3GIE: Nation 2 Nbhd

The original video, with a brief summary, is linked on https://azprojects.wordpress.com/2025/01/15/exploring-three-generations-of-islamic-economics/  This was a lecture delivered to a class of students in BSI Literasi Series on 11th Jan 2025. An edited video cuts out the original 10m intro and the final 20m Q&A, leaving only the lecture; this YT video is linked below. 

A LinkedIn gateway post, built around this video: https://www.linkedin.com/pulse/third-generation-islamic-economics-from-nation-asad-zaman-9ytqf/ 

The video is followed by the slides, and an audio transcript of the video-talk.  

A brief summary of the talk is given here:

A critical insight about all social theories is that they are born in response to, and as solutions of, social problems. Looking at the theory, without looking at the problem that it was created to solve, is sure to deceive you regarding the nature of the theory. It is within this framework that we can understand the emergence of the first generation of Islamic Economists in the 20th Century. At the dawn of the twentieth century, about 90% of the Islamic world was colonized. The two world wars took a heavy toll on the military power of the European colonizers, and enabled movements of liberation around the globe to succeed. As the Islamic countries broke free of colonial rule in the mid 20th Century, intellectuals demanded a return to Islamic systems, and in particular, an Islamic Economic system. Maulana Maudoodi and Syed Baqir Sadr explained how such a system would provide justice, and welfare for the public, and be far superior dominant systems of Capitalism, Communism, and Socialism.  Unfortunately, after liberation, a class of compradores trained to admire and emulate the colonizers slid into power. They continued the extractive policies of the colonizers, and accumulated wealth for themselves, with the help of the European powers. As a result, the revolutions required to create Islamic political and economics systems did not succeed. In the 70's, this led to a rethink within Islamic Economics. If it was not possible to overthrow capitalists and replace the economic system, perhaps it was possible to worth within the system, and gradually modify it to become Islamic. The revolutionary approach was replaced by an evolutionary approach. This second generation approach attempted to Islamize Capitalism. However, the global financial crisis of 2007-8 exposed the crisis prone and fragile nature of both capitalism, and capitalist economic theory. There was widespread realization that instead of Islamizing capitalism, Islamic Financial Institutions were caught up in the global financial systems with lead to increasing inequality, concentration of wealth, and exploitation of the planet, the biosphere, and human beings. This led to the third generation approach, which learns from both previous generations. It adopts the revolutionary goals of the first, but abandons the political struggle for power which failed. It adopts the pragmatic approach of the second generation, and seeks to create revolutionary change on the micro-scale of local communities, while linking them across the globe to form the Ummah. It recognizes the importance and power of thinking globally, and also the necessity of acting locally.