Appeared in Journal of Islamic Economics, Banking and Finance:
JIEBF, Volume - 6, Number - 1, January - March 2010. p. 87-104 Link to published PDF on journal website.
This paper is addressed to an Islamic audience. Another paper on scarcity, entitled: Normative Foundations of Scarcity : is addressed to a secular audience.
INTRODUCTORY SECTION:
“Scarcity” is at the heart of economic theory. If there is an abundance of all material wealth, then there would be no need to discuss economic issues. After agreement on this fundamental issue, Islamic economics and conventional Western economics part ways. The Western analysis of the causes of scarcity, how to handle the problem, and the consequences of solving the problem are radically different from Islamic views. The purpose of this note is to discuss these differences and argue that the Islamic views are superior, and in accordance with observations.
As discussed in Zaman (2007), a fundamental problem facing the project of Islamization of Knowledge is the lack of confidence among Muslims due to over a century of defeats on the battlefield. Ibn-e-Khaldun remarked on the tendencies for the defeated nations to emulate the victors in all ways. In fact, barbarians have often defeated more civilized nations historically. In recovering from defeat, one must analyze carefully the causes for defeat and seek to remove them, rather than uncritically accepting the superiority of the victor in all dimensions. In the context of economic theory, Zaman (2008, An Islamic Critique of Neoclassical Economics) discusses how flawed Western economc theories conflicting with Islamic views have generally been accepted by Muslims. In this paper, it is our aim to show that the Quran and Sunnah offer far greater wisdom on management of economic affairs than is currently available with the leading experts from the West. In particular, the Quranic analysis of the fundamental economic problem of scarcity is deeper and more sophisticated than standard Western analysis. Thus we do not stand in need of borrowing Western economic theory.
Central Page on Scarcity - Links to all of works and relevant references