Equilibrium and the Generation of Public Welfare: An Economic-Islamic Perspective

Abstract

The relationship between equilibrium and public welfare has long intrigued scholars in both conventional and Islamic economics. As economies evolve amidst social and structural shifts, understanding how equilibrium fosters public welfare becomes more urgent and nuanced. Classical and modern economic theories provide foundational perspectives on equilibrium, but integrating these with socio-religious principles from Islamic teachings presents a more comprehensive framework for sustainable development. This study aims to explore the conceptual, theoretical, and empirical nexus between economic equilibrium and public welfare, particularly emphasizing justice (ʿadl), benefit (maṣlaḥah), and balance (tawāzun) as pivotal Islamic economic values. The research investigates how market equilibrium, institutional arrangements, and moral-economic norms collectively influence the realization of collective wellbeing in society. Employing a qualitative-descriptive method based on textual data from classical economic theory, Islamic jurisprudential sources, and policy documents, the study analyzes equilibrium not just as a mechanical market condition but as a value-driven objective aligned with public interest. Data was collected through literature review and analyzed through content-based thematic analysis. Findings reveal that true equilibrium is not merely price stability or resource allocation but a multidimensional state encompassing ethical, distributive, and institutional justice. This study underscores the importance of harmonizing state policy, religious norms, and economic rationality to generate sustainable public welfare.