Wages are allowed to be determined by the market, subject to a minimum wage constraint. The same applies to profit and the ratios of profit-sharing (between those who supply money capital and those who employ it in productive enterprise). The same may apply to rent. Unfortunately, distribution is one of the least researched areas in Islamic economics, and this deficiency is very conspicuous concerning the nature and rationale of rent in an Islamic economy. A theory of distribution is especially called for in view of the high priority attaching to justice and need fulfillment. Islamic economists affirm that the reduction of inequality in the distribution of income and wealth is a policy objective. A macroeconomic theory of distribution applicable to an Islamic society has the potentiality of identifying the possible policy options in this regard. But the subject has been generally discussed in the context of Zakat and the Islamic laws of inheritance. A more comprehensive treatment at the microeconomic and macroeconomic level comprising all the three components of Islamic economics (ends and values, existing reality and market solutions under the influence of Islamic norms of behavior and policy directed at a transition toward the desirable pattern) is very much needed. It is on the basis of such study that a role for the Islamic state in securing a just distribution of income and wealth in the first instance and in maintaining balance over time, can be envisaged. In the absence of this basic work, opinions vary from "radical" suggestions on socialization to legalistic approaches aimed at perpetuating the status quo.
Source: Dr. Muhammad Nejatullah Siddiqi, Economics An Islamic Approach. Republished with permission.
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