Islamic Economic Principles

2019 ◽  
Author(s):  
Rodney Wilson
Keyword(s):  
Interest Rates ◽  
Economic System ◽  
Charitable Giving ◽  
Private Property ◽  
Moral Issue ◽  
Socialist Economy ◽  
Private Property Rights ◽  
Banking And Finance ◽  
Normal Method ◽  
Islamic Economic

Justice in commercial transactions is central to Islamic economic teaching, in particular the notion that remuneration should be fair, with distribution viewed as a moral issue. Risks are inherent in any economic system, but in Islam rather than risks being borne by debtors alone, they should be shared by creditors. This has implications for the organization of banking and finance. The charging of interest is forbidden, partly due to concerns about exploitative usury, as well as unease about how interest rates are determined. Islamic economic teaching stresses the merits of charitable giving and the importance of tackling poverty. At the same time there is an awareness of the dangers of creating a dependency culture and the desirability of sustainability in charitable giving. There is concern not only with how money is earned but with how it is spent, with Islamic economic teaching providing guidance on what spending is legitimate and desirable and what should be avoided. Markets are viewed as the normal method of conducting business in Islamic economics, and private property rights are respected. Islamic teaching in the economic sphere is often regarded as more compatible with a capitalist economic system than a socialist economy, although there is no consensus among Islamic economists about where the dividing line between the state and the private sector lies. Arguably Islamic teaching has developed more at the microeconomic level of the firm while macroeconomic fiscal and monetary policy options remain contested.

Islamic Finance and Development in Malaysia

2021 ◽  
Author(s):  
Fulya Apaydin
Keyword(s):  
Interest Rates ◽  
Capital Accumulation ◽  
Islamic Finance ◽  
Financial Industry ◽  
Consumer Durables ◽  
Banking And Finance ◽  
International Investors ◽  
Islamic Economic ◽  
Institutional Legacies ◽  
Financial Transactions

From a historical perspective, Islamic economic institutions have not been conducive to capital accumulation in Muslim societies (Kuran 2004, 2011). This has been further hampered by a lack of trust among different faith communities, where Muslims were historically charged higher interest rates by non-Muslim financiers (Kuran and Rubin 2018). Despite these institutional legacies, Islamic banking and finance has grown rapidly in the Muslim world over the past few decades. In some countries, Islamic finance is no longer considered a niche field, as the total volume of halal exchanges constitute a substantial share in the overall amount of financial transactions. This chapter focuses on the role of Islamic finance in development and argues that this relationship is further influenced by the conditions under which private money creation occurs. In particular, the case of Malaysia is a good example that showcases how the building of market institutions is not enough to stimulate equitable development: while an extensive network of Islamic finance institutions attract domestic and international investors, much of the loans extended by these banks finance real-estate and consumer-durables purchases. Islamic banks are less willing to extend credit to small and medium-sized businesses on the grounds of perceived high risk. The key beneficiaries of the Islamic financial industry are large financial corporations that raise capital via issuing Islamic equity, and governments that diversify their debt composition using shariʿa-compliant bills and bonds.

scholarly journals Privatization in economic theory

2007 ◽  
Vol 54 (1) ◽  
pp. 103-118 ◽  
Author(s):  
Maja Drakic
Keyword(s):  
Property Rights ◽  
Economic System ◽  
Market Economy ◽  
Private Property ◽  
Choice Theory ◽  
Free Market ◽  
Mass Scale ◽  
Equilibrium Models ◽  
Dominant Form ◽  
Private Property Rights

