ISLAM AND OTHER ECONOMIC SYSTEMZCZC6943

PRESENTED BY:MAISYARAH STAPAH

FARHANAH MOHD NOAH

• CAPITALIST SYSTEM• SOCIALISM SYSTEM• COMMUNISM SYSTEM• ISLAMIC ECONOMICS SYSTEM• THE DIFFERENCES BETWEEN ISLAMIC

SYSTEM AND CONVENTIONAL SYSTEM

• ISSUES• RECOMMENDATION

OUTLINE

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.

BASIC PRINCIP

LES

Private ownersh

ip

Free enterpri

se

Profit motive

Competitive

Market econo

my

CAPITALIST IDEOLOGY

Self-interest

Limited role for

governmentFree 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

Moralism BASIC

PRINCIPLES

• 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

Basic principl

es

Islam focuses on

the distribution of wealth

not just the production.

All basic needs

guaranteed

Circulation of wealth is a duty

Prohibition of Riba –

encouragement of

investment

The Islamic economy is

real and Islam

prohibits the current form of financial

markets

It is prohibited

to sell what you

don’t have

Islam neither

believes in a free market

nor a command economy

The Gold & Silver

standard for

currency

THE DIFFERENCES BETWEEN ISLAMIC

SYSTEM AND CONVENTIONAL

SYSTEM

Distribution

Scarcity

Moral Considerations & Restrictions

Right To Wealth

Concept Of Brotherhood

Divine ProhibitionGovernment

Restriction

Risks

Sovereignty

Private Ownership

Co-Existence

Religion

surplus money

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.