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This study aims to discuss the understanding of hadith about the value of money in the perspective of Islamic economics. This research applies a qualitative type through literature study using thematic, takhrij, and syarah hadith methods as well as descriptive analysis. The discussion of this research includes an overview of money, thematic hadiths regarding money, and an understanding of the hadith about the value of money from an Islamic economic perspective in the contemporary era. This study concludes that the money used by Muslims at the time of the Prophet was Persian silver dirhams and Roman gold dinars, traditions about money are known to be maqbul traditions and can be used as evidence, and the understanding of hadiths about the value of money is closely related to buying and selling and selling. an effective prohibition of usury for controlling inflation so that people's purchasing power is maintained and economic stability is created, in this case Islamic economics which emphasizes increasing people's welfare is recognized in this contemporary era dealing with money politics with the ideology of capitalism.

This article argues that the coronavirus pandemic has shown the world community that the current global economic system is unsustainable. The devastating impact of social, economic and health due to the corona virus are manifesting along with societies’ great inequalities due to the flaws of capitalism. The pandemic has also shed light on the fact that human societies cannot flourish without combatting inequalities.Thus, the seemingly more apparent internal tensions, inconsistencies and moral inadequacies in capitalism seem to necessitate a more ‘moral’ economy. Pertinent to this, Moral capitalism based on universal values can be an alternative system. Both moral capitalism and Islamic economics share similar moral ethical values that could possibly contribute to a more just economic system and therefore a better wellbeing for the global community. This article concludes that there is a dire need to have moral economy for global community. Neo-liberalism needs to be reconstructed for its structural inequalities that renders to societies unsustainablity. For, failure to protect the health and safety of people living in abject poverty around the world, we put the entire world at risk.

The existence of an economic system of capitalism, an economic system of socialism, and an economic system of sharia are a response to problems regarding the economy as well as an answer to removing people from the obscurity of the existing economic system. It’s hoped that these systems will be the key to the economic success of a society. But there are always advantages and disadvantages to every existing system. The economic system of capitalism is an economic system hi which investors or owners of capital are the movers and rulers. Meanwhile, the economic system of socialism is a system hi which the government is the main control, this system ignores the position of the individual, everything is regulated by the ruler and no one has the right other than the ruler. The considerations positives and negatives of each system have created a sharia economic system where this system has every positive side of the capitalist and socialist economic system but ignores the shortcomings or negative sides of the two systems. This paper discussed how the economic system of capitalism, the economic system of socialism, the Islamic economic system, and the relationship between them. The method used in this writing was library research, in which the authors used various secondary data from books, article, and many more. The results showed that it is clear that there are far differences between the conventional economic system and the Islamic economic system, the conventional economic system includes the economic system of capitalism and the economic system of socialism.

Islamic economic thought became increasingly prevalent with the birth of various schools of thought in Islamic economics. One of them is the critical alternative school that was pioneered by Timur Kuran. This research will discuss from Islamic economics to the urgency of prohibiting usury; an offer of the East Kuran Islamic economy. With the aim of knowing and analyzing the extent to which Eastern Kuran's economic thought made significant contributions to the development of contemporary Islamic economics. This research is a qualitative research with a library research approach and all data obtained were analyzed using descriptive analysis methods. The results of this study indicate that Timur Kuran is one of the pioneers of the Critical alternative school which critically studies various concepts of Islamic economics and banking. Various forms of economic thought such as from the concept of Islamic economics are none other than modern doctrines that offer alternatives to the economic systems of Capitalism and Socialism. The emergence of an Islamic economy was none other than political-cultural, with the largest contribution coming from Pakistanis, zakat is a more effective safety net than a secular redistribution system and the waqf system does not yet have the flexibility needed for efficient resource use, and the Qur'an prohibits the practice of usury which involves compounding the debt of a loan that is unable to make payments according to a predetermined schedule.

