Comparative Economic Systems: A Brief Review
Salman Ahmed Shaikh
Institute of Business Administration; IBA Karachi
December 1, 2012
Australian Journal of Islamic Banking and Finance (AJIBF), Forthcoming
This paper analytically compares the theoretical foundations of major economic systems i.e. Capitalism, Socialism, Mixed economy (a hybrid of Capitalism and Socialism) and the Islamic economic system. The research identifies that lack of an ethical base, unbridled pursuit of self interest in production as well as in consumption and interest based financial and monetary system are the major problematic issues in the current economic order. Socialism promises to create heaven on earth, but takes fundamental human rights and profit motive away and in the extreme case, it gives way for an autocratic regime. The paper provides brief outline of Islamic Economics and explains that Islamic economic system is a blend of natural features present in Capitalism i.e. right to private property, private pursuit of economic interest and use of market forces etc. Along with this, Islamic economic system uses some distinct features derived through Islamic economic teachings i.e. Interest free economy, moral check on unbridled self-pursuit and provision of socio-economic justice to achieve the goals of Socialism as far as is naturally possible without denying individual freedom and profit motive.
Number of Pages in PDF File: 20
Keywords: economic systems, capitalism, socialism, communism, Islamic economic system
JEL Classification: A13, B52, A14Accepted Paper Series
Date posted: November 8, 2012
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