•Indruduction p.2 •Objectives of Islamic Economics
oRight of Property p. 3 oThe problem if equality p. 3-4 oSocial Justice p. 4 •Characteristics of Islamic Economics
oProduction of Wealth p.5 oDistribution of Wealth p.5 o Law of Demand and Supply p.5 oHalal and Haram p.5 •Conclusion p.6 •References p.7
The basis of Islamic economics is enshrined in the spiritual norms of Islam. Unlike the modern economic systems which are based on the mundane philosophy, the Islamic economic system is directly guided by Allah Almighty Himself. As Islamic economic system was passing through its early stages of development, the Quran guided the Holy Prophet (P.B.U.H.) with regard to its effective enforcement. Since this system is Divine guided, it is spiritual. Additionally, all important aspects of the Islamic economic system and the applicable norms are thoroughly discussed in the Holy Quran. Whether it is production, consumption, distribution or the financial system, they all have been discussed in this Divine Book sufficiently. Quran itself declares that Allah Almighty created the human being as His Viceroy on this Earth, and as such He created all needed provisions so that they may consume them and may satisfy their wants. Islam has laid down certain principles and limits for the economic activity of man so that the entire pattern of production, exchange and distribution of wealth may conform to the Islamic standard of justice and equity. Islam does not concern itself with time-bound methods and techniques of economic production or with the details of organizational patterns and mechanisms. Such methods are specific to every age and are evolved in accordance with the needs and requirements of the community and the exigencies of the economic situation. Islam’s concern is that whatever the particular form of economic activity in operation, its underlying principles should always be the same. According to the Islamic point of view, Allah has created for mankind the earth and all that it contains. It is, therefore, the birthright of every human being o try to secure his share of the world’s wealth and sustenance. Islam does not allow a particular person, class, race or group of people to create a monopoly in certain economic activities: equal opportunities for all is its watchword.
Objectives of Islamic Economics
Right of Property
Resources which are provided by nature and which can be used directly by man may be utilized freely, and everyone is entitled to benefit from them according to his needs. Water in the rivers and springs, timber in the forests, fruits of wild plants, wild grass and fodder, air, animals of the jungle, minerals under the surface of the earth and similar other resources cannot be monopolized by anyone nor can restrictions of any sort be imposed on their free use by Allah’s creatures to fulfill their own needs. Of course, people who want to use any of these things for commercial purposes can be required to pay taxes to the state. Or, if there is misuse of the resources, the Government may intervene. But there is nothing to prevent...
The direction of Islamiceconomics emerged since the prophetic period from the practice of Prophet Muhammad as an entrepreneur. His life and the companions that surrounded within the parameter of this business culture as guided by the Holy Qur’an. Nevertheless, the formal discussion of the discipline is rarely discussed in the previous conventional economic system. In order to serve the responsibility as a khalifah, Muslims practice a just economic system to achieve the objective of Shariah, as oppose to embracing economy as the object of the process. Three basic conception of economics which indirectly relate the conception to the objective of economics in Islam, firstly, Allah created body and soul for all creatures and particularly to mankind which are similarly important in the fulfillment of human biological life. The second concept is the oneness of God – Allah bearing objective. All the life and fulfilments are mainly toward His blessings. And the third concept is comprehensive integration of various stems of Islamic system of life.
The objectives of Islamiceconomics are supposed to guide the objective of Islamic banking and Finance. There are four goals of Islamiceconomics in prevailing the values and holistic...
...IslamicEconomicsEconomics studies are devoted with the economical behavior of individuals and societies, for
instance production, consumption, saving, good exchange and so on. Every nation is supposed to
regulate the production of goods and services as demanded by the people, consumers, thus any
economic system needs to answer four main questions:
1- What to produce of goods and services?
2- How to produce these goods and services?
3- Who to produce to these goods and services?
4- What will be the rate of economic growth?
Economic growth is essential in order to be able to provide high living standards to the people
affording to provide more products, the faster the rate of economic growth the better the living
standards are going to be. The four main production resources are:
1- Natural resources
Every economic system aims to achieve a better utilization of these resources which leads the
way to a greater economic growth providing a balanced system and better living standards
through equal division of wealth among different social sectors.
Towards the end of the 20th century, a new terminology was raised by muslim scholars, although
theories ages back to the early days of Islam, yet the term IslamicEconomics was only...
...ASSIGNMENT OF ISLAMICECONOMICS
TOPIC ECONOMIC IMPLEMENTATION OF REDISTRIBUTIVE MEASURES OF ISLAMIC SOCIETY WITH REFERENCE TO PAKISTAN
REDISTRIBUTION OF WEALTH Redistribution of wealth is the transfer of income, wealth or property from some individuals to others caused by a social mechanism "such as tax laws, monetary policies, or tort law". Most often it refers to progressive redistribution, from the rich to the poor, although it may also refer to regressive redistribution, from the poor to the rich. The desirability and effects of redistribution are actively debated on ethical and economic grounds. It holds pivotal role in economic growth. In fact it appears that whole economy is based on the concern to make the economy just and stable.
