The Factors of Production in Islam. Capitalism has four factors of production 1. Capital - the produced means of production" Compensation: Interest 2.

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The Factors of Production in Islam

Capitalism has four factors of production 1. Capital - the produced means of production" Compensation: Interest 2. Land -'natural resources'' (that is to say, those things which are being used as means of production without having previously undergone any process of human production). Compensation:: Rentals The Factors of Production in Conventional System

3. Labour - that is to say, any exertion on the part of man. Compensation: Wages 4. Entrepreneur, or Organization - the fourth factor which brings together the other three factors, exploits them and bears the risk of profit and loss in production. Compensation:Profit The Factors of Production in Conventional System

1. Capital —That is, those means of production which cannot be used in the process of production until and unless during this process they are either wholly consumed or completely altered in form, and which, therefore, cannot be let or leased (for example, liquid money or food stuffs etc.) Compensation: Profit The Factors of Production In Islam

2. Land —that is, those means of production which are so used in the process of production that their original and external form remains unaltered, and which can hence be let or leased (for example, lands, houses, machines etc.) Compensation: Rentals 3. Labour -that is, human exertion, whether of the bodily organs or of the mind or of the heart. This exertion thus includes organization and planning too. Compensation: Wages / Profits (in case of Mudarabah arrangement) The Factors of Production In Islam

CAPATILISM affirms an absolute and unconditional right to private property SOCIALISM totally denies the right to private property ISLAM admits the right to private property but does not consider it to be an absolute and unconditional right which can be used to cause disorder on earth Difference Between Capitalism, Socialism and Islam

1.Establishment of a practicable Economic system Islam accepts the following thing within a certain limits: a.laws of demand and supply b.motive of personal profit c.market forces d.natural relation of employer and employee ''We have distributed their livelihood among them in worldly life, and have raised some above others in the matter of social degrees, so that some of them may utilize the services of others in their work." (43:32) Objectives of Distribution of Wealth

2. Enabling every one to get what is rightfully due to him:- A: Elementary level of deserving wealth: Factors of production B: Secondary level of deserving wealth: poor Objectives of Distribution of Wealth

"In their wealth there is a known right for those who ask for it and those who have need for it.” (70:24-25) In certain verses, this right has been defined as the right of Allah. For example, this verse in connection with harvests: “And pay what is rightfully due to Him on the day of harvesting." (6:142)

3. Eradicating the Concentration of Wealth through: Prohibition of hoarding, interest, gambling, Speculation,Uqood Fasidah, and Gharar "So that this wealth should not become confined only to the rich amongst you”. (59:7) OBJECTIVES OF DISTRIBUTION OF WEALTH