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Can There Be an Economics Based on Religion? The Case of Islamic Economics Mohamed Aslam
Haneef (International Islamic University Malaysia) ©
Copyright: Mohamed Aslam Haneef
2005 Introduction
As an undergraduate student at the
International Islamic University Malaysia, my experience in studying
economics was quite unique in the sense that while being exposed to
mainstream neoclassical economics, there was an explicit mention that
economics was to be taught in a ‘comparative’ and ‘critical’ manner. At the
same time, due to events of the late 1970s and early 1980s, developing
‘Islamic economics’ was one of the goals in a few Muslims countries,
including Malaysia. I discovered that there was also a ‘mainstream school’
among those writing on Islamic economics, modeled
along neoclassical lines, working almost within the boundaries of
neoclassical theory, with some adjustments to incorporate
teachings/norms/values that reflected certain requirements of Islam. What worried some of us was
the almost total neglect of non-mainstream views in the literature and very
few serious attempts to identify and address ‘foundational’ issues seriously.
Writings in Islamic economics began to be dominated by those in the area of
banking and finance, with the almost sole objective being to develop
alternative financial instruments and products to be used in the ‘alternative
banking and financial system’ that has now become globally known as Islamic
Banking and Finance. I could not accept the almost exclusive direction taken
by the ‘mainstream’ writings and coming across the Post-Autistic Economics
Movement at the turn of the century was almost a ‘revelation’. Looking through the issues of
the post-autistic economics review
(PAER), I realized that the writings went to the
core of neoclassical economics, attacking its theoretical foundations. It is
imperative to address these foundations and to point out their relevance to
reality. What we know, how we can know it, and the criteria to evaluate what
and how we know are central foundational issues in any approach to economics.
If we claim to have an alternative approach to economics, it must necessarily
be projected from a worldview or vision that represents that approach. It
must also be developed based on knowledge and using the sources of knowledge
in a way determined by that approach. Section 1 of this paper
briefly shares the experience at the Department of Economics, International
Islamic University Malaysia in introducing a course called Foundations of
Islamic Economics (FIE). Section 2 then discusses issues related to the
relationship between economics and religion and puts forward arguments why a
religious based economics is possible, at least in the case of Islamic
economics. The author welcomes comments and constructive criticism, in the
hope that religious based economics can be accepted as part of heterodox
economics, in-line with calls for pluralism in economics. Section 1: Background of ECON
1710: Foundations of Islamic Economics (FIE)
The FIE course has been
offered as a faculty required course to all students since 1993, with
adjustments made in 1995, 1997 and 2003 to the course content. It is meant to
provide students with a rationale and an introduction to Islamic economics.
The course is presented in a comparative manner and all students would have
taken Principles of Microeconomics and Macroeconomics as pre-requisites.2
FIE is generally meant to provide a conceptual introduction to economics as
stated in the course outline: This course introduces students to the basic premise that the study
of Islamic economics proceeds from the Islamic worldview and has to be
developed according to a methodology that is founded upon this
worldview. Therefore the `foundations'
that need elaboration are the Islamic worldview, Islamic economic methodology
and features of an Islamic economic system.
