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Profit Maximisation: Secular Versus Islamic

Author

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  • Hasan, Zubair

Abstract

This 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.

Suggested Citation

  • Hasan, Zubair, 1992. "Profit Maximisation: Secular Versus Islamic," MPRA Paper 2820, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:2820
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    File URL: https://mpra.ub.uni-muenchen.de/2820/1/MPRA_paper_2820.pdf
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    Citations

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    Cited by:

    1. Hasan, Zubair, 2008. "Markets and the role of government in an economy from Islamic perspective," MPRA Paper 12233, University Library of Munich, Germany.
    2. Aydin, Necati, 2013. "Redefining Islamic Economics as a New Economic Paradigm," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 21, pages 1-34.
    3. Tarik AKIN & Abbas MIRAKHOR, 2016. "Efficiency with Rule-Compliance: A Contribution to the Theory of the Firm in Islamic Economics," Journal of Economics and Political Economy, KSP Journals, vol. 3(3), pages 560-574, September.

    More about this item

    Keywords

    Profit maximization;

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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