An Analysis of the Islamic Moral Concepts Incompatible with the Framework of Conventional Economics and Its Economic Functions

One of the aims of morals is training people so that they may automatically respect the rights of one another without the need of legal obligation. Using an analysis-descriptive method, this paper investigates the economic moral concepts in Islam and its function in economic system. This paper supposed that the extension of Islamic morality contributes to the formation of balances which are on an upper level of the condition of balance which is based on self-interest. The findings of paper show that, such Islamic teachings, like: paying attention to science, recommendation for rationality, encouragement to work, optimum use of facilities, avoiding a waste of resources, proper performance of duties are recommended in capitalism. Contrarily, such doctrines like recommendation for asceticism, denouncing worldliness, denouncing stinginess and extravagance, contentment, helping others, and pre-destined provision are characteristic of economic system in Islam. This shows the distinction between the system of economic morals in Islam and that of capitalism. The moral principles in Islam which contribute to self-refinement of individuals and spiritual promotion of man lead to a decrease in transaction cost, an increase in social capital, increase in perspicuity in the market and increase in efficiency. The result of this is reducing the consequences resulting from the originality, of individual’s benefit and confronting the market failure by generating motivation in people.