Chapter 2

Getting to Know Islam and the Role of Sharia

In This Chapter

arrow Touching on the history, beliefs, and pillars of Islam

arrow Understanding why Muslims rely on sharia to guide their conduct

arrow Recognizing the objectives and sources of sharia

Your study of Islamic finance can’t progress very far without a familiarity with at least the basics of Islam because some of the religion’s tenets are the cornerstone of the industry. So I’ll start with the basics: Islam is a monotheistic religion and a way of life based on the holy scripture called the Quran and the teachings of Prophet Muhammad (pbuh).

remember.epsNote that pbuh stands for peace be upon him. Islamic tradition calls for this phrase to follow each reference to the name of a prophet, including the Prophet Abraham, the Prophet Moses, and Prophet Jesus (pbuh to all).

In this chapter, I introduce you to some core information about the religion, such as its followers, origins, sources, and basic beliefs. I also explain where Muslims go for guidance on how to best uphold Islamic law.

tip.epsIf, after reading this brief introduction to Islam, you want to find out more, a wealth of resources is available in print and online. Consider picking up a copy of Islam For Dummies by Malcolm Clark (Wiley) or visiting a website such as or

Introducing the People of Islam

The word Islam is Arabic, and it literally means submission or surrender. The religion’s name can be translated as submission to the will of God. The followers of Islam are Muslims, so the word Muslim means someone who has submitted her or his will to the will of God. (Muslims generally use the word Allah to refer to God, for reasons that I discuss in the later section “The basic beliefs of Islam.”)

Muslim people live in communities throughout the world — from the Asia-Pacific region to the United States. Muslims are the majority population in more than 50 nations, including Afghanistan, Bahrain, Egypt, Indonesia, Iran, Iraq, Jordan, Kuwait, Nigeria, Pakistan, Saudi Arabia, Sudan, Turkey, and United Arab Emirates.

A 2011 report indicated that the world’s Muslim population is expected to increase to 2.2 billion by 2030. If these projections play out, more than 25 percent of the world’s population in 2030 will be Muslim. This rapid growth means Islam will surpass Christianity as the world’s most popular religion as soon as the next few decades.

For reasons I explain throughout this chapter — and, really, this entire book — the emergence of this vast population with specific financial product needs means that the Islamic financial industry has a captive market that represents tremendous growth potential for all the parties involved. Understanding their beliefs and why they can’t use conventional financial products can only improve your participation and work in the global financial system.

tip.epsFor many people, the first instinct when learning about a system or religion that’s not their own is to compare and contrast it with what they know. I encourage you to hold back on comparing Islam to Christianity or Judaism, even though these three monotheistic religions share common origins. That is, all three descend from Abraham, and Abraham is considered equally important in all three religions. Moreover, several biblical prophets, including Moses, Isaac, Noah, Joseph, and Jesus (pbuh to all) are frequently mentioned in the Quran.

Yet Muslims consider Islam to be a complete way of life; its concepts govern all aspects of life, including social, economic, and political affairs. See the later section “Adhering to a Code of Conduct: Sharia” for a thorough explanation of Muslims’ holistic approach to religious principles.

A Brief History of the Islamic Religion

After the fall of the Roman Empire, when the Western world was experiencing the Dark Ages, Islam was a beacon of light. The Muslim community that flourished during the early days of Islam — the period known as Islam’s golden age — saw breakthroughs in science, medicine, mathematics, architecture, and literature. But how exactly did Islam begin, and when? In this section, I describe the revelations that provide the foundation of this religion and the evolution of Islam throughout the life of the Prophet Muhammad (pbuh).

