46 AN INTRODUCTION TO ISLAMIC FINANCE
contractual obligations by recognizing and protecting the property rights
of stakeholders, community, society, and state. Since the fi rm’s behavior is
shaped by that of its managers, it becomes their fi duciary duty to man-
age the fi rm as a trust for all stakeholders in ensuring that the behavior of
the fi rm conforms to the rules and norms specifi ed by the Law (Iqbal and
Mirakhor 2004).
ECONOMIC JUSTICE IN ISLAM
A just economy is part of a just, healthy, and moral society, which is the cen-
tral objective of Islam. What underpins all the rules of behavior prescribed
by Islam is its conception of justice, which maintains that all behavior, irre-
spective of its content and context, must, in its conception and commission,
be based on just standards as defi ned by the Shari’ah. Islam considers an
economy, in which the behavior of its agents is so conceived, as an enterpris-
ing, purposeful, prosperous, and sharing economy in which all members of
society receive their just rewards. Such an economy is envisioned as one in
which economic disparities that lead to social segmentation and divisiveness
are conspicuously absent. Another important rule is the prohibition against
taking (that is, receiving) interest. This issue will be covered in detail later.
The components of economic justice in an Islamic society are (i) equal-
ity of liberty and opportunity for all members of society with respect to the
utilization of natural resources; (ii) justice in exchange, and (iii) distribu-
tive justice—all accomplished within the framework of the Shari’ah. In this
conception, liberty means that a person is not prevented by others from
combining his creative labor with resources which are designated by the
Shari’ah for the use of the individual members of society. Opportunity, on
the other hand, represents a favorable conjunction of circumstances, which
gives the individual the chance to try it and success is dependent on the indi-
vidual’s efforts and abilities. This equality of opportunity must be secured
deliberately by the collectivity. It not only denotes free and equal access
to physical resources, but, generally, also extends to technology, educa-
tion, and environmental resources. The basis for this equality of access to
resources and equality of opportunity to use them is Islam’s position that
natural resources are provided for all members of the society. Even if the
opportunity to use these resources is not available to some, either naturally
or due to some other circumstances, their original claims to resources remain
intact and are not nullifi ed. They must be remunerated for these claims, at
some point in time, by the other members who happen to have “or get”
greater opportunity to use them.
The idea is that, by mixing their creative labor with resources, individu-
als create a claim of equity to the possession of the assets thus produced, by
virtue of which they can participate in exchange. To allow exchange to take
place on the basis of just standards, Islam places a great deal of emphasis on
the market and its moral, just and—based on these two factors—effi cient