Islamic Economics: Wage Maximization

It is proposed that wage maximization is one of the fundamental principles of Islamic economics, and should be counter-posed to the profit maximization principle of capitalism. Wage maximization needs to be analyzed for both the macroeconomy as well as for the microeconomy, since wage maximization has to be realized at the level of the firms of the microeconomy. A mathematical model for the Islamic macroeconomy is postulated that determines how to maximize macroeconomic wages. A model for a firm is proposed that pays minimum wages based on macroeconomic wage maximization. Wages can be further augmented by wages having a variable component based on profit and loss sharing by the workers with the firm, and which entails a degree of risk. Fixing the variable wage component results in the rate of profit of all firms becoming equal to the macroeconomic wage maximizing macroeconomic rate of profit.