Revelations to the Prophet Muhammad (pbuh)

Although Islam is often associated with the life of the Prophet Muhammad (pbuh) in the early seventh century, Muslims believe that Islam is the only religion revealed by God and that it has been in existence since the beginning of time. That is, Muslims believe that Islam was revealed to mankind through various prophets, starting with Adam — the father of mankind — and including Abraham, Moses, Jesus, and many more (pbuh to all). Each prophet lived in a different location and shared revelations with different societies; the last prophet of Islam was the Prophet Muhammad (pbuh).

remember.epsTo be clear, no human founded or established Islam. Rather, Islam was revealed in different periods to different chosen prophets, and its final version was revealed to the Prophet Muhammad (pbuh) by Allah over a period of 23 years that began when the Prophet (pbuh) was about 40 years old.

Muhammad (pbuh) was born in the present-day Saudi Arabian city of Mecca (Makkah) around the year 570, a time when the Arabian Peninsula was ruled by various tribes with differing beliefs. Some tribes worshipped idols and participated in uncivilized practices such as burying female children alive (because of gender discrimination) and engaging in prolonged battles in the name of the tribal owner. Jews and Christians also lived in parts of the region.

Prophet Muhammad (pbuh) lost both parents by the time he was about 5 years old. The boy was cared for by his grandfather and later by his uncle. Muhammad (pbuh) became a trader at a young age; at the age of 25, he married his trading partner, Khadija.

As he got older, Prophet Muhammad (pbuh) began preferring isolation and therefore spending a lot of time alone in the cave of Hera, which was close to the city of Mecca. In this location, around the year 610 (when he was about 40), Prophet Muhammad (pbuh) received his first revelation of God through the Angel Gabriel. Muhammad (pbuh) was told that he was a prophet and should call the people to Islam. This revelation was the first of many that the Prophet Muhammad (pbuh) would receive over the course of 23 years until his death.

Migration to Medina

Initially, Prophet Muhammad (pbuh) shared God’s message only among his family and friends. Later, the circle expanded to include other people in his community. As the group grew, its members began to be persecuted in Mecca because the revelations countered existing pagan practices and idol worship. When the persecution became too strong and threats against the Prophet’s life emerged, Muhammad (pbuh) and his followers fled to the present-day Saudi Arabian city of Medina (Madinah) in 622. This migration from Mecca to Medina is today called Hijra, and 622 is considered the first year of the Islamic (Hijri) calendar.

The people of Medina generously welcomed the Prophet (pbuh) and his companions. Many people in Medina converted to Islam, and soon after this first migration, the main tribes and families in Medina signed a treaty with the non-Muslim communities of the region. The treaty is popularly known as the Constitution of Medina, and it established the world’s first charter of human rights. Medina soon after became the first Islamic state. But that doesn’t mean the Prophet Muhammad (pbuh) and his followers had no further struggles.

While the Prophet (pbuh) and his companions were in Medina, these early Muslims fought a number of armed conflicts with the ruling tribe of Mecca and even with some groups in Medina who wanted to destroy the Prophet (pbuh), his companions, and the Islamic religion. But in 630, Mecca surrendered to the Prophet (pbuh), and the city’s holy mosque was cleansed of pagan idols and imagery. Prophet Muhammad (pbuh) declared Mecca to be Islam’s holiest site.

Compiling the Quran

The Prophet Muhammad (pbuh) died around 632, at which time (Muslims believe) God’s revelation was complete. Shortly after his death, the revelations given to Muhammad (pbuh) over the course of 23 years were compiled into the holy Quran — the scripture that Muslims still believe is the true word of God.

The Quran was already written down completely during the lifetime of the Prophet (pbuh), but not in book format. Instead, its verses were written on a variety of materials, including flat pieces of bone, date palms, stone, and wood. The Prophet Muhammad (pbuh) and his companions memorized the whole Quran and shared its verses orally.

After the Prophet’s death, the compilation of the Quran was ordered by Abu Bakr, the first of the caliphs —Muslim religious and civil rulers who were the successors of Prophet Muhammad (pbuh). Subsequently, the third Muslim caliph, Uthman, spread the complete and compiled version of the Quran across the Muslim communities.

