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Islam provides a complete and simple economic system which is the best alternative for both capitalism and socialism. It has the good things of both without sharing the evils. Islamic economic laws are divine and better in all aspects form man made economic systems. The revenues of Islamic state comes form Zakat and Usher. These funds used for the welfare and defense of the state. Islamic economic system strictly disallows the existence of interest, the philosophy behind is this makes society inactive as rich start lending their money for certain interest and would avoid productive activities due to risk factor which slowed the economic and trade cycle.
Economic Justice
It is the duty of the Islamic state that it should provide equal chances of employment and economic development to all the people irrespective of color and caste.
Social Justice
All the citizens, rich or poor should be equal before the eyes of law. Courts should work honestly to provide justice to the people.
Utilization of Resources
It is the duty of the state to make full utilization of economic resources for the economic welfare of the people.
Stability in the Price Level: The state is responsible to maintain stable prices in the country. In this regard a government can frame a fiscal and monetary policy.
Economic Freedom
In Islamic state everybody is allowed to adopt any profession or business within the law and it is the duty of the state that it should give them full protection.
Bilateral Relations
Islamic economics advocate developing good relations with Muslim world in particular and other in general. It should always cooperate with those who are right and serving for humanity.
Establishment of Baitulmal
The revenue and expenditure of the Islamic state is through baitulmal which is just like central bank of the country. The items of revenue and expenditure of baitulmal are fixed in Islam.
In replacement of Tax system Islam gives The concept of Zakat. An Islamic State can collect the zakat and usher from the citizens. It can also impose tax and borrow the money form inside and outside the country.