Islam's Gift: AJES

Islam's Gift: An Economy of Spiritual Development

"Islam’s Gift: An Economy of SpiritualDevelopment." American Journal of Economics and Sociology 78.2 (March 2019): 443-491.

Pre-publication draft available at SSRN: https://ssrn.com/abstract=3314802

https://bit.do/ajes - Post on Islamic WorldView Blog -- a sequence of posts explaining this paper in great detail

Abstract: According to the standard narrative, economics is an objective and scientific study of universal laws applicable to economic affairs of modern societies. After a brief introduction, the second section of the paper presents a counter-narrative which disputes this claim, and provides an alternative point of view which situates modern economics within its European historical, political, and social context. We briefly discuss why the conventional methodology of modern economics makes false claims to objectivity and universality. The third section provides an alternative methodology, which is based on the recognition that human behavior is inherently and unavoidably normative, and any study of human beings and societies must take this into account. The fourth section of the paper brings out the norms concealed within the foundations of modern economics, since the avowed methodology does not permit explicit and open expression of these norms. The fifth section describes Islamic views which describe the normative ideals for our personal and social lives. In particular, Islam aims at the development of the potential for excellence that every human being is born with. It does not aim at accumulation of wealth and material possessions, nor does it aim at achievement of happiness through the maximization of pleasure achieved by consumption. The sixth section describes the transformational strategies required for spiritual progress in different dimensions of our human existence. The seventh section describes some of the institutional structures required in the economic realm to assist in the achievement of the transformation towards the normative ideals. The final section explains how we should use our unique and precious lives to aim for higher goals than mere consumption of goods and acquisition of wealth.

Acknowledgements: A note on the genesis of this paper will allow me to express my deep appreciation and gratitude to Clifford Cobb, and also explain his contributions towards shaping the unique point-of-view expressed in this paper.

As Edward Said has explained in Orientalism, the conquest of the globe by Europe colors all European productions of knowledge about the Orient. Because of the dominance of European educational systems, these Eurocentric views have also been absorbed and assimilated by Muslims. This has caused great difficulties in the development of Islamic Economics, because Muslim scholars have attempted to reconcile two diametrically opposite views. European views give primacy to the material dimensions, which Islamic views give primacy to the spiritual dimensions of human existence. In my writings – for example, “The Crisis in Islamic Economics,” and “Building Genuine Islamic Institutions” – I have explained how this attempt has prevented the emergence of genuine Islamic theories as well as genuine Islamic institutions which embody these theories. The majority of the literature on Islamic Economics attempts the impossible task of making minor modifications to Western economic theories, to align them with Islamic Views.

Cliff asked me to write a paper explaining Islamic Economics from an authentic Islamic viewpoint, uncontaminated by Eurocentric perspectives. I wrote initial drafts with sensibilities of a modern secular audience in mind, and tried to avoid stepping on toes. But this has the natural consequence of diluting and modifying the message in subtle ways. Cliff repeatedly encouraged me to avoid pulling punches, and the present paper is the final result after a sequence of attempts. As many authors have documented in detail, the transition from a traditional society based on Christian values to the present day secular modern society was a revolution in ways of thinking and acting. Islamic views on economic organization would be familiar to pre-modern thinkers, but alien and strange to modern scholars. Understanding it will require ‘walking in alien moccasins for mile’.

Keywords: Islamic Economics, Homo Economicus, Homo Islamicus, Transformation of Human Behavior.

JEL Codes: B41, B59, P49

KAU-JIE-Classification: G1, H11, M1

Bowles, Samuel, and Herbert Gintis (2012) Democracy and capitalism: Property, community, and the contradictions of modern social thought. Routledge.

Cooter, R. and Rappoport, P (1984) “Were the Ordinalists Wrong About Welfare Economics?” Journal of Economic Literature, Vol. 22, No. 2, pp. 507-530

Dawes, Robyn M. and Richard H. Thaler (1988) “Anomalies: Cooperation”, The Journal of Economic Perspectives, Vol. 2, No. 3. pp. 187-197

Easterlin RA (1973) Does money buy happiness? Public Interest 30:3–10.

Easterlin, R. A., McVey, L. A., Switek, M., Sawangfa, O., & Zweig, J. S. (2010). The happiness–income paradox revisited. Proceedings of the National Academy of Sciences, 201015962.

Cheryl D. Fryar; et al. (September 2018). "Prevalence of Overweight, Obesity, and Severe Obesity Among Adults Aged 20 and Over: United States, 1960–1962 Through 2015–2016" (PDF). Health E-Stats. National Center for Health Statistics, Division of Health Interview Statistics. Retrieved December 26, 201

Bowles, Samuel, and Herbert Gintis (2012) Democracy and capitalism: Property, community, and the contradictions of modern social thought. Routledge.

