ISLAM AND OTHER ECONOMIC SYSTEM ZCZC6943 PRESENTED BY: MAISYARAH STAPAH FARHANAH MOHD NOAH
OUTLINE• CAPITALIST SYSTEM• SOCIALISM SYSTEM• COMMUNISM SYSTEM• ISLAMIC ECONOMICS SYSTEM• THE DIFFERENCES BETWEEN ISLAMIC SYSTEM AND CONVENTIONAL SYSTEM• ISSUES• RECOMMENDATION
CAPITALIST SYSTEM• Emergence – Capital is needed to build factories, purchase machines, raw materials and pay labor – Individuals invest in hopes of profit (future return) – Based on concepts of free enterprise and competition – Needs and desires of consumers (purchasers) met by quality goods at lowest price.
• The business owner or capitalist get richer while the workers do all the hard work.• The capitalists get more power to serve their own interests.
Limited role for Free trade governmentSelf-interest Competition CAPITALIST IDEOLOGY
• FLAWS OF CAPITALISM – No bindings / restrictions while maximizing profits. – No moral value limitations – Monopolies are created that exploit the society as a whole – Government and industrialists join hand for mutual benefit and make laws that exploit common people – Imbalance in the distribution of income due to which concentration of wealth take place
SOCIALISM SYSTEM• Emergence – Socialism provides a different conception of individual responsibility and government – A variation on socialism argue that socialism and democracy can work – Democratic governments should promote economic – as well as political – freedom and equality
• FLAWS OF SOCIALISM – Individuals lose incentive to work – Government becomes a dictatorship – Government places needs of the state over the individuals – Government central planning the economy – Government must be in constant state of emergency to instigate production
COMMUNISM SYSTEM• A government where people shared work fairly and were paid equally• Goal: to get rid of social classes and make everything fair for everyone
• FLAWS OF COMMUNISM – Everything is distributed equally – Dictatorship is the government when a group or one person has control over everyone – The rich get richer, while the poor get poorer – People never achieved the goal
ISLAMIC ECONOMICS SYSTEM• The humanitarian goal of achieving the well being of all members of the human family• To raise the spiritual content of well being and reduce all the symptoms of anomie• Islam accepts the right to private property and maximize profit. But these right are not uncontrolled rather there are some prohibitions
Islam focuses on the distribution of wealth not just The Gold & the production. All basic Silver needs standard for guaranteed currency Islam neither believes in a free market Basic Circulation of wealth is anor a command economy principles duty It is Prohibition of prohibited to Riba – sell what you The Islamic encouragemen don’t have economy is t of investment real and Islam prohibits the current form of financial markets
Distribution surplus money Scarcity Moral Religion Considerations & Restrictions Co- THE DIFFERENCES Right ToExistence BETWEEN Wealth ISLAMIC SYSTEM AND CONVENTIONAL SYSTEM Private Concept Of Ownership Brotherhood Divine Sovereignty Prohibition Government Risks Restriction
ISSUES• Poverty in Islamic country• Begging status in Islam economic• Islamic economic system as alternative in financial crisis
RECOMMENDATION• Positive economics: – The part of economics that analyzes human behavior as it is or on its own nature-looks at people do• Normative economics: – Give prescriptions about how the human behavior should be-deals with policy matter on what ought to be done.