Islamic Economic System in Practice: Beyond Merely Islamic-based Transactions

Abstract

Islamic economic system is well-known for its not-so-generally accepted concept, a gap between theory and reality, and paradigm disputes. Regarding the different thoughts and the need for economic, social, and moral values; this study intends to elaborate on the Islamic economic system practice at a mezzo level in Pondok Modern Darussalam Gontor (PMDG). This study presents the novelty of the Islamic economic system practice with authority protection and Islamic worldview. Data were collected through semi-structured interviews and interpreted narratively. This study finds that the Islamic economic system in PMDG comprises economic agents and Islamic institutions, transactions, worldviews, and behaviors with market protection to ensure efficient resource allocation and business units’ sustainability. Economic agents consist of a foundation, the chairman as an economic and religious-related decision maker, the management of business units, and the society surrounding PMDG. PMDG allocates resources and regulates market protection through Islamic institutions and transactions to prevent unhealthy competition. The Islamic worldview and behaviors are shown by the integration of modern knowledge and Islamic principles with cooperation and brotherhood. Eventually, the whole process of the Islamic economic system implies the social welfare of internal PMDG and the surrounding community, as well as the achievement of the objective of Sharia. Further research can investigate the more challenged implementation of Islamic economics in a macro-level system and diverse society.
 Keywords: Islamic economic system, Islamic transactions, protection, Islamic worldview, Islamic behaviors