Distribution of Income Earned from Production Process

Author

Faculty Member of The Research Institute of Seminary and University, Department of Economics

Abstract

The present essay deals with-among different types of distribution - "the distribution
of product among production factors" and suggests two important ideas:
First, it is not possible to claim with certainty that in a perfect competitive market,
final output of a factor shows its added value and participation rate in production. It is
true if some presuppositions being considered i.e.; not only getting assured that
production function is homogenous but also not a specific rate of factors influences the
added value. Accepting a fixed output, a product is earned from the added value of all
factors, but separating the added value of each factor is not possible by final output.
Second, in Muslim scholar's point of view, justice necessitates that the owners of
production factors demand their share to the extend they participate in the
production of a product, the role they play in it and the rate of added value they
create. It can't be claimed that their added value is equal with their final output.

Keywords