GROUP ASSIGNMENT OF BWSE1013 FOUNDATION OF ISLAMIC ECONOMICS

1.0 INTRODUCTION

Al- Ghazali or the real name, Abu Hamid Mohammad Ibn Mohammad al- Ghazali was

actually born in 450 A.H at Tusk which is located in contemporary Iran. He was

orphaned in the early stage of his life and his education was left to a sufi which is

Muslim mystic who was a friend of his father. Then, in his life, al- Ghazali left tusk to

study with Imam al- Haramayn al – Juwaini who was a leading figure of the Asharite

doctrine which is situated in Niisabur. At the death of Imam al- Haramayn al- Juwaini, al-

Ghazali was already an accomplished scholars mastering various that is Fiqh, Usul al -

fiqh, kalam, philosophy and logic. Moreover, al- Ghazali also was a theologian, philosopher,

jurist and also had been known as one of the most prominent Muslim scholars who

have contributed in the area of Islamic economy.

For the contribution in Islamic economy thoughts, is actually due to the his

mastery in the Islamic sciences as well as the secular disciplines of his times which is

gave him the opportunity to get more deep insights on the issues that he used to

discuss. To al- Ghazali, economic activity could be a means to attain the highest level of

“ al- Muqarrabun” if they are carried out within a normative framework that he outlined

with some details. The economic thoughts of al- Ghazali was not elaborated in special

treatises, such an isolated treatment of a specific field of human affairs would hardly

have been compatible with the principle of learning at the times Further, al- Ghazali

mixes, philosophical, religious, sociological, ethical and economic considerations into his

writings. However, this meaning of basic needs is flexible and may be more inclusive,

that is depending upon conditions prevalent in a given society and at a given time, but

consistent with the Islamic shariah, which is exactly based on the Al- quran and hadith.

Indeed, according to al- Ghazali, the list may include such economic and socio-

physiological needs as furnishings, property, status and prestige and even marital relations,

in additions to the aforementioned basic needs.

For the deep knowledge about Islamic economy thoughts by al- Ghazali, will be

discussed in this assignment which is include, the sources of hukm and merit taken by

al- Ghazali in describing about the economy, the humankind economy activity by al-

Ghazali, and also ethics of economy that had taken by al- Ghazali.

1

GROUP ASSIGNMENT OF BWSE1013 FOUNDATION OF ISLAMIC ECONOMICS

2.0 THE SOURCES OF HUKUM IN ECONOMY TAKEN BY AL-GHAZALI

Normally, the Islamic ulamak taken the Quran and hadith as the main references in describing

their analysis and when solving any matter in their decision. Al-Ghazali too, in deducting any

views in economy, he was inducted (istiqraa) from many verses in the Quran besides refer to the

Prophet’s hadith and rely to the critical analysis that will effecting the society during his time.

His though remain maintain to religion views even in economy line. He try to understand

well in economy activity which allowed in Islam for example, refer to Surah Al-Jumu’ah and

Surah An-Naba’ which Allah SWT stated that human can involve in both religious and world

activities.

“And when the prayer has been concluded, disperse within the land and seek the bounty of Allah

SWT, and remember Allah SWT often that you may succeed”.

Al-Quran (Al-

Jumu’ah:10)

“And we have made the day for livelihood”.

Al-Quran (An-

Naba’:11)

Al-Ghazali also refer to any related hadith about economy which supporting the Muslim to get

involve in business activities and perform actively to achieve the success in the world and

hereafter.

The Prophet Muhammad saw said: The truthful tradesmen will resurrect on the Resurrection

Day with the truthful (siddiqin) and the martyrs (shuhadaa).

Besides, he was put some possible objectives of why human naturally engage in economy

activities as the sources in this economy activities. The first is to improve the necessary live hood

which is not only for oneself but also to the family. In his analysis, human basically will try to

satisfy their need starting from economy self-sufficiency then develop to the barter system. His

possible objective is to increase the wealth which can be classified as the modern economic aim

which only can be achieve the public welfare if follow the shariah law.

2

GROUP ASSIGNMENT OF BWSE1013 FOUNDATION OF ISLAMIC ECONOMICS

So, here we can see that Al –Ghazali is a careful jurist in describing his views about

certain issue including about economy by refer to Quran and hadith in his sources.