The objective of moderate income redistribution is to avoid the unjust equalization of incomes on one side and unjust extremes of concentration on the other sides. Today, income redistribution occurs in some form in most...
...‘Nature of IslamicEconomics’
‘’Islamic economy identifies and promotes an economic order that conforms to Islamic scripture and traditions".
Economic problems started with the birth of men and become more complicated with the development in the wants of men as the men is surrounded by wants. According to western scholars economics is the study of wants and scarcity and the reaction towards the ends and wants of the people. Adam Smith is regarded as the Father of economics due to his famous book, ’’The wealth of nations ‘’ in 1776 A.D. But five centuries before Adam Smith Madan’, and ‘Al-Muash’ etc. our well known economists are Muhamad bin Hassan tossi (1274 A.D), Ayatollah Mahmoud Taleghani (1911 - September 9, 1979), Ibne Khaldun (1332 A.D to 1406 A.D).
The industrial resolution have given an edge I almost every field to western nations. Due to the advancement of western arts and science and more and new concepts that the modern institutions in Islamic countries has started providing education and training in those areas. The awareness of the need to re orientate the arts and science has risen among Muslim academicians and educationists of the countries which have won independence in the 20th century.
‘Difference between Islamic and Modern economics’
...Objectives of Economic Growth and Development
Economic growth is defined by, among other things, material capital formation, human capital formation and the creation of innovation. Put another way, economic growth is determined by the amounts and types of capital and labor that are invested, and how they are utilized for production. The objective of economic growth through economic policy is not necessarily GDP or GNP maximization but maybe enhancing and improving quality of life or other values that cannot be measured by GDP. If we limit our outlook to economic growth itself, the questions of what to assume as the objective of economic growth and how to measure it is decided by people. It is possible and desirable, to have a scheme wherein issues that are not easy to quantify, such as quality of life, are taken into account when policy choices are prepared and decisions carried out. The idea here is only that no matter what kind of economic society one visualizes, the issues of investment of capital and available resources are of extreme importance. This is to say while the objective of economic policy is improving the welfare of citizens, it will primarily be dependent on resource investment and productivity, no matter how that improvement may be defined. Whether looking at GDP or quality...
...to know what is Islamiceconomic before we carry on discussing the importance of Islamiceconomic. There are two main categories of definition of Islamiceconomic are ventured by Muslim economists. The first categories consist of definitions that concentrate on the principles of Shari’ah that make up the framework or the milieu of the behavior of economics agents. While the second categories focuses on the behavior of the agents themselves. Hasanuz Zaman defines Islamiceconomics as “the knowledge and application of injunctions and rules of the Shari’ah that prevent injustice in the acquisition and disposal of material resources in order to provide satisfaction to human being and enable them to perform their obligations to Allah and society”. Similarly, Zaidan Abu al Makarim’s definition is “the science that deals with wealth and its relations to man from the point of view of realization of justice in all forms of economics activities”. These two definition focuses on determinant of the normative framework of the economics activities, they look at Islamiceconomics as a branch of Islamic studies similar to Fiqh or the interpretation of the Quran. The subject of Islamiceconomics, according to this definition is not the decisions that...
...But subsidies are essential, and has always been so to ensure the survival of all persons in Malaysia - especially those from the lower-incomed groups - including the middle class. The plan of removing subsidies - and using the money saved to channel financial assistance directly to the poor is being now thrown around.
But alas, this really will not work given the rise of 'corruption' and 'discrimination' in Malaysia.
Even today, there are many complaints that the UMNO-led BN government discriminates against persons belonging to (or alleged to be supporters of) other Opposition parties/persons. Connections are 'important' in Malaysia when it comes to receiving benefits and opportunities, and that is why it is best to just maintain subsidies for all essential items that affect survival and normal day living of all Malaysians. Remember, subsidies are only for the basic needs.
With the opening of markets, and the entry of foreign companies - this will mean that the Malaysian government money may have to be given to these foreign companies as 'subsidies ' to maintain the low prices that people in Malaysia pays.
Why pay the foreign companies? Because there is no choice for just paying local current service/material providers as this would be a violation of the 'free trade' equal competition requirement. Today, subsidies with regard to electricity is paid to Tenaga - but when another foreign utilities company comes in, then that company too will have to be paid...
the branch of knowledge concerned with the production, consumption, and transfer of wealth.
the social science that studies economic activity to gain an understanding of the processes that govern the production, distribution and consumption of goods and services in an exchange economy.
SCARCITY: THE NEED TO CHOOSE
Scarcity is the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources. It states that society has insufficient productive resources to fulfill all human wants and needs. A common misconception on scarcity is that an item has to be important for it to be scarce. However, this is not true, for something to be scarce, it has to be hard to obtain, hard to create, or both. Simply put, the production cost of something determines if it is scarce or not. For example, although air is more important to us than diamonds, it is cheaper simply because the production cost of air is zero. Diamonds on the other hand have a high production cost. They have to be found and processed, both which require a lot of money. Additionally, scarcity implies that not all of society's goals can be pursued at the same time;trade-offs are made of one good against others.
The basic economic problem that arises because people have unlimited wants but resources are limited. Because of scarcity, various economic decisions must be made to allocate resources...