Since economics deals with the production, consumption and
distribution activities of man, these areas will be addressed in this
course. Other more prominent areas of
contemporary Islamic economics such as the prohibition of ‘riba' and issues in Islamic banking are also discussed. Six main topics are
covered in about 14 weeks and include the following: Topic 1 : Islam, its Worldview and Islamic
Economics Topic 2 : Methodology of Islamic Economics Topic 3 : The Islamic Economic System Topic 4 : Allocation of Resources In An
Islamic Economic System Topic 5 : Distribution Topic 6 : Issues in Islamic Financing : Riba, Contracts and Islamic Banking For
topics 3-6 of the course, articles written by writers (and occasionally critics)
of Islamic economics who address the sub-topics and issues discussed are used
as references. Most of the topics and sub-topics are known to students as
they are topics in economics. For example, topic 3 discusses the
characteristics of economic systems used in comparative systems textbooks. An
attempt is made to situate the Islamic economic system vis-à-vis capitalism
and socialism, while pointing out that all systems have their own underlying
philosophical foundations and goals in terms of their meaning and means of
achieving them. Topic 4 discusses consumption and production, focusing on the
possibilities of different normative frameworks that govern the
positive/technical side of decision-making. Topic 5 discusses distributive
justice as seen by writers of Islamic economics and elaborates on goals of
distribution and measures implemented to achieve distributive justice. Topic
6 very briefly surveys some important issues in Islamic banking and finance
and is included in this course more for the business and accounting students
who may not take other courses in Islamic economics. As
pointed out in the introductory class, Topics 1 and 2 are in actuality the
main topics of the course since they (and to a lesser extent topic 3) are the
‘foundations’ of economics. Any attempt of presenting alternatives to
standard textbook economics discussions (in Topics 4, 5 and 6) can only be
fruitful if these foundations are presented and understood in a meaningful
and acceptable way that opens up the minds of students to the possibility of
alternatives and to give arguments to support these alternative foundations.
Students are encouraged to refer to the PAER as
additional references in the course. What follows is a brief elaboration of
Topics 1 and 2 in terms of ‘what is covered’ and ‘how it is covered’. In
presenting this, I have attempted to connect the discussion to issues found
in alternative economics literature, especially in the PAER.
Islam, Its Worldview and Islamic Economics Contemporary
Islamic economics is presented as a 20th century response of
Muslim societies to calls for indigenous solutions to their development
problems since political independence beginning after World War II. Although
some writers like Kuran2 have traced the term Islamic economics to
the 1940s, it was only in the 1970s that Islamic economics was officially
born. Is there a rational basis for an Islamic economics? Topic 1 tries to
present this rationale. The
course is based on the premise that no human endeavor
is value-free. Economics in this case, is preceded by what Schumpeter (1954)3
calls a ‘vision’. As far as the conceptual framework of economics is
concerned, what needs to be done is to derive or “systematize” a certain
economic vision within the overall worldview that will involve certain “core”
economic related concepts in the overall worldview. This process of deriving
an economic vision, made up of selected interrelated concepts, is
“ideologically” based in the Schumpeterian sense, since choosing, and later
ordering, defining and interpreting these concepts are undertaken within the
overall worldview of the person doing it.
While Schumpeter still considered this ideological element as
something that needed to be “neutralized” through proper, universal methods
of analysis, we do not agree that these elements are necessarily “bad” or
that they can and should be neutralized.
In this sense, we agree with Heilbroner
(1988)4 who sees ideology as a part of economics since its
“motivations are not only powerful, inescapable, but legitimate.” Since
alternative worldviews/ideologies exist, different economics are not only
possible but, one can argue, natural and legitimate as well. In fact
according to Heilbroner, without a vision or a
“belief system” (ideology) there can be no economic analysis because there
will be nothing to analyze. In this
sense, economic analysis works within an ideology. Hence, the universality of the western experience of economics,
dominated by neoclassical economics today, cannot be accepted as a rule of
law. This view is supported by J. S.
Mill (1836)5: Political economy, therefore, reasons from
assumed premises which might be totally without foundation in fact, and which
are not pretended to be universally in accordance with it. Topic
1 tries to discuss the Islamic economic vision and tries to make comparisons
to the standard neoclassical economic vision that underlies textbook
economics. In this, much of the criticism used by alternative economics can
be, and is, given as support for the position that alternative views of
religion, man, nature, knowledge, aim in life and their implications for
economic pursuits can lead to ‘different economics’. For purpose of this
paper, we will highlight the discussion on religion. Religion and Economics The
very idea that religion can be a major influence in determining economic
activities would be dismissed as incoherent, irrational and emotional by the
majority of contemporary economists. This is primarily due to the historical
experience of Western Europe with Christianity and the result of the
secularization process that took place in Western Europe since the 17th
century. However, as presented by some writers, this secularization process
is very much a western European experience and may not be universally
applicable6. In the religious perspective of Islam, human beings
are asked to address secular pursuits i.e. to deal with the here and now.