3.0 HUMANKIND ECONOMY ACTIVITIES BY AL- GHAZALI

The central focus of Imam al-Ghazali, a great philosopher and sufi, was Islamic philosophy and

Islamic ethical values, which compass all dimensions of life including economics. He states in

al-Ghazali, Ihya, Vol. 2, 62 that “Earning is not the aim of human life but it is a means to an

end.” In this topic, we are going to discuss more deeply about the humankind of economics

activity by him. We also try to explore relevance and application of al-Ghazali’s ideas in the

modern period.

3.1 Economic Philosophy

One of the overriding concepts of al-Ghazali based upon Shariah which encompasses all

human activities, including economic, is ‘maṣlaḥa’ which promotes social welfare of

community. All matters and activities of human being have to be seen as a means to

achieve goals in increasing the social welfare. It is well defined by Al Ghazali,

concerning individual as well as social needs. There are five compulsory Shariah based

on his thought as components for a proper and just individual and social life such din

(religion), nafs (life of soul), naṣl (family), mal (wealth) and ‘aql ( intellect, reason).

Maṣlaḥa is related to Shariah, which key objective is follow what is according to

the Quran perceived as good in the worldly life and Hereafter. Thus the noblest deed in

the sight of Allah is the promotion of general good in the society. Al Ghazali discusses

three aspects of maṣlaḥa in a hierarchical form: necessities (ḍarurriyat), conveniences or

comforts (ḥajiyyat), and refinements or luxuries (taḥsaniyyat).These foundations have to

be constantly revised by the people themselves.

The second foundation comprises “all activities and things that are not vital to

the preservation of the five foundations, but, rather, are needed to relieve or remove

impediments and difficulties in life”, whereas the third foundation includes activities that

are perceived as a surplus or additional to the basic necessities.

3.2 Islamic Economics: The Notion of Hereafter, Basic Needs, Sharing And Just Conduct

As we mention before, one of the concepts of Al Ghazali based upon Shariah which

encompasses all human activities, which promotes social welfare of community. But,

3

GROUP ASSIGNMENT OF BWSE1013 FOUNDATION OF ISLAMIC ECONOMICS

since Al Ghazali positions economic activities within the parameters of the Islamic

worldview, the Hereafter is seen as the ultimate goal of human beings. There are

evidence from Quranic verse:

“But seek, through that which Allah has given you, the home of the Hereafter; and [yet],

do not forget your share of the world. And do good as Allah has done good to you. And

desire not corruption in the land. Indeed, Allah does not like corrupters."

Al-Quran (Surah Al-Qaṣaṣ:77)

From this verse we can be understood in the light of not neglecting one’s share or

contribution or effort in this world for the Hereafter. On the other hand, duniawi or

worldly life is seen primarily as a temporal place but rather a struggle and preparation for

the salvation and this struggle has to be utilized through human endeavors and affairs,

which include also the economic pursuits. Thus, economic activity is a prerequisite for

the salvation.

Level of consumption thus has to range between necessity and extravagance.

Whilst necessity has to be fulfilled by the consumer for it is perceived as a religious

obligation, extravagance is haram. According the Al Ghazali all economic activities have

to provide basic human needs such food, clothing, and shelter. These needs are consistent

with Shariah, thus Al Ghazali tries to deliver information from his economic inquiry of

various material matters that relate to provide and please human conditions, as part of the

idea of Islamic social welfare. In Mizan al ‘Amal, al-Ghazali mentions three levels of

consumption which are the lowest, middle, and highest, Each of the basic things can be

applied to each of the three levels as a necessity, convenience or luxury. His discussion

on need and surplus of material things is linked with the percept of the relation between

wealth and poverty.

In order to reach the state of content, basic human needs are what one needs.

