Wednesday, July 27, 2005

By the Token of Time "Wal 'Asr"



The Quran says, "by the token of Time, man is at loss (khusran) except those who:
1. have faith (iman)
2. do good deeds ('amal salih)
3. strive for the truth (haq)
4. act in patience while striving for the truth (sabr)

One may ask, why Time is put forth by Allah s.a.w. as the backdrop in defining people who are not lost but guided (i.e. those who posses the 4 attributes in the above).

A lot can be said about the meaning and importance of Time and but I can only examine one meaning and that is from the economic prspective.

In economics, we can say that time is scarce. Under that notion of scarcity, time has value. But man can choose to live in leisure and earn nothing. He can also wisely spend the time to work in order to earn money. Man is given the freedom to choose. For that he must be ready to face the consequences of his action. This is a law in nature that no rational person will frown at.

The time factor also shows that people can choose to spend today or postpone their spending to some future date. Choosing the former certainly mean securing the pleasure of spending without delay. People who have work hard to earn money will now enjoy the fruits of their labor today. i.e. attaining happiness and pleasure derived from current purchases.

However, those who chooses to postpone their current spending will have a no definite idea how much pleasure they can secure from future purchases. This is called spending under uncertaintly.

The interest system i.e. riba actually came into being to guarantee certainty. It came to put the law in nature upside down. By paying interest on loans to those who postpone current spending i.e. creditors, the interest system guarantees identical pleasures to that when one chooses to consume today. In this way, people who take and receive riba are indeed those who are in loss (khusran) in a sense that they work against the law in nature.

Investment in Islam operates under uncertainty (i.e. unknown business outcome) as no one but only God knows the outcome of business. If a scheme guarantees certainty on the return of investments, it is none other than the devil. The Quran says, "They who swallow down usury, shall rise in the resurrection only as he aristh whom Satan hath infected by his touch"

12 Comments:

Blogger Maya Puspa Rahman (G0319620) said...

Due to the scarcity of time, men often act hastily, or rather, taking actions without putting any serious thinking on its implications.

It is inevitable that men love luxurious life, (and who wouldn't) and it is this devotion towards things, based on the unlimited wants of men, that drive people to succumb to the idea of "spend now and pay later" - the notion that is famously associated with the use of credit cards.

It is the impatience of men in fulfilling their desires that enticed them to really spend today (and beyond what they can afford) to fall into the traps of credit cards. And with that, the recent news that bankrupty rate among those graduans who have just started working and within their late 20's came as no surprise.

By the token of Time, indeed men are at loss. Except for those who are wise enough to plan for their futures, and every steps that they take in life, just like implementing the economic theory of decision making for example; what courses that I want to study, what kind of work I'd like to do, what type of car I want to drive, what type of house I would like to live in and so forth.. but the most important decision making of all is that, WHAT HAVE I PRESENTED TO ALLAH THUS FAR - is it already enough? Are all the decisions that I have made in my life significant in expecting the love of Allah??

Maya Puspa Rahman
G0319620

9:23 PM  
Blogger ronald rulindo said...

Ronald Rulindo (G0421855)

By the token of time, indeed men are loss...
Allah had already reminded us about the importance of the time.
Just imagine, if we value the time by Rm 1/second, we have to pay to Allah Rm3600/hour, Rm86400/day, Rm 2'592'000/month and Rm 31'526'00/year. So, we are really become a losser if we not manage our time well!

Then, we have to remember that we only have limited time in the world. Like what Prophet Muhammad said in his hadith: “Remember five things before comes the five things, healthy before sick, young before old, rich before poor, spacious before tight, life before death”. (Al Bukhari & Muslim).

Based from those Verses and hadith, we can derive a conclusion that we have valuable time and we must manage it because Allah only give us a limited time. So we have to plan our time to maximize our productivity as human and as the slave of Allah.

If we talk about plan, from finacial business perpective there is one product which could derive based from this reason: the financial Planning. Both verse and hadith can be the reason of the importance of financial planning. However,as a moslem what thing should we plan in our financial planning? should we make the finacial freedom or buy a new car as our goal in our plan? The answer is no! Because Allah created us only to do worship to Him.

