Ebtihaj's Encyclopedia of Economics Wiki

Traditional Islamic concepts having to do with economics included:

  • zakat —the “taxing of certain goods, such as harvest, with an eye to allocating these taxes to expenditures that are also explicitly defined, such as aid to the needy.”
  • gharar —”the interdiction of chance … that is, of the presence of any element of uncertainty, in a contract (which excludes not only insurance but also the lending of money without participation in the risks).”
  • riba —”referred to as usury (modern Islamic economists reached consensus that Riba is any kind of interest, rather than usury)”

These concepts, like others in Islamic law, came from the “prescriptions, anecdotes, examples, and words of Muhammad, gathered and systematized by commentators according to an inductive, casuistic method.” Sometimes other sources such as al-urf (custom), al-aql (reason), or al-ijma (consensus of the jurists) were employed.

In addition, Islamic law has developed areas of law that correspond to secular laws of contracts and torts.

Read More on Islamic Banking dedicated website