Factors of production

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Factors of production

  1. 1. IBM 11013 Introduction to Islamic Economics Islamic View points of Production Lecturer in charge RA.Sarjoon 06.06.20116/18/2011 Factors of Production 1
  2. 2. Production• Islam considers production as a means using the wealth and the effort of the person to produce commodities which satisfy his living needs on this earth in a concept of Halal and Haram, and any means used outside this concept no matter the goods are do not consider production in the view of the Shari’ah.6/18/2011 Factors of Production 2
  3. 3. Factors of Production1. Land /Natural Resources2. Labor3. Capital4. Organization /Entrepreneurship6/18/2011 Factors of Production 3
  4. 4. 1. Land/ Natural Resources (Meaning and Importance)1. Earth (Soil) (2:36)2. Minerals (57:25)3. Mountains (15:19) (79:32,33)4. Forests (11:80)5. Animals (20:54)6. Climate and Rainfall (16:10,11)7. Wider Significance of Land (20:53)6/18/2011 Factors of Production 4
  5. 5. 2. Labor (Meaning and Importance)1. Man was created to work (90:04) (76:28)2. Physical Labor (28:27)3. Intellectual Labor (12:54-56)4. Supply of Labor a) Efficiency of Labor b) Mobility of Labor c) Population5. Freedom of Occupation(4:97,98)6. Dignity of Labor6/18/2011 Factors of Production 5
  6. 6. Supply of Labor(4)1. Efficiency of Labor a) Physical and Moral Health (28:26) b) Mental Fitness (12:55) c) Education and Training (2:269) d) Beauty and Grace (27:88)2. Mobility of Labor(4:97)3. Population(6:151)6/18/2011 Factors of Production 6
  7. 7. 3. Capital (Meaning and Importance)1. Accumulation of Capital2. Avoidance of Extravagance3. Hoarding4. Peace and Security6/18/2011 Factors of Production 7
  8. 8. Accumulation of Capital(1)a) Growth of Income 1. Compulsory Measures a. Payment of Zakath b. Prohibition of Interest 2. Optional Measures a. To encourage growth of capital in the community b. Re-investment of cash c. Leaving successors wealthy6/18/2011 Factors of Production 8
  9. 9. b) Avoidance of Extravagance (7:31),(17:26,27)c) Hoarding (70:18),(9:34)d) Peace and Security (2:193),(22:40)6/18/2011 Factors of Production 9
  10. 10. 4. Organization (Meaning and Importance)1. Business Contracts (2:282)2. Forms of Business Organizations a. Profit Sharing (Mudaraba/Qirad) b. Partnership a. Muzarea and Musaqath b. Shirkath Al-Mufawadha c. Shirkath Al-Anan d. Hirkath Al-Sanai e. Shirkath Al-Wujooh6/18/2011 Factors of Production 10
  11. 11. c. Joint-Stock Companies d. Business on Commission e. Government undertaking6/18/2011 Factors of Production 11

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