ABSTRACT
A Sharia model fully embraces the naturalism of the classical model, except for the interest-debt contracts which are forbidden in Sharia. The interdiction of interest contracts has far-reaching implications on the financial sector, public finance, money, and trade. In the area of government, a Sharia model restricts the government to its natural role without which the welfare of the community will be seriously impeded. The government has to remain within the confines of its Sharia duties and not expand to areas that do not fall under its natural role. In the area of justice, the state is not allowed to circumvent Sharia laws. Capital and labor markets are competitive in a Sharia model; rates of return on capital are rates of profits of individual firms. Foreign trade in a Sharia model aligns with Adam Smith's and David Ricardo's free trade model; capital movements are free.
