| Abstract: |
What are the fundamental differences between an Islamic economy and
capitalism? The Islamic economy is characterized by the prohibition of Riba
(interest) and the enforcement of Mudaraba (joint venture) and Waqf
(donation). We propose new econophysics models of wealth exchange and
redistribution to quantitatively compare these characteristics with the
differences in capitalism, and evaluate wealth distribution and disparities by
simulation. Specifically, we propose a loan interest model representing
finance capitalism and Riba, a joint venture model representing shareholder
capitalism and Mudaraba with respect to exchange, and a transfer model
representing inheritance tax and Waqf with respect to redistribution. As
exchanges are repeated from an initial uniform distribution of wealth, the
distribution of wealth approaches a power-law distribution more quickly in the
loan than in the joint, and the Gini index, which represents disparity,
rapidly increases. The joint has a slower increase in the Gini index, but
eventually the wealth distribution in both models becomes a delta
distribution, and the Gini index gradually approaches 1. Next, when both
models are combined with the transfer model to redistribute wealth every given
period, the loan has a larger Gini index than the joint, but both models
converge to a value with a Gini index less than 1. These results
quantitatively reveal that in the Islamic economy, disparities are restrained
by their characteristics. These correspond to the three economic modes Polanyi
presented: reciprocity, redistribution, and exchange. The insights encourage
an economy that embraces the morals of mutual aid as described in Mauss's
theory of gifts, Kropotkin's theory of mutual aid, Graeber's theory of debt,
Sarthou-Lajus's repayment to third parties, and Karatani's mode of exchange D,
and provide guidelines for the next alternative to capitalism. |