Three Generations
The foreward (excerpted below) identifies three generations of Islamic Economists. To which generation (intellectually) do you belong?
2015 Vol. 6 No. 4
Special Issue on the Challenge of Islamic Economics
Guest Editors: Asad Zaman and Jack Reardon
371-385
386-408
Specific Policies to Help Societies Provision
See also: Post on DEFINING ISLAMIC ECONOMICS on IWV BLog which cites Forward
EXCERPTS from the FOREWARD, which characterizes three generations of Islamic Economists:
FIRST GENERATION: Early writings on Islamic
economics focus on comparison and evaluation of economic systems, and proving the
superiority of a hypothetical economic system based on Islam. In particular, two major
figures played a prominent role in promoting the vision of a just and equitable Islamic
Economic system: Muhammad Baqir al-Sadr in his book Iqtisaduna (Our Economy), and
Sayyid Abul-Alal-Mawdudi in numerous books and articles (e.g., Economic System of
Islam). Chapra (2004) and Wilson (1998) summarise this historical background, and also
remark on the courage it took to formulate an Islamic economic system and defend it
against the dominant and apparently tremendously successful Western systems in the
early 20th century.
SECOND GENERATION: The vision of the founders of the field, like Mawdoodi and Baqir Al-Sadr, for an
Islamic Economic system which would provide a just and equitable alternative to both
Capitalism and Communism were abandoned. Second generation pragmatists saw that
the required revolution did not appear to be forthcoming, and more limited goals were
targeted. Instead of rejecting Capitalist institutional structures, the new Islamic
economics (nIE) attempted to tinker with Capitalism in order to make it conform to
Islamic principles. A popular formula for defining the subject became: nIE =
Capitalism – Interest + Zakat. Due to circumstances to be discussed in detail shortly,
second generation authors in nIE sought to reconcile the differences between Capitalism
and Islam that had been seen clearly by the first generation. While acknowledging its
debt to the founders of Islamic economics, the second generation buried first generation
expressions of conflict, and the grand vision of an alternative system, under the carpet.
They asserted that these were mistakes made by founders, who did not have sufficient
understanding of modern economics. This fundamental mistake of the second generation
led the entire field of Islamic economics astray
THIRD GENERATION:function. Zaman (2015b) shows how existing definitions of Islamic economics are
compromises, based on mixing normative Islamic principles with supposedly positive
economic principles. The paper shows that genuine Islamic principles are in direct
conflict with neoclassical economic theory. For example, conventional micro and macro
look at economic issues from the perspective of the individual and the nation. Islam
suggests the need to look at the family, neighbourhood, community, and humanity as a
whole, and explicitly rejects thinking in terms of national interests (or in terms of race,
colour, language and ethnic groupings), as divisive and harmful to the brotherhood of
man. Islam also rejects detached observation of oppression as inhuman, and calls for
action against injustice; thus it is transformative, rather than positive or normative. Islam
calls for simple lifestyles in harmony with nature and with our neighbours, rather than
seeking to outdo each other in increasing luxury. There is heavy emphasis on cooperation
and generosity, in radical contrast with the virtues of competition and selfishness
emphasised in conventional economics. The outcome is that a genuine Islamic economics
is radically different from conventional economics, instead of being a branch of it.
Since the start of the new millennium, the conflicts between Islam and economics, as
described in ‘Islam versus economics’ by Zaman (2015c) are receiving greater
recognition. It also recognised that the epistemological claims of conventional Western
economic theories to objectivity and factuality are false. Recognising the normative status
of conventional theories creates the confidence in the third generation of Islamic
Economists to reject western theories and affirm Islamic principles when faced with a
conflict between the two. All of the writers in this volume, and a great many other
authors in addition, are contributing to the increasingly diverse literature in the third
generation of Islamic economics.