The economy in Islam is a free market economy. It is the law of free market (invisible hand) that God created and Adam Smith discover it. It is a moral capitalism. You play the market fairly with integrity and honesty. No corruption and bribes in this form of economy. You serve a lot of social functions by paying money to the poor (obligatory: zakat-2.5%) or non obligatory: Sadaka). Paying the poor strengthens the economy causing money to go around to stimulate the economy while keeping inflation down. A lot of people have forgot that money is a medium of exchange and it looses more of its value if the economy goes down or inflation sours. Examine these verses to find the main principals of economy in Quran:
1- Break the cycle of money between the rich to a wider cycle that include the poor and rich:
059: 006-7: Whatever Allah has turned over to His Messenger from those communities belongs to Allah and His Messenger (i.e. the Central Authority). [It shall be spent by the Messenger (i.e. the Head of the Islamic State) on]: (the 'Office' of) the Messenger, the welfare of the families of the believers, the orphans (,those who still feel left alone in the society, the widows), those who have no means of earning their livelihood, (the disabled who cannot move around looking for the Bounty of Allah), the homeless son of the street, ( those who are on their way to join you, or those who travel a distance to seek help). The expending will be in such a manner that it may not be [a benefit] going round and round among such of you as may [already] be rich. Hence, take what the Messenger gives you, and abstain from what he forbids you. Guard yourself against the harmful consequences of violating the Commands of Allah by careful observance. Verily, Allah is Stern in grasping."
2- Honest free market with no abuse of government for unfair businesses:
002.188 And do not swallow up your property among yourselves by false means, neither seek to gain access thereby to the judges (governors), so that you may swallow up a part of the property of men wrongfully while you know.
3- Money spent for God's cause is an important way to worship God:
002.261 The parable of those who spend their property in the way of Allah is as the parable of a grain growing seven ears (with) a hundred grains in every ear; and Allah multiplies for whom He pleases; and Allah is Ample-giving, Knowing
4- The human sins contribute much to poverty through preventing the blessings of God. Sins as infidelity, alcoholism, drug addiction, gambling, dishonesty, theft and wars have destroyed large wealth of nations:
002.268 Satan threatens you with poverty and enjoins you to be niggardly, and Allah promises you forgiveness from Himself and abundance; and Allah is Ample-giving, Knowing.
5- A lot of poor people may be invisible to us. It is our job to find them and take care of them:
002.273 (Alms are) for the poor who are confined in the way of Allah-- they cannot go about in the land; the ignorant man thinks them to be rich on account of (their) abstaining (from begging); you can recognize them by their mark; they do not beg from men importunately; and whatever good thing you spend, surely Allah knows it.
6- Usury is not trade. Money is created as medium of exchange and not as a good. People who sale you money today at high interest rate are committing sin against God in both the Quran and Bible (see in my blog: interest-based economy Satan work in earth):
002.275 Those who swallow down usury cannot arise except as one whom Satan has prostrated by (his) touch does rise. That is because they say, trading is only like usury; and Allah has allowed trading and forbidden usury. To whomsoever then the admonition has come from his Lord, then he desists, he shall have what has already passed, and his affair is in the hands of Allah; and whoever returns (to it)-- these arc the inmates of the fire; they shall abide in it.
7- Usury is not blessed by God and is profitable only for the few rich and greedy. Zakat is blessed and is good for every one:
002.276 Allah does not bless usury, and He causes charitable deeds to prosper, and Allah does not love any ungrateful sinner.
8- Universal welfare System:
The Prophet (pbuh) is reported to have said: If a single person were to sleep hungry in a town, then God's protection is lifted from such a town. [ Masnad Imam Ahmad ] This hadith emphasizes that no one (Muslim or non-Muslim) under this system should go hungry. Thus this zakat system created the first universal welfare system in human history. It was paid by Muslims to non-Muslims in early Islam. We are able now to create it as a universal world system.
