Market for Lemons and Cigarettes: An Islamic Perspective on Market Failure and a Lesson for Eliminating Interest from Economy
Journal Title: Türkiye islam iktisadı dergisi - Year 2017, Vol 4, Issue 2
Abstract
The existence of interest and interest based institution in a market economy is in fact a market failure which remains unrecognized even by such Nobel Laureates who have been awarded Nobel Prizes on their research on capital and financial markets. Just as the market of cigarettes is a failure of market to turn away the smokers from their killers, similar it is the failure of interest based financial market to turn away the finance seekers from their killers (providers of finance on interest).This market failure needs to be recognized and the solution for this failure should be found not by intervening in the market but should be found in human behavior. As putting filters on the cigarettes does not stop smokers from being killed and something is needed to change in the consumer behavior to make them turn away from their killer, similarly, correction is needed in the interest based lending and borrowing to turn them away from their killer, the interest based financial institutions.
Authors and Affiliations
Muhammad Fahim Khan
Keywords
Related Articles
- EP ID EP300538
- DOI 10.26414/tujise.2017.4.2.1-17
- Views 128
- Downloads 0
Cash Waqf as an Alternative Panacea to Poverty Alleviation, An Overview of Human Development in Nigeria
This study investigated how cash waqf was used to alleviate education poverty in Nigeria among the orphans and under-privileged in Zamfara State in particular. The failure of government has deprived people of good health...
Al-Ghazâlî on Justice and Social Justice
As is suggested by its title the main purpose of this study is a presentation, analysis and evaluation of al-Ghazâlî’s ideas on justice and social justice. However, in the meantime we shall have an opportunity to shed so...
NAKVİ, N. Haydar (1985) . Ekonomi ve Ahlak. Tercüme: İlhan Kutluer. İnsan Yayınları, ss. 224.
Son yıllarda artan, ekonomi biliminin araçları ve varsayımlarının doğruluğu ve ahlakiliği konusu dünya çapında tartışılmakta ve yeni, alternatif teoriler yaygınlık kazanmaktadır. Ekonomi biliminin varsaydığı insan ve top...
Defining Islamic Economics: Scholars’ Approach, Clarifying The Nature, Scope and Subject-Matter of The Discipline
While developing Islamic economics as a discipline, it is necessary to define the nature, scope and subject-matter in order to clarify the object of study and indicate the boundaries of its reach. Islamic economists in t...
KİTAP TANITIMI VE TENKİTLER: KURAN, Timur (2012). Yollar Ayrılırken: Ortadoğu’nun Geri Kalma Sürecinde İslam Hukukunun Rolü. Tercüme: Nurettin el-Hüseyni. İstanbul: Yapı Kredi Yayınları. ss. 448.
İnsanın, ekonomi ve ekonomik faaliyetlerle ilişkisi, insanlık tarihi kadar eskidir. Temel ihtiyaçlarını gidermek için, insanlığın ilk günden itibaren yaptığı faaliyetlerin neredeyse tamamını bu kapsamda ekonomik bir eyle...