Factors Of Production In Islamic Economics

Islam considers the factors of production as a means using the wealth and the effort of the person to produce commodities in order to maximize his living needs that based on a concept of Halal and Haram, and any means used outside this concept no matter the goods are do not consider production in the view of the Shari’ah.In capitalist economy, the primary right to wealth is enjoyed by the factors of production, but however,in the theory of Islam, the factors of production are not well defined, not is their share in wealth determined in exactly the same way as is done under the Capitalist of economy. In fact, the two ways are quite distinct. From the Islamic point of view, there are four factors of production, which are capital, land, labour

This is because if an individual uses only hands in farming, mining and manufacturing sectors, his productivity will be very low. However, if he replaces his hand with some sort of tools and equipment, it is to be believed that his productivity will be boosted up. In Islamic economics perspectives, the capital is defined as the means of production that cannot be used in the process of production until and unless during the process, it is either wholly consumed or completely altered in form and which, therefore, cannot be let or leased. For example, the liquid money or food stuff.For Islamic economics, capital is like the backbone in industry that runs and keeps the industries going. Therefore, the Islam has given much importance to capital. Al-Qur’an, the revealed book of Islam, verse (16:5-8) stated of the use of cattle wealth as capital goods of production: “And the cattle hath He created, whence ye have warm clothing and uses, and whereof ye eat… And they bear your loads for your unto a land ye could not reach save with great trouble to yourselves…And horses, a mules and asses that ye may ride them.” Besides, the Al-Qur’an, verse (16:80) also stated that: “And Allah hath given you in your houses an abode, and hath given of the hides of cattle, tent-houses which ye find light on the day of migration and on the day of pitching camp; and of their wool and their fur and their

However, based on the Shari’ah, the land can be owned privately and contribute in the production process on the basis of fixed return contracts of rent or on the basis of crop sharing with the farming agent or the business firm. In the Islamic economics, there are certain lyrics on prohibition that against on renting land, but there is no opinionthat are supported in the Shari’ah and the position of all schools of jurisprudence is on supporting the permissibility of both land renting and crop sharing. For the plain land, such as the un-owned lands of mountains, valleys or deserts, the Shari’ah establishes two very important segments of land ownership laws. Firstly, any person can claim ownership by “bringing life into a piece of plain land”. This is the law of reclamation and is the way to gain private claim of ownership on a lot of land. It may be regulated by the government but this is a right given to the citizenry of a county that Shari’ah does not authorize any government to abolish. Secondly, mere reservation of a plain land by any person, other than the government for public use, does not generate a right of