Based from Al Baqarah 201, Allah asked us to pray to him with this sentence: ...“O our Lord gives us in the world which is good and in the Hereafter which is good and save us from the torments of fire”
(Al Baqarah 2, 201)

It is clear now that we have two goals in our live: world and Hereafter. So, we can make a plan in order to reach our goal in both. Actually, We can make a same planning with the plan in convetional financial planning for our goal in the world. However, as a moslem we should make the plan not more than necessary. Then, to reach the hereafter goal, We can manage our finance to fulfill the obligation from Allah such as pay Zakah, do Hajj, give infaq, shadaqah and waqf.

1:07 AM  
Blogger Md.khademul Islam said...

By observing the above article, I think that Prof. has discussed the time in two parts. One of them is present time and anther is future time. In his article he has tried to prove his discussion at the economics perspecpective in the Islamic valuation. Man usually spends his time for present consumption and for future consumption to fulfill his unlimited wants. As a result, time is scarce. For earning more money, he used to work hard. In this situation, he can do work in two way - in Islamic way and another one non Islamic way. If he likes Islamic way, but there is also not available resource. Why? This is because of lack of knowledge. Then another question can rise in which source we can collect our knowledge? This answer is easy because Quran and Sunnah are our main resource. Otherwise we can earn a lot of money in evil way. For example, we can work for producing alcohol or selling pornographic CD in order to earn more money but this is not fair in Islamic perspective. Therefore, man can get happiness in present time but it should be Islamic way in order to get free from curse in hereafter life. But Professor does not discuss clearly in this point of view.
On the other hand, what will happen in future, if he leaves current consumption? In general sense, he should get reward. But we should think in Islamic Philosophy. Islam does not allow Riba. Why? There are many reasons behind this. One of them is resource’s allocation. In Riba system, owner will be gainer in every time but borrower will be loser in every time. As a result only rich man will gain money and will more rich than before. Therefore, poverty will increase day by day. So we cannot distribute our resource in equally. On the contrary, Islam gives us equal distribution in trading way. In Islamic system both party can share profit/loss according to their capital/investment. So, one party never bears the loss portion. Finally, we spend our time in Islamic economics of the following diagram;
Knowledge (Quran,Sunnah)- choice-action(Islamic work)
In concluding remark, I would like to comment that if Doctor explain deeply that how consumer will spend their time in economic behavior?, then it will be helpful to reader for understanding the time value of Islamic economics.

Md.Khademul Islam
G0429917

11:29 AM  
Blogger eghutapea said...

Wa al-ashr, inna al-insan lafi khusrn…….

To avoid loss, we have to be faithful, do good deeds, and so forth. Why is faith putted in the first place? Because faith is a necessary and sufficient condition to do the others. We know that faith is believed in heart, said verbally, and implemented through real action. According to Islam, every deed without faith is valueless and without value it will end up with loss (i.e. we got nothing in the eye of Allah but spent resources to do it).

In economic sense, from the above statement can formulate our axiom as:

Axiom 1
An Islamic agent will maximize his utility (i.e. to seek the pleasure of God) subject to limited resources (i.e. lifetime)

Axiom 2
Any deed with faith will be rewarded value, otherwise valueless.

Axiom 3
To make it more complicated, utility function is quasi-concave (i.e. not decreasing).

An agent will be judged as irrational and will be a looser if he failed to achieve his goal. Without faith he denied his existence from nothing to be in reality in this world. He will become a parasite in this world since he wastes resources without giving any value to the society. Having a lot of this type of agent will make this world disheartening (similar with what we have now).

So, easily we can see that a rational Islamic agent will maximize his utility (pleasure from his Creator) by trying to increase his level of faith. Having a faith will result in gaining value from every deed he does.

For sure, this kind of agent will have such kind of economic behavior that follow the Islamic teaching. He will only do what was permitted and will move away from what was prohibited.
By having many agents like this in society will represent society akin to that during the time of Rasullah pbuh at Madinah. At that time, the ultimate goal of every activity was promoting the mashlahah of ummah fid dunya wal akhirah.