Türk edebiyatının önde gelen isimlerinden olan Mustafa Kutlu’nun kapitalist sistemin temel kavramlarına ve kavramsal kurgusuna yönelik esaslı değerlendirmeleri ve eleştirileri vardır. Bu çalışmada, temel kavramlar üzerinden bir Mustafa Kutlu taraması ve değerlendirmesi yapılmıştır. Yazı kurgusunun etrafında döndüğü temel kavramlar şunlardır: modern kapitalizm, tüketim, ihtiyaç ekonomisi-kanaat ekonomisi, israf, cimrilik, temerküz, infak, rekabet, dayanışma, ahilik, sömürgecilik, büyüme ve kalkınma, küçülme ve küçük üreticilik. Mustafa Kutlu, one of the leading authors in Turkish literature, has fundamental evaluations and criticisms of the founding concepts and conceptual framework of the capitalist system. In this study, a scanning and evaluation of Mustafa Kutlu were made on the basis of basic pillars. The basic concepts around which the script revolves are modern capitalism, consumption, the economy of need, economy-thrift economy, wasting, stinginess, accumulation, spending, competition, solidarity, ahi-order, colonialism, growth and development, downsizing, and small production.

The purpose of this study is to determine the state's protection of ownership both individual ownership and general ownership. The method used in this research is to use literature studies. After conducting a review of various information found that in Islam economic arrangements are regulated in the Qur'an and the Sunnah of the Prophet Muhammad. Then the Islamic economy does not run alone as understanding or other conventional economic concepts. the focus of Islamic economic studies or Islamic economics one of which is regarding the ownership of property. In Islam ownership is very flexible unlike capitalism which emphasizes freedom or socialism which forbids individual ownership. In the level of individual ownership, Islam really values and even protects it. More than that ownership in Islam can be more beneficial for others so that ownership does not depend on just one person. Instruments in the ownership of individual Islam accommodate through various things such as: the management of orphans' property, the distribution of inheritance, the obligation to pay zakat.

Ekonomi kapitalis-sosialis yang telah lama menjadi paradigma dalam kegiatan perekonomian seolah-olah menjadi bumerang dalam paradigma itu sendiri. Melihat kondisi perekonomian yang semakin tidak menentu, membuat orang berfikir untuk mencari solusi atas permasalahan yang terjadi. Mahzab pemikiran Karl Marx dan Adam Smith tidak seindah yang dibayangkan. Konsep monopolistik justru memunculkan isu-isu kesejahteraan manusia dan ketidakseimbangan alam yang tidak lagi dapat bisa di tolerir. Konsep pemikiran ini akhirnya telah sampai pada titik jenuh. Ekonomi Islam atau Ekonomi Syariah sempat menjadi alternatif dalam menanggulangi permasalahan tersebut. Akan tetapi, apakah ekonomi Syariah telah sesuai dengan ketentuan yang ditetapkan oleh Allah SWT dalam Al-Quran? Kembali kepada aturan Syariah, bukan berarti kembali kepada aturan yang ditetapkan oleh Allah SWT. Metode penelitian dilakukan melalui pendekatan kualitatif, dengan menggunakan metode Library Research. Hasil penelitian ini memberikan perspektif ekonomi dengan cara memberikan penjelasan didasarkan ayat-ayat yang terkandung dalam Al-Quran. Mulai dari solusi dalam permasalahan proses produksi dan konsumsi, perdagangan, konsep keseimbangan, serta pengelolaan utang piutang.

Aim: This article takes a critical look at the claims made by advocates of an Islamic economy, in particular that it differs fundamentally from capitalism and socialism because it is built “on a superior ethical basis. The aim is to find out whether this claim can be creditably sustained and why it is made.Design: The world view behind the Islamic economy is probed into by means of a literature study encompassing publications by prominent students of Islam and Islamic economics, predominantly themselves Muslims, which have appeared in a wide range of professional books, magazines and paper series.Conclusions: It is concluded that an Islamic economic system does not differ fundamentally from mixed-economy non-Islamic ones and that there is little reason for non-Muslims to accord Islamic ethics special status. Further, it is found that important drivers of the attempts to Islamize the economy are frustration about the sorrow state of the Islamic world at least since the early nineteenth century and a wish to regain something of its former glory. In other words, identity politics is at play. There may an element of subjectivity in this conclusion, as it depends on interpretations that are hard to prove or disprove conclusively, but statements by leading Muslim advocates of Islam economists give it weight. The conclusion may help to interpret developments in the Muslim world, which is an indispensable step in finding a way to deal with them.

