Capitalist v Islamic Economic System

UAE Laws and Islamic Finance

Outskirts of the Vatican

Thoughts from Iraj Toutounchian’s Islamic Money & Banking, Integrating Money in Capital Theory

Negatives of the Capitalist Economic System

1. Non-satiation: the primary assumption in utility theory;

2. Denial of society: assumed Pareto efficiency;

3. No cooperation: due to both impossibility of comparison of utilities and fixed-wage payment to labor;

4. Emphasis on self-interest to the neglect of other aspects of the complexities of human nature;

5. Self-interest overwhelming social interest;

6. Denial of externality, based on self-interest and impossibility of comparison of utilities;

7. Equity, a second-hand argument with no guarantee of success;

8. Conflict between efficiency and equity;

9. Equilibrium guaranteed by efficiency but not optimality;

10. Unchecked greed due to non-satiation and to denial of society;

11. Zero-sum game as a result of no cooperation;

12. Virtual wealth, resulting from non-satiation and to denial of society;

13. Endorsement of all kinds of risks…

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