economic thought in the qur"àn and sunnah 73Where: Z = ZakàhR = returns on accumulated savings at the beginning of
the period.(other connotations are as above)To sum up, the consumer behaviour from an Islamic perspective
can be outlined as follows:
- The utility function which the consumer seeks to maximise con-
sists of two main components: goods and services consumption
utility and religio-social-caring spending utility. - Both components of utility could be sought together and the rit-
ual aspects of Islamic teachings does not necessitate the trade-off
of goods and services consumption for the sake of religio-social-
caring spending, subject to the conditions of the level of income
and the fulfillment of fundamental needs. - A portion of saving, which is for bequeathing to dependent heirs,
is mandatory in Islamic teachings; other portions of saving are
induced by the force of the concept of moderation. - The institution of Zakàh promotes the religious feeling of religio-
social-caring, provides the Islamic state with a flow of revenue to
be spent on religio-social-caring purposes, and “penalises” idle sav-
ings, which helps narrow the gap between saving and investment. - Saving would have to be invested to, at least, maintain the terminal
value of wealth. The investment would have to be on the basis
of profit-sharing, not at a fixed interest rate, which might help
encourage savers into becoming entrepreneurs in the long run. - With the restriction on credit sales, since credit sale would have
to be granted by enterprises on an interest-free basis, and on bank
loans, which would have to be given on the same basis, and by
the condemnation of monopoly in Islamic teachings, it could be
suggested that some inflationary pressure in the economy of a
demand pull type might be alleviated.
Economic Resources: Income Distribution
Islam does not advocate an equal distribution of income. Instead, it
recognises the differences between individuals’ income and wealth