ECN3112

INTRODUCTION

 The goal of each society is to achieve perfect

human life
However, each community has different
measurements for this perfect life
How to realize the perfect life also varies
depending on the type of society

What is a perfect life?

Material goals
- Eliminating poverty
- Meet the basic needs of each individual
A fair distribution of income and wealth
- This can be achieved through an efficient
and fair use of resources

 Efficiency and fairness require an economic system to

answer these basic questions concerning production;
i.

what, how and for whom?

ii. how many alternative goods and services should be

produced?
iii. who made a production?
iv. what are the combination of resources and
technology that will be used?
.Apart from that, there is also the need to choose
between production and consumption for current and
future periods

The existing economic

system
Three economic system that can be found in
the world today are;
1. capitalist
2. socialist
3. Secular welfare state
.The original version of the system has
undergone a lot of reviews, because of their
many problems

 These systems have failed to achieve their

goals
Also having problems regarding imbalance
macroeconomic variables
The incidence of crime and social disorder
have increased and very difficult to control
Defects of these systems are due to the
conflict in the goals stemming from the
moral and religious past, and the world view
of their secularization and strategy

The Islamic system

alternative
Islam provides an economic system that is
based on the teachings of Islam (Shari'ah)
where Islamic worldview and strategy are
used
The system does not give priority to
materialistic such as those used in the
secular systems today

 The goals of Islam (maqasid al-Shari'ah) are

based on the well-being of humans (Falah)
and the good life (life tayyibah) with the
emphasis on;
i.

Brotherhood

ii. Social justice

iii. Satisfaction based on the balance between
material and spiritual

 The main principle is the belief that all men

are created equal,
as the leader of Allah on earth,
and mankind is only basing his hope in Him
alone
Humans will not feel happy and calm until
the real prosperity can be achieved through
spiritual fulfillment and material needs.

How economic is taught in

the Quraan
For a complete guide, Allah has taught in the
Holy Quraan how people should conduct
their economic activities.
In his book Al-Mawdudi has outlined 22
economic aspects that are taught in the Holy
Quraan;
1. basic truth
2. Things that are allowed and disallowed
3. private Rights
4. Irrational concept of economic parity

6. Differences in halal and haram lifestyle

7. The unacceptable ways of earning
livelihood
8. Forbidding stingy attitude and hording of
goods
9. Love of money and greed
10. uncontrolled expense
11. How to properly spend the money
12. Fines for sinful practices
13. Terms and conditions for acceptable
welfare
14. The path of virtue

17. Regulation on the spoils of war

18. The division of inheritance
19. wills
20. The right of people with less "intelligent"
21. Keeping the public interest held by state
22. Guidance on taxation
Every aspect of this teaching are described in a
few sentences (ayat) in certain chapters (surah).
God willing, we will get to know the ayat and
surah when discussing the relevant concepts.
End of topic 1