Comparative Economic Systems: A Brief Review

Shaikh, Salman (2012): Comparative Economic Systems: A Brief Review. Forthcoming in: Australian Journal of Islamic Banking and Finance (AJIBF)

Abstract

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economic Systems, Capitalism, Socialism, Communism, Islamic Economic System
• Subjects: A - General Economics and Teaching > A1 - General Economics > A13 - Relation of Economics to Social Values; A - General Economics and Teaching > A1 - General Economics > A14 - Sociology of Economics

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