Consequences of the Legal Personality of Commercial Entities: An Evaluation from the Perspective of Islamic Economics

Harun Sencal ()
Additional contact information
Harun Sencal: Istanbul 29 Mayıs University, Faculty of Economics and Administrative Sciences, Department of Economics, Istanbul, Turkey

Istanbul Journal of Economics-Istanbul Iktisat Dergisi, 2021, vol. 71, issue 71-2, 367-394

Abstract: This study aims to critically evaluate the institution of a legal personality from the perspective of Islamic economics. The legal personality of commercial entities plays an integral role in the emergence of the capitalist system. This system, in turn, is characterized by capital accumulation. We argue that although the social relations based on the solidarity envisaged by Islamic economics have weakened with the individualization of modern societies, the primary negative effect of individualization has been the commodification of several services provided by solidarity among the members of society in the capitalist market system.Typically, such a system has spurred the practice of leveraging the limited liability of commercial legal entities to earn unlimited profits. Furthermore, because corporations prefer earning profits by selecting the most efficient and cost-effective approaches developed by means of rational decision mechanisms, it leads to the increase of material inequality in society and the expansion of debt-based financial instruments. In addition, corporations move investments from the real sector to the financial field, therefore playing a significant role in the development of financial capitalism. In other words, incidental problems such as lack of regulation and supervision are effective in regulating the situation in the wake of the crises caused by financial capitalism and other social adversities; however, a pertinent issue that remains overlooked is the existence of commercial legal entities and the goal of obtaining unlimited profit, which has emerged as the mission imposed on these legal entities within the capitalist system.

Keywords: Islamic economics; Legal personality; Financialization JEL Classification: G23; O16; P12; P51 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/9C54826D54D6456FA2E040B647A07B85 (application/pdf)
https://iupress.istanbul.edu.tr/en/journal/ije/art ... an-bir-degerlendirme (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ist:journl:v:71:y:2021:i:2:p:367-394

DOI: 10.26650/ISTJECON2021-1023078

Access Statistics for this article

Istanbul Journal of Economics-Istanbul Iktisat Dergisi is currently edited by Gökhan Karabulut

More articles in Istanbul Journal of Economics-Istanbul Iktisat Dergisi from Istanbul University, Faculty of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Istanbul University Press Operational Team (Ertuğrul YAŞAR) ().