Hence ‘shunning this world’ was never a religious teaching for Muslims as it
may have been to Christian Europe in the Middle ages. However,
the ideology of secularism that underlies much of contemporary science and
western society today is more problematic. This ideology, if interpreted to
mean that ‘only the here and now’ is relevant and even ‘real’, would not be
acceptable to most religions and their adherents. Reference to a life
hereafter, to matters that are not strictly observable or comprehensible to
pure human reason, are irrelevant for economic decision-making in standard
economic reasoning. However, if one believes in the ‘unobservable’, it has
tremendous implications on what rational decisions mean. This ‘extended
time-horizon’ would certainly affect the choice of individuals and societies
in allocating scarce resources. Religion for Muslims is not accepted as
being a “human creation” of, or for, “infantile” man, but is a representation
of a “way of life”. The term used to denote “religion” in Islam .
. . whole way of life .
. . covers both the private and public/societal
lives of man, it permeates the whole fabric of society, and includes
theological dogma, forms of worship, political theory and a detailed code of
conduct, including even matters which the European would classify as hygiene
or etiquette. . . As
far as Islam is concerned, it is argued that the concept of din Man who is at once the vicegerent on earth
and servant of God has to play the role of a trustee, utilizing nature for
the benefit of humankind. Both these roles have to be lived simultaneously
and any neglect of either one would not enable man to function as his true
self. In fact as stated by Nasr (1990)9: There is no more dangerous creature on
earth than a khalifah (vicegerent) While
these views are shared by other religious teachings, they have huge
implications for ethical behavior. Motivation is
both extrinsic and intrinsic10. Man is at once endowed with
physical, intellectual and spiritual potentialities that must all be nurtured
and developed. This acceptance of the
spiritual aspect of man is of fundamental importance in the Islamic economic
vision (and in other religious traditions) and has far reaching implications
for the epistemology and methodology of Islamic economics and on human
welfare and needs. Nature
is not seen as something that must be “overcome” or “conquered” in man’s
pursuit for development in this world.
It is, rather, a bounty from God that must be utilized in the “best
way possible” for all. This “best way” could be interpreted differently by
different scholars at different times and places while still being within the
parameters set by the Islamic worldview and more specifically, the economic
vision. This view of vicegerency, shares many
commonalities with the Christian view of stewardship and even with some
social economics views discussed in the PAER. The primary aim of
life for humans as described by Islam is to achieve happiness or falah (ultimate
success). Man is urged to use the resources in this world to achieve success
not only in this world, but in the next world as well. In the
mould of Aristotelian ethics, one of the most prominent scholars in Islamic
scholarship, Al-Ghazali (d. 1111), mentions four
means to achieve this ultimate success: goods of the soul, goods of the body,
external goods and divine grace. Material pursuits (wealth) would be
considered external goods that are part of the provisions to achieve success
provided it does not contradict the other categories, especially the goods of
the soul (faith and good character or knowledge and right action). The
ethical imperatives of this requirement are again very profound. Justice is the observing of
moderation in all things. All virtuous qualities of the soul are thought to
stem from temperance and justice while selfishness/greed is not seen as a
virtue.11 Methodology of Economics: Is There Only
One Scientific Method? Topic
2 on methodology is probably the most difficult to teach as well as to
receive (on the part of students). In Malaysian universities, this may be due
to the type of secondary education system that focuses primarily on ‘exams’
and on the expectation that economics must deal with ‘practical matters’. (The
author welcomes feedback from participants on whether similar problems are
faced in other programmes and how they have been overcome.) First
and foremost, it must be stressed that in Islam, knowledge is possible and
that certainty, at the human level, is attainable. The central point of
departure of Islamic epistemology from that of post 17th century
Western Europe is in the prominence and centrality of revelation in the
pursuit of economic knowledge. It is
revelation that provides the foundation upon which the senses and intellect
function. Thus in Islamic epistemology
and I believe in other religious traditions, there is a higher authority than
the senses and human reason that provides the stable “vertical axis” (the
transcendent) to which the “horizontal axis” (efforts of humans) can refer to
as a point of reference. This paradigm of knowledge sees human reason aided
or rather guided, by revelation.
