ISLAM AND OTHER ECONOMIC

SYSTEM
ZCZC6943

PRESENTED BY:
MAISYARAH STAPAH
FARHANAH MOHD NOAH
 OUTLINE
• CAPITALIST SYSTEM
• SOCIALISM SYSTEM
• COMMUNISM SYSTEM
• ISLAMIC ECONOMICS SYSTEM
• THE DIFFERENCES BETWEEN ISLAMIC
SYSTEM AND CONVENTIONAL SYSTEM
• ISSUES
• RECOMMENDATION
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.
 Private
ownership

Market Free
economy enterprise
BASIC
PRINCIPLES

Competitive
Profit
motive
 Limited role
for Free trade
government

Self-interest Competition
CAPITALIST
IDEOLOGY
• 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

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 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
 Islam focuses
on the
distribution of
wealth not just
The Gold & the production. All basic
Silver
needs
standard for
guaranteed
currency

Islam neither
believes in a
free market
Basic Circulation of
wealth is a
nor a command
economy
principles duty

It is Prohibition of
prohibited to Riba –
sell what you The Islamic encouragemen
don’t have economy is t of investment
real and Islam
prohibits the
current form of
financial
markets
 Distribution
surplus
money
Scarcity

Moral
Religion Considerations
& Restrictions

Co-
THE DIFFERENCES Right To
Existence BETWEEN Wealth
ISLAMIC SYSTEM
AND
CONVENTIONAL
SYSTEM
Private Concept Of
Ownership Brotherhood

Divine
Sovereignty
Prohibition

Government
Risks Restriction
 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.