Ethical considerations are essential and not optional in Islamic finance. The values of justice openness and reciprocity must guide investments. The positive sum game is a key idea that embodies these principles. Gaining insight into this idea helps one better understand how Islamic investments ought to function.
Zero Sum Game versus Positive Sum Game
A situation in which the total value created grows over time and all parties can profit is known as a positive sum game. In contrast in a zero sum game the winnings of one party inevitably result in the losses of another. It is a positive sum game when companies use innovation production or services to create real value and investors profit from the expansion. This reflects the Islamic focus on shared prosperity and productive economic activity.
Financial Market and Positive Sum Games
Financial market is inherently positive sum games. Businesses raise money to expand their operations generating goods, services and jobs. Businesses profits increase with success and investors returns follow suit. Numerous stakeholders gain from this result. Contrarily speculation devoid of profitable support or based only on short-term price fluctuations tends to be zero sum and carries risks similar to gambling which is forbidden (haram) in Islam.
Also read:Patience as a Virtue of a Muslim Investor
Speculation and Caution for Islamic Investors
But not every financial market activity is necessarily a positive sum game. Short selling, derivative day trading and speculative bubbles frequently skew the real intent of capital markets. Such actions have the potential to push investments in the direction of a zero sum or even negative sum dynamic in which losses exceed gains. Islamic investors need to exercise caution and make sure their participation is linked to legitimate value-generating businesses.
Gharar And Gambling are Prohibited In Islam
Gharar or excessive uncertainty and maysir or gambling are strictly forbidden in Islamic teachings. In the creation of value trading or investing differs significantly from gambling. Investments are profitable endeavors that in spite of risks and uncertainties gradually increase wealth. The transfer of wealth without any underlying productive activity on the other hand occurs in gambling one party gains because another loses.
Also read:The Urgency of Real Sector Investment in Islam
Islamic Investment Ethics and Value Creation
Islamic ethics emphasize the requirement that investments be linked to material possessions and profitable ventures in order to be considered from an Islamic standpoint. Putting money into a business that manufactures goods or offers beneficial services is in line with Shariah since it advances the general well-being (maslahah) of society. However gambling is based on chance and harms society by promoting addictive behavior and unfair enrichment.
A Thriving Economy and Islamic Values
Islamic principles are naturally aligned with the positive sum nature of actual investing. In a positive economic cycle an investor purchases stock in a company that adds value for consumers employs people and pays taxes to support the community. This is much better unjust transaction promoted by speculative zero sum game practices. Allah ﷻ said in Qur’an:
O you who have believed do not consume one anothers wealth unjustly but only [in lawful] business by mutual consent (Quran 4:29)
Also read:The Urgency of Having a Long-Term Vision in Investing
Sharing Risks and Making Long-Term Investments
Long-term investment fosters tolerance and collaboration between the business and the investor. Like the Islamic concepts of mudarabah (profit-sharing) and musharakah (partnership) investors share in the ventures risks and rewards. These arrangements encourage risk-sharing and interest balance as opposed to exploitation or purely speculative behavior that leads to unfair distribution of wealth, manipulation, and unfair risk bearing.
In Conclusion
The framework for positive sum games in conclusion provides a helpful prism through which to assess investments from an Islamic ethical standpoint. Real investing is in line with Islamic principles since it is based on production value creation and equitable risk sharing. Muslim investors ought to look for opportunities that advance societal well-being in addition to offering financial returns. By doing this they support the principles of equity justice and reciprocity that form the basis of Islamic investment and economic theory.
Also read:Risk Bearing as an Essential Characteristic of Islamic Investment
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References
Adam, A. (n.d.). Gambling vs. Investing: What’s the difference from Islamic perspective? LinkedIn. Retrieved April 18, 2025, from https://www.linkedin.com/pulse/gambling-vs-investing-whats-difference-from-islamic-perspective-adam/
Axlarry. (n.d.). Saham: Positive sum game atau zero sum game? Retrieved April 18, 2025, from https://axlarry.com/saham-positive-sum-game-atau-zero-sum-game/
Darul Fiqh. (n.d.). What is the difference between trading, investments and gambling when the outcome is uncertain in all and all have risk? IslamQA. Retrieved April 18, 2025, from https://islamqa.org/hanafi/darulfiqh/156599/
TYC Finance. (n.d.). Gambling vs. investing: What’s the difference? Retrieved April 18, 2025, from https://www.tycfinance.com/eninfoc_details/id/125
