من هناك
11-08-2009, 03:13 PM
A better version
Session 1: http://docs.google.com/View?id=dc2bp68v_1251hb75zbfx
Session 2: http://docs.google.com/View?id=dc2bp68v_1250djzz5cgc
Major Aspects of conventional Economics
Factors of production are in general the productive inputs or the resources employed to produce any goods and services in an economy.
In the 19th century, the factors were:
·Labor: ability to produce
·Capital: any human contributions, skills, tools, machines…
·Land: All natural resources that are gifted by nature.
·Entrepreneurship: This item was added during the previous century. Also the human capital was separated from the financial capital.
The important factor varies from one school to another. For example, for a Marxist, the most important factor is the labor (including entrepreneurship and human capital sometimes). For neoclassical (Free market preachers), they think the time of the entrepreneur is the most important factor because this is what decides on the amount of production.
However, almost all schools of economics agree that the scarcity of an input makes it more important than other abundant factors.
Major Aims of Conventional Economics
Economics aims to maximize the society income and provide economic growth to raise the utility and standard of living of participants in the economy (Welfare).
1.Sustainability.
2.Full employment.
3.Price stability (Internal balance, inflation).
4.External balance.
5.Equitable distribution of income and wealth (might be equal in some cases).
6.Increasing productivity (Hourly efficiency of production input).
Major problems with conventional Economics
·The wealth Gap: (Rich got richer and poor got poorer) or (Money is begetting money like cows beget cows).
oSeveral solutions were suggested: usury laws, taxes, redistribution of wealth, training, social welfare programs, price controls…
oThese are temporal solutions: get rid of one abusing group to get another new group.
oRadical solutions lead to corruption and dictatorship
§French revolution: No bread. Throw the king, kill the landowners. Make bread cheaper. Nobody wants to produce. Kill farmers. Not enough farmers to produce. Hunger continues
§US Model: favor groups of farmers. Subsidize them. Make it easier to farm. Prices fell down. In recession, buy and destroy the product. Hunger continues.
Major aspects of Islamic Economies
Ibn Khaldoun was one of the pioneering Muslim economists and he was the first scholar (internationally) to establish the concept of cyclic social forces. He noted that
·The stronger social cohesion is (asabiyya), the stronger is the distribution of wealth and the greater is the economic growth.
·Growth and social development enhance demand and supply (at the same time).
·Demand and supply determines the prices of goods.
·Production depends on macro-social forces, population growth, human capital development, and technological advancements.
·Population growth is a factor of wealth (!!!).
Some early Muslim scholars who tackled economical issues are:
·Imam Abu Hanifah and his student Abu yusuf (Kharaj)
·Al-farabi
·Ibn sina (Avicenna)
·Al-Ghazali
·Al-Mawardi
·Ibn Taymiyah
·Al-Maqrizi
In few words, the major differences in Islamic economics:
·Trade is allowed by Interest bearing transactions are prohibited “allah has permitted trading and forbidden interest”.
·Substantive economy
·No speculation and no abuse (Gharar, gambling…)
·Circulation of wealth is a religious obligation (Zakah) or favoured (Sadaka)
·Scarcity is not absolute.
·Producers need an incentive.
·Wealth cannot be created without exchange assets (value added transactions).
·The value of goods should be intrinsic. The value of services should be fair.
·Intentions are not enough. Some actions would lead to unintentional consequences.
·Costs can be good or bad but might be minimized without abuse.
·The only way to increase a nation's real income is to increase its real output.
·Competition is welcome as long as it does not violate the value of inputs or lead to abuse.
Ultimate Objectives of Shariah (Makassed el Shariah)
1.Al-shatibi: shariah aims to promote the welfare for the people in this life and the hereafter by protecting:
a.Vital necessities (darourat)
b.Needs (Hajat)
c.Embellishments (Kamaliyat)
2.Al-Ghazali: sharia aims to promote human welfare which encompasses safeguarding of faith, life, intellect, family/society, and welath.
3.Ibn-3Ashour: Sharia aims to bring benefits, eliminate harms, establish equity, safeguard the social harmony, sustain the power of the ummah, and reinforce the respect of the religion.
4.Sheikh al-Qaradawi: added another dimension for the aims of the sharia by concentrating on the current social structure (not the individual or the state). So he thinks that Sharia aims to promote: freedom, shura, justice, equality, and sustainability of societies in addition to the old five elements.
Other Islamic Financial views
Islam is to surrender to Allah and obey all his orders and only through complete submission, Muslims attain welfare and stability. Hence, Islamic finance and Islamic economics are part of this style of life and all social transactions (including the financial ones) have to follow the orders of Allah the Creator.
Michael Bonner labeled the Islamic system as an “Economy of Poverty” during the first six centuries because of Zakat, prohibition of bad circulation of wealth, prohibition of market monopolies.
Islam has special views on:
·Properties (private, public, and state)
·Markets (freedom of exchange, fair competition, private initiative, security of contracts). Sharia mandates that consumers are allowed to obtain desired goods, producers to sell their goods, at a mutually acceptable price and a fair competition in the market at anytime as long as there is no speculation, abuse, nor monopoly.
·Natural capital should be preserved although Allah rizk is abundant. “And in the heaven is your provision and that which you are promised”.
·All transactions should involve asset movement by a trade move or an equity acquisition.
·Any business activity should create value for both parties.
