Examining the Optimal Consumption Pattern from the Perspective of Islamic Economics and Conventional Economics

Sayed Mohammadnaqi Mosavi

doi:10.55544/ijrah.5.2.3

Authors

Sayed Mohammadnaqi Mosavi Al-Mustafa International University, Kabul, AFGHANISTAN

DOI:

https://doi.org/10.55544/ijrah.5.2.3

Keywords:

Consumption, Optimal Consumption, Consumption Pattern, Islamic Economics, Conventional Economics

Abstract

Consumption, as the driving force of production, has significant effects on individuals' lives and the economy of society. Since consumption in conventional economics and Islamic economics pursues different goals and outlooks, leading to distinct impacts on individual and social welfare as well as worldly and eternal well-being, examining these differences becomes crucial. The study of consumption initially began with Keynes and later gained an independent status alongside production and distribution through the contributions of Jean-Baptiste Say. In the process of addressing shortcomings and refining Keynes’s nascent consumption theory, the consumption models of Modigliani, Duesenberry, Friedman, and Barro-Ramsey converged on a common point: people use savings and transfer part of their income to the future to smooth consumption and strive for sustained well-being in their consumption patterns.

This article compares consumption from the perspectives of Islamic and conventional economics, utilizing a library research method and content analysis. It poses the question: "How does optimal consumption in the framework of Islamic economics differ from that in conventional economics?" and tests the hypothesis that "Islamic optimal consumption does not necessarily pursue the goal of consumption smoothing but rather aims to achieve both material and spiritual well-being, as well as worldly and eternal prosperity." The article argues that consumption smoothing is not a path that all individuals desire or are capable of following.

The study's well-founded conclusion is that, from an Islamic perspective, consumption is optimal when it ensures the material and spiritual welfare of an individual and their family, assists in meeting the material and spiritual needs of close relatives, and fulfills the rights of the needy in society. Furthermore, beyond ensuring worldly material and spiritual welfare, it also provides for individuals' eternal well-being. Additionally, a portion of an individual's income should be allocated to savings, investment, and development.

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