The Dynamics of Market Mechanisms: A Comparative Analysis of Islamic and Conventional Economic Thought

Abstract

Market mechanisms play a critical role in shaping modern economic systems. In conventional economics, these mechanisms are rooted in supply-demand dynamics regulated by price, while in Islamic economics, they are governed not only by market forces but also by al-ʿadl (justice) and al-iḥtisāb (market supervision) grounded in Sharia principles. The divergence in philosophical foundations has significant implications for economic practice and policy. This study aims to analyze the comparative framework of market mechanisms in Islamic and conventional economics, identifying areas of convergence and divergence. The research investigates how ethical dimensions, institutional arrangements, and regulatory instruments function differently in both systems while responding to similar economic needs. Using a qualitative approach based on textual and normative sources, including classical Islamic economic texts, economic theories, and comparative policy reviews, the study finds that Islamic market mechanisms emphasize moral filters and social welfare, while conventional perspectives prioritize allocative efficiency. The findings also reveal nuanced differences in how each system perceives interest (ribā), speculation (gharar), and monopolistic behavior. The study contributes to expanding the theoretical and practical discourse on pluralistic economic models. By integrating ethical considerations within the analytical structure of market theory, this research underscores the relevance of Islamic economics in global economic thought and its potential to enrich economic policy formulation, especially in Muslim-majority contexts.