ANALYSIS OF CLASSICAL THEORY IN ISLAMIC DEVELOPMENT ECONOMICS: PERSPECTIVES FROM ADAM SMITH TO JOHN STUART MILL

Abstract

Social inequality and development stagnation in many developing countries highlight the need for an economic framework that integrates not only material growth but also moral and spiritual dimensions. In this context, revisiting classical economic theory is crucial to assess its relevance and potential integration with Islamic economic values. This study aims to analyze the thoughts of classical economists such as Adam Smith, David Ricardo, Thomas Robert Malthus, and John Stuart Mill in relation to Islamic principles like justice, balance, and social responsibility. A descriptive qualitative method with a literature review approach was employed. The findings suggest that key classical principles such as market efficiency, labor specialization, and capital accumulation can be contextualized within Islamic economics through mechanisms like zakat, waqf, and the prohibition of riba. Moreover, spiritual values and accountability to God extend the meaning of development from mere economic growth to holistic well-being. The study recommends future empirical research to assess the practical implementation of this theoretical integration in development policies, especially in Muslim-majority countries.