This article agrees with Reardon (2019), that economics finds itself in a predicament caused by the neoclassical school. The dominance of neoclassical economics and its lack of response to calls for reform has been endemic. Reform must include both the neoclassical analysis as well as the system of market capitalism it strives to defend. This paper briefly discusses both aspects of reform. It introduces the new school of analytical Islamic economics and its agenda to reform both the discipline and the economic system. The paper enumerates several advantages of Islamic economics to the economics discipline itself as well as the economy, in addition to bringing together intellectuals and scholars of economics, both from East and West, in a more communicative and inclusive group. In addition, the article makes some proposals towards opening the doors in-between the different schools of thought for positive as well as enriching intellectual interactions. يتفق هذا المقال مع ريردون (2019م) ، في أن علم الاقتصاد يجد نفسه في مأزق تسببت فيه المدرسة النيوكلاسيكية. حيث أضحت هذه المدرسة مهيمنة لا تعبأ بنداءات الإصلاح المتعددة الذي يجب أن يشمل كلا من التحليل النيوكلاسيكي ذاته، وكذلك نظام رأسمالية السوق التي يحاول الدفاع عنه. تناقش الورقة بإيجاز كلا جانبي الإصلاح. كما تقدم المدرسة الجديدة للاقتصاد الإسلامي التحليلي وجدول أعماله لإصلاح كل من علم الاقتصاد والنظام الاقتصادي. تعدد الورقة المزايا التي يجلبها الإصلاح لعلم لاقتصاد نفسه بالإضافة إلى النظام الاقتصادي السائد. ويسعى جدول الأعمال أيضا إلى الجمع بين المثقفين وعلماء الاقتصاد، من الشرق والغرب، في مجموعة تواصلية لا تستبعد أحدا. ويقدم المقال بعض المقترحات نحو فتح الأبواب بين المدارس الفكرية المختلفة من أجل التفاعلات الفكرية الإيجابية بغرض الإثراء المعرفي.

Islamic finance has been surprisingly undertheorized in the international relations literature. In this paper, I fill this gap by investigating the dynamics of mainstreaming within the Islamic finance regime in global markets. Using the norm diffusion literature, I argue that the development and diffusion of Islamic economics, and the corresponding expertise, have followed three distinct steps. First, Islamic economics initially was a critique of capitalism and world markets; second, it was “nationalized” by the political leaders of major Muslim-majority countries; and third, it became an integral part of world markets. By tracing the development of Islamic finance as part of global politics, I situate it within a theoretical framework and show the wider implications of this economic framework for global politics.

This research aims to highlight the role of the Islamic system in economic freedom and its success over the capitalist system, and a socialist in freedom. And between the pros and cons and the way of freedom in the mentioned systems. He emphasized that economic freedom in the capitalist system is absolute, there is no limit in it, but a little, while denying public ownership only an exception to the original, And the state's non-interference in economic and financial activities. And with the denial of economic freedom in the socialist economic system and direct and absolute interference of the state in all economic and financial activities through the central planning system, With the recognition of private ownership, an exception to the original. The research emphasized that economic freedom in the Islamic economic system is neither absolute nor denied, Rather, a compromise between the two sects recognizes economic freedom, but within a limited scope, Because it is disciplined by the legal controls that are valid for all societies. And on the research methodology: I used it in the research as a theoretical and descriptive study that shows freedom in the prevailing economic doctrines with an explanation of Islam’s position on its restricted freedom and the importance of legitimate controls valid for humanity. The results were obtained and the most important ones are Economic freedom in the capitalist economic system is absolute without any control, and Economic freedom is denied in the socialist economic system, therefore Many criticisms of the capitalist and socialist economic system appeared throughout their history as a result of some wrong ideas on which the Philosophy of the two doctrines, however The right to analyze and prohibit is not anyone's right but God alone, but the Economic freedom in the Islamic system is defined by Shari’a controls and constrained by restrictions that refer to the interests of the human community in general, though Islam’s mediation in economic freedom is between capitalist launch and socialist exile. One of the most important recommendations in this research Taking care of teaching Islamic economics in colleges and institutes, Commitment to economic freedom disciplined by Sharia controls, in order to eliminate corruption and bring human interests, and Following to this rule: every action is permissible unless there is evidence that it is prohibited.