The Quran was written in the Arabic language and exists that way today — the same way that Muslims believe God (Allah) revealed it. But the Quran has also been translated into many major languages. For example, multiple Quran translations into English are available, including the English Pickthall version (translated in the early 20th century by the Islamic scholar M. Pickthall) and the more recent Hilali-Khan version (translated by Dr. Muhammad Taqi-ud-Din al-Hilali and Dr. Muhammed Muhsin Khan).

remember.epsKeep in mind that a translation of the Quran into any language is not considered to be the Quran itself. A translation is, by its nature, a human work. Only the original Quran in Arabic is considered by Muslims to come directly from Allah.

When you read the Quran translated into your native language, most of it is clear and easy to understand. However, sometimes Muslims need help to understand certain verses more deeply. They often turn to commentaries given by the Prophet Muhammad (pbuh) and his companions as well as by Islamic scholars. If you’re interested in more information on the Quran, check out The Koran For Dummies by Sohaib Sultan (Wiley).

Composing sunnah and hadith

The Arabic word sunnah means habit or usual practice. In the context of Islam, it refers to the behavior that was modeled by the Prophet Muhammad (pbuh), which includes his statements, his own deeds, and his silent or tacit approval of certain deeds done by others.

During the Prophet’s lifetime, people observed his actions and discussed them. For example, if a companion of his observed Muhammad’s (pbuh) way of worship or observed any of his business dealings, the companion would share what he saw and heard with other people. Also, people would often ask the Prophet (pbuh) for rulings regarding family affairs, trade, political matters, and so on and then model their actions based on his judgments.

The golden age of Islam

If you want to understand how Islam has contributed to the development of human civilization, you need to know a bit about the golden age of Islam, which spanned from the 7th century to the 13th century, when the Islamic empire stretched from North Africa and Spain to the Arabian Peninsula and western India. During this period, Muslims created major developments in the arts, agriculture, astronomy, science, economics, business, industry, law, navigation, technology, mathematics, medicine, and philosophy. They sought new innovations while protecting their own traditions. Following are some of the important fields developed by Muslim scholars during the golden age of Islam:

check.png Mathematics: Algebra, induction, and irrational numbers are products of Islam’s golden age. Important mathematicians during the time include Omar Khayyam, Al-Biruni, and Ibn Khaldun.

check.png Medicine: Muslim scholars made significant contributions to the medical profession, affecting many specialties, including anatomy, pathology, pharmacology, physiology, ophthalmology, and surgery. For example, Al Razi (Rhazes) discovered measles and smallpox, and Abul Al Qasim (Abulcasis) laid the foundation for modern surgery. The philosopher Ibn Sina (Avicenna) has been praised for laying the foundation for the development of modern medicine.

check.png Agriculture: Muslims developed new agricultural techniques, including sugar refineries, cash cropping, and crop rotation, during this period.

check.png Economics: A free-market economy was developed during the Islamic golden age with the introduction of common currency. Early Islamic financial contracts were used at this time, including murabaha, musharaka, and sakk.

check.png Technology: Muslim scientists during this period isolated previously undiscovered chemicals and invented many technologies, including mechanized water clocks and valves.

The companions of the Prophet Muhammad (pbuh) wrote down his commands, actions, and speech, which are compiled into works known as hadith. Six of these compilations are unanimously considered to be the most authentic: Sahih al-Bukhari, Sahih al-Muslim, Sunan Abu Dawud, Sunan al-Tirmidhi, Sunanal-Nasa`I, and Sunan Ibn Majah.

The words sunnah and hadith are often used interchangeably, but the two terms differ:

check.png Sunnah: This term refers to the overall tradition of the Prophet Muhammad (pbuh) — his every teaching, including his lifestyle and mannerisms.

check.png Hadith: This term refers more specifically to the Prophet’s (pbuh) documented speech, actions, and commands.

remember.epsMuslims consider the example of the Prophet (pbuh), as espoused in hadith and sunnah, to be the greatest example of Islamic principles and law in action.

