Profit Maximisation: Secular Versus Islamic
AbstractThis paper argues that profit maximization of mainstream economics though unrealistic serves a useful function in price theory formation. In Islamic economics too we need it for the same purpose. Maximization per se is value neutral. What is maximized, how, and to what end are the real issue to be investigated in a case. Profit maximization from an Islamic perspective can be accommodated if all the Islamic norms of conducting business are scrupulously observed. In that case it will simply work as a pressure for attaining efficiency both in resource allocation and production. One need not throw away the baby with the bath water. The paper shows profit maximization as conducive to social well-being. under an Islamic dispensation. It would lead to a lower price, greater output, and lower risk as compared to a competitive firm under secular framework.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 2820.
Date of creation: 1992
Date of revision:
Find related papers by JEL classification:
- D2 - Microeconomics - - Production and Organizations
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
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- Hasan, Zubair, 2008. "Markets and the role of government in an economy from Islamic perspective," MPRA Paper 12233, University Library of Munich, Germany.
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