The Quran forbids taking interest (“Riba”) but allows trade.

“However, Allah permits commerce, and prohibits usury. Thus, whoever heeds this commandment from his Lord, and refrains from usury, he may keep his past earnings, and his judgment rests with Allah. As for those who persist in usury, they    incur Hell, wherein they abide forever“,

is written in the Holy Quran (2. Surah, 275). 

The Prophet Mohammed (P.B.U.H.) himself was a merchant. Merchants enjoy a high standing in the Muslim community. If you go to a place in the Middle East like Damascus, Jeddah or Jerusalem, you can see the delight merchants take in trading on the bazaars.

In Western thinking, however, Islam is often seen as “anticapitalistic”. But being against trade, commerce and wealth is in no way the true nature of Islam. To the contrary: Differing from many other religions, in Islam, religion and economics are not two different parts. Islam has a holistic view on life, which means, that economics, politics, social affairs and religion are not only interrelated, but also deeply interwoven. Economic and business activity and -success play a much greater role in Islam than in many other religions.

In the Western world, the main incentive for trading goods is the scarcity of goods. To satisfy seemingly unlimited demand, there is only a limited supply of goods. Islam has a different view: Allah gave enough resources to all people to satisfy their needs and make a living upon. Unbridled desire and greed and a lack of the will to work hard however lead to a high demand and a low supply and thus to an economic imbalance.

How can this imbalance be solved? Concerning demand, Islam differentiates between worthwhile and non worthwhile needs.

Concerning supply, Islam holds the opinion, that on a daily basis a lot of resources of people that could be used for hard work are wasted, for example via gaming, gambling, drinking alcohol and consuming drugs. Also wars and the craft of war are designed to destroy a lot of resources and thus diminish supply. This is another reason, why weapons and war are frowned upon by the Shari’ah.

As Allah has given enough resources to human beings, it is up for every one of us to use these resources in the best way and to work hard. So the economic problem of scarcity of goods is solved in Islam via self constraint on the demand- and hard work and focus on the supply side.  

One of the most important aspects of Islam’s value system is that mankind is acting as a trustee for the world and its goods. For the world and all its goods belong to Allah, man is just acting as the custodian. So in dealing with the resources of the earth and in business activities, Muslims are bound to Allah’s laws and thus should take great care in following the Shari’ah, for example in payment of social tax (“Zakat”) or in not paying or receiving interest payment (“Riba”).

Striving for wealth and economic success is perfectly acceptable in Islam. However, not sharing one’s wealth with society and exploiting trading partners and other people by using “Riba” and usury is not.