Micro-foundations of God-Conscious Economic Agents in Islamic Economy
Salman Ahmed Shaikh ()
MPRA Paper from University Library of Munich, Germany
Abstract:
This paper discusses Islamic principles and how they can help in achieving efficiency along with equity in a market system. We start with the concept of ‘human welfare’ in Islam and show how it is distinct from the concept of welfare in western social sciences. The difference comes from the worldview. This difference is not trivial. It has important implications on human behavior and choices. Belief in perfect accountability and absolute justice will help in achieving ethical behavior even when it cannot be codified or made compulsory by law. After presenting the basic framework of welfare, we present how Islamic principles can systematically help to achieve equitable distribution of resources within a market system. We discuss the institution of Zakat and how it will incorporate diminishing marginal utility of wealth and also achieve the objective of circulation of wealth and utilization of idle resources. We also present labor market dynamics in an Islamic economy. We show how labor force participation, human capital development and technical progress will be achieved in an Islamic economy. Lastly, we discuss the effects of Zakat on bringing competition, efficiency, investment and employment.
Keywords: Islamic Economics; Welfare Economics; Zakat; Labor Market; Asset Market; Property Market; Consumer Theory; Producer Theory (search for similar items in EconPapers)
JEL-codes: I31 L38 (search for similar items in EconPapers)
Date: 2013-12-01
References: View references in EconPapers View complete reference list from CitEc
Citations:
Published in Proceeding The Tenth International Conference On Tawhid and The World System 2013 1.1(2013): pp. 326-344
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/53806/1/MPRA_paper_53806.pdf original version (application/pdf)
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:pra:mprapa:53806
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().