Type Of Economic System

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Types of Economic System Ruhul Nisa Binti Remali Centre for Foundation Studies,International Islamic University of Malaysia Brother Mohd Karimi Bin Sulaiman Human Sciences 144312 Types of Economic System The term economic system refers to the mode of production and distribution of goods and services within which economic activities takes place. In other words, Assar Lindbeck(1972)defined it as "a set of mechanism and institution for decision making concerning production,distribution and consumption within a given geographical area" in a broader sense, the term economic system also refers to how different economic agents solve the central problems of economy what, how and for whom to produce. While,according to Loucks definition…show more content…
The government,rather than the market makes decision about the allocation and distribution of goods. To explain more,socialism is a social and economic system characterised by social ownership of the means of production and co-operative management of the economy,as well as a political theory and movement that aims at the establishment of such a system.In socialism,everybody would have free access to the goods and services designed to directly meet their needs and there be no system of payment for the work that each individuals contributes to producing them. Meanwhile,socialism can be divided into several types. The first one is democratic socialism which is advocates socialism as an economic principle and democracy as a governing principle. Next is revolutionary socialism. It advocates the need for fundamental social change through revolution or insurrection.The third one is utopian socialism. It is a term used to define the first currents of modern socialist thought in the first quarters of the 19 century. While,libertarian socialism aims to create a…show more content…
The term of Islamic economics literally translated from Arabic word ‘al iktisat’ul Islam,or rarely ‘al fiqh’ul iktisat. On the other hand,it is the studies on how to achieve the best certain policy goals,such as full employment,stability,economic growth and improving productivity and equity. To give more professional definition,refering to Umar Chapra,”that branch of knowledge which helps to realize human well-being through an allocation and distribution of scarce resources that is in conformity with Islamic teachings without unduly curbing individual freedom or creating continued macroeconomic and ecological imbalances.” Also according to Chapra and many other scholars,there are four sources of islamic economic systems. They are Quran,Hadith,Ijma’ and Qiyas. Traditional Islamic concepts having to do with economics included zakat,the charitable taxing of certain assets such as currency,gold or harvest. Gharar or uncertainty also included in this which it means the presence of any element of excessive uncertainty,in contrast is prohibited. In the 1960 and 1970,Shi’a thinkers worked to describe Islamic economic “own answers to contemporary economic problems.” Several works were paticularly influential Eslam va Maleikiyyat (Islam and Property) by Muhammad Taleqani (1951),Iqtisaduna (Our Economics) by Mohamad Baqir al-Sadr (1961) and Eqtesad –e Tawhidi (The

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