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Can Islam really solve pricing problem? I want answer from economist.

Can Islam really solve pricing problem? I want answer from economist.

Macroeconomics: Private and Public Choice (MindTap Course List)
Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
ChapterST4: Keynes And Hayek: Contrasting Views On Sound Economics And The Role Of Government
Section: Chapter Questions
Problem 5CQ
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Can Islam really solve pricing problem? I want answer from economist.
Petrol & Diesel Pricing. The recent surge in petrol and diesel prices takes a heavy toll on the already tethered budget of an ordinary citizen. The taxes and privatization of natural resources are the real culprits behind this facade. In the economic system of capitalism, corporate giants own public resources (according to the freedom of ownership) cashing in huge profits and the harsh Taxes (both direct and indirect) collected does the rest of theft on our pocket (according to news portal The Wire- 50-65% of fuel prices are central and state taxes). Capitalist Solution In capitalism the ever mysterious hand of market is gatekeeper of prices which loosely changes the situation from monopoly to duopoly (at most). Also the regulatory body which should act as watch dog becomes the lap dog making it totally redundant. Islamic Solution Drawing parallel to the Islamic system both these major aspects which contribute to the spike in prices, privatization and taxes, on natural resources are absent. Abyaz-bin-Hammal Marbi reported that the Prophet took back a salt mine from him when he found that it was for common use of all Muslims. (Tirmizi, Ibn Majah) The Prophet said: "The people are partners in three things, waters, feeding pastures and fire."(Ahmad). According to this Hadith, all energy resources, including oil and gas wells, coal mines and electricity generation plants can never be privatized. The Prophet said: "The collector of taxes will not enter heaven." (Ahmad). According to this Hadith, nobody is allowed to tax the people at will and the revenues for the Khilafah's state treasury are only those ordained by Allah (SWT) which is taxing the amount that exceeds the needs and not the entire amount earned by the person.
Transcribed Image Text:Petrol & Diesel Pricing. The recent surge in petrol and diesel prices takes a heavy toll on the already tethered budget of an ordinary citizen. The taxes and privatization of natural resources are the real culprits behind this facade. In the economic system of capitalism, corporate giants own public resources (according to the freedom of ownership) cashing in huge profits and the harsh Taxes (both direct and indirect) collected does the rest of theft on our pocket (according to news portal The Wire- 50-65% of fuel prices are central and state taxes). Capitalist Solution In capitalism the ever mysterious hand of market is gatekeeper of prices which loosely changes the situation from monopoly to duopoly (at most). Also the regulatory body which should act as watch dog becomes the lap dog making it totally redundant. Islamic Solution Drawing parallel to the Islamic system both these major aspects which contribute to the spike in prices, privatization and taxes, on natural resources are absent. Abyaz-bin-Hammal Marbi reported that the Prophet took back a salt mine from him when he found that it was for common use of all Muslims. (Tirmizi, Ibn Majah) The Prophet said: "The people are partners in three things, waters, feeding pastures and fire."(Ahmad). According to this Hadith, all energy resources, including oil and gas wells, coal mines and electricity generation plants can never be privatized. The Prophet said: "The collector of taxes will not enter heaven." (Ahmad). According to this Hadith, nobody is allowed to tax the people at will and the revenues for the Khilafah's state treasury are only those ordained by Allah (SWT) which is taxing the amount that exceeds the needs and not the entire amount earned by the person.
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