Islamic Economics Essay

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Islam is a religion that was founded in the year 622 AD by the prophet Mohammed. Mohammed founded the religion in the city of Mecca, in what is now present day Saudi Arabia. The God of Islam is referred to as Allah, which means the one true god. The holy book of Islam is the Qu'ran, which is considered to be the words of Allah as revealed to Mohammed. Islam is an Arabic word that means to submit. A Muslim is a person who submits to Allah and follows the teachings of Islam (World Religions, 2003).

Muhammad was born in 570 AD in Mecca, and Muslims believe that in 610AD he began to receive the word of Allah through the angel Gabriel. He received these messages over a 22 year period while he lived in Mecca and Medina in Arabia. Mohammed assembled these words and teachings into a book called the Qu'ran. The Qu'ran is considered to be the holy words of Allah and is the sacred text of Islam. The Qu'ran makes up the foundations of Islamic law (Worldbook Online, 2003).

Islam is not just a religion, but it is a way of life. The Creator of humanity, Allah, gives guidelines in the Qu'ran that direct all aspects of life, including the economic aspect. Not only must Muslims follow the law of Islam regarding prayer and fasting, they also must obey the rules of economics and interest. The Qu'ran dictates how Muslims are to properly conduct economic transactions (USC, 2003).

According to a devout Muslim leader, Shayhk Nizam Yaquby, "There is no sin in the Qu'ran - not even drinking, not even fornicating, not even homosexuality - which could be as abhorrent and serious as dealing in riba (interest)." (Useem, J., 2002).

Riba is the Islamic term for interest. A large part of Islamic economics is based on the strict forb...

... middle of paper ... and pork are avoided. Asian Wall Street Journal, New York, May 18 2000. 20-21.
1999, Toronto CA.

Presley, J.R. & Sessions, J.G. (1994). Islamic economics: the emergence of a new paradigm. The Economic Journal, 104, 584-596.

Principles of Islamic banking. Retrieved February 27, 2003 from

University of Southern California (USC). (2003). Economics and Islam. Retrieved February 27, 2003, from

Useem, J. (2002). Banking on Allah. Fortune, 145(12)-154-159.

Virk, S. (2003). Women in Islam: economics. Retrieved February 27, 2003 from

Worldbook Online. Retrieved February 27, 2003 from

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