The Economic System of Islam by Taqiuddin an-Nabhani

The balance of trade is the difference in total value between the visible imports and the visible exports over a period. If we were to calculate the total value of the imports on one side and the total value of exports on the other, we would be able to work out the balance of trade. So if the value of our exports exceeded that of our imports, the balance of trade would, in this case, be in our favour, because other countries owe to the State the difference between the value of the exports and imports.

Therefore, foreign demand for the State’s currency to pay for commodities from the State would exceed the State’s demand for foreign currency to do the same. However, the balance of trade would not reflect the real picture about the state of the national economy. Because the national income is not only restricted to the profits from foreign trade. Other sources of income would also be considered as part of national income. The balance of trade does however reflect the real picture concerning the state of our foreign trade. It would however be unwise to aim to maintain the balance of trade tipped in favour of the State at all times. This is because the State may have other designs related to her ideology, or to the propagation of that ideology, or related to industrial development, or to fulfilling her needs, or to political issues concerning the stance of a country with whom she has trade relations and how she aims to shape that stance. It could also be related to the international situation and what may influence it. In this context, the State’s intended designs would override the need to achieve a favourable balance of trade.

Therefore, although the commercial perspective would be based on profit, it should at the same time be from the State’s perspective, not from an individual’s, thus the objective and the entity of the State should override any commercial gains.