Post-modernism is one method of counter-backing the moderanism. The counter back is doing by reconstruction the disable made by the part of moderanisme. Then what about the Islamic economy which it’s the existence is considered to bring down capitalism? The objective of this research is to identify the main points of Abu 'Ala Al-Mawdudi's thought about Islamic economics and his counter-back conducted by Al-Mawdudi to capitaslim economy. The research method that the writer uses is descriptive qualitative method by reviewing Al-Maududi's books plus secondary data source taken from good scientific work in the form of journal etc. The results of this study indicate that modern Islamic economic thought is not escaped from the thought of Al-Mawdudi, Al-Mawdudi's desire to undermine the capitalist system is very relevant to the suffering of economic societies who want justice in the economy. The elimination of usury, speculation and other unfair instruments is the main objective of Islamic economics. With the emergence of an economic system based on the foundations of Islam will cultivate and develop a better economic system. Islamic economics will answer all the "complaints" of the international community in the economy. Keywords : Al-Maududi, Post Moderanism, Islamic Economics, and Capitalism

There is a strong belief formed in scholarly and policy circles that contemporary capitalism is the source of many economic, social and political problems that plague the world today. This system is blamed for large inequalities between the rich and the poor, unrestrained profit-seeking without moral, ethical and social considerations, venal accumulation of income and wealth, and environmental destruction. The argument that capitalism drives innovation and attracts investment is now weakend substantially by these systemic global problems that pose existential threat to human societies. It is clear that the world cannot continue on the current trajectory and needs to harness other forms of managing its resources to create a balance between, self-love, profit motive, ambition on the one hand, and moral, ethical, social responsibility and environmental accountability, on the other. “Islamic economics” has been suggested as providing a basis for one such alternative system. However, it is argued here that the present paradigm of “Islamic economics” needs to change its orientation away from its current “Islamization of knowledge” methodology toward a paradigm more attuned to the Qur’an’s vision of society and its economy in order to provide a viable and sustainable set of solutions to human problems. A move in this direction requires consideration of elements of this vision that have not been been explored thus far in presentations of the discipline of “Islamic economics”. This note is an exploratory consideration of one such fundamental elements derived from the Qur’an: the idea of spiritual capital — as the organizing element of effective and efficient utilization of social, human and financial capital — as a step toward initiating a paradigm shift in investigating the Qur’an’s vision of how societies should manage their resources.

This is a discussion as to how Islamic finance and Islamic economics are shaping the political economy of nations in the Middle East, Central Asia and East Asia. There is a consideration of the synergies between Islamic economics and left-wing political thought and how Islamic economics has strong synergies with the developmental capitalist model of East Asia. There is also an analysis of Islamic insurance—known as takaful.

This chapter considers the theological foundations of Islamic finance. There is also an analysis as to how arguments against religion helped revitalise the debate surrounding Islamic economics. There is a comparative analysis as to how Muslim and Christian thinkers perceive the role of the markets within a religious context.

The failures of capitalism economic in realizing justice and prosperity is due to the implementation of the interest system (usury system). In the long term usury system pose a huge gap between communities. Giving a variety of impacts on the economy of ummah. As the imbalance of the real sector and monetary sector, poverty and others. People, their life has been shackled by the economic system that allow the practice of interest or on the practice of usury is certainly contrary to the society ideals which is social justice, contrary to a life filled with love In fact, not a few countries receiving assistance of these loans were destroyed due to the large amount of foreign debt. Islamic economic as economy system resurfaced again trying to bring about justice and the welfare of his followers to abolish interest (riba) and replace with a system of profit sharing (profit loss sharing). As one of alternative to achieve economic justice. The underlying revenue sharing system embodiment of justice in various financial sector and the real sector. As for the elimination of usury system that for centuries held in various countries. To errasing the practice of usury rate system, Islamic economics has its own rules in eliminating usury system and replace it with a system of profit sharing (profit loss sharing) to achieve justice in economic life and charity as a form of wealth distribution. Profit loss sharing system with the end result-oriented on businesses without unknowning the share out either be positive or negative. Each parties will share in the same way

The Islamic Economic Doctrine is a comparative study that looks at the fundamental principles of Islamic economics, and compares them with the economic and philosophical foundations of capitalism and Marxism. It identifies through a review of theoretical economics the structural problems that lie in the current economic order. Poverty and Inequality have increased in last two decades and the millennium development goals are still far from achieved. The research identifies that lack of an ethical foundation, unbridled pursuit of self interest in production as well as in consumption, interest based financial ad monetary system are the major problematic issues in Capitalism against which mixed economy has also shown limited effectiveness. Socialism promises to create heaven on earth, but takes fundamental human rights and profit motive away and in the extreme case give way for an autocratic or totalitarian regime. Islamic economic system in its true sense is not present in any country. It is a blend of natural features present in Capitalism i.e. right to private property, private pursuit of economic interest, use of market forces etc. used along with 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.