In reality privatization has never occurred according to the handbook rules of ordinary market transactions. Not even in advanced market economies can privatization transactions be described by the Walrasian or Arrowian, or Leontiefian equilibrium models, or by the equilibrium models of the game theory. In these economies transactions of privatization take place in a fairly organic way ? which means that those are driven by the dominance of private property rights and in a market economy. But despite this fact Western privatization also some peculiar features as compared to ordinary company takeovers, since the state as the seller may pursue non ? economic goals. Changes in the dominant form of property change positions and status of many individuals and groups in the society. That?s why privatization can even less be explained by ordinary market mechanisms in transition countries where privatizing state-owned property have happened in a mass scale and where markets and private property rights weren't established at the time process of privatization began. In this paper I?ll discuss and analyze the phenomenon of privatization in context of different economic theories arguing that empirical results go in favor of the public choice theory (Buchanan, 1978), theory of "economic constitution" (Brennan and Buchanan 1985), (Buchanan and Tullock, 1989), and theory of "collective action" (Olson, 1982). These theories argues that transition from one economic system into another, for example transition from collectivistic, socialistic system into capitalism and free market economy with dominant private property, will not happen through isolated changes of only few economic institutions, no matter how deep that changes would be. In other words privatization can not give results if it's not followed by comprehensive change of economic system because privatized companied wouldn't be able to operate in old environment.

scholarly journals REDEFINIG ECONOMIC SYSTEMS AS AN ISLAMIC ECONOMIC SYSTEM

2016 ◽  
Vol 12 (1) ◽  
Author(s):  
Muhammad Waqas ◽  
Keyword(s):  
Economic System ◽  
Private Property ◽  
Practical Implication ◽  
Economic Systems ◽  
Social Variables ◽  
Economic Problems ◽  
The Social ◽  
Different Types ◽  
Islamic Economic ◽  
Loan System

Objective: Need of a new economic model has been realized at the international level, as numerous and significant flaws has appeared in both two systems capitalism and socialism, which are becoming a great cause for economic crises in almost every economy of the word, in this regard this study has been carried out on the redefining Islamic economics as a new model, that how it can take out those problems and flaws which has appeared in both structure. Methodology: Islamic economic system doesn’t emphasize only on the economic variables it also considers the social variables which has been neglected by both previously and currently practicing systems (socialism and capitalism).current study is a comparative analysis of all said systems. Findings: It has been also observed that in spite of having great strength to winkle out all the economic problems, without interest how we are able to get the profit and what different types of new loan system that is RIBA free and helpful for getting the good profit. Practical Implication: In Islamic economic system the private property is being debatable. Government or state should be involved in only condition if market is failed to provide public good and education.

scholarly journals Institutional Setup in Market Economy and Islamic Property Rights

2018 ◽  
Vol III (I) ◽  
pp. 12-20
Author(s):  
Noor Fatima ◽  
Muhammad Zubair ◽  
Zubair Sarfaraz
Keyword(s):  
Property Rights ◽  
Economic System ◽  
Market Economy ◽  
Free Trade ◽  
Private Property ◽  
Essential Element ◽  
Property Right ◽  
Base System ◽  
Distribution Of Wealth ◽  
Islamic Economic

This paper argues that there is an ever-growing demand to correlate between Islam and Economics. Property-right and ownership is the basic concept of the modern economic structure of a liberal economic system. A property right is well explained in Islam and that also an essential element for the market economy, this paper discusses the Islamic perspective of property rights and how far it is complementary with the market economy. Since property rights of Islam are central to the structure of the economic system, Islam also emphasizes on economically good life depends on free trade. Free trade demands a recognized system of property rights, as a market base system demands a healthy competition of commodities, which ultimately needs private property rights for the protection of capital of producers and owners. The distribution of wealth is the main argument of the Islamic Economic System, which helps states in the fair distribution of resources.

scholarly journals Toward the Shari'ah Paradigm of Islamic Economics

1985 ◽  
Vol 2 (1) ◽  
pp. 79-99
Author(s):  
Muhammad Arif
Keyword(s):  
Economic Theory ◽  
Economic System ◽  
Market Economy ◽  
Private Property ◽  
Free Enterprise ◽  
Scientific Justification ◽  
Scientific Nature ◽  
Islamic Economic ◽  
The Right ◽  
Made In

