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Profit-Making in Islam: Justification and Importance

  • Mohsin Ali
  • Najeeb Zada
Chapter
Part of the Palgrave CIBFR Studies in Islamic Finance book series (PCSIF)

Abstract

This chapter discusses profit making in Islam. We also present justification of profit making and why is it an important phenomenon of Islamic trading framework. We argue that in order to construct a well-integrated theory of profit, profit shall be defined revenue minus cost. Secondly, the focal point of the theory shall be a firm instead of an entrepreneur. Additionally, it should be considered as the function of dynamic changes in business environment. Lastly, the profit may be shared between labor and capital in order to endorse fairness, growth, and peace in society. This type of profit theory will be acceptable in both conventional and Islamic trading frameworks.

Keywords

Profit Firm Entrepreneur Labor Capital 

References

  1. Hasan, Z. (1975). Theory of profit. New Delhi: Vikas Publishing (Out of print).Google Scholar
  2. Knight, F. H. (1921/1965). Risk uncertainty and profit (2nd ed.). New York: Houghton Muffin.Google Scholar

Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Mohsin Ali
    • 1
  • Najeeb Zada
    • 2
  1. 1.Taylor’s Business SchoolTaylor’s UniversitySubang JayaMalaysia
  2. 2.Department of Islamic TheologyIslamia College PeshawarPeshawarPakistan

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