During the last two decades, two economic ideologies which experienced world development namely socialism and capitalism were competing to prove their selves as the most rightful and the most potential in solving economical problems which was faced by people. Yet, both of them were judged failed to serve solutions in solving the main classic economic problem of people. Islamic Economy was introduced as the alternative in solving the problems. One of the idea from Islamic Economy ideologies is the concept of production, distribution, and consumption. The research methodology, which was used in the research was descriptive-qualitative method, the data collection was conducted through combining theories from different references. The research aims to acknowledge how the concept of production, distribution, and consumption in Islamic Economy works. The research findings includes: 1) the production concept in Islamic Economy should be based on three main basic aspect namely the aspect of belief, knowledge, and deed; 2) the production concept in Islamic Economy should be based on the basic principle of Islamic Economy namely individual freedom, social insurance, prohibition in accumulating wealth, and fair wealth distribution; 3) the concept of consumption in Islamic Economy to only fulfill daily needs not the wants.

This chapter argues that the recent rise of Islamic finance is moving towards “disguised capitalism” rather than the new economic system based on Islamic values. It defines Islamic moral economy based on the Islamic worldview. It explores the foundational and axiomatic differences between Islamic and capital economic systems. It calls for an authentic economic system based on the Islamic worldview.

This article preliminary explores a forgotten figure of defining concept of Indonesian Islamic economics, Kahrudin Yunus. Differ from other contemporary concepts; Yunus has generously framed sistem ekonomi kemakmuran bersama as a basic principle of Islamic economics. Although Yunus has courageously implanted such Arabic economic thinker as Baqr al-Shadr, the Indonesian political tension that infused capitalism and socialism in the middle of 1955 had imposed him to not define Islamic economics in narrow theological perspective, conversely, Yunus argued that Islamic economics must be built on the benefits of economic politics in order to constructing a democratic system. Yunus forgotten thought would have been a counter debate of contemporary Islamic economics today that somehow enforced the return of golden age of Islamic revival. Keywords: Islamic economics, kemakmuran bersama, economic thinker

Rationalism is one of the philosophical schools originated from Greek Civilization. Two prominent scholars developed the theory, namely Plato and Aristotle. The ratio is a crucial way to approach truth. The rationalism has influenced all knowledge and sciences developed by other scholars in different time and place. The study aims to know the influence of rationalism toward economic development in Indonesia. To obtain a clear answer, the study used thematic analysis to identify, categorize, and report the qualitative data related to the study. The finding says that rationalism has been adopted by Indonesia when it used either capitalism or socialism in the development of economic in Indonesia. The existence of Islamic economics in Indonesia gives a new paradigm of the method in understanding and solve the economic problem by using ratio in the framework of Islamic revelation. By then, there is a fundamental difference of philosophical underpinning related to the development of economic in Indonesia, starting from a conventional one to Islamic economics combining ratio and revelation to solve the economic problem of society.

Distribution is one of the economic topics that is necessary to be discussed, mainly the distribution of wealth because it concerns the effort to achieve prosperity for all levels of society in a country through equitable distribution of wealth. In this article, we will discuss the concept of wealth distribution both from conventional perspective, which is based on capitalist ideology and from the perspective of Islamic economics. As the public understanding about capitalism, it is one of the economic comprehension carried by the Father of Economics "Adam Smith" which emphasizes the individual freedom in managing assets without government intervention. Capitalism has led to injustice and income inequality in the community, causing conflict and creating permanent poverty for the citizens of society. Islam refers the process of distribution of wealth following Islamic principles. Islam prevents the accumulation of wealth in certain small groups and promotes the distribution of wealth to all levels of society. This research is descriptive qualitative based on the study of literature such as books and other literature that are relevant to the problems considered by the author. The purpose of this study is to understand the concept of wealth distribution based on Islamic economic and capitalist economic perspectives. The result of this article concluded that the capitalist wealth distribution system should be replaced by the Islamic economic system that emphasizes the value of freedom as well as the behaviour of human based on religious teachings and the value of justice in ownership.

