I read your answer on “Economic System” wherein you asserted this principle: “It needs to be appreciated that man has been blessed with the faculty of intellect and reason and has also been blessed with innate guidance regarding good and evil. In the affairs of life, his intellect and innate guidance are generally enough to guide him and show him the way.”

In this connection, I would like to ask how can reason and innate guidance determine good and bad; ie. what is the rational or intuitive criterion to differentiate between good and evil?

The Qur’ān says that the Almighty has blessed man with the ability of distinguishing good from evil. Thus all of us know that honesty is a cherished value and telling lies is a condemned trait. We do not need to ask any external agency for this. Each and every human being is equipped to make this decision and his own conscience guides him in this regard.

Thus the Qur’ān while alluding to this innate ability of man says:

وَنَفْسٍ وَمَا سَوَّاهَا فَأَلْهَمَهَا فُجُورَهَا وَتَقْوَاهَا  قَدْ أَفْلَحَ مَنْ زَكَّاهَا  وَقَدْ خَابَ مَنْ دَسَّاهَا (٩١: ٧-١٠)

And the soul bears witness and the perfection given to it, then [God] inspired it with its evil and its good that he succeeded who purified it and he failed who corrupted it. (91:7-10)

The Prophet (sws) is reported to have said: “Virtue is professing high morals and sin is that which pricks your heart and you would not like others to come to know of it.” (Muslim, no. 6516) It is this part of a person that the Qur’ān has termed as nafs-i lawwāmah (the reproaching soul) and has unequivocally stated:

بَلْ الْإِنسَانُ عَلَى نَفْسِهِ بَصِيرَةٌ وَلَوْ أَلْقَى مَعَاذِيرَهُ (٧٥: ١٤-١٥)

In fact, man himself is a witness upon his own self however much he may put up excuses. (75:14-15)

 (Courtesy: www.al-mawrid.org/pages/questions_english_detail.php?qid=661&cid=210)