Munich Personal RePEc Archive

How Capitalism and Islamic Economics Supplement Each Other

Mamoon, Dawood (2020): How Capitalism and Islamic Economics Supplement Each Other.

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Abstract

N iterations of Prisoner’s dilemma would determine outcomes that favor humanity at large towards material welfare at a universal scale through scientific innovation but the motivation comes through examples of leadership within human societies that have opted for kindness, cooperation and collective welfare. The paper tries to unlock one of the most pressing questions in human history whether bringing peace to this polarized world when there is no armed conflict among countries and within countries is possible. The paper suggests that transforming historic grievances into practiced competition between nations is possible by providing fair and level playing fields where populations have equal access to information and opportunities and thus would not be exploited but would contribute to their own welfare. It is very important for each country to work on international commitments like SDGs to finally have a world bereft of violent conflict. The paper explains the path from income centric measures of human emancipation like in case of poverty line towards more sustainable and inclusive definitions of development that include qualitative definitions of progress like quality health and education representing capability approach by Amartya Sen while not excluding good governance practices adopted by the government. There is a difference between Capitalism that defines progress through monetary outcomes and Islamic economics that harness and define human emancipation on wider definitions of progress including values like trust, ethics, culture, and rights. In this context the article explains to its audience why Pakistani Prime Minister Imran Khan refers to the golden era of Islamic caliphate of Umer Bin Khatab who put the foundations of an economic system where human welfare was practiced through universal application of human progress based on economic, social, cultural and ethical emancipation. The paper explains that according to Islamic values monetary asset ownership that is a contract between the government and the people should have application for ethical dispensation and strong welfare purpose rather than driving greed in guise of incentive.

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