32 AN INTRODUCTION TO ISLAMIC FINANCE
If these rules are not generally known or understood because both indi-
viduals and their collectivities have avoided their duty, compliance will be
lacking or fundamentally weak. In that case, imposition by fi at of an Islamic
economic superstructure, whatever that may mean under the circumstances,
will not produce the desired result. But once the rules are known and under-
stood, individuals, the government and society at large all have the duty and
the responsibility to ensure compliance and enforcement.
More specifi cally, Islamic economics can be considered as a discipline
concerned with: (a) the rules of behavior (institutions) prescribed by Islam
as they relate to resource allocation, production, exchange, distribution and
redistribution; (b) the economic implications of the operations of these rules
and; (c) the incentive structure and policy recommendations for achieving
compliance that would allow convergence of the actual economy with the
ideal economic system envisioned by Islam.
CORE ECONOMIC INSTITUTIONS IN ISLAM
With this background, let us examine the rules prescribed by Islam with
respect to core values of the society concerning property rights, contractual
agreements, trust, and many others. These rules in turn lay the foundation
for core economic institutions in Islam and ultimately, the collection of these
institutions defi ne the economic system prescribed by Islam. The core eco-
nomic institutions which ultimately defi ne the economic system prescribed
by Islam are as follows.
Property Rights
While the individual’s right to property affi rms the natural tendency in man
to possess—particularly something resulting from his own creative labor—
the concomitant private property obligations, from the point of view of
justice, are designed to give effect to the interdependence of the members
of the community, with a view to recognizing explicitly that they cannot live
in isolation. The private property obligations, therefore, reject the notion
that a person does no harm to members of his group if as a result of his
effort he is better off and others are no worse off than they would otherwise be.
These obligations write the principle of sharing into the delineation of inter-
ests in property and consider private ownership to be subject to a trust, or
a duty, in order to effect sharing. Hence, private initiative, choice, and
reward are recognized in Islam’s conception of property rights, but such
recognition is not allowed to subvert the principle of sharing or to lead to
violations of the rights of the community. If, as a result of the growth of
society, division of labor, or increasing complexities of markets, either the
obligation to share is shirked or the rights of the society and the cohesion of
the community are undermined, an intervention by the legitimate authority
to take corrective measures would be deemed justifi ed.