Exploring the framework of sharia

With the Quran and sunnah in hand, the caliphs worked to establish the basic framework of sharia (or Islamic law, which I describe in detail later in this chapter). As Muslims grew in numbers and the circle of Muslim influence widened, Muslim jurists and scholars worked toward expanding the implications of existing Islamic law. As a result, the scope of sharia expanded greatly in the centuries after the Prophet Muhammad’s death (pbuh), and the Islamic legal teachings turned into a complete judicial system.

By the year 900 C.E., the sharia framework was almost fully developed, and specialized books began to be produced. But as I explain in Chapter 3, the golden age of Islam, in terms of its political power, began to diminish around the 12th century, and the later colonization of Muslim nations by European powers severely impacted Islamic civilization. Even after the 12th century, however, Islamic legal discourse continued to be a dominant element of Islamic scholarship.

The Core Beliefs of Islam

As with all major religious and cultural movements, the followers of Islam share a set of beliefs that are essential to their faith. Every Muslim is expected to know and act upon these six core beliefs that serve as the foundation for their daily conduct:

check.png Belief in Allah (God): The Arabic word Allah refers to the one true God. The word doesn’t have any gender or a plural form; that’s why Muslims who speak languages other than Arabic still use the word Allah to refer to God. Islam is based on absolute monotheism, which strictly says there is only one God; no superior, lower, or equal gods exist. Muslims believe that Allah is a being and not created by anyone; Allah is the creator of everything in the universe. Allah has no parents, partners, or children.

check.png Belief in Allah’s angels: Muslims believe that Allah creates angels, who worship and serve Allah. The angels are given commands and responsibilities by Allah. For example, the Angel Gabriel is responsible for sending messages to the prophets.

check.png Belief in Allah’s revealed books: Muslims believe that Allah revealed the scriptures to guide mankind, starting when mankind was created. The Quran mentions the following scriptures that were revealed to the prophets:

• The Old Testament (Torah) revealed to Moses (pbuh)

• The Psalms (Zabur) revealed to David (pbuh)

• The New Testament (Injil) revealed to Jesus (pbuh)

• The holy Quran revealed to Muhammad (pbuh)

remember.epsAlso, Muslims believe that all the previous scriptures before the Quran have been distorted, and some were lost. Therefore, the Quran is the only scripture remaining with its pure, original form.

check.png Belief in the prophets of Allah: Muslims believe that the prophets were created as human beings and sent to humankind to reveal Allah’s message that people must pray to only one God. And although the prophets are the most noble representatives of mankind, they don’t have any divine qualities; therefore, Muslims aren’t permitted to pray to the prophets or seek help from them.

The Quran mentions many prophets who lived before the last prophet, Muhammad (pbuh), including Adam, Noah, Abraham, Ishmael, Isaac, Jacob, Joseph, Moses, David, and Jesus (pbuh to all). However, Muslims believe that many other prophets lived prior to Muhammad (pbuh) as well. In brief, Muslims acknowledge almost all the Biblical prophets as their own.

check.png Belief in the Day of Judgment: Muslims believe that on the Day of Judgment, the body and soul of every human — from the first human created to the last human born — will be resurrected to Allah’s judgment for his actions during his lifetime, and Allah will determine his final destination (heaven or hell).

check.png Belief in Allah’s divine will (al qadr): Muslims believe in divine predestination. Allah knows the past, present, and future because Allah is timeless. Predestination does not mean that human beings have no free will. Rather, Allah gives humans free will so that we can choose right or wrong and be responsible for our choices.

The Pillars of Islam

Although the six core beliefs of Islam are crucial, Muslims are also compelled to put their beliefs into practice. Muslims must practice five important obligations — the pillars of Islam — in order to lead responsible lives. No matter how strongly a Muslim holds to the six core beliefs outlined in the preceding section, he or she must also put those beliefs into action by performing these five obligations.

