The Structure of Islamic Economic System

By Maher Kababji

Financial distress is increasing. Corruptions are going on around the world. Prices are soaring. Poor is becoming poorer. Living standard of middle class is declining. Relatively small number of individuals and corporations are controlling huge pools of capital. Public debt is increasing. Confidence in currencies is deteriorating. The bursting of several financial bubbles in last decades points to the fact that present economic systems failed to achieve the economic goals.

Failure of present economic systems to realize prosperity makes it necessary to review the foundations on which present economic systems are based and look for establishment of an alternative system that would reflect fair economy.

Failure of present systems reflects the failure of the ideologies based on human thoughts. Capitalism which is centered on liberal thoughts failed to sustain people at or above reasonable prosperity level, and socialism failed to realize equality. Fallacies are the root of the technique of thinking in economics.

Unlike human thoughts, the ideological concepts of the Islamic Economic System are based on justice. The book presents an alternative economic system in light of the Holy Qur’an and the sayings of the Prophet (Pbuh). Almost all Muslims do not know the structure of the Islamic economic system. Non- Muslims and those who believe in secularism will have the chance to make a comparison based on knowledge.

• Language: English
• Publisher: Maher Kababji
• Release date: Mar 24, 2017
• ISBN: 9781370298297

Book preview

The Structure of Islamic Economic System

By

Maher Kababji

Published by Maher D. Kababji at Smachwords

Copyright 2017 Maher D. Kababji

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Table of Contents

Introduction

Chapter 1: Economic Resources

Chapter 2: Economic Activities

Chapter 3: Market and Prices

Chapter 4: Exchange and Money

Chapter 5: Finance

Chapter 6: Foreign Currencies

Chapter 7: Redistribution of Wealth

Conclusion

Abstract

One of the main functions of a government is to sustain all its population at or above the prosperity level which expresses the feasible material standard of living that an economy can provide. Governments failed to realize prosperity and financial distress is increasing. This book aims to discuss in simple wording each of the factors that causes the failure of the present economic systems to realize prosperity, highlight the pitfalls in economic thinking, and introduce a fair economic system in light of the Holy Qur’an and the sayings of the Prophet (Pbuh).

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Introduction

Financial distress is increasing. Corruptions are going on around the world. Prices are soaring. Poor is becoming poorer. Living standard of middle class is declining. Relatively small number of individuals and corporations are controlling huge pools of capital. Public debt is increasing. Confidence in currencies is deteriorating. The bursting of several financial bubbles in last decades points to the fact that present economic systems failed to achieve the economic goals.

The most dominant economic systems at present are capitalism and socialism. Some Islamic countries such as Iran practice what is so called Islamic economic system. In practice, they imitate traditional capitalistic measures under different names.

Before the industrial revolution, European mercantilists believed that world’s resources are limited, so that one nation grew only at the expense of another. Consequently, European nations established monopolies at home and supported colonialism abroad.

The growth in trade led to inflation being injected into the feudal economies. By the early 1770s, the economic and social conditions were in place for the industrial revolution to explode. Capitalism arose from the systematic breakdown of feudalism.

In his book Wealth of Nations which was published in 1776, Adam Smith introduced the system of natural liberty. He urged that the keys to the wealth of nations were production and exchange, not the acquisition of gold and silver at the expense of other nations. Smith proposed that the path to economic growth and prosperity lies in granting every citizen the maximum freedom possible to pursue his private interests his own way, and to bring his business into competition, under a tolerable system of justice. The system of natural liberty is viewed as the classical model of capitalism. Capitalism became the main ideology of the most popular economic systems.

Karl Marx claimed that labor is the sole producer of value. He believed all profit and interest obtained by capitalists must be unjustly extracted from the earnings of the working class. According to Marx, the marketplace becomes a monster and people are measured solely by their income and net worth. The Communist Manifesto of Karl Marks and Friedrich Engels which was published in 1848 introduced socialism as an alternative to capitalism.

Economics is concerned with prosperity as the material aim that contributes to the nonmaterial ultimate objective of happiness. Both socialism and capitalism failed to realize prosperity. Since socialism favored at lease approximate equality of wages and state ownership of the means of production, it failed to achieve its goal of equality and reach a reasonable rate of economic growth. Since capitalism promotes market freedom and private ownership of the means of production, it has been transformed into monopoly-finance capitalism leading capitalists to earn wealth through foul means.

Failure of present economic systems to realize prosperity makes it necessary to review the foundations on which present economic systems are based and look for establishment of an alternative system that would reflect fair economy.

In order that an organized body of knowledge might be classified as science, its hypothetical law must be based on facts. Unlike any other social science, fallacies are the root of the technique of thinking in economics. By the lapse of time, theses fallacies have been blindly accepted as if they represent a part of the natural life which people have to live with.