Next: Discussion of Riba and Islamic Financial Products
http://docs.google.com/View?id=dc2bp68v_1250djzz5cgc
Session 1: http://docs.google.com/View?id=dc2bp68v_1251hb75zbfx
Session 2: http://docs.google.com/View?id=dc2bp68v_1250djzz5cgc
Major Aspects of conventional Economics
Factors of production are in general the productive inputs or the resources employed to produce any goods and services in an economy.
In the 19th century, the factors were:
·Labor: ability to produce
·Capital: any human contributions, skills, tools, machines…
·Land: All natural resources that are gifted by nature.
·Entrepreneurship: This item was added during the previous century. Also the human capital was separated from the financial capital.
The important factor varies from one school to another. For example, for a Marxist, the most important factor is the labor (including entrepreneurship and human capital sometimes). For neoclassical (Free market preachers), they think the time of the entrepreneur is the most important factor because this is what decides on the amount of production.
However, almost all schools of economics agree that the scarcity of an input makes it more important than other abundant factors.
Major Aims of Conventional Economics
Economics aims to maximize the society income and provide economic growth to raise the utility and standard of living of participants in the economy (Welfare).
1.Sustainability.
2.Full employment.
3.Price stability (Internal balance, inflation).
4.External balance.
5.Equitable distribution of income and wealth (might be equal in some cases).
6.Increasing productivity (Hourly efficiency of production input).
Major problems with conventional Economics
·The wealth Gap: (Rich got richer and poor got poorer) or (Money is begetting money like cows beget cows).
oSeveral solutions were suggested: usury laws, taxes, redistribution of wealth, training, social welfare programs, price controls…
oThese are temporal solutions: get rid of one abusing group to get another new group.
oRadical solutions lead to corruption and dictatorship
§French revolution: No bread. Throw the king, kill the landowners. Make bread cheaper. Nobody wants to produce. Kill farmers. Not enough farmers to produce. Hunger continues
§US Model: favor groups of farmers. Subsidize them. Make it easier to farm. Prices fell down. In recession, buy and destroy the product. Hunger continues.
Major aspects of Islamic Economies
Ibn Khaldoun was one of the pioneering Muslim economists and he was the first scholar (internationally) to establish the concept of cyclic social forces. He noted that
·The stronger social cohesion is (asabiyya), the stronger is the distribution of wealth and the greater is the economic growth.
·Growth and social development enhance demand and supply (at the same time).
·Demand and supply determines the prices of goods.
·Production depends on macro-social forces, population growth, human capital development, and technological advancements.
·Population growth is a factor of wealth (!!!).
Some early Muslim scholars who tackled economical issues are:
·Imam Abu Hanifah and his student Abu yusuf (Kharaj)
·Al-farabi
·Ibn sina (Avicenna)
·Al-Ghazali
·Al-Mawardi
·Ibn Taymiyah
·Al-Maqrizi
In few words, the major differences in Islamic economics:
·Trade is allowed by Interest bearing transactions are prohibited “allah has permitted trading and forbidden interest”.
·Substantive economy
·No speculation and no abuse (Gharar, gambling…)
·Circulation of wealth is a religious obligation (Zakah) or favoured (Sadaka)
·Scarcity is not absolute.
·Producers need an incentive.
·Wealth cannot be created without exchange assets (value added transactions).
·The value of goods should be intrinsic. The value of services should be fair.
·Intentions are not enough. Some actions would lead to unintentional consequences.
·Costs can be good or bad but might be minimized without abuse.
·The only way to increase a nation's real income is to increase its real output.
·Competition is welcome as long as it does not violate the value of inputs or lead to abuse.
Ultimate Objectives of Shariah (Makassed el Shariah)
1.Al-shatibi: shariah aims to promote the welfare for the people in this life and the hereafter by protecting:
a.Vital necessities (darourat)
b.Needs (Hajat)
c.Embellishments (Kamaliyat)
2.Al-Ghazali: sharia aims to promote human welfare which encompasses safeguarding of faith, life, intellect, family/society, and welath.
3.Ibn-3Ashour: Sharia aims to bring benefits, eliminate harms, establish equity, safeguard the social harmony, sustain the power of the ummah, and reinforce the respect of the religion.
4.Sheikh al-Qaradawi: added another dimension for the aims of the sharia by concentrating on the current social structure (not the individual or the state). So he thinks that Sharia aims to promote: freedom, shura, justice, equality, and sustainability of societies in addition to the old five elements.
Other Islamic Financial views
Islam is to surrender to Allah and obey all his orders and only through complete submission, Muslims attain welfare and stability. Hence, Islamic finance and Islamic economics are part of this style of life and all social transactions (including the financial ones) have to follow the orders of Allah the Creator.
Michael Bonner labeled the Islamic system as an “Economy of Poverty” during the first six centuries because of Zakat, prohibition of bad circulation of wealth, prohibition of market monopolies.
Islam has special views on:
·Properties (private, public, and state)
·Markets (freedom of exchange, fair competition, private initiative, security of contracts). Sharia mandates that consumers are allowed to obtain desired goods, producers to sell their goods, at a mutually acceptable price and a fair competition in the market at anytime as long as there is no speculation, abuse, nor monopoly.
·Natural capital should be preserved although Allah rizk is abundant. “And in the heaven is your provision and that which you are promised”.
·All transactions should involve asset movement by a trade move or an equity acquisition.
·Any business activity should create value for both parties.
Next: Discussion of Riba and Islamic Financial Products
http://docs.google.com/View?id=dc2bp68v_1250djzz5cgc