Blessing of Allah on who are the rational ones.

Wallahu ‘alam bissawab

8:47 PM  
Blogger abduh said...

Muhammad Abduh (G0415065)
BY THE TOKEN OF TIME “WAL’ASR”

Faith means that he trust to Allah and all His regulation. As a Muslim that has faith, so he must trust that a livelihood is from Allah. Because of it, he don’t need to worry afraid not getting livelihood. All human being already set by Allah their livelihood. It’s our duty to get and pick it up.

Allah order us to collect and find all sources of His livelihood in this world as much as possible, it means that Allah order us to make effort to get it. Without effort, we will not get what we want. Allah already set (sunnatullah) that who make hard effort or work hard will get more than who don’t work to get it.

After we have worked, we also have the trust whatever we do, the result will determine by Allah. Together with effort,we also have to pray to Allah requesting what we want to Allah. And also what we do must in right way and halal. Halal in the getting it, halal the things that we get, and halal to where we use it.

People who take riba is lazy people,they want to invest if they get certain income or guarantee that their deposito will not loss without ignoring that in doing business sometime getting loss, sometime getting profit. They want to get much money without working hard to get it.

In relation with effort and good deeds, we can make all what we do become good deeds. Allah will always give reward to all good deeds even it is a small thing. Investation is the effort to get money, but we can make it become a good deeds if we do Investation because of Allah, with desire to help other people. It will get Allah’s reward for sure and maybe other good things in the world that we don’t know will come. Investation that considered about loss and profit whether it invest in deposit money in Islamic banking or he open new firm or company. We will get reward because doing effort and because of helping other difficulty. By investing, other people will get new job and salary. Otomatically, it will decreasing the number of unemployed people.

2:59 AM  
Blogger muhammad said...

Assalamualaikum

The conception of time value of money as financing benchmark has been long debated among Muslim scholars.

Some scholars agreeable that the borrower has to paid extra to the borrower on the virtue of opportunity cost and risk taken on the borrower before repayment of their advances.

While some of them opposed on the basis that the advances money creates profit on top of it, which is subject to riba.

To synergize this ideas, Muslim jurist, confine to few countries including Malaysia developed system that based on (al bay?) and profit is fixed via buying and selling transaction.


The asset, which is to be used for 'al bay'/trading transaction is purely need & acquired by the borrower or merely stepping stone to validate the transaction is in question.

Upfront profit charge on the borrower, which is much higher that conventional rate can be allowed by Muslim scholars to justify opportunity cost forgone OR 'risk' to be bared by the financier.If so, on what basis they allowed such imposition?.

I leave it to my wise colleagues to comment.

Regards

Muhammad

1:41 AM  
Blogger muhammad said...

Assalamualaikum

The conception of time value of money as financing benchmark has been long debated among Muslim scholars.

Some scholars agreeable that the borrower has to paid extra to the borrower on the virtue of opportunity cost and risk taken on the borrower before repayment of their advances.

While some of them opposed on the basis that the advances money creates profit on top of it, which is subject to riba.

To synergize this ideas, Muslim jurist, confine to few countries including Malaysia developed system that based on (al bay?) and profit is fixed via buying and selling transaction.


The asset, which is to be used for 'al bay'/trading transaction is purely need & acquired by the borrower or merely stepping stone to validate the transaction is in question.

Upfront profit charge on the borrower, which is much higher that conventional rate can be allowed by Muslim scholars to justify opportunity cost forgone OR 'risk' to be bared by the financier.If so, on what basis they allowed such imposition?.

I leave it to my wise colleagues to comment.

Regards

Muhammad

1:41 AM  
Blogger Bilal Mohd Parid (G0428469) said...

Using time frame as a reason to make profit is unethical action. Riba is always perceived as easy money and a way to show superiority by taking additional money from the debtor. This is what happens during the Prophet time in Mecca. Therefore the wealth of nation circulates among the Mecca leaders (rich people).

