THE LOW OF ISLAMIC ECONOMIC SYSTEM IMPLEMENTATION

FACING THE DEVELOPMENT OF CONVENTIONAL ECONOMIC SYSTEM

IN INDONESIAN MUSLIM SOCIETY


Final Assignment of Islamic Economic Lecture





Irsyad Abdul Ghani (110810251004)


MGT - X
Faculty of Economic
Jember University
2014

Abstract
In economic terms the etymology of the Greek word " oikonomia " which consists
of the word " oikos " means household and " nomos " meaning rule . The word "
oikonomia " means the rules that apply to meet the needs of a household . Islamic
Economics refers to the interest of the world and the hereafter whereas
conventional economics refers only worldly interests . In the midst of the global
economy as it is now , the contribution of Muslim scholars to economic thought
almost forgotten , which appears only western scholars thought that was actually
still very new . Thomas Kuhn said : Each system has a paradigm , the core
paradigm of Islamic economics is certainly derived from the Qur'an and Sunnah .
Key words : Economic , Qur'an and Sunnah , World , Eternity

Introduction
As the map of human life , the concept of Islamic economics has existed
since Islam 's presence on this earth . Al- Quran and Hadith are rich in laws and
economic policy direction to be taken and adapted with the times as well as
regional differences ( Said , 2007 : 21 ) .
Islam is inherently economy is a logical consequence of the perfection of
Islam itself . Islam must be in kafah hug and comprehensive manner by the
people. Islam demands to his people to realize his Islam in all aspects of life . It
does not make sense , a Muslim praying five times , and on other occasions he
also engaged in financial transactions that deviate from the teachings of Islam (
Mustafa , 2007 : 2 ) .
This paper departs from the mushrooming phenomenon or conventional
western economic system in which much of the rules of Islam , even though we
know most of the world 's Muslim population is Indonesia, which should in all
aspects of life including economic aspects must be based on the rules of the Koran
and Hadith .

Definition of Economics
Economics is the science of the events and issues related to human effort
or private individual , or groups , families , tribes , organizations , countries that
do not meet the needs that are faced with limited resources satisfying limited . In
economic terms the etymology of the Greek word " oikonomia " which consists of
the word " oikos " means household and " nomos " meaning rule . The word "
oikonomia " means the rules that apply to meet the needs of a household . In
Arabic the word economy commensurate with " Iqtishad " which means
that the mid- race , or can also use sustenance or resources that are all around us (
Ismail , 2009: 1 ) .
According to Drs . Mohammed Abdullah al - ' Arabi , Islamic economics
is a set of common economic fundamentals which we infer from the Qur , an and
as- Sunnah , and is part of the economy that we build on the foundation of the
basics of each environment and the appropriate time. ( Mardani , 2011: 1 ) . He
explained that Islamic economics is composed of two parts : one fixed , while
others can be fickle .
The first is termed " a set of common economic fundamentals were
deduced from the Quran and As - Sunnah " , that has to do with economic matters
, such as the word of Allah :

Dia lah Allah yang menjadikan segala sesuatu yang ada di bumi untukmu (Al
Baqarah: 29).
This verse lays down the principle that the most important economic ,
decide that all means are allowed businesses origin .

