What is Islam (Stabilization of economy) part 1

Introduction:

Economic stabilization is a frequent discussion among economists over the globe. Its means the adjustment of economy in which all the factor of production earn their respective share and country enjoys a positive growth rate.

Illustration:

When people of country have jobs, businessmen earn profit, country’s exports exceed over imports, not single but all sectors facing boost, this means that such country enjoys the economic stabilization.

Policy tools for stabilization:

Conventional economists have two tools for stabilization of economy, fiscal policy and monitory policy. In simple words sending or sucking money from the market (by interest rate) is one tool and imposing tax or giving subsidy is the second one. It is obvious from the history and current situation of world that these two tool specifically first one is fail to run the economy on right way. That’s why number of people under the poverty line is increasing over the globe.  It is my faith being a Muslim and being a keen observer of conventional economics, that capitalism has no worth to resolve the economic problems of world.

Islamic doctrinefor economics:

Islam doesn’t deal economic affairs exclusively, but economic is a part of whole picture of Islamic teaching and have connection with other social and moral principals. Islamic doctrine for stabilization of economy based on three principal;

justice

result of interest

benevolance

1-      Justice

2-      Benevolence

3-      Prohibition of interest

Islam says that all economic activities should be based on justice and both producer and consumer should be benevolent while doing business. This will reduce the usual habit of deceiving each other. Prohibition of interest is principally based on justice, but as it is a big policy tool of capitalism so Islam deals it exclusively.  Interestingly, after facing the outcomes of interest, conventional economists also move toward the idea of zero interest which is said by Quran 14 centuries ago. (I welcome your comments; this will help me to make discussion more informative and interesting. For more discussion please wait till next post)