Cooter, R. and Rappoport, P (1984) “Were the Ordinalists Wrong About Welfare Economics?” Journal of Economic Literature, Vol. 22, No. 2, pp. 507-530

Dawes, Robyn M. and Richard H. Thaler (1988) “Anomalies: Cooperation”, The Journal of Economic Perspectives, Vol. 2, No. 3. pp. 187-197

Easterlin RA (1973) Does money buy happiness? Public Interest 30:3–10.

Easterlin, R. A., McVey, L. A., Switek, M., Sawangfa, O., & Zweig, J. S. (2010). The happiness–income paradox revisited. Proceedings of the National Academy of Sciences, 201015962.

Faruqui, Naser I. , Asit K. Biswas and Murad J. Bino, eds. (2001) Water Management in Islam, UNU Press, Tokyo.

Grant, Adam (2013) “Does Studying Economics Breed Greed?” Psychology Today Blog: https://www.psychologytoday.com/us/blog/give-and-take/201310/does-studying-economics-breed-greed

Hausman, D. M., & McPherson, M. S. (2006). Economic analysis, moral philosophy, and public policy. Auflage Publishers, Cambridge.

Lane, Robert E. (2001) Loss of Happiness in Market Economies. 18, 121, 126

Layard, Richard (2005) Happiness: Lessons from a New Science. Penguin.

Lovins, Amory B., L. Hunter Lovins, and Paul Hawken (1999) "A road map for natural capitalism." Harvard business review 77: 145-161.

Lucassen, Jan,Tine De Moor and Jan Luiten van Zanden (2008) “The Return of the Guilds: Towards a Global History of the Guilds in Pre-industrial Times” International Review of Social History, Vol. 53.

Manicas, P. (1987). History and Philosophy of the Social Sciences, Oxford: Basil Blackwell

Mitchell, Timothy (2002) Rule of experts: Egypt, techno-politics, modernity. Univ of California Press.

Nelson, Benjamin (1969) "The Idea of Usury: From Universal Brotherhood to Universal Otherhood."

Nelson, Julie A. (2012). Poisoning the well, or how economic theory damages moral imagination. In The Oxford handbook of professional economic ethics.

Pfeifer, Karen (2001) Islamic business and business as usual: a study of firms in Egypt. Development in Practice, 11(1), pp. 20-33.

Polanyi, Karl (1944). "The great transformation: Economic and political origins of our time." Rinehart, New York

Reuben, Julie A. (1996) The Making of the Modern University: Intellectual Transformation and the Marginalization of Morality, Chicago: University of Chicago Press.

Sait, Siraj and Hilary Lim (2006) Land, Law and Islam: Property and Human Rights in the Muslim World, Zed.

Samuelson, Paul A. and William Nordhaus (1989). Economics, 13th Edition. McGraw-Hill: Berkshire

Stigler, George J. and Gary S. Becker, (1977). ‘De Gustibus Non Est Disputandum’, The American Economic Review, 67 (2), pp. 76-90.

Tawney, R.H. (1926) Religion and the Rise of Capitalism, New York: Harcourt, Brace & World, Inc

Vadillo, Umer Ibraheem (n.d.) “The Return of the Guilds” unpublished manuscript. . https://www.scribd.com/document/118411417/Professor-Umar-Ibrahim-Vadillo

Veblen, Thorstein (1924) Theory of the Leisure Class.

Weber, Max (1918). Science as a Vocation. Reprinted in H. H. and C. Wright Mills (transl), From Max Weber: Essays in Sociology. Oxford: Oxford University Press.

Weber, Max (1958). The Protestant Ethic and the Spirit of Capitalism. New York: Scribner’s Press.

Yildirim, Onur (2006) "Ottoman guilds (1600-1826): a survey." Paper delivered to the conference on ‘The Return of the Guilds’, Utrecht.

Zaman, Asad and Mehmet Karacuka (2012) “The Empirical Evidence Against Neoclassical Utility Theory: A Review of the Literature” International Journal for Pluralism and Economics Education Vol. 3 (4), p 366-414.

Zaman, Asad (2008) “Islamic Economics: A Survey of the Literature,” Religion and Development, Working Paper 22, Univ. of Birmingham.

Zaman, Asad (2009) “Origins of Western Social Science” Journal of Islamic Economics, Banking and Finance, vol 5, number 2, May-August, p. 9-22

Zaman, Asad (2012) “The Normative Foundations of Scarcity,” Real-World Economics Review, issue no. 61, pp. 22-39

Zaman, Asad (2015). “Building genuine Islamic financial institutions.” Journal of Islamic Economics, Banking and Finance, 113(3170), 1-20.

Zaman, Asad (2015) Deification of Science and Its Disastrous Consequences, International Journal of Pluralism in Economics Education, Vol 6, No.2, 181-19

Zaman, Asad (2018) "An Islamic Approach to Inequality and Poverty" Journal of King Abdul Aziz University: Islamic Economics Vol 31 No. 1 pp 69-92 (January 2018);

Zuboff, Shoshana (2009) “The Old Solutions have become the New Problem,” Businessweek, July 2, 2009, http://www.businessweek.com/managing/content/jul2009/ca2009072_489734.htm