Islamic Finance

Early Shiite jurists believed that Islamic economics stipulated the private ownership of property and the means of production. Since the early 1970s, however, 'radical' interpreters have conceptualized a system akin to Marxism, while 'reactive' interpreters have reacted against this understanding. 'Radical' interpreters believe God to be the true owner of all property and divide property in three categories -- private, public, and governmental. 'Reactive' elements identify human labor as the root of wealth and property.

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Following the Islamic revolution in Iran, it became possible to analyze in real terms the problems that face an Islamic economy. Iran is viewed with an eye toward shedding light on the difficulties other economies might face if they moved toward

Everyone must support and aid the banking system's development if it is to Islamize. Ways to abet this process include the announcement of a definite schedule after fund requirements are met and the granting of advantages to companies with

Mr. Mohammed Abdul Rahman Al-Bakr encouraged Muslims to give Islamic banks and financial institutions their full support. Welfare states were first established by Muslims. Islamic institutions like zaka and inheritance laws provide economic justice and security.

The world's first Islamic bank was established in Dubai on October 1, 1975. The bank has performed well for seven years. Dubai Islamic Bank performs all the functions of a conventional bank within the framework of Islamic banking principles. The bank possesses a special 'zaka account' used to help certain institutions and the needy. Dubai Islamic Bank has started several projects, including a monthly magazine as well as real estate, industrial, and commercial projects. Recently, the bank has entered the field of trading and may soon expand to Pakistan.

Since the 1930's and the New Deal, some fundamental questions and crises have come to the forefront of economic thought. Among these issues are: the Phillips curve and the idea of optimal employment rates; the end of fiscal and monetary policy as remedies for every problem; the lack of market mechanisms to reconcile gaps between social and private costs; and the ideological commitment to neoclassical economics, which has caused it to be upheld despite its contradictory elements. Communist economics is adopting a religious bent and is thus becoming like capitalism.

Iran can learn from Japan's astounding transformation to a capital-exporting nation. Japan's success can be explained by certain factors including, among other things, corporate 'financial dualism', the household savings rate, legal advantages such as assistance from the Bank of Japan, and a transformation from a 'securities-based' to a 'bank-based' financial system. Iran should follow the Japanese example and develop a 'bank-based' financial system.

Ibn Taimeyah was both a scholar of

Education is classified as a consumption-investment mix commodity. Consumption deals with the psychic returns of the education; investment applies to the monetary return education yields. In the Islamic system, education is a highly value-oriented entity. The consumption-investment mix commodity analysis applied here to education is a framework that can prove fruitful for Islamic economics.