Islamic Economics
Islamic Economics: Invitation for Joint Research [link]
Current Papers on Islamic Economics [link]
Published Papers on Islamic Economics [link]
Islamic Economics: A Survey of the Literature: [link]
Thematically Organized Collections:
Islamic Worldview & Combating Eurocentricism: The dominant story which we learn in our education is that the West is advanced and developed and we are backwards and underdeveloped. To progress we must imitate the west. This story is fundamentally wrong. Essays in this collection explain why and how, and develop an Islamic alternative to this story.
Contrasts Between Islamic and Conventional Economics: Because Muslim economists have been deceived by claims that western economics is a positive science, they have accepted large portions of it uncritically. This set of articles is concerned with highlight the numerous conflicts and contrasts between western ideas and islamic ideas about economics.
Western Social Science: It is asserted by western intellectuals, and widely believed by Muslims, that social science is just like physical science. Both are objective factual and concrete descriptions of laws governing the field of study. In fact, human behavior is not subject to laws, unlike that of particles. So the basic requirement os science is not fulfilled. This means that the methodology of social science is founded on many western misconceptions. These are explored in this set of essays.
Methodological Differences: Current western methodology for social science is based on logical positvism. This philosophy has collapsed, which undermines the foundations of the social sciences. Also this philosophy is dramatically opposed to Islamic views. Many of my papers explore the conflicts between positiivist methodologies and Islamic Views. These are collected here. Some of these are addressed to secular audiences. In such papers, the Islamic position is not clearly brought forward or explained, only the errors of the positivist methodology are highlighted.
Islam & Money: Large numbers of discussions on appropriate financial architecture for Islamic Societies -- How western banking systems cannot be islamized, and what genuine Islamic alternatives look like. Also on the nature of money, whether gold dinar would solve our problems, legal status of paper currency, etc.
Excerpts from a e-letter to IEF Review in connection with a discussion with Nejatullah Siddiqi and other Islamic Economists.
Dear Fellow Muslim Economists Assalamo Alaikum
Initital proponents of Islamic Economics offered a grand vision, a radically superior alternative to existing economic systems. Many have been disappointed at the results. Dr Nejatullah Siddiqi writes that “The grand idea … has yielded to a desire to joint the flock.” Masoodul Alam Choudhury writes that Islamic economics “could not show its worth or dazzle with her supreme beauty and power.”
Why was the promise of Islamic Economics not fulfilled? Is this promise just a mirage, or is it capable of realization even today?
My answer to the first question, detailed in the “Crisis in Islamic Economics” paper, is that Muslim Economists tried to construct Islamic Economics as a MIX of Western Economics and Teachings of Islam. The most elementary formula is: Islamic Economics = Capitalism + Zakat – Interest, but nearly every one of more than twenty definitions of Islamic Economics I have seen is based on more or less the same idea (including one by MNS as well as Umer Chapra).
The problem is the modern Western Economics is DIRECTLY in conflict with ideas of Islam about how we should manage economic affairs. One cannot mix two things which are directly opposed to each other. What needs to be done is that the fundamentals of Islamic Economics must be derived directly from Islamic sources. What is currently being done is that the fundamentals are derived from western sources and then Islamic teachings are tagged onto these as an afterthought.
In my paper “Re-Defining Islamic Economics,” I have proposed a definition of Islamic Economics based directly on Islamic sources. Because it is based purely on Islamic teachings, it would be acceptable to all Muslims whether currently or in the past. This means that it can command a consensus which none of the others can – all other definitions mix current economic notions with Quran and Hadeeth, and therefore contain elements which would not be understood or recognized by Muslims of earlier ages. But if something is Islamic, then it should be derivable purely from Islamic sources. In this paper, I discuss TEN dimensions along which Islamic teachings are diametrically opposed to Western teachings about economics and its methodology. It is the attempt to combine these opposites that has led to confusion and failure in the project of Islamic Economics. A large number of papers I have written discuss in detail the numerous conflicts between the two. Our poet Allama Iqbal refers to this problem in his couplet:
Kheera na kar ska mujhay jalwae Danish-farang, surma hay mairy ankh ka, khake Medina o Najaf
The knowledge of the West could not dazzle my eyes, which were protected by the dust of Medina and Najaf.
Unfortunately, the eyes of the Islamic Economists were dazzled by the glorious mathematics of the West – as Krugman has said: The profession as a whole went astray because they mistook the beauty of mathematics for truth.
SOLUTIONS: I have sketched the pathway to solutions in my paper on “Islam Versus Economics” – acondensed and somewhat secularized version is due to be published in a forthcoming Oxford Handbook on Islamic Economics and Finance, but I recommend the original version linked above to a Muslim audience.
What is most important for the project of Islamic Economics is the attached paper on Deification of Science, which makes the following points (some implicitly)
The prestige of science led to the adoption of scientific methodology in the west.
Scientific methodology is FUNDAMENTALLY unsuited to social science, despite claims to the contrary.
Normative statements are meaningless in Science, but of vital importance in social science. Adoption of scientific methodology led to the widespread WRONG belief that the normative has no role to play in positive economic theory.
Even though it is now gradually being realized that this is a mistake, and that the normative element MUST be taken into consideration for proper economics to emerge, the West has NO WAY to derive norms. The only basis for norms is religion. Without religion, there can be no norms. The two alternatives known to the west are social consensus (morality by majority vote) or utilitarianism (whatever makes you happy is moral) -- both are seriously flawed.
This provides us with a unique opportunity to do economics from the Islamic perspective, in way which will provide leadership to the world. Thus the original promise of Islamic Economics is NOT a mirage, it can be fulfilled if the right approach is taken.
Wa ma toufiqi illa billahe Rabbil Alameen.
Asad Zaman