Introduction to Economic System

Topics: Capitalism, Socialism, Economics Pages: 9 (3047 words) Published: May 17, 2011
What is system?
System (from Latin systema, in turn from Greek systēma) is a set of interacting or interdependent entities, real or abstract, forming an integrated whole. A group of interdependent items that interact regularly to perform a task. Economic System

An economic system is a system that involves the production, distribution and consumption of goods and services between the entities in a particular society. The economic system is composed of people and institutions, including their relationships to productive resources, such as through the convention of property. In a given economy, it is the systemic means by which problems of economics are addressed, such as the economic problem of scarcity through allocation of finite productive resources. Examples of contemporary economic systems include capitalist systems, socialist systems, and economic system of Islam. Economic systems are the economics category that includes the study of respective systems. Economic System of Islam

Islamic Economic System implies a mood of satisfying the economics needs of the members of organized society in accordance with is injection of Quran and Sunnah. The mood of spending production, distribution and exchange of wealth is determined by the tenor of these injections. In this system the economic activities of the members of the society are regulative by the certain values of which pity, justice, benevolence, cooperation, brotherhood and equality are especially important. The sources and origin of these values are the Holy Quran and the Sunnah of Allah’s Apostle (PBUH). They are eternal and immutable. Consumers, producers and traders are must abide these values. At one level, the state can also use the its powers to implements and enforce these values, however, Islam mostly ensure their implementations and daily affairs of life through its system of education and training and by creating a general climate of piety in the society.

Some Fundamental features of Islamic Economics System are written below. * All the wealth belongs to Allah (SWT):
"And give them of the wealth of Allah which He has given you." [An-Nur: 33] * The community is the trustee of the wealth:
"Believe in Allah and His Messenger, and spend whereof He has made you   heirs."[Al-Hadid: 7]
* Hoarding of wealth is prohibited:
"And those who hoard up gold and silver and spend not in the way of Allah;   announce to them a painful chastisement." [At-Tauba: 34]
* . Circulation of wealth is a duty:
"Whatsoever Allah may restore unto His Messenger - is due unto Allah and unto His Messenger - the orphans and the needy. So, that it may not be confined to the rich amongst you." [Al-Hashr: 7] Other Economic System

There are two economic systems
•    Capitalism
•    Socialism
Capitalism is the economic system in which the means of production are distributed to openly competing profit-seeking. Capitalism is not merely an economics system but a peculiar attitude of mind and behaviour. Basically it springs out of the notion of the capitalist that he has earned his wealth by his own ability, skills, knowledge and wisdom. Some of the features of capitalism are written below. 

1. Private persons and where investments, distribution, income, production and pricing of goods and services are predominantly determined through the operation of a market economy 2. Capitalism is originally defined as a mode of production, where it is characterized by the predominant private ownership of the means of production, distribution and exchange in a mainly market economy 3. Capitalism is usually considered to involve the right of individuals and businesses to trade, incorporate, and employ workers, in goods, services (including finance), labor and land. 4. In Capitalism, state action is confined to defining and enforcing the basic rules of the market though the state may provide a few basic public goods and infrastructure. 5. The most laissez-faire...
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