Muslim ought to sharing and also humanitarian charity endowment (waqf) to prevent

disproportionate upsurge of income in a society. There are two stages of sharing:

1. A lower stage (a person sacrifices without expecting return)

2. A higher level (presupposes that a person considers his brother as himself and

spends upon him as if he would spend on himself)

4

GROUP ASSIGNMENT OF BWSE1013 FOUNDATION OF ISLAMIC ECONOMICS

Thus, al-Ghazali states that money has been created for a specific purpose in order

to fulfill needs of human beings. Miserliness means that where money should be spent is

restricted, whilst extravagance suggests the opposite, where money should not be spent,

there is an excessive expenditure of it. Accordance Islamic jurisprudence not only one’s

welfare was secure but the procedure of spending on lawful products in a lawful way.

Misuse of monetary activities would be minimized due to the regulations of Shariah. The

Quran encourages the acquisition of wealth. Therefore, all stages have to be realized not

for the sake of acquiring wealth but in the name of Allah.

4.0 ETHICS OF ECONOMIC BY IMAM AL-GHAZALI THOUGHT

4.1 Meaning of ethics based on al- Ghazali

According to Al-Ghazali, ethics has a central place in this religion of Islam, he states that

“nobody should forget religion and hereafter when his make a trade, commerce earning

live hood. If they do, it shows that they are not wise because they are selling their next

world in this world; but the wise man always try to protect his capital, his real capital;

that is his religion and the matters related to the next world”.

It is clear that a Muslim must keep his virtue when he is making trade. Based on that, we

can say that, there are two parts of categories of behavior in business which is in the first

one is the obligatory status and second part is about the recommended.

4.2 The obligatory of status

In this part, Al-Ghazali found that the Muslims have different attitudes when they are

involve in economic activities and it must be observes. So, there are a few things that we

must follow.

4.2.1 Acquiring the knowledge of the lawful and unlawful about business

Based on Al-Ghazali knowledge whose acquisition is compulsory which is

Muslims must do it and if they are leave or ignored it they can get a punishment.

This compulsory obligations is about the prayer, fasting, and so on.

Besides that, knowing what is lawful and unlawful in matters earnings is

also obligatory on those who involve in such activities. This is based on Shariah

5

GROUP ASSIGNMENT OF BWSE1013 FOUNDATION OF ISLAMIC ECONOMICS

rulings and this will enable them to avoid any unlawful activities or recognize the

issues which need the fatwa of a learned person.

Hadith the Prophet Muhammad states that “ The research of knowledge is

compulsory on every Muslims”. Al-Ghazali gives more attention for all the

section to explain further about fiqh aspects of the contracts which is confirmed

by Shariah like murabahah, ijarah and so on. Besides that, business that was

carried out through this contracts and what he discussed was the required

knowledge for the businessman.

4.2.2. Formulation of intention

Next is about the formulation of intention that it is will be at the beginning to

determinant of the status of worship. Al-Ghazali states that the worker should

have as intents which is to save himself and his family from depending on others,

to earn what will enable him to perform the various commands of Islam, to

perform the advice in the workplace, to execute his duties with equity and

benevolence and to perform one of the furud kifayah.

4.2.3 Being equitable and avoiding injustice

Al-Ghazali point out different kinds of actions which are harmful to the

individuals and society, even though they are may seem to be acceptable in

appearance. There are hoarding, use of counterfeit coins and telling the truth

about the commodity. Hoarding means hide of some foods or goods from

customer for earn more profit.

According on Al-Ghazali, hoarding of foods stuffs as not prohibited by

Shariah because it causes harm to the public. He takes hadith from Prophet

Muhammad that is, “If a man hoards up foods stuffs when they are hides it for

forty days to get higher price. He is displeased with Allah and Allah is displeased

with him”.

4.3 The recommended category

6

GROUP ASSIGNMENT OF BWSE1013 FOUNDATION OF ISLAMIC ECONOMICS

Al-Ghazali determine a few type of the behaviors that the merchant has adopt towards his

client to get rewards and ranks even they are not compulsory. Because of this action, he

list up few instructions which aim at preserving the religion of the merchant. The first is

Ihsaan.

Ihsan should be happen in different ways and different stages of the transactions

such as for pricing because it will take greater profit and it is unlawful. So that, the buyer

must avoided the seller who is take advantage above them. Another that is relate with the

debt. The lender should demand in a good manner and grant time when realizing the

dues.

According by Al-Ghazali, practicing ihsan for the debtor may be in the form of

clearing the debt before demand, going to the creditor, not to wait for its demand and

paying more than the principal.

Other than that, there are the remaining item of the list instructions by Al-Ghazali

to make the religion of a business man perfect which is let not worldly markets distract

you from the Hereafter markets (mosque), be attached to the zikr of Allah, do not be too

greedy in the markets and in business, keep away from doubtful things even after giving

up unlawful things and adjust accounts of your business with everybody.

7

GROUP ASSIGNMENT OF BWSE1013 FOUNDATION OF ISLAMIC ECONOMICS

5.0 CONCLUSION

As a conclusion, regarding to the elaborations from the ethics of economy by Al- Ghazali

thoughts, the sources of hukm in economy that taken by the al- ghazali, and the humankind

economics activity by al- ghazali, it is shows that, there is no doubt that al- ghazali is one

of the most prominent Muslim scholars who had contributed in the area of Islamic

economics.

For the ethics of economy by Al- Ghazali, , the meaning of the ethics itself had

strictly firm that a Muslim should keep his virtue when making a trade. Based on this

also, had divided two parts category of behavior in the business which is the obligatory

status and the recommended. The obligatory status included the certain thing that must

be followed . Meanwhile for the recommended strategy, Al- Ghazali had evaluated a

several types behavior that included the ihsan.

Next, for the sources of hukm in economy, Al- Ghazali had taken many verses

from the al- quran and the hadith as the main resources in describing his views in

economy, besides refer to the critical analysis that had effectively affect the community

during this day. For example, Al- Ghazali, had taken the verses from the Surah al-

Jumu’ah and al- Naba’. Moreover, Al- Ghazali also refer to related hadith to support the

Muslim to get involves in economy and business activity.

Furthermore, for the humankind economy activity, Al- Ghazali had encompasses all

human activity which had included the maslaha, that promotes the social welfare of

community. This means that, all the human activity that have been done must acts as a

means to increase the social welfare. According to the Al- Ghazali, all economy activity

also must provide the basic human needs such as food, clothes and shelter.

Last but not least, from this three elements, we can evaluate that Al- Ghazali had

really contribute to development of Islamic economy which allowing and give the

benchmark to the Muslim in doing the Islamic economy activity in a permissible and

8

GROUP ASSIGNMENT OF BWSE1013 FOUNDATION OF ISLAMIC ECONOMICS

lawful by the Shariah, which is refer to the al- quran and al- hadith. But it is actually

depend to the individual himself whether to follow or not, this is because, not many from

the people who had involved in business are following the Shariah legal ruling.

6.0 REFERENCES

Internet

Abdou Diaw (April 2009), Imam Al-Ghazali’s Views on Economic Activities, retriview at

2.10 am, 7 April 2014, from http://mpra.ub.uni-muenchen.de/32515/1/IMAM_AL-

GHAZALIS_VIEWS_ON_ECONOMIC_ACTIVITIES.pdf

Hashim W. A. (2009, September 12). Islamic economic thought: Al-Ghazali on economic

issues. retrieved 22 April 2014, from

http://islamiceconomicthought.blogspot.com/2009/09/al-ghazali-on-economic-

issues.html

Daghistani. S. A. (2012, July 1). Ethics and economy in islam: contribution of imam al

ghazali in focus. retrieved 22 April 2014, from http://kud-logos.si/2012/07/01/al-ghazali-

islamic-philosophy-of-economics/

Islamic Economy Thoughts Of Imam Al- Ghazali. Retrieved : 27 March 2014, From, http://islamiceconomy.net/al-ghazali/

Book

S. Mohammad Ghanzafar and Abdul Azim Islahi “Economy Thought Of Al-

Ghazali”( 450- 505 A. H./ 1058- 1111), Published by, Scientific Publishing Centre

King Abdulaziz University Jeddah, Saudi Arabia, Page 9-15

Abdou Diaw ( April 2009 ) “Imam Al- Ghazali’s Views On Economic Activity”,

Page 4-5

Islahi, A. A. (2001). An analytical study of al-Ghazali. Aligarh muslim university.

Department of economics. Aligarh, India: Munich Personal RePEc archives.

9