The failure of the capitalist system in realizing just welfare becomes a necessity for mankind to deconstruct the economy of capitalism into a just and civic economic system which in this case of course Islamic economics deserves to be considered as one alternative in realizing human prosperity. As one of today’s contemporary muslim economists, Baqir Sadr’s ideas are increasingly finding relevance to the current global economic situation. This article examines the thoughts of Baqir Sadr in the book Iqtishaduna (our Economic) by using the approach of library research. The results of this study include. First The idea that capitalism is a system that is solely oriented to the accumulation of capital and ignore the values outside the economic motive. The two important meanings of the State’s role in economics at Baqir Sadr’s foundation can be found in the notion of a conventional economist, one of which is former US Federal Reserve governor Alan Gleenspan, which highlights the importance of state involvement in economic activities as in the case of the Subprime Mortgage financial crisis. The three ideas of wealth distribution that require the circulation of property in both local and transnational domains become very relevant to see the imbalances that occur in the world today as the United Nations Development Program (UNDP) said as many as 20% of the rich in the world are enjoying 86% of world wealth, while 80% of the world's poor enjoy only 14% of the world's wealth. Keywords: Relevance, Capitalism Failure, Baqir Sadr Thought

Referring to Shakespeare’s Hamlet, this paper explains the “tragedy of Islamic economics” by looking at the issue of the moral economy of Islam as an orientalistic “ghost” that, if may distress the “world” of conventional economics, represents, instead, a false problem for its own methodology and a major obstacle for its own theoretical development. In fact, as much as Prince Hamlet is worried by the vision of his father (King Hamlet)’s ghost in Shakespeare’s tragedy, so Islamic economics seems persistently obsessed by the challenge of (self-)legitimizing itself from a moral perspective, as it was its own duty to overcome the limits of conventional economics, avenging its weaknesses, and its own destiny to perpetuate an underlying dichotomy between the West and the Orient. But, beyond Orientalism as a practice of knowledge and culture creation (that is, in the end, subservient to Western domination), if one resides in the real “world” of Islamic economics, morality is not detached from economics and, accordingly, there is no need to rectify economics through morality. In other terms, to the extent to which it does not embrace the Western spirit of capitalism, no orientalistic moral economy’s ghost should haunt the house of an eco-system really founded on Islamic principles. On the contrary, when the tawhidi framework is adopted and shari‘ah-based rationales of abundance, sharing and cooperation nurture the pillars of economy, an Islamic eco-system (by fully integrating economics and morality) can develop its own paradigm of shared prosperity autonomously from conventional economics and its ghosts. Following this reasoning the paper suggests that time has come for Islamic economics (Prince Hamlet) to “liberate” itself from the need for “revenge” inspired by the double-sided spirit of capitalism and moral economy’s ghost, so to depart from the orientalistic legacies of conventional economics and Western cultural domination (King Hamlet).

Nagaoka’s analysis of Islamic Economics provides the reader with the opportunity to contrast a religion-based economic system against a major comparator, Buddhist Economics (Chapter 23), and contemporary (Western-led) Global Economics. The idea of ‘Islamic Economics’ is new, from conceptual roots in 1941, and with massive expansion of the Islamic Banking System from 2002 to 2012. Key features of Islamic Economics are revealed, such as the forbidding of “riba”, unequal exchange, ie: interest free finance—with benefits to be repaid at the end of the venture; and demand for “zakat”, return of a percentage of income (normally 2.5%) to God, via the Mosques and good works. Benefits of zakat will be enjoyed in the afterlife, not now. This is a system therefore that promotes self-centered and profit oriented economic action, is not an anti-capitalist movement, but, as the author argues, still needs some renovation to fit into the “wisdom” of modern capitalism and its practices.

Often spiritualism and religion impose social and economic duties (constraints) on its adherents. Islam promotes various encouragements, limitations and prohibitions on expenditure, consumption and production. So, in modern world, does Islamic brand of economics have a place? Capitalism and Communism have marked this era. Tools of utility and profit maximization have supported renditions of Capitalism: Classical, Keynesian, Neo-Classical Economics and Rational Expectations. This paper examines consumer behavior given Islamic constraints. Some Muslim economists are wary about utility maximization, convinced that the selfishness axiom cannot be adequate for a system bound up in selflessness. Besides, they report that, by some accounts, people do not appear to maximize utility. This paper, using the elementary combination of indifference curve and budget line for optimization exercise, besides showing the unfoundedness of this criticism (because selfishness could include selflessness as its end – finding satisfaction in being considerate and generous), illustrates how, through substitution and income effects, Islamic rules and regulations influence consumption. So, the baby need not be thrown out with the bath water. A reinvention of the wheel is unnecessary.

