ECONOMIC SYSTEM

Socialism aims to abolish capital ownership, coordinate the production of goods and services to directly satisfy demand and eliminate bisness cycle, unemployment and problems of overproduction that are the result of an economy based on capital accumulation and private property

Motivation on socialism is derived from individual needs for self-realisation.

It is not sensible to have private ownership of the factors of production when planning and decision making is totally under state control

Made by a central agency. The central planning board will decide on the production, distribution and consumption ogf goods and services by all economic agents in the economy

Dictatorship of the proletariat

Equality

Economic agents in capitalism maximise their self-interest that is firm maximise profit and consumers maximise their satisfaction

To optimise their own interest or satisfaction. Satisfaction can arise from both material and non-material outcomes

Based on freedom of choice and voluntary exchange of trade of goods and services between different parties

In capitalism in mainly decentralised. Ideally, the role of the goverment in capitalism is maximum it is to facilitate the operation of the market

Competition

Efficiency

An islamic economic system is al-Falah which is a balance between material and spiritual well-being.

Islam recognises the self-interest of the individual but limits it within the boundary of islamic framework

Property ownership is an islamic framework is relative even if property can be privately owned. However, as the trustee of these resources economic agents are responsible and accountable to utilise them in an optimal way and accordance with the Syariah

Decision making is a combination of both centralisation and decentralisation hence economic agent can enter into binding contracts with each other depending on the circumstances and state of economy. Both market and goverment play important roles in coordinating economic activities

ITQAN

ADL

IHSAN

TA'AWUN