‫ح‬

‫سم ہللا الر من الرحی م‬ ‫ب‬

ECONOMICAL SYSTEMS AND ISLAM

DR. SANAULLAH MAHMOOD

 ‫ح‬
‫سم ہللا الر من الرحی م‬ ‫ب‬

ECONOMICAL SYSTEMS AND ISLAM

DR. SANAULLAH MAHMOOD

THE BASIC ECONOMIC PROBLEMS
 Determination of Priorities
 Allocation of Resources
 Distribution of Income
 Development
THE ECONOMIC SYSTEMS

Feudalism

Capitalism
Socialism
•Communism

Islam
introduction

FEUDALISM
FEUDALISM
 In the year 650 AD
 Spain
 Sicily
 Carsa
 Sardinia
 Southern Italy
FEUDALISM
 End of sixth century
 Iran
 Syria
 Palestine
 Jordan
 Lebanon
 Egypt
FEUDALISM
 Europe was confronting with the problem of
trade routes.
 Cultivation was their main occupation.
FEUDALISM
 The decline of the ROMAN empire
 Small kingdoms
 Feudal States.
FEUDALISM
 The landowners and feudal lords gave small
pieces of land to farmers for cultivation. The
produce was divided.
 It was the duty of the feudal lord to protect the
life and honor of the farmer
 The farmer was bound to offer his military
service when needed.
FEUDALISM
 The farmer was burdened with taxes
 If his master was taken prisoner, farmer must
ransom him
 When the daughter of the master was wedded
farmer has to arrange her dowry
 Farmer had to bear the expenses of celebration
when his master’s son become chief
FEUDALISM
 The Crusade Wars
 Muslims Lost Control over Eastern Mediterranean
Sea ,Sicily Cyprus.
 Money Lenders Progress in Transport Thinking in
Terms of National interests Patriotism
MUSLIMS DOWNFALL AND ITS EFFECTS
 Muslims downfall in Spain
 1492 King Ferdinand and Queen Isabella defeated
Muslims ‫ق‬
‫سن‬
 Turk Muslims rule over Constantinople ( (‫ئ نط یہ‬‫ط‬ and
‫ف‬ ‫ف‬
captured River Bosphorus ‫ورس‬ ( ‫س‬ ‫ ( آب ن ا ے ا‬and
other Sea routes of Europe
DISCOVERY OF OCEAN ROUTES
 In 1598 Vasco De Gama discovered an ocean
route to India
 Doctrine of Discovery
INDUSTRIAL REVOLUTION
 Gold and Silver trade
 Art of shipping attained new heights
 New tools and methods of cultivation
 Small farmers sold their land
 Increase in city population
 Many large and new cities and towns
Eighteenth Century

CAPITALISM
CAPITALISM
 Determination of Priorities
 Law of demand and supply
 Allocation of Resources
 Law of demand and supply
 Distribution of Income
 Law of demand and supply
 Development
 Law of demand and supply
CAPITALISM
 Factors of Production
 Land
 Labor
 Capital
 Entrepreneur
CAPITALISM
 Private Property
 Profit Motive
 Laissez Faire
CAPITALISM
 For economic solutions
 Profit motive a Greed ‫ال چ ل‬r
 Law of supply and demand a
 No prohibition of any kind in maximization of profit
r
CAPITALISM
 No prohibition of any kind in maximization of
profit
 Appeal evil desire of society
 Un wanted inflation
 Invest against social benefits
 Monopoly
CAPITALISM
 No prohibition of any kind in maximization of
profit
 Difference in standard of living
 GDP Un employment
CAPITALISM
 According to G. William Domhoff
 As of 2007
 The top 1% (upper class) owned 34.6% of wealth
 19% (Managerial professionals) 0wned 50.5%
 Which means 20% of people owned 85% of
wealth.
http://sociology.ucsc.edu/whorulesamerica/power/wealth.html
(updated October 2009)
CAPITALISM

Distribution of Wealth 2007

80%
15%

1%
35%

19%
50%

1% 19% 80%
CAPITALISM
 No prohibition of any kind in maximization of
profit
 Interest
 Gambling
 Speculation
SOCIALISM
SOCIALISM
 Determination of Priorities
 Planning
 Allocation of Resources
 Planning
 Distribution of Income
 Planning
 Development
 Planning
SOCIALISM
 Factors of Production
 Land
 Hence it is not in the ownership of anyone, so no need to
pay rent.
 Labor
 Government will decide the wedge.
SOCIALISM
 Capital
 Result of Production
 Entrepreneur
 Labor
 Actually State is the risk taker
SOCIALISM(BENEFITS)
 Collective Property
 Planning
 Collective interest
 Equitable distribution of Wealth
SOCIALISM EXPECTED LOSSES
 Human error and Chances of Corruption
 Tyrant State
 Decrease in Performance
ISLAMIC FINANCE
ISLAMIC FINANCE
 Islam is a complete Deen it is not an economic or
financial system
ISLAMIC FINANCE

 Islam does not reject the supply and demand

theory
ISLAMIC FINANCE (BENEFITS)
 (1)But there are certain prohibitions From the
creator
 Forever
 For economic stability
 For the wellbeing of society
ISLAMIC FINANCE

2. From the state

 They are temporary
3. Moral
ISLAMIC FINANCE
 Factors of Production
 Land
 Labor
 Entrepreneur
 The Owner
 Zakat
 Ushar
 Sadaqat
 The holy Slaughtering
ISLAMIC FINANCE
 Difference between Land and Capital
Land Capital
Usable by itself and remains with in Does not have its own use only a
your hand after use medium of exchange.

Accept depreciation Does not depreciate

Risk belongs to the owner Does not belong to the owner

ISLAMIC FINANCE
 That is why Islam does not consider capital same
as land
 So you can get rent for the land
 Not interest for the capital
 If you want profit so bear the risk
ASSIGNMENT