Premium Essay

Diffrence Between Islamic Economics and Conventional Economics

In: Business and Management

Submitted By noorsaf
Words 817
Pages 4
Frankly, to know more about Islamic economic, lets briefly look at differentiation between Islamic economic and conventional economic. The first different is the role of moral values. Basically, conventional economics is more concern towards behavior and preferences of individuals as given. However, Islamic economics more concern on individual and social improvement throughout the moral elevation. This moral evaluation or known as uplift moral aims to the changes of individual and preferences of the individuals which is complement the price mechanism in promoting general well being. (Chapra Umer M, 2010) This obviously show that conventional economic considers about the behavior and preference that given while Islamic economic consider about the changes of behavior and preferences. In Islamic economics, before customers entering the market place and being exposed to the price filter, the consumers are expected to pass their claims through the moral filter. With this, the preposterous, wasteful and unnecessary demand on resources can be discarding and filter out. Here then the price mechanism take over and lessen all the claims on resources and subsequently lead to meet market equilibrium. Sometimes, two filters (Islamic and conventional) can make it possible in making optimum economy, due to may be one filter not able to fulfill the market needs of all human being. This two filter can be together in order to use only the necessary resources to satisfy the material as well as spiritual needs of all human being. Besides, it also can reduce the concentration of wealth in a few hand to rise saving, in order to promote for a greater investment and employment. Other than that, help to be rational economic man also one of the differences between the Islamic economics and the conventional economics. Rationality is a need in human life which leads to be human behavior....

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