Economic Theories of Production and Distribution

In capitalism, the resources used to create goods and services. These are usually considered to be capital, labor, and land.

Produced means of production; things used to make other things, such as machinery, materials, and money.

Human effort used in production.

Natural resources used in production, such as raw materials and land itself.

An economic system where trade and industry are controlled by private owners for profit, rather than by the state.

The rights of individuals to own and control property.

Wealth distribution in capitalism is generally among those contributing to its production, the factors of production, as seen as a natural consequence in capitalist principle.

A framework for analyzing production and distribution that is based on Islamic principles.

Means of production where the original form remains the same, allowing for letting or leasing (e.g., land, houses, machines). Compensation is rent.

Human exertion (physical, mental, or emotional). Includes organization and planning; compensation is wages.

Different from Socialism and Capitalism. Emphasizes Allah's ownership; collective trust of most resources.

Does not recognize private property; rewards labor (wages) as the only factor in wealth creation.

Certain elements are considered the common trust of humanity – land, water, mines, wild plants, etc.; thus, not privately owned.

Entrepreneur's reward for organizing resources and taking risks. Only earned if expenses are met after rent, wages, and raw material costs are paid.

Elements like land, labor, and capital needed to create goods or services

Islamic economics recognizes Allah's ownership and collective trust over resources which contrast sharply with socialism's focus only on labor as a source of societal wealth.

Riba means excess, increase, or addition.

Separate counters for deposit on Profit & Loss Sharing (PLS) basis, mandated by the government in 1981.

The government discontinued the PLS deposit system from July 1985.

Banks were allowed to invest PLS deposits in interest-bearing government securities in 1985.

Declared the 1985 bank procedures as un-Islamic.

Rejected appeals and ordered the cessation of laws on interest banking.

Allowed dealing with foreign parties on interest basis.

First Islamic bank licensed in Pakistan (2002).

Riba, in Islamic teachings, refers to interest or usury, considered sinful in Islam.

The Quran mentions the Jews' practice of Riba, highlighting their wrongdoing.

The Quran clearly prohibits Riba (interest) for Muslims.

The Quran states that those who engage in Riba face consequences.

This verse of the Quran prohibits Muslims from indulging in compounded interest, emphasizing the importance of fearing Allah.

This verse of the Quran explains why Riba is forbidden and highlights its negative consequences.

Engaging in Riba is likened to being misled or driven mad.

The Quran differentiates sale (permitted) from Riba (prohibited), emphasizing the distinction.

Any additional charge or excess above a predetermined loan amount. A forbidden practice in Islam.

Riba resulting from charging interest or excess on a loan with a predetermined interest rate.

Receiving or paying interest, recording interest transactions, and acting as witnesses to such transactions are forbidden.

Loans should not involve added interest, and gifts or favors should not be exchanged in connection with a loan.

A creditor should allow postponement of payment for a debtor in difficult circumstances (e.g., poverty).

Neither wrong nor be wronged, treating others with justice in financial dealings.

The day of reckoning, when each person will receive the reward or punishment for their actions.

A specific form of interest directly prohibited in the Holy Quran, considered the primary form of Riba.

Interest practice prevalent during pre-Islamic times, considered a form of Riba Al Quran.

These verses in the Holy Quran directly condemn Riba Al Quran and its implications.

Excess in trade transactions is permissible in Islam, whereas Riba is strictly forbidden.

In pre-Islamic times, people considered Riba a type of sale and did not distinguish it from legitimate trade.

Islam distinguishes between Excess (permissible in trade) and Riba (prohibited in loans).