Islamic Economic Jurisprudence

Islamic Economic Jurisprudence

Islamic economics refers to the body of Islamic studies literature that "identifies and promotes an economic order that conforms to Islamic scripture and traditions," and in the economic world an interest-free Islamic banking system, grounded in Sharia's condemnation of interest (riba). The literature has been developed "since the late 1940s, and especially since the mid-1960s." The banking system developed during the 1970s. The central features of Islamic economic literature have been summarized as the following: "behavioral norms" derived from the Quran and Sunna, zakat tax as the basis of Islamic fiscal policy, and prohibition of interest.

In Shia Islam, scholars including Mahmoud Taleghani and Mohammad Baqir al-Sadr developed an "Islamic economics" emphasizing the uplifting of the deprived masses, a major role for the state in matters such as circulation and equitable distribution of wealth, and a reward to participants in the marketplace for being exposed to risk and/or liability.

Islamist movements and authors generally describe an Islamic economic system as neither socialist nor capitalist, but as a "third way" with none of the drawbacks of the other two systems.