62 chapter two
responsibility. It refers to the societal responsibility of the producer
towards employees and the surrounding community. The objectives
of the producer, an individual or a group of individuals as it might
be, could be, therefore, depicted as in figure 2.1. (see page 91). The
producer aims, or should aim, to achieve three sets of objectives
related to three groups: entrepreneurs, employees and society. In the
course of realising these objectives the producer, or the entrepre-
neur, endeavours, or should endeavour, to achieve a “balanced” rela-
tionship between these three sets of objectives. The final reward is,
as we might deduce, obtaining God’s satisfaction. In examining the
objectives of the entrepreneur, we must bear in mind the attitude
of Islam regarding worldly needs: these should not be neglected.
What is required, therefore, is a “balanced” relationship between the
interests of these different groups. The concept of moderation might
be also applied here. Using modern economic terms, the above rela-
tionship can be portrayed mathematically as follows:
(maximise) U = Ua (R), Ub [Ua(R), E, S], F (P) (1)
Subject to Y = R + E + S
where:U = utility function
Ua = secular utility
Ub = ritual utility
R = entrepreneurs’ financial rewards (profit)
E = cost of employment welfare (wages and the like)
S = social cost (cost of society welfare)
P = the degree of piety
Y = net value of productionIt is noticed that the degree of piety is introduced in the equation.
This is to show how the desire to obey God’s rule and consequently
to achieve the above “balance” by the entrepreneur varies from one
person to another. Muslims vary from the level of merely satisfying
the basic religious requirement to the level of entire devotion to
God.
Bringing Western economic theory into the comparison a few
observations may be made as follows: