Attempt has been made to investigate the Islamic Economics System from the perspectives of Maulana Maududi. He is one of the greatest thinkers that Islamic world has ever produced. He was a great scholar, and has written a large number of books, articles and booklets on different aspects of Islam. Economics has been one of the fields of his interest. It may be said that at least in the Sub-Continent, he was the person, who has established “Economics of Islam” as a separate branch of knowledge. In this context, he has highlighted the characteristics, principles and objectives of this system. On the pattern set by him, a large number of Muslim economic thinkers have followed his line of thinking. According to Maulana Maududi basic principles of Islamic economic systems are: private ownership, limits of halal and haram, economic equality, free economy and welfare role of state. Whereas this system is established to achieve the objectives of human liberty, simultaneous development of material and moral growth, establishment of justice, equal distribution of wealth, fulfillment of basic needs of people and co-ordination between different groups of society.Islamic economic system, Principles, Objectives.

Farooq Aziz

Muhammad Mahmud

English

Research Papers in Economics

Indus Journal of Management & Social Sciences, 3(2):45-50 (Fall 2009)                                  http://indus.edu.pk/journal.php 
                      
   
Islamic Economics system In the Eyes of Maulana                                                          Farooq Aziz and Muhammad Mahmud 
                                           
 
 
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Islamic Economics system In the Eyes of Maulana Maududi-An Analysis 
 
Farooq Aziz
* and Muhammad Mahmud
**
 
ABSTRACT 
 
Attempt has been made to investigate the Islamic Economics System from the perspectives of 
Maulana Maududi. He is one of the greatest thinkers that Islamic world has ever produced. He was a 
great scholar, and has written a large number of books, articles and booklets on different aspects of 
Islam. Economics has been one of the fields of his interest. It may be said that at least in the Sub-
Continent, he was the person, who has established “Economics of Islam” as a separate branch of 
knowledge. In this context, he has highlighted the characteristics, principles and objectives of this 
system. On the pattern set by him, a large number of Muslim economic thinkers have followed his 
line of thinking. According to Maulana Maududi basic principles of Islamic economic systems are: 
private ownership, limits of halal and haram, economic equality, free economy and welfare role of 
state. Whereas this system is established to achieve the objectives of human liberty, simultaneous 
development of material and moral growth, establishment of justice, equal distribution of wealth, 
fulfillment of basic needs of people and co-ordination between different groups of society. 
 
JEL. Classification: B11; N3. 
 
Key words: Islamic economic system, Principles, Objectives.  
 
1. INTRODUCTION 
 
No doubt Maulana Maududi was a great thinker & religious scholar. He has written a voluminous 
literature on different aspects of Islamic ideology. One dimension of his knowledge is economics of 
Islam. No doubt he is the person who has played a deciding role to shaping Islamic economy as a 
separate branch of knowledge (Chapra 1988:14). He has written on different aspects of Islamic 
economics, and it is almost impossible to review the varying dimensions of his economic thoughts 
 
The material presented by the author does not necessarily represent the viewpoint of editors and the management of the 
KASBIT as well as the authors’ institute 
 
*Assistant Professor, Incharge Department of Business Administration Federal Urdu University, Gulshan-e-Iqbal  Campus 
Karachi.Cell: 0345-2972711, E-mail: drfaziz@yahoo.com
 
** Dr. Muhammad Mahmud Dean, Faculty of Management Sciences and finance, Khadim Ali Shah Bukhari Institute of 
Technology 
 
Acknowledgement: Author would like to thank the editor and anonymous referees for their comments and insight in 
improving the draft copy of this article. Author furthur would like to declare that this manuscript is original, has not 
previously been published, not currently on offer to another publisher; and willingly transfers its copy rights  to the publisher 
of this journal.  
 
 Recieved: 24-08 -2009;                     Revised :  17-10-2009;            Accepted: 29-12-2009;                  Publis hed: 31-12-2009 
 
 Indus Journal of Management & Social Sciences, 3(2):45-50 (Fall 2009)                                  http://indus.edu.pk/journal.php 
                      
   
Islamic Economics system In the Eyes of Maulana                                                          Farooq Aziz and Muhammad Mahmud 
                                           
 
 
46
in an article. This is the reason that, only one aspect of his economic views i.e. how he had seen the 
Islamic economic system has been selected to discuss in this article. As a matter of fact, he 
recognized that Islamic economic system means that basic principles and objectives, which Shariah 
has set for our lives in general and particularly for economic aspect. These principles and objectives 
are those foundation stones on which the building of Islamic economic system can be built at any 
time and anywhere, according to the needs and requirements of that society and time. The society 
that wants to adopt these principles and objectives can set up the details of the system, which are 
universal and independent of time and place. This is the reason that structure of the building may be 
different but the soul will remain same (Maududi 1977).  
 
In the following lines a brief analysis of those principles and objectives on which Islamic economic 
system is based in the eyes of Maududi, and the difficulties in their application.   
  
