• Asad Ullah Institute of Cost and Management Accountants of Pakistan (ICMAP)



Islamic Economics, Capitalism, Socialism, Poverty, Economic Stagnation, Unjust Distribution, Sustainable Development


The philosophy of economics is concerned with the nature of reality, sources of knowledge, and the way knowledge is created. Based on their respective philosophical frameworks; capitalism seeks solution to economic problems through its laissez-faire model, Marxism attempts to resolve the problem through a planned economy model, and Islam on the other hand keeps the balance between the two approaches. The study is based on a comparative qualitative analysis of the philosophical frameworks, making reference to practical world problems. The paper maintains both Capitalism and Marxism have contributed to poverty, economic inequality, unemployment, and financial crises of the world at large. The study provides a model of the righteous economic system based on Islamic teachings for the sound functioning of the economy which can be adopted by the countries intending to switch from the conventional systems to the Islamic economic model.



Download data is not yet available.


Abdullahi, M. M., Bakar, N. A. B. A., & Hassan, S. B. (2016). Debt overhang versus crowding out effects: Understanding the impact of external debts on capital formation in theory. International Journal of Economics and Financial Issues, 6(1), 271–278.

Almonifi, Y. S. A., & Gulzar, R. (2021). The COVID-19 pandemic effect on the performance of the islamic banking sector in KSA: an empirical study of Al Rajhi bank. Available at SSRN 3834859.

Arestis, P., & Sawyer, M. (2003). Reinventing fiscal policy. Journal of Post Keynesian Economics, 26(1), 3–25.

Bogenschneider, B. (2015). Income Inequality and Regressive Taxation in the United States. Interdisciplinary J. Econ. & Bus. Law, 4(3), 8–28.

Bresser-Pereira, L. C. (2003). Economics’ Two Methods. Trabalho Apresentado No Xv Encontro Anual Da European Association for Evolutionary Political Economy, Maastricht.

Carver, T. (1984). Marxism as method. After Marx, 261–278.

Chapra, M. U. (2008, March 16). Islamic Economics: What It Is and How It Developed. Retrieved from Economic History :

Choudhury, M. A. (2008). Islamic economics and finance: Where do they stand? International Journal of Accounting and Finance, 1(2), 149–167.

Croce, B. (1914). Historical materialism and the economics of Karl Marx. Transaction Publishers.

De Soto, J. H. (1999). The ethics of capitalism. Journal of Markets & Morality, 2(2).

Dylan Sulvin, J. H. (2022). Capitalsim and extreme poverty: A global analysis of real wages, human height, and mortality since the long 16th century. Elsvier.

Easton, L. D. (1970). Alienation and empiricism in Marx’s thought. Social Research, 402–427.

Fianto, B. A., Gan, C., Hu, B., & Roudaki, J. (2018). Equity financing and debt-based financing: Evidence from Islamic microfinance institutions in Indonesia. Pacific-Basin Finance Journal, 52, 163–172.

Filipenko, A. S. (2022). An Overview on Methodology in Economics. New Innovations in Economics, Business and Management Vol. 9, 40–50.

Furqani, H. (2015). Methodology of Islamic economics: Typology of current practices, evaluation and way forward.

Goda, T. (2017). A comparative review of the role of income inequality in economic crisis theories and its contribution to the financial crisis of 2007-2009. Revista Finanzas y Política Económica, 9(1), 151–174.

Goldberg, J. E., Klee, E., Prescott, E. S., & Wood, P. R. (2020). Monetary policy strategies and tools: Financial stability considerations.

Ha, J., Kose, M. A., & Ohnsorge, F. (2022). Global Stagflation.

Hausman, D. M. (1989). Economic methodology in a nutshell. Journal of Economic Perspectives, 3(2), 115–127.

Hausman, D. M. (2018, September 4). Retrieved from The Stanford Encyclopedia of Philosophy:

Jabareen, Y. (2009). Building a conceptual framework: philosophy, definitions, and procedure. International Journal of Qualitative Methods, 8(4) 49-62.

Ihori, T., Nakazato, T., & Kawade, M. (2003). Japan’s Fiscal Policies in the 1990s. World Economy, 26(3), 325–338.

Ismail, A. G., & Shaikh, S. A. (2017). Role of Islamic economics and finance in sustainable development goals. IESTC Working Paper Series, 1(1).

Kamali, M. H. (2006). Reading the signs: A Qur’anic perspective on thinking. Islam & Science, 4(2), 141–165.

Kellner, D. (1977). The Crisis of Marxism. In Karl Korsch: Revolutionary Theory (pp. 73–114). University of Texas Press.

Khan, M. M., & Bhatti, M. I. (2008). Development in Islamic banking: A financial risk‐allocation approach. The Journal of Risk Finance, 9(1), 40–51.

Khan, M. W. (2003). Marxism; which had been rejected by history (Marxism - tareekh jis ko rad kar chuki hy: Urdu). New Delhi: Goodword Books.

Lefebvre, H. (2009). Dialectical materialism. U of Minnesota Press.

