Islamic Economics

Topics: Distribution of wealth, Wealth condensation, Wealth Pages: 12 (3897 words) Published: February 24, 2011
REDISTRIBUTION OF WEALTH Redistribution of wealth is the transfer of income, wealth or property from some individuals to others caused by a social mechanism "such as tax laws, monetary policies, or tort law". Most often it refers to progressive redistribution, from the rich to the poor, although it may also refer to regressive redistribution, from the poor to the rich. The desirability and effects of redistribution are actively debated on ethical and economic grounds. It holds pivotal role in economic growth. In fact it appears that whole economy is based on the concern to make the economy just and stable. The objective of moderate income redistribution is to avoid the unjust equalization of incomes on one side and unjust extremes of concentration on the other sides. Today, income redistribution occurs in some form in most democratic countries, most commonly through income-adjusted taxes (in which the amount of tax paid is directly connected to one's income), some of which goes to fund welfare programs to assist the poor[neutrality is disputed] , or to all of society. Progressive income taxes are a widely used method of income

The economics of distribution signifies the sharing of wealth produced by a community among the agents, or the owners of the agents, which have been active in its production. The theory of distribution is thus concerned with the evaluation of the services of the factors of production like land,labour ,capital and enterprise, and distribution of the rewards among them. But here we are not concerned with economics of distribution rather we are concerned with social distribution of wealth which means fair and even distribution of wealth amongst the members of a community. If distribution of wealth in a community is unfair, unjust and inequitable, the social peace is always at stake and the conflict between the haves and have-nots results in bloody revolutions. Pockets of prosperity cannot survive in oceans of poverty and, therefore, fair and equitable distribution of wealth is vital to a community for its peace, well-being and ultimate prosperity. ISLAM AND REDISTIBUTION OF WEALTH Economic system of Islam makes utmost endeavours to maintain redistribution of wealth on just and benevolent basis and to provide means sustenance to every member of society in a dignified manner. Islam enjoins that man should earn and spend wealth through lawful means and spend it 1 on his personal needs 2 invest in a lawful business

3 give it away to others so that they may meet their needs Islam takes various social , institutional,legal and moral steps to ensure just distribution of wealth on maximum scale and circulation of wealth through all classes of the society . If the wealth remain in few hands than many people will be deprived of their rights and concentration of wealth is created . Basic aim of Islam, as we have already stated earlier, is to ensure well-being (Falah) of its followers in this world and in the Hereafter, and also to establish brotherhood among the members of the Muslim community (Ummah). This aim cannot be achieved if distribution of wealth among the members of Muslim...
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