Padahal Allah telah menghalalkan jual beli dan mengharamkan riba(Al
Baqarah: 275).
. This verse put common functions , namely buying and selling
dihalalkannya and diharamkannya usury .
And His word
. . . .
. . .Supaya harta itu jangan hanya beredar di antara orang-orang kaya saja di
antara kamu sekalian (Al-Hasyr: 7)
Word is putting a general rule , the leader must be able to decide to restore
the distribution of wealth in society when there is no balance among those they
lead .
Characteristic principle of general principles is that these principles do not
change or change and is suitable for all times and places , regardless of the level
of economic progress in society .
The second is " building an economy that we build on the foundation of
the basics are in accordance with each environment and future " .
With the above said he meant the ways adjustment or settlement of
economic issues that can be achieved by experts in Islamic countries, and the
implementation of appropriate principles ago. Such information is prohibited
usury , treasure limit enough to do with charity and so on .
Basic differences Islamic and Conventional Economic System
The basic difference between Islamic and Conventional economics may be
viewed from several angles , namely :
1 Source ( Epistemology )
As an addin that syumul , berasaskan source to source the absolute ie
Qur'an and Sunnah . The position of this absolute source make Islam as a religion
( addin ) special compared with other religions creation . Qur'an and the Sunnah
tell us mempraktikkkan the doctrine of revelation in all aspects of life including
muamalah matter . Muamalah matters described in the revelation that melipiti
messengers and restrictions.
Messengers such as eating and drinking describes the demands of human
purposes . Allah explanation of his events to be used by humans ( Surah Yasin
verses 34-35 , 72-73 ) ( Surah an - Nahl verses 5-8 , 14 , 80 ) indicate that this is
provided so natural to man as vicegerent of Allah SWT ( Surah al - Baqarah verse
30 ) .
Prohibitions of Allah such as usury ( Al-Baqarah verse 275 ) commercial
pork , wine , and other matters such as human function as caliph mencerobohi
earlier . All of which lead to a goal of a balanced spiritual and physical
development berasaskan monotheism .
While conventional economics is not sourced or based on revelation .
Therefore , he was born of human thought that can change based on the time or
times so required a new edict . If there ketikanya taken from revelation but the
taste of the human mind to process it themselves because the goal gets
recognizing humans not take the acknowledgment of Allah SWT . That's the
difference between the source of revelation to the source of human reason or
philosophy which is also known as escape from bondage revelation .
2 Purpose of Life
The purpose of Islamic economics led to the concept of al - Falah ( glory )
in the world and in the hereafter , while the secular economy in the world just for
the satisfaction . The conventional economists try to resolve any problems that
arise without any considerations regarding the matter of divinity and keakhiratan
but prefers to ease any man in the world .
3 Concept of Assets As Wasilah
In Islam the treasure is not as life goals but just wasilah or intermediaries
to realize the commands of Allah . Real goal in life is like the word of Allah .
Surah Al - An'am verse 162 :

Katakanlah: Sesungguhnya sembahyangku, ibadahku, hidupku dan
matiku untuk Allah, Tuhan semesta alam.
Realizing the actual commands of Allah will bring to life the essential
quietness . Every Muslim believes that Allah is the Creator who gave the ultimate
tranquility . Thus the property is not the main goal but as a way of life in the
world to achieve a favor to the netherworld .
This is different from the conventional economic goals laid mundane as
nothing to do with God and the afterlife at all . It is certainly contrary to Islam .
They form a system of personal taste will satisfy their appetite for their sheer
material . Therefore, the conventional system has the advantage goals regardless
of the value of revelation , then they are concerned with individual interests or the
interests of certain groups as well as groups or individuals who oppress the weak
and strong principled whom he was in power ( survival of the fittest at ) ( Mustafa
, 2007 : 8 -10 ) .
Youth Economics
Economics , in Western countries , is a relatively young science exist . It
was because he was just starting to learn the people since the late eighteenth
century . Since that time Europe started pass the developments in aspects social,
politics and economics . And it's all an impression of each of the French
Revolution and the Industrial Revolution ( Abu and Anshori , 1980: 5-13 ) .
Contributions of the Muslims greatly to the survival and development of
economic thought in particular and world civilization in general , has been ignored
by Western scientists . Text books of Western economic role almost never
mention the Muslims . According to Chapra , although most of the fault lies in the
hands of Muslims for not adequately articulate the contribution of the Muslims ,
but the West has a stake in this case , because it does not provide a proper
appreciation of the contributions of other civilizations to the advancement of
human knowledge .
Western historians have written economic history with an assumption that
the period between the Greek and the SAT is sterile and unproductive . For
example , once the leading economic historian Joseph Schumpeter , completely
ignores the role of the Muslims . He began writing the economic history of the
Greek philosophers and immediately stepping away for 500 years , known as The
Great Gap , to the time of St . Thomas Aquinas ( 1225 - 1274M ) .

