In Islamic economic framework, increase in investment through entrepreneurial activities could increase the labor demand and wages. Increase in wages will improve the standard of living of poor labor class and enable them to improve their productivity further.
Abbas Mirakhor and Hossein Askari write that the claims of any society to call itself Islamic must be validated by the existence and effective operations of the institutional structure (rules of behavior). They opine that in today’s Muslim societies, the core elements of the institutional structure that would designate a system as Islamic are, by and large, notable for their absence.
Most developing countries are going through a perpetual debt trap which takes away resources that could have been used on development, but instead are used to service compounded debt.
The idea of material progress and well being enabling the people to forget fear and religion and Question of ‘why we exist’, has failed. Ignoring the purpose of existence and trying to replace it with material self pursuit does not and has not solved the fundamental human quest of ‘why we exist’.
Salman Ahmed Shaikh Capitalism, the way it is practiced as an economic system, has largely allowed and provided legal cover to certain exploitative institutions and their operations based on free market philosophy. […]
Rather than complimenting humans in their animalistic instincts to keep having one-eyed focus on material well-being only, Islam inculcates piousness, kindness, cooperation and communal responsibility in humans. In some instances, Islam guides explicitly to avoid extravagance, lavishness and using certain products and services which harm a human’s ethical existence and well being either individually and/or harm the society in the process.
Islamic inheritance laws in Islamic economic framework have the potential to permanently and systematically reduce the concentration of wealth in every generation at the most micro level possible.
In neoclassical growth theories, the emphasis is on increasing savings and technological progress which brings about increase in capital per worker and eventually output per worker. In ‘endogenous growth theory’ models, more sophisticated work has been done by determining the factors which affect the technology, human capital and savings. This article analyzes whether Islamic economic principles have the capacity to help build these elements for sustainable growth and development.
Resources are scarce as compared to unlimited wants. But, the economics of non-rival ideas creation has proved that resources are ample and that physical resources could be used in ways that keeps fulfilling the basic needs of society through the creation of ideas that augment and bring multiplier effect to the availability of given physical resources.
History of economic man is fascinating. He has used the nature’s blessings to find and create new and innovative ways of maximizing utility. But, nonetheless, at all points in time, he does not feel satiated. He remains poor ‘relatively’ to the limitless desires and nature’s limitations. The dream of being ‘truly apart’ only remains a dream in everyone’s life. But, then, everyone achieves it one day. There is one place that everyone reaches where he is not accompanied by anyone. It’s his or her grave. Belief in life hereafter is the only thing that gives meaning to this world and life.
Islamic Economics Project 