Islamophobia and Islamic finance

Islamophobia refers to the irrational fear of — and bias, hatred, or hostility toward — individual Muslims, communities of Muslims, or the followers of Islam as a whole. The term came into existence sometime around the late 1980s but became part of the Western vernacular after the events of September 11, 2001.

As Islamic finance expands in the Western world, Islamophobia challenges its acceptance. Because Islamic finance is based on sharia (Islamic law), some people assume that Islamic finance operations are linked to financing terrorists. Another assumption is that Muslims want Islamic law to be implemented in every country.

Although Islamophobia is certainly an issue that affects Muslims in the West, the relatively small size of the Islamic finance industry in the United States (compared with other Western nations, such as the United Kingdom) isn’t the result of this irrational fear. Instead, the industry’s small size is due primarily to complicated regulatory challenges that make establishing Islamic banks difficult. Nevertheless, the industry has made important inroads in America, including the establishment of the world’s first Islamic investment fund in 1986 (see Chapter 11) and the 2011 issuance of sukuk (the Islamic alternative to bonds) by financial giant Goldman Sachs.

Here, I describe the pillars just briefly, offering the core concepts:

check.png Testimony of faith (shahadah): The basic statement of faith in Islam is declaring La illaha ill Allah, Muhammadur Rasul Allah. The English translation is “There is no god except Allah, and Muhammad (peace be upon him) is the messenger of Allah.”

remember.epsBy making this declaration sincerely and willingly, a person can become a Muslim. This statement confirms that the person reciting it believes that only one God (Allah) exists and that Muhammad (pbuh) is the messenger of God, and it indicates that the person will conduct his or her life according to Islamic principles.

check.png Daily prayers (salah): Muslims are obliged to pray to Allah five times daily: at dawn (before the sun rises), at midday (after the sun passes its highest point in the sky), later in the afternoon, at sunset (soon after the sun sets), and at night. The Arabic word salah means “connection,” and the daily prayers are a formal way of helping Muslims connect with and think about Allah. Practicing Muslims around the world adhere to this obligation. These prayers are quite ritualized.

check.png Obligatory charity (zakat): All wealthy Muslims must pay a kind of tax in the form of charity to the needy from a portion of their wealth. To be clear, zakat isn’t a voluntary charitable donation given by Muslims to the needy; instead, it’s an obligation imposed on the rich.

remember.epsZakat management is part of modern Islamic finance and is a separate field of study. Most Islamic firms take zakat from their investors’ profits and from their own profits and set aside these amounts for charity. (In a Muslim country, the firm’s zakat fund is turned over to a regulatory body for distribution). The rates of zakat calculation are different according to the type and amount of wealth accumulated. For cash and gold held in an individual’s savings, for example, 2.5 percent must be given as zakat. I describe zakat in Chapter 14, where I explain Islamic financial reporting requirements.

check.png Fasting (sawm): With some exceptions, Muslims are required to fast each day during the Islamic month of Ramadan, which is the ninth month of the Islamic (Hijri) calendar. Each day during that month, Muslims fast from dawn until sunset. During the fasting time, Muslims aren’t allowed to indulge in sexual relationships or consume any food or drink from dawn to dusk.

People excepted from Ramadan fasting obligations are children under 12, people who are mentally and/or physically unwell, breastfeeding mothers, pregnant and menstruating women, and people who are traveling on long journeys.

check.png Pilgrimage to Mecca (Hajj): Every Muslim who is financially, mentally, and physically able must perform Hajj once in a lifetime. Hajj is a pilgrimage to the holy city of Mecca — the first place ever built to worship Allah and also the birthplace of the Prophet Muhammad (pbuh) — that involves a series of specific rituals. This pilgrimage takes place during the month of Hajj on the Islamic calendar, and an increasing number of Muslims are performing this obligation each year. For example, more than 3 million people performed Hajj in 2011.

