Some notes on Islamic Economics
By Iliyas Ismail
Islamic economics was shaped into a separate form of discipline with its own doctrine fairly recently in the 1970s. Prior to that, classical Muslim scholars have contributed to shaping this doctrine, with Ibn Khaldun contributing the most to this thought.
In 1976, the first international Islamic conference on economics was held in Mecca and many see this as the birth of Islamic economics as a doctrine and especially as a science with its many theories. Roger Arnold (2008) stated that theory is an abstraction of reality, and science itself can be described as a home of theories. The interesting thing with developing Islamic economics is to find the source of knowledge for contribution to it, whether from a rationalist perspective or empiricist perspective. Logical positivism, which is closely related to empiricism, states that truth must be logical, evidence-based or based on logical analysis.
This positivist approach, almost always takes away the role of religious scriptures, since religion tend to be faith based. Thus, approaching Islamic economics as a discipline of its own, with a scientific approach on testing hypothesis, like it or not, would need to base itself with the source seen as the ultimate source, which is the Qur'an.
In arguing for Islamic economics, many Muslim scholars tend to be comfortable discussing issues among other Muslim scholars in their own conferences. Islamic economy as a thought, is developing in the Muslim world, but presenting it to the non Muslims to be accepted as a superior model is still a challenge. In fact. it is a challenge for any scholar trying to inject a religious worldview in mainstream discussions. Islamic economists find common ground with Christian economists in facing a common enemy, that is, conventional economics. Chapra (2000) in his "Is it necessary to have Islamic ecnomics?" lays the argument for IE and states how it contributes to the methods for infusing in man, more incentives to be moral and using this as to guide a society in their dealings with economics. Of course, the obvious issue is that this doesn't prove Islam to be true, but it simply shows that it can be used to serve as a model so as to guide mankind.
Islamic economics as a discipline, rejects the concept of absolute scarcity, where a resource is believed to be limited and God if accepted as existing, does not as a being interfere to provide for humans. IE accepts the concept of relative scarcity -the idea that scarcity has more to do with different distribution patterns, and varying efforts needed to cultivate resources- and uses this as its worldview, although also laying emphasis on the avoidance of waste and causing mischief on the land. Mankind should serve to please God by taking care of his relationship with others and the environment. This is an important aspect of Islamic economics that people should take into consideration. Al-Attas in his Islam and Secularism talks about the rational soul, that human beings are more than just physical beings and can attain a more deeper meaning and fulfillment in life and ponder on attaining God's pleasure by maintaining good ties with his creations including taking care of the environment.
Klein (2014) mentioned in his prologue, that religious discourse in economics is not itself onto economics, but only to attempt to enrich it. He talks about how economics is unduly flat. Neo-classical economists indeed tend to flatten economics, meaning to say they tend to explain away human behavior in economics as mostly to maximize wealth, and most discourses simplify matters into concepts, methods modes. Klein argues that religion or quasi-religious ideas could extend economics by discussing on aspects of utility such as coherence, purpose and duty, ideas according to him are not given their due share in economic discussions.
Islamic economics can and should adopt this line of reasoning by infusing and enriching the conventional economics discussion. As Morris (2014) puts it, although economics has a great deal to offer, it can be "tautological and uninteresting", and expanding the scope although making things more difficult, can also enrich the discussion. As Islamic economics develops in our world today, Islamic economists should broaden their discourse to include other religious based economists to exchange ideas and improving on their own.
Iliyas Ismail is a financial analyst attached with IIUM.
Islamic economics was shaped into a separate form of discipline with its own doctrine fairly recently in the 1970s. Prior to that, classical Muslim scholars have contributed to shaping this doctrine, with Ibn Khaldun contributing the most to this thought.
In 1976, the first international Islamic conference on economics was held in Mecca and many see this as the birth of Islamic economics as a doctrine and especially as a science with its many theories. Roger Arnold (2008) stated that theory is an abstraction of reality, and science itself can be described as a home of theories. The interesting thing with developing Islamic economics is to find the source of knowledge for contribution to it, whether from a rationalist perspective or empiricist perspective. Logical positivism, which is closely related to empiricism, states that truth must be logical, evidence-based or based on logical analysis.
This positivist approach, almost always takes away the role of religious scriptures, since religion tend to be faith based. Thus, approaching Islamic economics as a discipline of its own, with a scientific approach on testing hypothesis, like it or not, would need to base itself with the source seen as the ultimate source, which is the Qur'an.
In arguing for Islamic economics, many Muslim scholars tend to be comfortable discussing issues among other Muslim scholars in their own conferences. Islamic economy as a thought, is developing in the Muslim world, but presenting it to the non Muslims to be accepted as a superior model is still a challenge. In fact. it is a challenge for any scholar trying to inject a religious worldview in mainstream discussions. Islamic economists find common ground with Christian economists in facing a common enemy, that is, conventional economics. Chapra (2000) in his "Is it necessary to have Islamic ecnomics?" lays the argument for IE and states how it contributes to the methods for infusing in man, more incentives to be moral and using this as to guide a society in their dealings with economics. Of course, the obvious issue is that this doesn't prove Islam to be true, but it simply shows that it can be used to serve as a model so as to guide mankind.
Islamic economics as a discipline, rejects the concept of absolute scarcity, where a resource is believed to be limited and God if accepted as existing, does not as a being interfere to provide for humans. IE accepts the concept of relative scarcity -the idea that scarcity has more to do with different distribution patterns, and varying efforts needed to cultivate resources- and uses this as its worldview, although also laying emphasis on the avoidance of waste and causing mischief on the land. Mankind should serve to please God by taking care of his relationship with others and the environment. This is an important aspect of Islamic economics that people should take into consideration. Al-Attas in his Islam and Secularism talks about the rational soul, that human beings are more than just physical beings and can attain a more deeper meaning and fulfillment in life and ponder on attaining God's pleasure by maintaining good ties with his creations including taking care of the environment.
Klein (2014) mentioned in his prologue, that religious discourse in economics is not itself onto economics, but only to attempt to enrich it. He talks about how economics is unduly flat. Neo-classical economists indeed tend to flatten economics, meaning to say they tend to explain away human behavior in economics as mostly to maximize wealth, and most discourses simplify matters into concepts, methods modes. Klein argues that religion or quasi-religious ideas could extend economics by discussing on aspects of utility such as coherence, purpose and duty, ideas according to him are not given their due share in economic discussions.
Islamic economics can and should adopt this line of reasoning by infusing and enriching the conventional economics discussion. As Morris (2014) puts it, although economics has a great deal to offer, it can be "tautological and uninteresting", and expanding the scope although making things more difficult, can also enrich the discussion. As Islamic economics develops in our world today, Islamic economists should broaden their discourse to include other religious based economists to exchange ideas and improving on their own.
Iliyas Ismail is a financial analyst attached with IIUM.
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