Asked in EconomicsIslam
What are the advantages and disadvantages of islamic economy?
June 05, 2014 1:07PM
The Islamic economy is based off the principles and philosophy blueprinted in the Quran. It is based on having high morals instead of financial profit by any means. Honest trade is encouraged. Cheating, exploiting, or fraud in business is prohibited. Gaining wealth by lawful moral means is the standard of economic growth and success. One of the main advantages is that interest is charged on loans. Instead of a bank charging interest, they may get a percentage of the profits from the business. What can be seen as an advantage could be considered a disadvantage when it comes to not being charge interest because that means the rate is set and may never be lower. The potential for economic growth can be considered a disadvantage. For example, in the economy in the United States, lower interest rates can speed the economy up at times because consumers will spend more which can help businesses and certain markets grow and profit.