What difference Islamic principles make?
Some obvious differences that the above mentioned Islamic principles introduce to the economic system as compared to the current capital systems prevalent in the Muslim countries are as follows: 1. Money capital gets distinguished from the physical capital. Money capital has been disallowed to earn a rent (i.e., interest) as physical capital can earn. It is entitled only to share the profits of the firm while bearing the risk of sharing the losses too. This is because the productive sources of money capital are unable to be ascertained in advance. They can be known only after they have been used in the productive activity and the outcome known. Hence it can share only the outcome and nothing can be guaranteed in advance. 2. Just distribution of the outcomes of a jointly organized productive activity. There is ex-post, one outcome of a project- Profit or loss. But the outcome is not known, ex-ante, at the time of negotiating the sharing of the outcome of the proposed project Shariah req
