Global Income Inequality, Trickle-Down Economics, and Charity in Islamic Economics

1. Introduction

Human behaviour has remained an enigma for the researchers and the endeavour has not ended rather new trends are emerging to understand it. From the discipline of Philosophy to Economics, human behavior has remained central theme for the discussion. A time was there when the academic community in general used to consider human being as Econs while studying economics rather than considering them Humans. Econs were always rational and later the researchers and economists identified and accepted that human beings do not take decisions that are always rational. In the background of this finding human behaviour became central in social sciences. From consumer decisions to risk and uncertainty, theories were revised and reinterpreted. Considering Humans as humans and not Econs made way to study the human behaviour as a determinant of changes in the economic conditions. Among the several aspects of human behaviour, one is the involvement in activities that gives emotional and psychological satisfaction. In other terms, the morals as an aspect of human behavior plays an important role. From the concept of morality, ground is made for several activities such as charity, brotherhood, meditation etc. Charity has remained a part of spiritual building but its economic implications can’t be ignored as Adam Smith said “Every activity has an economic aspect”. Charity is advised generally as well as specifically in context of religion. Its economic implications are largely been ignored. Charity in Islam is both obligatory and optional depending on the economic status. Determination of economic status in Islam is quantitative and not qualitative for the obligatory charity while for optional charity there is no quantitative criteria.

In the present modern era, two issues have taken forefront in the discussion in international economics, that is, Global Income Inequality and Trickle-Down Economics. While the former is a problem the latter is an approach for economic recovery. The study hypothesize that Charity in Islam Economic addresses both the economic issues though it has largely been ignored by the conventional researchers of theology as well as economics. In this regard, the aim of the study is to highlight the implications of Charity according to Islamic teachings on Global Economic Inequality and Trickle-Down Economics. The study is divided into 6 sections. After introducing in Section 1, Section 2 presents the Conceptual Framework related to key concepts, which are, Charity, Global Economic Inequality and Trickle-Down Economics. Section 3 captures the existing literature related to the study. Section 4 and 5 presents a discussion on Charity and Global Income Inequality, and Charity and Trickle-Down Economics. Section 6 concludes the study.