2009 Lecture 04

Crisis in Islamic Economics: Diagnosis of the Problem

The main idea of this lecture is to show that Islamic Economics is facing a crisis -- many important problems that were supposed to be solved by IE are not being solved.

The reason for this crisis is the uncritical acceptance of many wrong ideas taken from western economic theory. For example the idea that modern economic theory is a positive theory --which is wrong -- has been accepted by Islamic economists in general. Similarly ideas about mathematical structure of theories, utility maximization, and the general framework in which economic problems are to be formulated and solved -- these ideas have been accepted. However, these ideas hide normative foundations which are contradictory with ethical ideas of Islam. The two cannot be mixed and taken together. This is why attempts to create IE have resulted in failure.

RELATED MATERIALS:

Critical Mission of the Muslim Economist,” La_Riba, Jurnal Ekonomi Islam, Vol 2, No. 1, Juli 2008, Universitas Islam, Indonesia, also in Pakistan Management Review, 2^nd Qtr. 2009 View Download A version of this paper was presented as comments and discussion of Dr. Munawar Iqbal’s presentation on “Contributions of Last Six Conferences” at the 7th International Conference on Islamic Economics, IERC, KAAU, Jeddah, April 1-3,2008: See: http://islamiccenter.kaau.edu.sa/7iecon/English/English%20Contents.htm