Challenging economic theory that is developed at micro level is a common practice among macro-economic behaviors of conventional economic system. In this context the paper analyses Islamic banking that tries to bring an interest free financial system. The paper explains the circumstances that may lead to a universal application of Islamic banking in Pakistan. This is done after presenting a detailed discussion on the rational for conventional banking. Keywords. Islamic banking, Capitalism, Islamic economics, Interest rates.JEL. E50, E52, E60.

Purpose– This paper aims to discuss the crises of free market capitalism in terms of its understanding of human nature. It reveals how recent market madness can be attributed to certain elements of human nature.Design/methodology/approach– The paper uses a conceptual and philosophical approach to analyze crises of free market capitalism. It links both success and failure of capitalism to its understanding of human nature. It compares and contrasts economic assumptions of human nature in conventional and Islamic economics. It attempts to explain the 2008 financial crisis through a comprehensive theory of human nature.Findings– It sheds some light on the irrational aspect of human nature as the driving factor behind the 2008 financial crisis. It elaborates on the importance of knowing self for knowing human decisions in free market economy. It concludes with the need for a comprehensive theory of human nature to predict and prevent irrational and irresponsible behaviors of populist politicians, greedy capitalists and conspicuous consumers. The paper also reflects on the 2013 Nobel Prize in economics as a victory for the study of human nature.Originality/value– The paper offers a new perspective to understand crises of free market capitalism.

The second chapter deals with the debates on (in)compatibility of Islam and capitalism, as a background for the discussion on the Islamic capitalism and Islamic democracy in Turkey. It mainly argues that there is not a unified position among the Muslim and non-Muslim scholars and intellectuals with regard to the question of (in)compatibility of Islam and capitalism. While most of the Muslim scholars advocate that Muslims should be active players in the global market along with fusion of modernity and Islam, most of the non-Muslim scholars propose that Islam and capitalism are two incompatible modes of existence.

Transaction in Islam is often criticized for not having a clear differentiator from the other transaction. Although departing from the different basic principles, but havingnot a much different impact than the other transaction. Often asked, whether Islamic economics is capitalism minus usury or socialism plusIslam? Therefore, no less important to know are, what a plus-minus of conventional transaction, what the distinguishing element between a conventional transaction with Shari’ah transaction, and whether the distinguishing element has different impact than what is produced by a conventional transaction.

The debate over the causes of the Muslim world lagging behind the ascent of Western Europe and failing to evolve adequate institutional and financial tools to counter the challenges of Modernity is of keen interest to economic historians. Works addressing this complex issue by two leading Turkish scholars, Professors Timur Kuran and Murat Cizakca, provide a focus for discussion of this debate and are here summarized and the authors’ divergent theses contrasted. At the heart of the debate is the question whether Islamic religious and legal structures inadvertently or directly hindered Muslim societies in the Middle East over the past several centuries from modernising their economic and financial systems. Furthermore, is there a viable alternative form of capitalism found in Islam? Several critical responses or contrasting views (M. Shahid Ebrahim, et al., 2012) are briefly presented, along with the implications for Islamic economics.

The more recent literature on Islamic economics is largely about Islamic financial instruments and institutions. It might give an impression as if the main difference between conventional and Islamic economics is in the instruments, rather than foundational aspect. Islamic economics is not about the prohibition of certain goods and services. It is a vastly different economic system whose answers to the core economic questions vary significantly. It is important to start from the foundation Islamic economics by redefining assumptions, developing new theories of microeconomics and macroeconomics, and offering testable models from the Islamic paradigm. This paper is an attempt to redefine Islamic economics as a new economic paradigm based on the distinctive axiomatic feature of Islamic worldview. In order to do that, the paper first presents evidences of the crises of capitalism and search for alternative paradigm. Second, it outlines the origin of capitalism within the Western secular worldview. Third, it presents the Islamic worldview from anthropological, epistemological, and teleological perspectives. Fourth, it redefines Islamic economics as alternative economic paradigm to capitalism.