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ISLAMIC ECONOMIC SYSTEM

• Islamic economic system is a divine system, which is given


by God in Quran and explained in Hadith by Holy prophet.
• This system has all the merits of Capitalism and
• Socialism and do not have any demerit of any of them.
• It advocates the welfare of the masses at large and wants to
eliminate all the social and economic evils from the society
so that material welfare of people may increase and people
may have healthy and prosperous life.
• It emphasizes the fulfillment of all basic necessities of life
without any undue restrictions.
CHARACTERISTICS
1----It allows right of private property, which is allowed in
capitalism but not allowed in socialism
2-----It does not allow concentration of wealth in few hands,
which is allowed in capitalism but not allowed in
socialism.
3---It allows freedom of occupation, a person can adopt any
profession of his choice in which he is more capable,
which is allowed in capitalism but not allowed in
socialism.
4---It stresses on equal distribution of national wealth so that
all people may fulfill their basic necessaries of life
properly.
CHARACTERISTICS
5---It allows price system and its mechanism but prices should not be
unjust and exorbitant and consumers should not be exploited. It is
against profiteering, hoarding, black-marketing and smuggling of
goods.
6---It does not allow interest. Loan should be on the basis of Qarz-e-
Hasna. Profit on money lent should take the form of Modaraba and
Musharka mode of investment. Any investment and undertaking on
the basis of profit sharing is permitted in this system.
7--- It allows to earn profit with established business norms and do not
allow the business of Haram items such as wine production,
gambling, or with which the moral values of people diminishes.
Production and supply of these goods and services are allowed in
both socialism and capitalism.
CHARACTERISTICS
8---It permits the inheritance system but do not allow “Death Duty”
9--- It forbids unnecessary competition to destroy each other and
natural resources are wasted for nothing.
10--It allows free consumption of goods and services as per
reasonable need of consumers but consumption for pomp and show
is not permitted.
11--It introduces Zakat and Usher system so that requirement of needy
persons is fulfilled and wealth is not accumulated in the hands of
lucky few. It emphasizes payment of Zakat and Fitra for welfare of
all people of society. This increases total consumption and business
activity in the economy and there appears no slump or depression
in economy.
CHARACTERISTICS
12--There is no class conflict in Islamic economic
system, because it advocates Adl ,Ehsan, Sakhawat
and payment of Zakat to the needy people of society.
13--It is against misery and accumulation of wealth,
rather it advocates people to spend money for
reasonable material welfare and not to keep money
idle as cash balances. Islam directs to keep the
money in circulation so that Effective Demand may
continue to increase and economy may prosper.