52 AN INTRODUCTION TO ISLAMIC FINANCE
The incentive-motivation aspects of the Islamic system have their ori-
gin in the basis of belief in Islam, which considers adherence to its rules of
behavior as primarily serving the best interests of the individual, both in
this world and the next, as well as those of the society as a whole. Islam has
provided these rules without negating either the drives or the self-interests of
the individual. At the same time, its Law has provided methods and proce-
dures whereby the interests of the community can be protected, should the
individual feel it utility maximizing to violate the rules and thereby damage
the community’s interests.
An important factor in the incentive system of Islam is the concept
of barakah, which serves as the material inducement for the individual to
follow the path of proper conduct. This notion refers to an “invisible but
material” blessing whose results can be observed by any believer who
engages in righteous conduct. It encompasses the whole spectrum of man’s
conduct, including, most importantly, his economic behavior. The concept
maintains that righteous conduct—that is, behavior whose motivation and
objective is to please Allah (swt)—will have returns with an increasing rate.
The more righteous the conduct, the greater is the presence of barakah.
This concept asserts that expending wealth in this cause (without expect-
ing a return from the receiver directly) will lead to its expansion. Such
actions will, in fact, bring manifold returns to the giver. The concept estab-
lishes a positive correlation between the system’s conduct and prosperity
and encourages Muslims to go beyond the minimum requirements of the
Shari’ah. The converse of the concept also holds true. That is, unrighteous
conduct in earning, possessing, or disposing of wealth will rob its holder of
its barakah. This applies not only to individual behavior, but to the com-
munity as a whole and because the results of the operation of barakah are
observable, it serves as an incentive for compliance with rules.
THE MODEL OF MAN
The Islamic economic paradigm is a Creator-centered conceptualization of
reality. Its view of man distinguishes between the exterior, physical form
(bashar) and the non-physical, substantive and internal substance full of
potentialities (insan). The two concepts roughly parallel man and human.
In exteriority, they are similar in appearance, but there are signifi cant dif-
ferences between the two. The most important difference between the two
is an active awareness of the supreme Creator and Cherisher Lord of the
Worlds which separates a “bashar” from an “insan.” Those of mankind
who become aware and conscious of their human state and its potentialities
focus on continuous actualization of this potential. The passage from bashar
(man) to the perfect human state is seen as an upward spiral movement
marked by the degrees of compliance with the prescribed rules of behavior.
In the ideology of Islam, man possesses a dual dimension: his body con-
nects him to the material world but he also possesses a cosmic dimension