ISLAM AND OTHER ECONOMIC SYSTEM Topic 3 ECS 10403

OUTLINE CAPITALIST SYSTEM SOCIALISM SYSTEM COMMUNISM SYSTEM ISLAMIC ECONOMICS SYSTEM THE DIFFERENCES BETWEEN ISLAMIC SYSTEM AND CONVENTIONAL SYSTEM

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 capitalist get more power to serve their own interests

Basic Principles Private Ownership Free Enterprise Profit Motive Competitive Market Economy

Limited role for government Capitalist Ideology Limited role for government Self- interest Free Trade Competition

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

Egalitarianism/Equality Basic Principles Egalitarianism/Equality Moralism

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 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.

Circulatuion of wealth is a duty All basic needs guaranteed Basic Principkes Circulatuion of wealth is a duty All basic needs guaranteed Prohibition of Riba Islam Focuses on the distribution of wealth not just the production

THE DIFFERENCES BETWEEN ISLAMIC SYSTEM AND CONVENTIONAL SYSTEM

ISSUES Poverty in Islamic country Begging status in Islam economic Islamic economic system as alternative in financial crisis