Application of Islamic Economic System in a Contemporary Economy: An Illustration with Poverty and Inequity in the USA

Abstract

This article examines the feasibility of Islamic economic system in a modern economy. Contemporary economic system is sophisticated and very complex. Islam established the foundations of its economic system fourteen hundred years ago and its principles are deemed straightforward and simple. So the question arises: How can such a straightforward and simple system handle the complicated problems of a modern economy? This question is addressed here using the problems of poverty and inequity in the USA as an illustration. The choice of the USA is based on the level of its affluence and technological development, but its failure to eliminate the scourge of chronic poverty in spite of the availability of the means to do what. I first show the nature of the problems in terms of poverty, hunger, homelessness, lack of medical care, and inequity in the distribution of income and wealth, in stark contradiction to the affluence of the country. Then I demonstrate how the application of the Islamic principles can, within a very short time, solve these problems without at all stifling the prosperity of the society. This conclusion, however, should not be misconstrued as if Islam cannot deal with the problems in the context of developing countries — Islamic principles worked like miracles in solving these and other problems with the least amount of resources during the early days of Islam.

Citation

Sharif, M. (2003), "Application of Islamic Economic System in a Contemporary Economy: An Illustration with Poverty and Inequity in the USA", Humanomics, Vol. 19 No. 3, pp. 41-54. https://doi.org/10.1108/eb018888