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Factors of Productions in Islam: Capitalist View

 This theory can be briefly stated like this: wealth should be distributed only over those who have taken a part in producing it, and who are described in the terminology of economics as the factors of production. According to the Capitalistic economics, these factors are four:-

  1. Capital: which has been defined as "the produced means of production" - that is to say, a commodity which has already undergone one process of human production, and is again being used as a means of another process of production.
  2. Labour: that is to say, any exertion on the part of man.
  3. Land: which has been defined as ''natural resources'' (that is to say, those things which are being used as means of production without having previously undergone any process of human production).
  4. Entrepreneur, or Organization: The fourth factor that brings together the other three factors, exploits them and bears the risk of profit and loss in production.

Under the Capitalist economy, the wealth produced by the cooperation of these four factors is distributed over these very four factors as follows: one share is given to Capital in the shape of interest, the second share to Labor in the shape of wages, the third share to Land in the shape of rent (or revenue), and the fourth share (or the residue) is reserved for the Entrepreneur in the shape of profit.


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Source: Dr. Muhammad Imran Ashraf Usmani, Meezan Bank’s Guide to Islamic Banking.