Behavior of the Producer
- Profit maximization subject to constraints imposed by the interests of the (Maslahah al-A’mmah). This may involve other objectives too, such as increasing employment opportunities, keeping down the prices of necessaries, increasing the supply of certain goods, which have social priority, etc.
- Cooperation with other producers with a view to achieving social objectives.
Though cooperation is frequently emphasized in the context of Islamically oriented behavior, especially among producers, it is not clear what forms it is expected to take and to what extent the outcome will be different from that obtaining in the competitive model. Cooperation in order to maximize profits would lead to monopoly. This is, therefore, ruled out as monopoly in that sense is unanimously considered to be un-Islamic. It is cooperation in order to achieve some of the other objectives mentioned above that is relevant. In so far as these objectives are social, their pursuit requires much more information than is normally available to the individual producer. Cooperation for promoting social interest and realizing public good would therefore involve other social institutions especially the state. It may also require a different kind of interaction with the consumers and the laborers.
Source: Dr. Muhammad Nejatullah Siddiqi, Economics An Islamic Approach. Republished with permission.
Search our Resources or Dictionary