I. INTRODUCTION -THE MAJOR CRITICS OFISLAMIC ECONOMICS: This paper attempts to respond to the critics who, on various grounds, oppose the development of Islamic economics. The author feels that a scientific response to these critics is the responsibility of the Islamic economists. It is believed that such a response would be educational for the critics and their followers. It would enable them not only to understand the scientific nature of Islamic economics but would also allow them to appreciate that the development of the Shari'ah paradigm ofislamic economics is, in fact, the beginningofascientific revolution in economics. Given the bases of their arguments, these critics of Islamic economics can be classified into the following three schools of thought. 1) The Adjusted Capitalism School: According to this school the fundamental principles of the Islamic economic system are the same as those of capitalism. In support of this assertion they point out that like capitalism, Islam also allows the right to private property, free enterprise, and market economy. They, however, acknowledge that certain adjustments need to be made in capitalism to bring it in conformity with Islamic principles. They hold that these adjustments should be made according to Islam's distinction between Haram and Halal, and Islam's teachings in financial and fiscal areas; namely, riba and zakat. According to this school, if these areas of capitalism are adjusted according to Islamic requirements, then the adjusted form of capitalism will be nothing but the Islamic economic system. Thus this school holds that the conventional economic theory, with only a few adjustments, is fully capable of generating the Islamic economic system. Hence, they see no scientific justification for the development of Islamic economics toward the creation and establish­ment of an Islamic economic system ...

scholarly journals Marxian Socio-Political Economic Theory: Two Schools of Thought: Part-II

2020 ◽  
Vol 7 (5) ◽  
pp. 452-477
Author(s):  
M. L. Sehgal
Keyword(s):  
Economic Theory ◽  
Interest Rates ◽  
Private Property ◽  
Supply And Demand ◽  
Future Generation ◽  
The State ◽  
Socialist Economy ◽  
Planned Economy ◽  
The Individual ◽  
Political Economic

 Marx, an idealist, who believed ‘Capitalism to be an Evil’ and ‘Socialism a Harbinger of Prosperity’, propagated his economic ideas whose basic Pillar was the Labor Theory of Value (LTV) which included Surplus –Value (SV), Falling Tendency of  Rate of Profit, Price of a Commodity, Supply and Demand’ Relation, Inflation and Interest Rates. His Socio-political thought included the state would be the Monopolist without anybody owning any private property with religion being the opiate of the masses. He preached class struggle but ignored the middle class. He wanted to do away the State even with the violent Revolution. All this brought him in conflict both with his contemporary economists as well as with the future generation of economists. The 150 old Socio-political Economic Theory of Marx, though a noble idea, could not stand the test of the times and started falling under its weight. The duality in the minds of the people about its utility and applicability is best described by the celebrated Physicist- Einstein’s viewpoint which speaks volumes of the aura of the man   named Karl Heinrich Marx:    “I am convinced (that) there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion. A ‘planned economy’, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child”  But look at the lurking fear in the mind of the genius about the ‘planned economy’ as: “Nevertheless, it is necessary to remember that a  planned economy is not yet socialism. A planned economy as such may be accompanied by the ‘complete enslavement of the individual’. The achievement of socialism requires the solution of some extremely difficult socio-political problems: how is it possible, because of the far-reaching ‘centralization of political and economic power’, to ‘prevent bureaucracy from becoming all-powerful and overweening’? How can the ‘rights of the individual be protected’ and therewith a ‘democratic counterweight to the power of bureaucracy be assured’?”

Sistem Ekonomi Islam Simbol Kesejahteraan Masyarakat

2018 ◽  
Vol 6 (1) ◽  
pp. 49-64
Author(s):  
Muhammad Wildan ◽  
Muhammad Wildan
Keyword(s):  
Economic System ◽  
Strategic Plan ◽  
Thomas Kuhn ◽  
Economic Independence ◽  
The Core ◽  
Economic Paradigm ◽  
Islamic Economic

The term “economy” comes from Greek word “oikonomia” consisting of “oikos” which means household and “nomos” which means regulation. The word “oikonomia” can be defined as the applicable regulation to fulfill the needs in a household. Islamic economics aims to build the economic independence of society collectively, meanwhile conventional economics is still individualistic. In the amidst of globalization, the efforts of sharia economist in covering coventional economic flow are already good enough. System that is already ingrained in society cannot easily be changed. The good strategic plan is required in instilling Islamic economic system in the middle of society. Thomas Kuhn says: ”every system has paradigm and the core of Islamic economic paradigm is definitely from Qur’an and Sunnah”.

Sign in / Sign up

Export Citation Format

Share Document