Hazara Islamicus (Jun 2018)
An Analytical Study of Moderen Economic Theories and Rationales Behind Interest = سود کے جواز پر جدید معاشی نظریات اورعقلی توجیہات کا تجزیاتی مطالعہ
Abstract
The Islamic economic system is purely based on such an ethical system in which contracts and matters between individuals and groups have been defined in a way that the rights, duties and obligations of every human beings are protected. On the one hand, Islam has given orders related to sales, transactions, and other contracts but on the other hand also prohibited those elements which are disastrous for economic and business relations among people. Interest (Riba) is an element that promotes hatred among people as well as Nations. Islam has discouraged and prohibited the interest. On the contrary, the economic theories on interest such as waiting theory, time preference theory, theory of compensation, theory of exploitation, theory of production and classical theory of interest have advocated the permissibility of interest. All these theories provide economic rationales behind charging the interest. In this article all above mentioned theories along with their economic rationales are briefly analyzed and critically examined in the light of socio-economic rationales. Furthermore, this article also explains the inherent weaknesses and flaws of these theories and outlines various types of interest in detail. It is concluded from this study that Islamic injunctions discourages the economic exploitation of individuals, groups and organizations. Besides, Islamic system highlights the harmful effects of interest on the life of individuals and also highlight its harmful effect on the social and economic fabric of the society.