It is very difficult to understand why Western scientists did not realize that
the history of knowledge is a continuous process , which is built on a foundation
that is in place the previous generation of scientists . If this evolutionary process
with a fully realized , according to Chapra , Schumpeter may not assume the
existence of a large gap of 500 years , but trying to find a foundation upon which
the SAT and Western scientists establish their intellectual buildings .
On the contrary , although it has made a great contribution , do not forget
the Muslims acknowledge their debt to the scientists Greece , Persia , India , and
China . This also indicates the inclusion of Muslim scholars of the past to a
variety of ideas thinking outside world does not contradict the teachings of Islam .
In line with Islamic teachings about empowering minds to stay true to the
Koran and the hadith the prophet , and the concept of economic theory in Islam is
essentially a response to the Muslim scholars to economic challenges at certain
times . It also means that the age of Islamic economic thought Islam itself .
Various practices and economic policies that took place at the time of the
Prophet and al - Khulafa ar - Rashidun an empirical example is used as the basis
for Muslim scholars in the birth of his economic theories . One thing is clear ,
focused their attention on meeting the needs , fairness , efficiency , growth and
freedom , which is nothing other than the main object that inspires Islamic
economic thought since the early days ( Adiwarman , 2006 : 8-10 ) .
Scientists contribution in Islamic Economics
Schumpeter (1954 ) wrote a book entitled History of Economic Analysis ,
as quoted by Mohammed Imad . The book contains the foundation and basic ideas
of economics and development. In his book , he explains the history of economic
development that occurs in the world . The interesting thing is that after the end of
the golden age Graceo Rome in the 8th century BC , found very little thought and
generated significant economic theory by scientists , even this period runs until
the 13th century that was marked by past St . Aquinas (1225-1274 AD ) . During
the approximately five centuries , not so much economic theory and the work
produced by thinkers in the western world . Schumpeter even call it a Great Gap ,
or there was a great gulf or distance between the West and the East .
If analyzed more deeply about the case in question, it was found that in the
darkness of the western world to the world of science , and science then at that
time the influence of the church is very thick felt , that they limit the experts and
scientists to produce scientific work , including work in the economic field . In
fact , a person can be considered to have defected from the teachings of the Lord
when having thoughts that are contrary to the teachings of the church , and the
death penalty will be given to him . In the dark ages of the Western world
experienced a setback in the field of science . On the other hand , it was found that
the dark ages were experienced by the Western world it is inversely related to the
development of science in the East ( Islam ) . In this period was the golden age of
Islam , which many Muslims scientists succeeded in providing scientific works
are significant , one of them in the development of world economics . Many
Muslim scientists writing , researching , and generating economic theories are the
result until now is still relevant to be learned and applied by the population
inhabiting the Republic of Indonesia .
Some Muslim scientist who managed to produce phenomenal work on the
economic theory of them is Ibn Taymiyyah , Ibn Rushd , Ibn Khaldun , Al -
Ghazali , and much more . Ibn Taymiyyah , for example , managed to issue a
theory known as price volatility or price fluctuations in the market . He stated : "
The cause of price fluctuations in the market not only because there is injustice
caused by a particular person or party , but also because of the short length of the
production period ( Khalq ) a commodity . So he produces the law of demand and
supply ( supply and demand ) in the market , it is now recognized as a theory of
irony coming from the Western world .
Other figures who managed to make a major contribution is Ibn Rushd .
Roger E. Backhouse (2002 ) , wrote a book called The Penguin History of
Economic . Ibn Rushd produces a theory by introducing a fourth function of
money , the purchasing power storage device of the consumer , who stressed that
the money can be used at any time by the consumer to buy his purposes .
Previously , Aristotle says that there are three functions of money , as a medium
of exchange , and as a means of measuring the value of reserves for future
consumption .
Ibn Rushd also refuted the Aristotelian theory of the value of money , ie
the money value should not change. Therefore , Ibn Rushd states that the money
should not be changed for two reasons . First of money serves as a tool for
measuring value , the same as Allah Almighty Ruler , He did not change, then the
money as a measure of the situation should not be changed . Second , money
serves as a reserve for future consumption , then the change is not fair to him .
With both of these reasons , the actual nominal value must be equal to its intrinsic
value .
The next character is Al - Ghazali who menyatakn that the need for human
life is made up of three , namely primary needs , ( darruriyyah ) , secondary (
hajiat ) , and luxury needs ( takhsiniyat ) . Hierarchy of needs theory is then taken
by Nassau William Senior which states that human needs consist of basic needs
(necessity ) , secondary ( Decency ) , and tertiary (luxury ) . Al - Ghazali also
stated that the main purpose of the application of sharia is a matter of religion or
of religion, life , mind, offspring , and possessions are concerned with economic
issues .

