Price Mechanism; Islamic Perspective

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NATIONAL ASSOCIATION OF MUSLIM ECONOMICS STUDENTS (NAMES)
UNIABUJA
PRICE MECHANISM; ISLAMIC PERSPECTIVE
The commitment of Islam to individual freedom distinguishes it sharply from capitalism or any system, which celebrates individual freedom. Free mutual consent of the buyer and the seller is, according to all schools of Muslim jurisprudence, a necessary condition for any business transaction. The condition springs from the verse of the Quran ‘O you who have faith! Devour not the property of anyone of you wrongfully except that it be trading by your mutual consent’ (Quran 4:29). The only system that would conform to this spirit of freedom in the Islamic way of life is one where the conduct of a large part of production and distribution of goods and services is left in individual or voluntary constituted groups. In promoting equity, individuals must sell and buy in accordance with social justice. And where each individual is permitted to sell to or buy from whom he wants at a price agreeable to both the buyer and the seller. This is an integral part of capitalism. In Islamic economics, they are set out conditions in the attainment of this objective. It is very important we know that the market mechanism may also be considered to be an integral part of the Islamic economic system because, on the other hand, the institution of private property is not workable without it. This is because it offers the consumers a chance to express their desires for the production of goods of their liking by their willingness to pay the price, and also gives resource-owners an opportunity to sell their resources in accordance with their free will.
The market system is based on the principle of plebiscite. Plebiscite is a system where each currency spent represents a ballot based on which national resources are automatically allocated among different wants based on the total ballots cast…...

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