Adhering to a Code of Conduct: Sharia

The core beliefs and pillars of Islam guide the lives of all Muslims. In addition, Muslims abide by a code of conduct — a rulebook, if you will — called sharia, which connects Islamic principles to all aspects of daily life. Sharia influences everything from how a family conducts its affairs to how leaders and businesspeople conduct political and economic situations.

tip.epsYou’ve undoubtedly heard of various systems of law, such as Roman law and English law. Well, sharia is the system of Islamic law (what a Muslim considers to be divine law), which has been developed from the birth of Islam until today. If you plan to pursue a career that relates to Islamic commercial law, I encourage you to become familiar with the objectives of Islamic law (in Arabic, maqasid al-sharia) and how they relate to Islamic finance.

In this section, I introduce you to sharia by first dispelling the notion that all Islamic law is radical. I then briefly touch on the objectives of Islamic law and explain how sharia governs a Muslim’s life choices.

Being wary of radicalism

Outside the Muslim communities, sharia has garnered tremendous criticism in recent years — largely because of narrow understanding (rather, misunderstanding) of what sharia is and why Muslims adhere to it. When you study Islamic finance, for instance, and come across frequent mentions of the need for sharia compliance, you may wonder what that means. Islam addresses every aspect of Muslims’ lives; it’s by no means limited to dictating a particular dress code or doling out punishments, as wrongly perceived by many people with no firsthand experience with the Islamic legal system. Rather, for the vast majority of Muslims, sharia is a means of promoting human rights by preventing harm to individuals and to society.

remember.epsPerceptions of sharia in the West are largely influenced by interpretations and actions that most Muslims deem radical. The majority of Muslims are as horrified by the notion of someone being stoned to death for adultery as you are. Unfortunately, stories that involve such applications of Islamic law are much juicier attention-grabbers than stories about Muslims who adhere to sharia when deciding what to eat or how to resolve a financial conflict with a neighbor whose tree fell onto their house.

Think of it this way: When you read a story about a preacher in Florida burning the Quran or an anti-gay church in Kansas picketing military funerals with signs such as “Thank God for 9/11,” do you think that someone in the Muslim community reading those stories assumes all members of that religion hold the same beliefs as that preacher or those church members? Or do you hope that people in other countries recognize radical religious positions and separate them from the moderate beliefs of most people in the West?

Sharia is a code of conduct that is intended to guide Muslims toward positive decisions related to their social, spiritual, political, and financial affairs. In this book, I write frequently about the role sharia plays in promoting transparency in the financial industry, for example, so that investors are always aware of how their money is being used — and so they (and the capital markets in general) aren’t harmed by fund mismanagement.

Respecting Muslim beliefs about the purpose of sharia

Muslims believe that Allah (God) is their creator and that Allah’s law is divine (and divinely revealed through the prophets). Why did Allah reveal law to humankind? As the creator, Allah knows (better than humans do) how to organize the lives of creation.

Islamic scholars, such as those who sit on sharia boards of financial firms (see Chapter 16), state that Islamic law exists to establish justice in the world — to benefit all people, support their well-being, and promote their happiness. Therefore, every tenet of sharia is founded in reason; implementing the law helps humans achieve something positive that promotes justice.

Many of the sources of Islamic law (which I identify in the later section “Citing the sources of Islamic law”) explain the reasoning behind specific rules so believers understand why they’re asked to behave a certain way. For example, the Quran prohibits consuming alcohol. Verse 91 (from the A. Yusuf Ali English translation) reads this way:

Satan’s plan is (but) to excite enmity and hatred between you, with intoxicants and gambling, and hinder you from the remembrance of Allah, and from prayer: will ye not then abstain.

Therefore, Muslims are told to avoid alcohol in order to avoid conflict and remember Allah. Alcohol creates unnecessary problems for society; the reasoning is pretty clear.

