On Volker Nienhaus (2013) - Methods and substance of Islamic economics: Moving where?
This paper by Nienhaus discusses on the issues and problems of Islamic economics as it is currently. This is a summary.
We will go straight to section four of his paper which discusses on the subject matter. He first touches on the fact that Islamic economics (IE) is right now a highly disregarded field in the world academia. A search on the journal databases yields low results on the topic within the wealth of writings on other types of economics. The four reason given for this is because:
a) The whole idea of Islamic economics, which is a religious based economics falls rather out of favor with mainstream trend which more is in line with secularist thinking. Even other economics from a religious standpoint such as Christian economics also faces the same problem.
b) New insights to solve economic woes from an Islamic viewpoint is still rather low. Islamic economists seem to still produce work that closely mimics conventional economics. Even those uniquely Islamic such as waqf and zakat seems too idealistic to solve any practical issues, viable only in the distant future, if ever.
c) Similar to the second point, IE is observed not able to challenge long held view of conventional economics with new arguments that could open up new fields.
d) IE seems relevant to Muslims only.
Nienhaus then criticizes the Qur'an and the sunnah, stating that most of the teachings do not provide any practical economic theories or explications that can be applied to the present day. The Qur'an spells out many things that are bad and needs to be avoided, but mostly do not explain the cause-effect behind it. I leave this to the readers to judge.
Dialogue between Islamic and conventional economists is stated as being very important, as it would not only opens discussion on values and morality, something that many conventional economists are not used to, but also to discuss on the normative side of IE, which is something quite unique especially since it is based on the Qur'an and Sunnah, and how knowledge could be derived to add to improving the existing system and also add a new dimension.
The author also calls upon academicians especially those of the younger generations to contribute to 'IE light' studies (ie. islamic economics field from a conventional framework). He gives another term 'IE proper', which is more religiously close (so to say), and has many issues especially when it comes to religious debates (including fiqh) that many non Muslims especially would not know the intricacies about.
Islamic economics as political economy.
Nienhaus states that there are various models and versions of IE, from "a socially moderated market economy to quite authoritarian models of a welfare dictatorship", but observes that there is little discussion between the various schools. Islam as a political economy strives to reach an ideal, but IE scholars must also provide a transition between the present reality to that ideal, which is rather lacking.
Next, Nienhaus observes that IE scholars tend to study the various established economic systems in the state of once they have been established, but not the process of transition and evolution. A study of the latter could give many insights to assist IE to transition by studying the various dynamics and interactions of economic and political aspects and assist IE evolution.
The unsettled relations between Islamic economists and Sharia scholars
For this section, Nienhaus writes about how Sharia scholars used to have so much influence and leverage in ancient times to give fatawa on many matters including economics. However, in the dynamic and complex nature of today's economic world, especially after the financial crisis of the mid 2000s, a ruling on what is Islamic should also take into consideration how people behave, namely, the need to understand social science, which is the expertise of the Islamic economists.
Concepts such as maslahah is (and should be) more open to re interpretation today, and needs the input of IE scholars. This is very important especially since according to Nienhaus, only aroudn 20% of today's sharia scholars have any formal education in economics, and yet, these are the very people making such a big impact on the direction of Islamic economics (in terms of what is Islamic and what is not).
We will go straight to section four of his paper which discusses on the subject matter. He first touches on the fact that Islamic economics (IE) is right now a highly disregarded field in the world academia. A search on the journal databases yields low results on the topic within the wealth of writings on other types of economics. The four reason given for this is because:
a) The whole idea of Islamic economics, which is a religious based economics falls rather out of favor with mainstream trend which more is in line with secularist thinking. Even other economics from a religious standpoint such as Christian economics also faces the same problem.
b) New insights to solve economic woes from an Islamic viewpoint is still rather low. Islamic economists seem to still produce work that closely mimics conventional economics. Even those uniquely Islamic such as waqf and zakat seems too idealistic to solve any practical issues, viable only in the distant future, if ever.
c) Similar to the second point, IE is observed not able to challenge long held view of conventional economics with new arguments that could open up new fields.
d) IE seems relevant to Muslims only.
Nienhaus then criticizes the Qur'an and the sunnah, stating that most of the teachings do not provide any practical economic theories or explications that can be applied to the present day. The Qur'an spells out many things that are bad and needs to be avoided, but mostly do not explain the cause-effect behind it. I leave this to the readers to judge.
Dialogue between Islamic and conventional economists is stated as being very important, as it would not only opens discussion on values and morality, something that many conventional economists are not used to, but also to discuss on the normative side of IE, which is something quite unique especially since it is based on the Qur'an and Sunnah, and how knowledge could be derived to add to improving the existing system and also add a new dimension.
The author also calls upon academicians especially those of the younger generations to contribute to 'IE light' studies (ie. islamic economics field from a conventional framework). He gives another term 'IE proper', which is more religiously close (so to say), and has many issues especially when it comes to religious debates (including fiqh) that many non Muslims especially would not know the intricacies about.
Islamic economics as political economy.
Nienhaus states that there are various models and versions of IE, from "a socially moderated market economy to quite authoritarian models of a welfare dictatorship", but observes that there is little discussion between the various schools. Islam as a political economy strives to reach an ideal, but IE scholars must also provide a transition between the present reality to that ideal, which is rather lacking.
Next, Nienhaus observes that IE scholars tend to study the various established economic systems in the state of once they have been established, but not the process of transition and evolution. A study of the latter could give many insights to assist IE to transition by studying the various dynamics and interactions of economic and political aspects and assist IE evolution.
The unsettled relations between Islamic economists and Sharia scholars
For this section, Nienhaus writes about how Sharia scholars used to have so much influence and leverage in ancient times to give fatawa on many matters including economics. However, in the dynamic and complex nature of today's economic world, especially after the financial crisis of the mid 2000s, a ruling on what is Islamic should also take into consideration how people behave, namely, the need to understand social science, which is the expertise of the Islamic economists.
Concepts such as maslahah is (and should be) more open to re interpretation today, and needs the input of IE scholars. This is very important especially since according to Nienhaus, only aroudn 20% of today's sharia scholars have any formal education in economics, and yet, these are the very people making such a big impact on the direction of Islamic economics (in terms of what is Islamic and what is not).
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