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The concept of profit on trade and finance in Islam

06/08/2011 07:35:00 PM GMT   Comments ()     Add a comment   Print     E-mail to friend

Islam has always made sure that not just some but all Muslims in the Muslim community are equal and equality is practiced. It has always urged the Muslims to follow lawful pursuits for material gain. Dealings in trade have been pointed our specifically. Because it is known that men and their greed and hunger for money and materialistic things will not change. It will drive them to be unfair in trade and will make them behave in ill-mannered ways. The fair trade gives concepts to an overall organized social movement that makes sure equality is practiced. It is pointed at alleviating poverty and promoting sustainable development.

The Islamic fair trade is strategic and it deliberately engages with marginalized producers and workers. So it can assist them in moving from vulnerability to security and self-sufficiency. This will result in a more balanced, pleasant relation between the rich and the poor.

Fair trade has grown immensely in the international waters. The number of consumers has been increasing in rich countries and the issues concerned are environmental sustainability, justice and social wellbeing, decided to purchase fair trade products.

Not now but for more years. Trade and commerce have played the key role in the expansions of Islam and its people. Although there is a huge difference between the old and the new Islamic economic order. The previous values were based on principles of kinship, tradition, and communal relationships. As for now it is based on materialism and other values.

The most important and the key principle in fair trade is the payment of fair price to producers. This has to cover not just the cost of their production but also the cost of production that is socially and environmentally sound. There is much support in Islam in such an approach.

The concepts such as equality, equity, fairness and mutual respect are very important in Islam. These are the integral parts of business and commerce dealings.  In short this means that self interest in only valid or is taken gratefully if it is not more than the interest of others. The Qur’an on several occasions states unequivocally:

“Deal not unjustly, and you shall not be dealt with unjustly” (2:279).

“God loves those who are fair and just." (49:9)

The relationship between the trading partners has to be based on transparent management. The mutual consent between the parties is highly promoted in Islam. This means both the parties have to be happy and satisfies with the dealing. The profit and the interest of both the parties is very important.  Sale under coercion is not acceptable. Charging a high price and taking advantage of someone’s plight is a form of exploitation and is highly forbidden in Islam.

Islam has always encouraged the basic principle that the market should be left free. The market should be free to respond to the responses of supply, demand and natural competition. The price controls, tariffs, charges, and other barriers of unfair means should be removed. This way the trade is clean clear and is beneficial for both the parties and the people involved. The Quran and many hadiths have all the references we need to perform the fairest trade which will not only benefit us but the people around us and involved in it.

Source: Al Arabiya Digital

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