In Islam man is khalifatullah fil ardh or the `vicegerent of Allah on earth’. What this means is that man as a representative of Allah is required to utilize the resources bestowed upon him as a trust by Allah in the most effective and efficient manner in accordance with the Islamic laws and regulations. In other words in Islam man’s existence comes with a purpose namely to serve and worship his Creator as depicted in the verse of the Quran ma khalaqtul jinnawalinsan illa liya`budun or `We do not create jin and man except to worship Me’ (Surah Al-Jatsiyyah, verse 57). Allah has provided man with the religion of Islam to guide him in performing his role as khalifatullah fi ardh. Islam is adeenul kamil wa syamil or a `complete and comprehensive system’ that provides the specific pattern of social and economic behavior for all individuals. As a vicegerent of Allah, homo Islamicus or the `Islamic man’ should do good to his own self and family, develop a good society and lead the society towards a peaceful and harmonious world based on the Quran and the Traditions of the Holy Prophet Muhammad S.A.W. His aim is to achieve falah which means `to attain bliss and happiness in this world and the hereafter’. In Islam there is no separation between the material and the spiritual, the soul and the physical aspects of man.
In a godless secular society, man has no purpose except to accumulate wealth and satisfy his lust and desire. He is not guided by any religious law but solely his own reason to maximize his satisfaction. Morality is not an integral part of the society and the life of man. In this society man is an economic agent or homo economicus with the aim of maximizing his own self-interest. He may be guided by customs or traditions of his ancestors or the secular law established in the society or state in which he is part of it but other than that he is free to make his own decisions or in the best he will do is to act in accordance with what his rational mind or conscience says.
In the secular view, economics is defined as the social science that deals with the effective and efficient allocation of scarce or limited resources to satisfy unlimited needs and wants of man. Since man in the secular society wants to gain happiness only in this life, they will try to gain satisfaction, maximize profit and their self-interest utilizing what they believe to be limited resources acquiring them using whatever ways and means possible. What this means is that in achieving this worldly happiness, ethics and moral values are not necessary.
In Islam, economics is defined as the application of the rules of the syariah in a way to prevent injustice in obtaining and distributing the abundance of resources to provide satisfaction to man and enable them to perform their obligations to Allah, society and the environment. In Islam, there are no limited resources as Allah has stated in one of the Surah in the Quran, which means; “It is Allah who hath created the heavens and the earth and sendth down rain from the skies, and with it bringeth out fruits wherewith to feed you; it is He Who hath made the ships subject to you, that they may sail through the sea by His command; and the rivers (also) hath He made subject to you.” (Ibrahim 14:32) HOMO ISLAMICUS
Islam offers a balanced and realistic picture of human nature. The homo Islamicus has four characteristics. First, man has been created as the best living beings and given responsibilities towards everything on this earth. The notion of divine vicegerency not only bestows an exalted status on man but also entails certain obligations. As God’s vicegerent on earth, man is responsible to Him for all his actions and deeds. The Prophet is reported to have said: “All of you are (like) shepherds; and all of you are accountable for your sheep”. Man has a moral responsibility to safeguard God’s bounties, including the planet’s resources, its...
Q.2 What is an Economic System?
Q.2 Apakah yang dimaksud dengan Sistem Ekonomi?
Ans.2. It is the set of goals rules and institutions that society prefers to follow in its economic life. Economic systems are the major repository of the “values” and ideals that society wants to live up to in its Economic life.
Ans.2. Ini adalah seperangkat aturan tujuan dan lembaga bahwa masyarakat lebih suka mengikuti dalam kehidupan ekonomi yang hidup. Ekonomi sistem utama repositori dari "nilai" dan cita-cita yang masyarakat ingin hidup sampai di Ekonomi.
Q 3.What are the main components of Economics?
Apa saja komponen utama Ekonomi?
For this lecture it is useful to divide Economics as a field of study into three components:
Untuk kuliah ini berguna untuk membagi Ekonomi sebagai bidang studi menjadi tiga komponen:
A. Economic analysis : the cause – effect and descriptive economic statements. This is the “What is” or “positive” element in Economics.
Analisis Ekonomi: penyebab - efek dan laporan ekonomi deskriptif. Ini adalah "Apa" atau "positif" elemen di Ekonomi.
B. Comparative economic systems . This is the “normative” component, ie what ought to be, the do's and dont's, haraam and wajib in economic life.
Perbandingan sistem ekonomi. Ini adalah...
...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 Islamic...
