Islamic Finance

Of the two groups of modern economies--market economies and centrally planned economies--market economies use supply and demand to fix prices and upholds the value of private property. The government's function in such environments is primarily is to keep the peace within the society. In Communist societies, the means of production are publicly owned and individuals are supposed to contribute services as their abilities allow. It cannot be said that any economy is at the extreme of no regulation or at the extreme of total regulation.

Capital formation in less-developed countries is discussed. Such formation has been shown to be a necessary condition for development. Banks and other financial institutions act to transfer funds from savings to investments and make decisions regarding where those investments are allocated. This conventional means of taking savings and making them investments is less than optimal. There is a superior method of channeling funds that can enhance the efficiency of the investments in the economy. In the conventional system, interest is at the core of operations.

HRH Prince Muhammad Al-Faisal-Al-Saud in his speech addressing UNESCO defines economics in Islamic terms. He outlines the most important differences between a capitalistic economic system and an Islamic one. He further explains the implications of establishing an Islamic economic system in the world. He gives reasons as to why the Capitalist system is failing in the present. He also proposes that the world economy be based on the Islamic model.

The author presents faults within the Capitalist economic approach and inadequacies within the Socialist economic approach while maintaining that the Islamic outlook is the ideal one. Whereas the Capitalist system provides liberty but no equity, the Socialist system provides equity but no liberty. Capitalism leads to such inequities that that, despite social security systems, there is homelessness and a high incidence of crime. The author provides some sketchy description of Warsaw Pact countries' low levels of nutrition and their lack of basic essentials.

The author emphasizes in the article the idea of Qiran, or pair theory of al-Qur'an. Often, as he shows, verses of the scripture pair actions pertaining to social welfare (such as Zakah, charity, and sacrifice) with Salah (prayer).

In order to work towards delineating the political economy of an Islamic economy, Lindblom's 1978 methodological system is an effective one. He looks at the blend of the political and the economic that influence the operations of a society. Through his setup, the tools for examining Islamic political economy can be gained. There is disagreement between ''secularists'' and ''Islamists'' in the

The unfair ownership of means of production and the inequitable distribution of a society's resources are the roots of all 'economic imbalances.' These imbalances have only been exacerbated in the economic systems of the world. In a Capitalist system, the wealth is controlled by the few while in a Communist framework the ruling party has total control. A just hand on the means of production is guaranteed in neither. The discrepancies in wealth are not even ameliorated by these systems. It is claimed by

The article is an account of the economic system under the leadership of the Sokoto caliphate, a caliphate established in the beginning of the nineteenth century AD. The author provides some historical background regarding Shaykh Uthman b. Foduye and his supporters, called the Jihadists. The Shaykh undertook a famous migration from Degel to Gudu after thirty years of preaching in Hausaland--the caliphate came into being a short time thereafter. The author presents a list of major players in the Jihadist camp.

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