A consumer and social welfare model based on the writings of Shibani (750-805 AD, 131-189 AH)

The work analyses the writings of Shibani, considering their relevance for contemporary Islamic economics. The novelty of Shibani’s earnings model is its integration of Zakat and other social giving in the social welfare function, which makes the consumer utility a multi-dimensional devotional, material, ethical, social, Shariah-compliant function. The paper proposes a model based on Shibani’s thought, in which the consumer’s income evolves increasingly, from the “imperative earnings” that cover the consumer’s basic needs, to “recommended earnings”, which cover the basic needs of relatives; and to “permissible earnings”, which cover the poor’s needs. Accordingly, the model distinguishes about imperative, recommended, and permissible utility. Rich consumers draw additional utility from Zakat spending in favour of poor consumers. The permissible marginal utility is related to faith interaction and enhances social utility as social transfers are paid to the poor and needy groups. JEL: D1, D6, I3, P46