...ISLAMICECONOMICS: WHAT IT IS AND HOW IT HAS DEVELOPED OVER THE CENTURIES
Dr. M. Umer Chapra
Islamic Research and Training Institute
A paper written for EH. NET’s
Online Encyclopedia of Economic and Business History (http://eh.net/encyclopedia/eh.net/encyclopedia/[email protected])
Sponsored by the Economic History Association (US),Economic History Society (UK), Cliometric Society, and the History of Economics Society
Prof. Robert Whaples ([email protected])
Phone: (966) (2) 646-6139
E-mail: [email protected]
Islamiceconomics has been having a revival over the last few decades. However, it is still in a preliminary stage of development. In contrast with this, conventional economics has become a well-developed and sophisticated discipline after going through a long and rigorous process of development over more than a century. This raises a number of questions, some of which are: Is it necessary to have a new discipline in economics? If so, what is Islamiceconomics, how does it differ from conventional economics, and has it made any worthwhile contributions over the centuries? This paper tries to briefly answer these questions in four...
...Difference between Islamiceconomics and conventional economics?
In Islam there is no conflict between matter and soul, as there is no separation between economy and religion. Although Islamiceconomics is young in comparison with conventional economics, its characteristics, value and essence are appreciated by Muslims and the non-Muslims. The over-arching values of Islamiceconomics lie in the principle that it is an economic strategy that can achieve unity and harmony between the material and the spiritual life of the people.
To ensure the true well-being of all individuals, irrespective of their sex, age, race, religion and wealth, Islamiceconomics does not seek to abolish private property, a practice done by communism, nor does it prevent individuals from serving their self-interest. It recognizes the role of the market forces in the efficient allocation of resources. It seeks to promote brotherhood, socio-economic justice and well-being of all through an integrated role of moral values, market mechanism and good governance. The differences between conventional and Islamiceconomics are as listed below.
1. The Role of Moral Values
While conventional economics generally considers the behavior, tastes and preferences of individuals as given,...
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...
... Economics Definition: Economics is a social Science dealing with the Economic Problem.
• Social: Science that deals with human beings.
• Dealing: Means facing and not solving.
• Economic Problem: The problem of Scarcity (The inability to satisfy all the needs & wants)
Economics is giving us the rules of rationality; the ability of taking rational decisions.
Economics studies the behavior of the government at the macro level.
Micro Economics: It studies the individual choices regarding how firms & organizations’ reactions affect the market.
Macro Economics: It deals with the whole economy that the government uses to improve their performance.
Law of Demands: When prices increased, demand decreased and when prices decreases the demand increases. However, when the product is inelastic and one need it urgently, no matter how much the product’s price is raised, the person is going to get it anyways.
The Economic Problem
The Economic problem can be defined as: The inability of a human being (whether rich or poor) to satisfy his/her human needs. The Economic problem is mainly based on two factors, which are:
NEEDS & WANTS (Limited)
-Needs: The very basic biological requirements to keep people alive (surviving). In other words, Needs are defined to be what...
Economics 1 Assignment
Name: Shaun Neo Wei Qiang
Student CT NO. : CT0209608
Date : 18th April 2014
Module : Economics 1
Lecturer : Mr Wong Hean Hoo
1) Introduction 2
2) Relating to the Article – Inflation 3
3) Some of the causes for inflation 4
4) Managing inflation 5
5) Conclusion 6
6) Biblology 7
7) Actual Article Selected 8
The article I chose Is from Today Online(with approval from Mr. Wong), which is heavily categorized under inflation .Reasons for choosing article due to that its related to present findings and forecast of the general economy. MAS touches on the housing, labor markets, wage pressures and Inflation forecasts.
Economic Terms of Inflation
Inflation can be defined as a continual increase in prices for goods which happens over a period of several months usually. Whenever inflation strikes, the purchasing power of consumers declines and the ability to purchase goods drops. This means that during a period of Inflation, the $X of money you spend only allows you to purchase a smaller portion of what you used to be able to purchase (full portion) before inflation. It can also be deemed as money losing its value overtime. Comparison of the difference in CPI(Consumer Price Index) is also vital. CPI is made up 6,500 of goods and services pertaining to general items...
...Kofie B Primus
Professor Soumyajit Sukul
15 November 2009
What is Economics?
Economics is the concept that contracts the manufacture, allotment, and use of produce and services. It is the study of how the use of inadequate resources will best satisfy the wants, needs and desire of the greatest number of people. The study of economics over the years as nations continues to connect globally has become tremendously important aspect. Economics consists of a large number of subdivisions with the two major ones begin macroeconomics and microeconomics. Macroeconomics encompasses the conclusion made by the people in the general public, such as the changes in interest rates that affects the national savings. Macroeconomics is the study of the complete structure of economics. Microeconomics consists of economics decisions made at a lower level. For example the change of a price item affecting an individual’s decision of purchasing that particular item. Microeconomics focuses on how the organization affects one business or parts of the economic structure.
President Obama’s recent economic proposal is a perfect example of the economic force at work. The president proposed an income-tax credit of $3,000 for all new jobs above a company’s current employment level. The United States had proposed the “New Jobs Tax...