Islamic economic system is a socio-economic system, which focuses on human

welfare. Islamic economic system believes on social justice whom clarifies that all
resources belong to Al-mighty Allah and man has custodian rights. It teaches for
fully utilization of resources and fair distribution among humanity. In Islamic
economic system, there is no sense of holidays and strikes because this system is
based on humans ability, his eagerness to seek the resources, and his efficiency to
utilize it.
Islamic economic system strictly prohibits such transactions in which the welfare of
mankind is in danger. For example: Illegal activities in monetary system (Riba) or
bad earnings. Islamic economic system has three components man, money,
commodity. These three components is necessary for every transaction to be legal.
Any transaction in which one of the three components are missing should be
considered as unethical or illegal.
In Islamic economic system the term used for investing activities are financing and
participation. A person who has shared his amount or savings to someones to enjoy
profits must first know the purpose of financing, the person to whom the finance is
given must have expertise in his field. The sharing of profit is based on mutual
understanding and should be in ratios, figure like 80:20.
As compared to Islamic economic system, conventional economic system is based
on lending and borrowing. Conventional economic system do not emphasize on
humans ability, there is no concern with the activities of a person to whom the
money is being lend. The distribution of profit is based on fixed percentage.
In conventional economic system, the rich become richer and poor become poorer
because it supports such community who has maximum resources, power and has a
dominant status in a society.