The Principles of Economic Production and Exchange

Introduction
It is the set of principles that underpins the operation and decision-making of an economy,
including the choice of which goods and services are produced.
How they are produced and exchanged, this paper examines how money from production
should be allocated across factor resources, and what constitutes a suitable balance between
the public and private sectors, in addition to between the free market mechanism and
government control.
Economic systems can be broadly classified into the following categories:
1. Islamic Economic System
2. Socialism
3. Communism
4. Capitalism
Comparison of Islamic Economic System with Capitalism:
The capitalist economic system, in contrast to socialism and the Islamic economic system, considers
capital to be a specific component of production that ought to be compensated with a factor payment,
namely interest. It enables capitalists to reap the benefits of wealth expansion without having to expose
their factor, i.e. capital, to the same dangers that an entrepreneur is exposed to. Interest rates have a
significant impact on the allocation of resources in this context. It has an impact on fundamental
economic decisions such as what to create and for whom to make it.
Islam does not reject the existence of market forces or the existence of a economy of market.
Even the motives of profit can be tolerated to a certain amount under some circumstances.
Private property ownership is not completely eliminated. Although there are some similarities,
the fundamental distinction between Islamic economies and capitalist, is that under secular
capitalism, the motive of profit or ownership are given unrestricted authority to influence
economic decisions.
There is no heavenly command that restricts their ability to enjoy their freedom. In the event
that there are any restrictions, they are imposed by human beings and are always subject to
change through democratic law, which does not recognise the authority of any super-human
power in any form. This approach has facilitated the growth of a wide range of activities, many
of which are detrimental to society as a whole. Various financial instruments such as interest,
gambling, and speculative trades all have a propensity to concentrate wealth in the hands of a