to fill the gap and how does this voluntary sector help achieve a higher degree of social justice?

Authors also explore as to what extent is the free market economy compatible with the notion of social justice in Islam? Which instruments can enhance wealth redistribution in an Islamic economy?

Authors also evaluate the role of Islamic financial institutions in the improvement of the state of social justice. Since Islamic finance is unsuitable for usury, debt rescheduling, speculative transfers, gambling or waste and other purely monetary activities, it seems to be an effective avenue for justice and social well-being.

It can be associated with other initiatives of Islamic redistributive mechanisms such as Zakat, Sadaqat and Waqf, all of which aim to enhance social justice. Authors also examine whether social aids affect people’s willingness to work and whether they are useful for maintaining social justice.

Role of Waqf in reducing poverty and inequality is also explained to provide social justice in societies. Given the feature of sustainability in Waqf institutions, it seems noteworthy to reconsider these institutions in terms of poverty alleviation in today’s world.

Interest has a remarkable impact on social justice. The effect of interest on social justice is analyzed in the context of the real interest rate and income inequality. Income inequality is a well-known phenomenon which arises when there is an unequal distribution of assets, income and wealth among society. The unequal distribution of income, generally, leads to the division of society, as the bottom of the society suffers from this division, while the top of the society reaps the benefits from it. Changes in the real interest rate lead to distortions in income distribution and thereby social justice.

In contrast to interest which results in wealth accumulation, Islamic economics has productive Zakat which is a mechanism through which Zakat is utilized to help eligible recipients generate income and use Zakat funds for productive activities.

Disbursing Zakat in the traditional way by providing cash payments to recipients basically has little impact on the welfare of the recipients since the poor tend to have high propensity to consume. Productive Zakat has been suggested as a better mechanism than “direct Zakat funds” in reducing income inequality and increasing social justice.

One study in the book estimates the potential Zakat collectible in 17 OIC countries for overcoming the poverty gap as measured by poverty headcount ratio and poverty gap index. It is found that the Zakat to GDP ratio exceeds Poverty Gap Index to GDP (PGI-GDP) ratio in all countries except in Bangladesh, Mozambique and Nigeria where the Zakat to GDP ratio is less than the PGI–GDP ratio with the poverty line defined at $1.25 a day.

The aggregate resources pooled together from the potential Zakat collection in 17 OIC countries will be enough to fund resources for poverty alleviation in all 17 OIC countries combined. Hence, there is an important role to be played by OIC in collaborating with member countries for transferring the necessary resources from the Zakat surplus regions to the Zakat deficit regions.

Finally, along with Waqf and Zakat, Islamic micro-takaful with its Community-Based Insurance (CBI) is an emerging concept for providing financial protection against the cost of illness, accidents, fires and improving access to quality health services for low-income rural households that are excluded from formal insurance (Takaful). Overall, the book presents th notion that social justice should be the main ingredient of Islamic society. Islamic injunction and its different institutions (like Waqf, Zakat, Takaful, Riba-free economy etc) provide significant support for establishing social justice. For establishing social justice, state and community are complements to each other. Reforms require changes in behaviour at the level of individuals. It also requires strong governance and law enforcement within and across countries.