Considering the objectives of Islamic law

The objectives of Islamic law (maqasid al-sharia) are studied and interpreted as part of a separate branch of Islamic knowledge. Maqasid theory explains the different models or paradigms for the objectives of Islamic law and describes the thoughts of various scholars, the evolution of Islamic law, and so on. For the sake of simplicity, here I explain some basic modern thoughts about maqasid theory based on the work of contemporary researchers.

Keep in mind that the primary goal of sharia is to bring well-being to humankind through justice. The objectives of Islamic law can be grouped into three categories based on their level of prioritization. They are essential objectives, complementary objectives, and embellishments.

Essential objectives

The five essentials, according to sharia, are faith (or religion), life, intellect, lineage, and wealth. These requirements are the most important ones for the well-being and survival of humankind. Islamic law works to protect and advance these essential objectives because their destruction would diminish the normal order of society and undermine humankind as a whole. Here is a bit of insight into each of these five essentials:

check.png Faith (or religion): Islam considers faith to be essential to a strong society, so sharia law advocates necessary steps for protecting faith in a person’s heart. These steps include clearly defining principles and core values and establishing knowledge with proof.

check.png Life: Yes, life itself comes second on the list of essential objectives; faith takes the top position. To protect and advance life, sharia prohibits suicide, advances punishment for killing, and so on.

check.png Intellect: Per sharia, the intellectual growth objective is necessary for the existence of humankind and society. Without intellect, justice and well-being are unreachable goals. Islamic law protects human intellect by imposing rules such as the prohibition of alcohol and other intoxicants.

check.png Lineage: This word refers to the continuation of humankind on earth. Islamic law protects lineage by encouraging family life: by promoting marriage, for example, and by fostering love among family members.

check.png Wealth or property: You may be surprised to see this item on the list of essentials, but sharia considers wealth (the accumulation of property and its protection) essential for promoting justice and the well-being of humankind. Yes, you’re allowed to be wealthy if you’re Muslim. That’s true because all earthly things are creations of, and gifts from, Allah. To acquire property means to share Allah’s gifts. To live without wealth or property indicates that Allah is testing an individual’s patience; the person will be rewarded if she demonstrates true commitment to Allah and to Islam.

remember.epsThis doesn’t mean that a person without wealth must live without provisions. As the earlier section “The pillars of Islam” indicates, zakat — the sharing of property with the less fortunate — is an obligation that all wealthy Muslims must fulfill. In other words, although the accumulation of wealth is acceptable, Muslims are obligated to distribute Allah’s gifts to people who most need them.

Sharia offers many prescriptions for the management of wealth, and Islamic economics and finance are subject to the principles laid out for achieving this essential objective. I explain the fulfillment of corporate zakat in Chapter 14.

Complementary objectives

Complementary objectives exist for the sake of protecting and implementing the essential objectives; they play a supporting role. Although humankind can continue to exist in the absence of complementary objectives, people would experience greater hardship and disorder without them.

realworldexample.epsConsider just two examples:

check.png Earlier in the chapter, I explain that one pillar of Islam is to fast during the month of Ramadan. This obligation supports the essential objective of maintaining one’s faith or religion. I also note that exceptions exist. The exceptions — the concessions — are complementary objectives. Without them, humans may experience some difficulties, but humankind would manage to survive.

check.png Some people live in areas that have very long days or nights. (Think of a Muslim living in Alaska, for example.) This circumstance makes praying according to schedule or fasting — when daytime is especially long — difficult for these Muslims. Many Islamic scholars agree that exceptions can be made in these cases; for example, Alaskan Muslims can follow the schedule observed by Muslims in another region with a more average division of day and night.


These objectives help bring the essentials to completion, but they aren’t (of themselves) essential. The embellishments promote the highest standards of conduct so that humankind is supported in its efforts to achieve the essential objectives.

The presence of an embellishment is more preferable than its absence; these objectives make life richer and more beautiful. For example, one embellishment is neatness and cleanliness in personal appearance. Other examples are developing moral values such as moderate consumption, encouraging charitable giving beyond the obligated zakat, and simply displaying kindness and good manners.

