Submitted to Islamic Studies, IRI on 17th September 2013. NOTE that variants of this could be published in SOCIO-ECONOMIC REVIEW.
1. Introduction
Quran 92:4 Verily, (the ends) ye strive for are diverse.
How does the diversity of human goals impact on the organization of economic activity? How can we co-ordinate efforts taking this diversity into account? These questions have been the subject of a deep investigation by economists. Our goal in this article is to compare these results with Islamic views on the subject.
The vast potential buried within each human being is highlighted in the Quran:
Q95:4,5 Surely We created man of the best stature. Then We reduced him to the lowest of the low,
Man can rise higher than the angels and also be worse than the beasts. The range of motivations of humans is correspondingly complex and varied, and much better captured in literature other than economics textbooks. Eschewing heroism, sacrifice, commitment to higher causes, etc., economists choose to focus on self-interest (greed) as the sole motive force in economic transactions. It would take us far from the topic of this essay to explore why economists have accepted this methodology, despite its numerous limitations and its conflict with our own experience and observations; see Sen (1977) for an insightful discussion. Instead, we discuss some of the consequences of accepting this narrow view of human motivation, which creates the framework for contemporary discussions of incentives by economists.