2. BASIC PRINCIPLES OF ISLAMIC ECONOMIC SYSTEM  
 
According to Maududi, the basic principles of Islamic economic system are as follows: 
 
2.1 Private Ownership 
 
The important features of basic principles of Islamic economic system are as follows:  
 
Western point of view accepts the absolute right of people, on their income and wealth (Spencer 
1993:18). But according to him in Islam this right is not absolute. From Islamic perspective Allah is 
the owner of each and everything, which people have. Allah has given them right to use, and has 
also described the guidelines for their consumption. Now it is the duty of the people to follow that 
orders and use their income and wealth in accordance with those rules and regulations (Maududi 
1971:306).  
 
No doubt, in line with other Muslim thinkers, Maududi has introduced the moral divinely ordained 
aspect in this principle, from which western concept is completely barefoot. It also gives superiority 
of Muslim concept over western thinking.  
 
But the main problem is that a big majority of the people could not understand the same. Moreover 
there is not any mechanism, which except a moral appeal to pressurize the people to adopt it. Due to 
this reason its practical application becomes a difficult task.  
 
According to him the items which are God gifted and mankind do not have any role in their 
preparation, if some people want to use them on commercial basis then government has the right to 
impose tax on them (Maududi 1977). But he did not explain whether government has the right to 
stop them or not?  
 
A person, who gets a part of natural resources and makes it fruitful with his ability, then he will be 
the owner of that thing (Maududi 1959:124-128.). 
 
If a person has the ownership of some assets, in accordance with the rules of Shariah,  then 
government does not have any right to reduce his rights of ownership or nationalize them. And if, 
government do the same then it is an open oppression (Maududi 1977). In this way he has almost Indus Journal of Management & Social Sciences, 3(2):45-50 (Fall 2009)                                  http://indus.edu.pk/journal.php 
                      
   
Islamic Economics system In the Eyes of Maulana                                                          Farooq Aziz and Muhammad Mahmud 
                                           
 
 
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closed the doors of nationalization of any private property.  
 
In the same way, he is not ready to impose any restriction on earning of wealth, subject to the 
condition that, these earnings are from Halal sources.    
 
On the same line, ownership of land is lawful up to unlimited extent and no limit can be imposed on 
it (Maududi 1969:105.).  He completely agrees with other Muslim thinkers, who are thinking on the 
same line (Usmani 1990:10). 
 
However, in some of his writings he is ready to impose some restrictions on these unlimited rights 
but with conditions, and the same is with the land (Maududi 1977).  
 
Most important point is this that he is not ready to distinguish between income from human labor 
and income from any asset and accepts it as halal. For its justification; he gives the examples of 
heirship, endowment and gifts which are lawful. Hence, on the basis of it, income from any sources 
is lawful except that it is not the result of haram sources as mentioned in Shariah. This situation 
makes the institution of private ownership as sanctioned cow. Nobody can touch it, but here are lots 
of undefined ifs and buts.  
 
2.2 Limits of Halal (lawful) and Haram (unlawful) 
 
According to Maududi only those economic activities will be allowed in an Islamic economic 
system, which are permissible in Shariah, and all those transactions which are in the category of 
haram, can not be allowed. 
 
2.3 Concept of Economic Equality   
 
He recognizes the diversified capabilities in human beings, and due to which income of all persons 
will be different in nature and consequently inequality in income is created. He advised to stop this 
inequality because the way of Islam is different from capitalism and socialism (Maududi 1941:10). 
But he did not highlight any concrete mechanism, suggested by Islam, to solve this basic economic 
problem. Somewhere he also suggested that, Nizam-e-Zakat can solve this problem. But what will 
be the way to achieve it by imposing this system. 
 
2.4 Free Economy 
 
He admitted that an Islamic economy will be a free economy and will be based upon the forces of 
demand and supply forces. Price mechanism is the basic instrument for the allocation of resources 
and remuneration of factors of production. But again this market will not be a completely free 
market like laissez-faire economy. But in a situation in which government has a very limited role 
in the economy to monitor demand and supply forces, and also cannot restrict private ownership. It 
is almost impossible that Shariah rule will be able to control the forces of demand and supply.  
 
2.5 Role of State 
 
In an Islamic economy role of state will be to provide all the essential facilities to the public. Since 
it will be a welfare state, hence state will perform all those functions which are expected from such Indus Journal of Management & Social Sciences, 3(2):45-50 (Fall 2009)                                  http://indus.edu.pk/journal.php 
                      
   
Islamic Economics system In the Eyes of Maulana                                                          Farooq Aziz and Muhammad Mahmud 
                                           
 
 
48
type of government. Government can also impose taxes other then zakat (Maududi 1962:354-355).  
 
It is quite interesting that, on one side it is claimed that, zakat system is the solution of all economic 
problems. On the hand it is allowed that government can impose taxes other then zakat. It is an open 
contravention (Farooq 2004:234). 
 
3 OBJECTIVE  OF  ISLAMIC ECONOMIC SYSTEM 
 
He did not describe the objectives of Islamic economic system at one particular place. But these can 
be derived from his different writings. Sometimes he calls them principles, sometimes elements and 
sometimes objectives (Khan 1983:31). These are as follows: 
 
3.1. Human Liberty  
 
One of the basic objectives of Islamic economic system is to safeguard the human liberty. So that, 
every human being will be free to take decisions about him-self. It is not an absolute freedom, but 
subject to the limits which are necessary for the collective welfare of society. In other words, Islam 
do not interfere in the personal freedom of the man, but restricts it where this freedom will become a 
danger for the society (Maududi 1977). 
 