Noting the areas of life governed by sharia

This section could be very short. Simply stating that sharia encompasses every aspect of human life covers the issue, but I’ll offer just a bit more detail than that! Islamic law governs Muslim religious practices, lifestyle choices, justice systems, and money matters. I’m hard-pressed to find a topic that doesn’t fit somewhere into these four broad categories.

Religious practices

Sharia guides and governs how humans relate to Allah (God). Without Islamic law offering this guidance and governance, people would likely create their own rituals and prayers, and the religion of Islam would falter and eventually disappear. As I explain in the “Essential objectives” section, the preservation of faith (religion) is the first essential goal of sharia, so this area is a biggie.

To ensure the continued strength of Islam, sharia describes laws, rules, and practices regarding, for example, the types of prayers Muslims should offer, how and when they should fast, how they should fulfill their obligation of zakat (charitable giving), and what rituals they should conduct during the Hajj pilgrimage. (Flip to the earlier section “The pillars of Islam” for an explanation of these Muslim obligations.)

Lifestyle choices

The word lifestyle here refers to how individuals, families, groups, and entire communities live. Islamic law guides lifestyle choices for the sake of fulfilling the five essential objectives outlined earlier in the chapter. Sharia has much to say about marriage, clothing, diet, leisure, and entertainment.

Sometimes Islamic law offers choices to its adherents, and sometimes it imposes rules. For example, sharia encourages marriage for the sake of human survival (lineage); however, an individual can choose whether or not to get married. But Islamic law absolutely prohibits adultery and prostitution, which are harmful to a moral society.

Matters of justice

The very basic purpose of Islamic law is to promote justice for all humanity, so the fact that Islamic law has a great deal to say about crime and punishment isn’t surprising. Sharia spells out what constitutes a crime — from murder and adultery to theft and blasphemy — and indicates the appropriate punishment for each crime as revealed in the Quran or other source of Islamic law.

Money matters

Money is an essential part of human life, and Islamic law gives money matters appropriate attention. In the interests of promoting justice and well-being, sharia addresses issues related to trade, charity, inheritance, and more.

remember.epsThe Islamic finance industry is governed by sharia guidelines and rules that fall into this category. In Chapter 1, I outline the major ones, including the prohibition of riba (interest), gharar (speculation), and maysir (gambling).

Citing the sources of Islamic law

Laws don’t emerge in a vacuum, and Islamic law is framed based on a set of specific sources. All Islamic scholars agree that the Quran and sunnah are the primary sources of sharia. However, they don’t always agree on the secondary and minor sources of sharia. The following list is generally accepted:

check.png Primary sources: As mentioned, the most important sources of sharia are the Quran and the sunnah.

Quran: The Quran is the first source of sharia. As I explain earlier in the chapter, the holy Quran was revealed by Allah to the Prophet Muhammad (pbuh) through the Angel Gabriel. The Quran talks about law, history, science, beliefs, morals, ethics, and more.

Sunnah: The sunnah is the second source of sharia. It consists of the orders and practices (the words and deeds) of the Prophet Muhammad (pbuh), which Muslims consider to be the best examples of sharia in action.

check.png Secondary sources: Ijma and qiyas are considered important, but not primary, sources of sharia. I describe these secondary sources in more detail in Chapter 6.

Ijma: The third source of Islamic law is ijma, which is general agreement among Islamic scholars about religious matters as they’re currently interpreted.

Qiyas: The word qiyas means “analogy,” and it represents the fourth most important source of sharia. Qiyas means that qualified sharia scholars consider the established rulings of previous cases and apply them to new cases that share the same basic components of the established rulings.

check.png Minor sources: Other sources of Islamic law include ijtihad (legal inference), istihsan (juristic preference), istishab (presumption of continuity), and urf (common practice), which I describe in Chapter 6.

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