This is also happening today where the nation can be occupied only by the mean of interest rate imposed by the rich country. The wealth of nations are being squeezed and confiscated by the creditor. This is evidence during the economic crisis in 1997 where International Monetary Fund (IMF) controls the economy of borrowing country. Therefore riba by all means is unlawful and harmful except for the creditors.

Time frame given to us is for the purpose of generating more efforts to achieve Saadah Duniawiyah and Akhirah. The keyword here is ‘effort’. Riba is not an effort, therefore it must be excluded from our life. The effort here also means generating and doing something that contains added value. Therefore generating new wealth by means of ta’awun and cooperation is needed to replace the existing riba system.

WallAllahu A’lam.

10:45 PM  
Blogger siti rubiah said...

From my opinion, Allah s.w.t. put forth Time as the backdrop in defining people who’re not lost but guided because Time is something no one can measure. What I meant here is that no one knows when will be his/her last moment of time in this mortal world. Should they know when will be their final moment, there is no point Allah blessed men with ‘aql & freewill. This is because of that faculty of intellect that will differentiate men from other creation. Because of that faculty of intellect also world and time perfectly act as the ‘testing’ ground for men. Every deed men conducted in this world has the consequences and subject to fair trials in the Hereafter.

The Quran says, “By the Token of Time, indeed man is at loss, except those who have iman, do amal salih, strive for the truth, and sabr while striving for the truth. Why Quran states faith at the first place? Because faith or iman works as a foundation. When the foundation is sound and strong, it will be translated into good deeds, strive for the truth and so forth. If the foundation is shaky, it will be no surprise to witness destruction and enjoyment of munkar than amal ma’ruf. Charging and paying loan is one of the examples.
Wallahu a’lam

9:18 AM  
Blogger kamruzzaman said...

I think it is safe to say that time in terms of its economic value is significant. “Time is money” is an often stated saying that holds true even in Islamic economics. Investments made must always have risks involved and must also include hard work of the investor in the business.

From another economic perspective it can be generally argued that an individual who has faith, work hard (performs good deeds), strives for the truth (to obtain his property) and is patient about it will be much better off than a person who sits idly on his haunches waiting for money to fall from the sky.

Allah helps those who helps themselves is aptly used with the above subject matter. Any business that doesn’t work hard to obtain profits consistently over time, will surely not succeed.

From the point of view of riba’ and usury, I would have to agree on the concept of all investments having some form of risk. People who pile interest on to their loans are obtaining a benefit that they are not supposed to. Since it is a sure business with no risk involved.


What if there is an element of usury and riba’ in conventional banks that are uncertain? Would that make them halal?

Considering that most banks have a credit rating now a days on the people that requires loans shows that some individuals have a higher risk of not being able to pay back the debt. Can this risk be considered an element of uncertainty when a bank “invests” in these individuals by providing them loans. The banks have an interest to see their loans repaid. A defaulter of a loan would mean a loss for the bank. Therefore does this element of uncertainty make it allowable?

Md.Kamruzzaman
G0418759

8:53 AM  
Blogger masahina said...

Time is an essence in Islam. As such in Islamic economics too time is an essence and it is considered as scarce. Under the notion of scarcity, time has value. Prof. Saiful has very prcisely explain the above by simple example. The exmple shows that the one who spends today will get the pleasure and happiness of his purchase immediately and the one who postpones his expenditure will not be sure as to how much pleasure he will get of his purchase.

He compares the interest based investment and islamic investment and very nicely shows that the interst based transactions go against the nature of law.

8:28 AM  
Blogger masahina said...

Time is an essence in Islam. As such in Islamic economics too time is an essence and it is considered as scarce. Under the notion of scarcity, time has value. Prof. Saiful has very prcisely explain the above by simple example. The exmple shows that the one who spends today will get the pleasure and happiness of his purchase immediately and the one who postpones his expenditure will not be sure as to how much pleasure he will get of his purchase.

He compares the interest based investment and islamic investment and very nicely shows that the interst based transactions go against the nature of law.

8:29 AM  

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