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PRODUCTION IN ISLAM - Coggle Diagram
PRODUCTION IN ISLAM
GOALS OF THE FIRM: Maximization of utility is the Goal of the Firm in an Islamic economy more specifically, M.N.Siddiqi explains 5 Goals of the Firm in an Islamic economy. These are following
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PRODUCER BEHAVIOUR
allowed to take profit at the highest level as long as it does not violate the Sharia (no profit monopoly)
allowed to take the lowest level of profit as long as it is not cruel (zalim) (enough for basic needs of self and family)
Sufficient is satisfactory: enough to be satisfied in terms of its goodness, the earning of money, the ability to maintain and expand the company in order to meet the needs of the community.
An organization or an entrepreneur or an enterprise faces risk and earns profit or loss by running its business. As like proprietorship or partnership, there are different types of business structure is available in Islam
Under Mudaraba arrangement, the entire capital is provided by one party and the other party bears only the managerial costs and share profit according to the agreed ratio
Under Musharaka arrangement, the capital is provided by both the parties and proportion of capital provided shares the profit.
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The concept of responsibility profit-not self fish, subject to islamic norm (responsibility to Allah and to ummah)
- Toward to Ummah Well-being
Earnings should be allocated for zakat. community rights in the form of zakat if haul and nisab are sufficient
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PHILOSOPHY: production is the human effort to improve not only his materiality, but also to improve his moral position as the basis of his goal
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IMPORTANCE
to meet the needs of life according to the priority of goods - life needs, basic needs and comfort (Aidit Ghazali: 1986)
to meet the needs according to responsibility-self needs, family, futre needs, next genaration fisabilillah (Siddiqi: 1979)
as a measure to avoid being fined for leaving property that is owned unused (such as land) and avoid being lazy (Kahf: 1982)
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as responding to God's call to work harder and find the barakah in work (Aidit Ghazali (1986) & Kahf (1982)
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PROCESS
AMANAH
producer must make sure that the resources are develop and used to produce
goods and services in ways that are permissible in Islam.
'IMRAN
andatory for mankind to inhabit the earth, take possession of its contents and
derive benefits from them
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FACTORS : From the Islamic point of view, the actual factors of production are three instead of being four
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)
human exertion, whether of the bodily organs or of the mind or of the heart. This exertion thus includes organization and planning too.
Theoretical concept of landownership according to the Quran, the hadiths and canon law books
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 stuff etc).
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