Maiga, F. K. (2017). Impact of interest rate on economic growth in Nigeria. Pyrex Journal of Business and Finance Management Research, 3(3), 98–111.

Maki, U., & Mäki, U. (2001). The economic world view: Studies in the ontology of economics. Cambridge University Press.

Maududi, A. A. (1967). Al-Humazah. In Tafheem ul Quran (p. 458). Lahore: Islamic Publications.

Maududi, A. A. (1997). Economics Teachings of Qura'n (Qura'n ki Maushi Talimat : Urdu). Lahore: Islamic Publications (Pvt Ltd.).

Możdzierz, A. (2017). The impact of changes in indirect tax rates on inflation in selected EU countries. Annales Universitatis Mariae Curie-Skłodowska, Sectio H Oeconomia, 51(4), 257–267.

Muinelo‐Gallo, L., & Roca‐Sagalés, O. (2011). Economic growth and inequality: The role of fiscal policies. Australian Economic Papers, 50(2‐3), 74–97.

Nicolaides, A. (2016). Assessing the Morality of Capitalism, Marxism and the Free Market Economy. Journal of Economics, 7(2–3), 107–118.

Nimni, E. (1985). Great historical failure: Marxist theories of nationalism. Capital & Class, 9(1), 58–83.

Nyazee, I. A. (2020). The Definition of Riba or the Failure of Modern Scholars to Understand the True Meaning of Riba. Available at SSRN 3522646.

Olamide, E., Ogujiuba, K., & Maredza, A. (2022). Exchange rate volatility, inflation and economic growth in developing countries: Panel data approach for SADC. Economies, 10(3), 67.

Olson, M. (2022). The rise and decline of nations: Economic growth, stagflation, and social rigidities. Yale University Press.

Othman, A. H. A., Musa Alhabshi, S., Kassim, S., Abdullah, A., & Haron, R. (2020). The impact of monetary systems on income inequity and wealth distribution: A case study of cryptocurrencies, fiat money and gold standard. International Journal of Emerging Markets, 15(6), 1161–1183.

Pattillo, C., & Ricci, L. A. (2011). External debt and growth. Review of Economics and Institutions, 2(3), 30.

Qaysr, F. I. (2018). Comparative Economics. North Charleston: Amazon Publishing (CS).

Saleem, M. Y. (2008). Methods and methodologies in fiqh and Islamic economics.

Salmon, J. (2021). The impact of public debt on economic growth. Cato J., 41, 487.

Samuelson, W. F., Marks, S. G., & Zagorsky, J. L. (2021). Managerial economics. John Wiley & Sons.

Schumpeter, J. A. (1936). The General Theory of Employment, Interest and Money.

Shaheen, F. (2013). Fluctuations in exchange rate and its impact on macroeconomic performance of Pakistan. The Dialogue, 8(4), 410–418.

Smith, A. (2010). The Wealth of Nations: An inquiry into the nature and causes of the Wealth of Nations. Harriman House Limited.

Sorrell, S. (2010). Energy, economic growth and environmental sustainability: Five propositions. Sustainability, 2(6), 1784–1809.

Sewharvi, H.-u.-R. (1939). Islamic Economic System (Islam ka Iqtisadi Nizam: Urdu). Delhi: Nadwatul Musaninfeen.

Sullivan, D., & Hickel, J. (2023). Capitalism and extreme poverty: A global analysis of real wages, human height, and mortality since the long 16th century. World Development, 161, 106026.

Thompson, L. A. (1979). The development of Marx’s concept of alienation: An introduction. Mid-American Review of Sociology, 23–38.


Usmani, M. T. (1993). Islam and Contemporary Economics (Islam aor Jadeed Maeeshat-o-Tijarat: Urdu). Karachi: Idara-tul-Maarif.

Voice, L. (2019, September 23). An International Declaration of the Trotskysist Fraction on Global Climate. Retrieved from,percent%20between%201970%20and%202014.

Wahbalbari, A., Bahari, Z., & Mohd-Zaharim, N. (2015). The concept of scarcity and its influence on the definitions of Islamic economics: A critical perspective. Humanomics.

Wang, X., & Piesse, J. (2009). Welfare effects of regressive taxation and subsidies in China. Brooks World Poverty Institute, University of Manchester.

Wikipedia. (2023, February 24). Marxist Ethics. Retrieved from,or%20force%20apart)%20living%20individuals.

Williams, R. (2013). Base and superstructure in Marxist cultural theory. In British Marxist Criticism (pp. 485–502). Routledge.

Wood, E. M. (1983). Marxism without class struggle? Socialist Register, 20.

Zwass, A. (2016). From Failed Communism to Underdeveloped Capitalism: Transformation of Eastern Europe, the Post-Soviet Union and China: Transformation of Eastern Europe, the Post-Soviet Union and China. Routledge.




How to Cite

Ullah, A. (2023). PHILOSOPHICAL FOUNDATIONS OF ECONOMICS – A COMPARATIVE STUDY OF ISLAMIC ECONOMICS, CAPITALISM AND MARXISM. International Journal of Islamic Economics and Finance Research, 6(2 December), 1-18.