Socialists claim that economic problems arise from the extraction of surplus value by the Capitalists in the production process. On the other hand, Capitalists urge that scarcity of resources is the basic economic problem which restricts output growth because wants are innumerable, but the resources for satisfying those wants are limited. Nonetheless, the empirical evidence does not support that resources are scarce for legitimate and compulsory economic needs.
This article looks at some of the descriptive and prescriptive teachings of Al-Quran and Sunnah (Ways of Prophet Muhammad [pbuh]) on consumption and spending behaviour.
The difference in an Islamic framework would come with the normative distinction between investments which are declared as prohibited in the ethical injunctions of Islamic faith and other investments which are deemed as permissible.
With a predominantly Muslim population which engages in significant private giving, social intermediaries who can transparently and efficiently mobilize charitable giving can enhance the socio-economic impact of private giving. Given the high prevalence of cash based giving and higher trust deficit between people and the public Zakat agency, the Islamic institution of cash Waqf can be suitable for effectively channelizing the charitable giving in the form of cash.
