Introduction
Establishing an effective and systematic branch of jurisprudence requires clarifying its foundations, assumptions, specific jurisprudential rules, and the network of related issues. Among these, specific jurisprudential rules help ensure that the branch is methodical and disciplined, with its arguments coherent and structured. Hojjat al-Islam Dr. Seyed Hamid Joushghani, Secretary of the Economic Jurisprudence Group at the Research Institute for Contemporary Jurisprudence Studies and a faculty member of the Economics Department at Al-Mustafa International University in Qom, addresses some of the rules and dimensions of economic jurisprudence in this exclusive note.
Economic Sectors and Islamic Principles
In any economy, economic activities are divided into two sectors: the real sector (encompassing investment, production, and distribution) and the financial sector, which is responsible for meeting the financial needs of the real sector. The real sector includes tangible economic phenomena and their relationships, which do not require social contracts to exist but are inherently realized externally. Examples include production, distribution, goods and services, and physical capital, forming two main markets: the market for goods and services and the market for production factors.
The financial sector, or the credit-based sector, includes conventional phenomena and assets such as money, stocks, other financial assets, and related activities and institutions like banks, stock exchanges, and other securities markets. In other words, financial markets—comprising the money market and the capital market—and their activities and relationships constitute the credit-based sector, tasked with financing and mobilizing capital for the real sector.
Separating these two sectors increases transaction costs and leads to inefficiencies, ultimately causing the real sector to bear higher costs compared to an integrated approach. Islamic Sharia emphasizes the integration of these two sectors to achieve balanced and sustainable economic growth. The principle of integration is one of the most fundamental principles required in Islamic economic theories and the development of Islamic financial products. While integration imposes certain restrictions on economic behaviors, it also fosters specialization at the input level, enabling the regulation of outputs across various sectors.
Based on this introduction, from a jurisprudential perspective, several key rules in the Islamic economic system can be highlighted, as follows:
Rule of Prohibition of Activities Leading to Usury
In conventional economics, the foundation of the financial system is the interest rate on various forms of debt, which has caused periodic major crises in capitalist economies. Economists such as Keynes, Minsky, and Weitzman have identified the root of such crises in the interest-based and usurious nature of the capitalist economic system. While usury (interest on money) permeates conventional economics in forms such as bonds, deposits, bank loans, credit facilities, credit cards, and more, Islam strictly prohibits it.
In Islamic economics, the financial system is driven by the return on capital and various forms of partnership. In this system, saved funds are channeled into income streams through partnerships; the saver simultaneously generates additional income, increases the production of real goods and services, and, after realizing the return on investment and production, creates a new source for further partnerships.
Rule of Prohibition of Gharar (Uncertainty)
The basis for this rule is the well-known narration: “The Prophet prohibited the sale involving gharar.” One meaning of gharar is risk, but it also implies deception and ignorance. These two meanings (risk and ignorance) converge in cases where outcomes have low probability but high value. Gharar and uncertainty (ignorance and risk) are closely related, with gharar being a product of uncertainty. Uncertainty may pertain to the characteristics of the transaction subject and, by extension, affect the likelihood of achieving a positive outcome.
Jurists have identified four instances of gharar in sales:
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Risk of the non-existence of one of the exchanged items.
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Risk of inability to deliver the exchanged items.
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Risk of ignorance regarding the value of the exchanged items.
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Risk of ignorance regarding the characteristics and conditions of the transaction.
Rule of No Harm and No Injury in Islam (La Darar wa La Dirar fi al-Islam)
One of the most well-known jurisprudential rules, widely cited across various branches of jurisprudence such as worship, transactions, and others, is the rule of no harm (la darar). The primary evidence for this rule, in terms of meaning and content, comes from narrations, though Quranic verses and reason have also been used by many jurists to substantiate it.
Since Sharia does not accept any form of harm or injury, and no ruling—whether directly, independently, or through its subject—causes harm to those bound by it, the sacred lawgiver has declared: “There is no harm or injury in Islam.” This negates real, tangible harm. The generality of this negation encompasses both obligatory and situational rulings. For instance, just as the obligation of ablution (wudu) is lifted in cases where it causes harm and is replaced with dry ablution (tayammum), a situational ruling such as the binding nature of a sale or a transaction involving deception (ghabn) is also lifted, granting the deceived party the right to rescind the transaction. Another aspect of the rule’s generality is that it applies to both existing rulings and the absence of rulings.
Rule of Prohibition of Unjust Acquisition of Wealth
Quranic verses and certain narrations clearly establish this rule. The primary evidence is the verse: “O you who have believed, do not consume one another’s wealth unjustly, except through trade by mutual consent” (An-Nisa: 29). According to this verse, any form of disposal of wealth through means considered invalid by customary standards is prohibited.