There are many other works produced by Muslim scientists to the
development of economic science . The sad thing is precisely the theories they
claimed to come from the West , was first produced by a professor from the
University of Glasgow are named Adam Smith in his book And Inquiry into the
Nature and Cause of the Wealth of Nations . The book was produced in the 18th
century that even it there are many similarities with the work of Ibn Khaldun's
Muqaddimah open produced a few centuries earlier . Major contributions of
Islamic scientists economy described above , can be used as a reference to keep
learning and generate significant works , both in the field of economics , as well
as other sciences in accordance with their respective expertise , thus materialize
the ideals of the founders of the Republic Indonesia, of which social justice for all
Indonesian people .
Factors Contributing to fading Application of Islamic Economic System in
Muslim Society
1 Lack of Necessity
The first phase of the arrival of Islam , the needs of society and legality of the
transaction will be thinking in economic activity has not been so tempestuous .
This is due to the mechanism of life that is still very simple and yet a lot of
developments happening in the sectors of the economy to produce goods and
services . The situation is also supported by economic actors are still dominated
by the value of devotion and asceticism as well as their consistency in
implementing Islamic values in social life ( muamalah ) .
2 Stagnation Thought
In the early days of the Islamic renaissance , spawned many books of tafsir
, hadith , fiqh , and the elaboration of the science of Islamic economic thought .
However , at the end of the 4th century Hijri , the Islamic community that
experienced a split into several small communities are diverse. Conditions were
split fairly large impact on the decline of Islam . Moreover, with the collapse of
the caliphate which further adds to the fragility of the Islamic civilization . And
governance mechanisms that exist after the economy away from Islamic values .
In public life there has been a moral decadence that led to the decline of religious
fervor that accompanied the world with a love of pleasure and power .
Distortion political and economic life in society greatly influence the
thinking of scholars , so that existing intellectualization unable to answer the
dynamics of economic life . In the end the tradition of thought and intellectual life
in peroblematika accommodate existing stagnated .


3 External War
At the end of the 4th century Hijri , disease wahn ( love of the world and
fear of death ) have poisoned the Muslim public . Muslim societies tend
menggandrungi worldly power and wealth , thus causing the split Muslims into
pieces small communities . Each of these communities at odds with each other ,
and hostile berseturu . The situation is a golden opportunity nagi foreign countries
to expand the colony . Muslim community became a target for the cross in
acquiring colonies . The military invasion carried out at the end of the 5th century
Hijri , and managed to control the Sham region . Given this war , destruction and
damage caused entire infrastructure life . By the middle of the 7th century AH ,
the colonial experience of Muslim societies in all aspects of life whether political ,
social , economic , cultural , and thought . It is an obstacle ( barrier ) for the
development of Islamic thought and Islamic economic life .
4 Progress Industries Europe And America
The development of industry and technology in Europe and America to
stimulate economic development as well as understanding the mechanisms and
systems that they are applied . These developments lead to a deterioration of the
economy and technology for the Muslim community . Technological
developments and economic hegemony in the Muslim community into the West
Country . Finally , Muslim countries into third world countries ( Said , 2007: 26-
29 ) .
According to Umar Chapra (2001 ) as quoted Merza Gamal decline of
Islam started since 12th century is characterized by the deterioration of morality ,
the loss of dynamics in Islam after the rise of dogmatism and rigidity of thought ,
a decline in intellectual and scientific activity , a local uprising and divisions
among race , war and attacks from outside parties , the creation of financial
imbalances and loss of a sense of security to life and property , and the factors that
reached its peak in the 16th century , namely the Mamluk dynasty Ciscassiyah full
of corruption , thus speeding up the deterioration process .
Progress and setbacks experienced by the Muslims it is not like a straight
line , but up and down and lasted several centuries . Various efforts and attempts
have been made by Muslims to stop the deterioration , but because there remains
the main cause , the deterioration continued until the main ini.Faktor to avoid such
setbacks are returned to the true teachings of Islam Falah oriented oriented , that
is, toward The world prosperity and happiness in the Hereafter ( Zainuddin ,
2008:44 )












Conclusion
Muslims must realize his Islam in all aspects of life , including economic
life . For indeed , Muslims have had its own economic system in which the
amount of lines has been described in full in the Qur'an and Sunnah A . Naturally,
we as Muslims , perform economic activities in accordance with the rules and
principles of Islam . It must be recognized development of civilization to the
present is remarkable . Similarly complex patterns so is life . So the Muslims in
general and Muslim scientists in particular need to be very proactive in efforts to
revitalize the concepts of muamalah , by extracting the values contained in the
Quran and Sunnah A .
















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