3.2.  Relationship between Material and Moral Development  
 
Another important objective of Islamic economic system is that material and moral development 
will be simultaneous. In the other words, on the one hand economy will grow at its optimum level, 
and on the other hand, this system will create good moral values in the public (Maududi 1977). 
 
Definitely it is almost an impossible task. History provides a lot of examples, which prove the fact 
that with increase in wealth, rapid fall in moral level of society occurs. And ultimately societies are 
destroyed. In case of Islamic economic system what will be the mechanism, with which it will be 
possible is never discussed by him. Even all Muslim thinkers have put the same claim, but none of 
them has described its mechanism.  
 
3.3.  Distribution of Wealth.  
 
With the increase in wealth, its equal distribution (up-to maximum limit) is another objective of 
Islamic economic system. This objective can be achieved, on one hand by developing the moral 
values in the society and on the other hand by effective enforcement of law. These laws will be 
restricted to concentration of wealth in society.  
 
In a society, in which role of government is quite limited and full protection is given to unlimited 
private ownership, how this objective can be achieved? Definitely it puts a big question mark for 
Muslim economists.  
 
3.4.  Fulfillment of Basic Needs of Men 
 
In a capitalist economy the basic problem is: How to increase the level of production? But in an 
Islamic economy, the basic objective of the society is to fulfill at least basic needs of the society. Indus Journal of Management & Social Sciences, 3(2):45-50 (Fall 2009)                                  http://indus.edu.pk/journal.php 
                      
   
Islamic Economics system In the Eyes of Maulana                                                          Farooq Aziz and Muhammad Mahmud 
                                           
 
 
49
Resources allocated to achieve this objective are is just opposite to western thinking (Khan 
1983:31). 
 
No doubt it is an ideal objective but practically impossible. The main problem is that measurement 
of needs of a man and the whole society is not possible. It is completely a relative term and changes 
from time to time and place to place. In such a situation when measurement of need is not possible 
then how resources will be allocated on this basis.  
 
3.5.  Co-ordination between Different Groups of Society  
 
Another objective of Islamic economic system is to create co-ordination between different groups of 
society. Taking the first step, efforts are being made to eliminate different groups e.g. the groups 
which they have and which they do not have or capitalist and labor groups etc. The institutions are 
also being built to eliminate such types of groups. On the second step, if some groups are 
established, which are the ultimate result of evolution of society, then Islam offers them the way of 
coordination to minimize the possibilities of clash between groups of the society (Maududi 1977).  
 
The situation is quite the same with this objective also. Question arises as what mechanism will be 
adopted for this purpose? Its answer is anxiously awaited.  
 
4. CONCLUSION  
 
Maulana Maududi as the founder of Islamic economics has sketched the principles and objectives of 
Islamic economic system, which are derived from Qur’an and Hadith. These principles and 
objectives themselves are questionable due to lack of continues sources. But the main question is: 
How to implement them? Almost all Muslim thinkers, including Maududi, have just described them 
but none of them paid attention on the applied form of these principles and objectives. This is the 
reason that Islamic economics till to date is no more a theoretical subject. It is the need of the time 
to think on the applied form of these principles and objectives floated by Maududi.  
 
REFERENCE 
 
Chapra, M. Ummer. 1988. The Economic System of Islam. Karachi: Bureau of Composition, 
Compilation & Translation, University of Karachi,  
Farooq Aziz. 2004. Murvija Islami Muashi Taswarat Qurani Tanazur Main. Karachi: Islamic Book 
Centre. 
Khan, M, Akram. 1983. Maulana Maududi Kay Muashi Taswarat. Lahore: Al-Badar Publications. 
Maududi, Syed Abdul A’la. 1959. Islam Aur Jadeel Muashi Nazaria., Lahore: Islamic Publications.  
Maududi, Syed Abdul A’la. 1977. Muashiat-e-Islam. Lahore: Islamic Publications, Pp.22, 23, 40, 
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Maududi, Syed Abdul A’la. 1969.  Masla-e-Milkiat-e-Zamin. Lahore: Islamic Publication. 
Maududi, Syed Abdul A’la.1941. Insan Ka Muashi Masla Aur Uska Hal. Pathan Koat: Maktaba  
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Maududi, Syed Abdul A’la. 1971. Tafheem-ul-Quran, Vol. V. Lahore: Idara Terjuman-ul-Quran. . 
Sewharvi, M. Hifz-ur-Rehman. 1984. Islam ka Iqtisadi Nizam. Lahore: Lahore, Idara Islamiat.  Indus Journal of Management & Social Sciences, 3(2):45-50 (Fall 2009)                                  http://indus.edu.pk/journal.php 
                      
   
Islamic Economics system In the Eyes of Maulana                                                          Farooq Aziz and Muhammad Mahmud 
                                           
 
 
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