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Social Natural
Sciences Sciences
A B C Economics
The
Economic
System
The
Paradigm
Basis of the
Micro
Foundations
The
Philosopic
Source : Muhammad Arif, 1984 Foundations
Cont’…
The charts shows that an economic system is
the outcome of the paradigm that it follows.
The choice of the paradigm is reflected by
the behavioural pattern of the individual
units in the society.
The behaviour of the individual units : is the
basic of the micro foundations of the system.
The philosophy in which the individual unit
believes is crystallized by its behaviour.
Economics
Economic Systems
Paradigm : Paradigm :
Marxian Paradigm : Shari’ah
Market Economy
Basis of the Micro Foundations : No Private Basis of the Micro Foundations : Basis of the Micro Foundations :
ownership of the factors of Production “Economic Man”
“Muslim Man”
Philosophic Foundations :
Individualism in the role of vicegerent of God Philosophic Foundations :
Philosophic Foundations : on earth with no objection to Utilitarian Individualism
Dialectical Materialism Achieve Falah in based on the “Laissez
This world and in the hereafter. Faire” philosophy
Accountable for performance
}21{ خزَائِ ُن ُه َومَا نُن َِزلُ ُه إِ اَّل بِ َقد ٍَر َم ْعلُو ٍم ِ ي ٍء إِ اَّل
َ ع ْن َدنَا ْ وَإِ ْن ِم
َ ن
ْ ش
And there is not a thing but its (sources and) treasures (inexhaustible)
are with Us; but We only send down thereof in due and ascertainable
measures.
Second interpretation for verses 21, all the wonderful gifts and
energies we see in the world around us have their sources and
fountainheads with Allah, the Creator and Sustainer of the
worlds. And what we see or perceive or imagine is just a small
portion of what exists. That portion is sent out (made available)
to us and to our world according to our needs or its needs from
time to time as the occasion arises. It is strictly limited according
to rule and plan (of Allah). Its source is unlimited and
inexhaustible.
The essence : relative scarcity in Islam, as
the best possible use of all available
economic resources, within the framework of
Shariah;
1. Only halal good and services will be produced.
2. All economics activities will take place through
contracts and transactions that are permitted by
Shariah.
3. The distribution of the output among Muslims will
be in accordance with the requirements of ‘justice’
in shariah and its intents.
4. Satisfaction or future needs, example growth of
output, will take place within the limits of best
exploitation, maintenance and development of all
kinds of resources.
According to (Yousuf Kamal, 1996 : 158-159),
Allah predetermined adequate resources to
all mankind but conditioned its prevalence
with the following;
1. To make use of grace and favors from Allah,
discovering rules and laws.
2. To behave righteously on earth (not to corrupt
it) through the obedience to what Allah
ordains.
As a reflection of the understanding the basic views of
Islamic Economic, it is everyone’s responsibilities
(especially Muslims) to organize efficiently the relative
scarcity resources as a trust to achieve al-Falah as a way
of life.
Land
Labor or Effort of Work
Capital
The old saying “Looking at the forest rather than the
trees” describes macroeconomics. Macroeconomics is
the branch of economics that studies decision making for
the economy as a whole. Macroeconomics applies an
overviews perspectives to an growth of the economy, the
money supply, and the national incomes of developing
countries. Macroeconomic decision making considers
such “big pictures” policies as the effect that federal tax
cuts will have on unemployment and the effect that
changing the money supply will have on prices.
Microeconomics