As stated by Al-Ghazali Islamic tradition accepts varying methods of scientific inquiry in
accordance with the nature of the subject in question and modes of
understanding that subject. Muslim scientists,
in their cultivation and development of the various sciences, have relied
upon every avenue of knowledge open to man, from ratiocination and
interpretation of sacred scriptures to observation and experimentation (Bakar, 1991: 15)12 Definitions, logical clarity and semantic analysis were some of the
early disciplines that developed from this religious based scientific spirit.
However, as stated by Bakar (1991), (logic) was used
extensively from the 11th century but did not lead to the kind of secular
rationalism experienced in the west during the enlightenment and
renaissance. Similarly, the empirical
studies employed by Muslim scholars did not lead to the kind of empiricism in
the west beginning with Roger Bacon.
This was because reason was always linked to revelation and sense
perception was never made the source and verification of all knowledge. Outlines of an Islamic
Economic Methodology
Methodology discusses the process of
building models, developing theories, testing hypotheses, as well as
establishing and using criteria to evaluate our process. It deals with theory
appraisal, with standards and benchmarks that determine the authority of our
‘scientific’ statements. Islamic economics or any other religious based
economics, just like any other disciplines of study requires proper
methodology to develop theories which then can be ‘verified’ or at least ‘not
falsified yet’, by practice. In Islamic economics
(religious based economics), we have the central position of revelation (the Quran or the other holy books) as the ultimate authority.
The challenge that is faced is how to use revelation, including reason and
observation to develop Islamic economics. The Quran
is not an economics textbook but it does provide guidelines and general
principles to guide human beings in their economic life. This entails a
process of ‘deriving’ the answers based on the sources and as agreed by all
scholars, most of the economic applications will have to be derived, and is
hence an intellectual effort. From an epistemological perspective,
Islamic economics was broadly defined as: an approach to
interpreting and solving man’s economic problems based on the values, norms,
laws and institutions found in, and derived from all sources of knowledge. These sources of knowledge include
revelation, reason and the universe (observation) and must be used
“appropriately.” Judging from the
writings of contemporary writers on Islamic economics, there is no
unanimously agreed upon formula as to
how the sources will be interpreted and followed, especially in all details. Very
little has been written in this area. Priorities differ among schools and
scholars, hence different economic views and policy prescriptions are
potentially possible. Both deduction
and induction are accepted methods of analysis in Islamic economics and this
has never posed a methodological problem for Muslim scholars in the past. In
this sense, pluralism has always been a part of Islamic scholarship. Model/Theory
Building In building models/theory, the stages
involved are as follows: 1.
Establishing
assumptions, relevant variables and their tentative relationship ·
understand
worldview ·
Establish
economic vision This stage may
happen ‘naturally’ as everyone has a worldview, even if they do not realize
they have one. Also in today’s world, most starting points are not from zero
but rather from past, accumulated work of previous scholars. In conventional
economics, many scholars also accept the fact that all economic analysis has
to start with a ‘vision’. The issue is what this vision is, its sources and
how it is formed. Revelation, being
a legitimate source of knowledge, will certainly be a source of this vision
and of modifying the vision. What revelation has to say about economic behavior and concepts including those related to man,
nature, man’s relationship to nature and other humans, as well as those
relating to consumption, production, distribution, finance etc. will form a
preliminary conceptual framework of Islamic economics. This framework will have to be
‘systematized’ into principles, postulates, hypotheses, precepts and
assumptions that will be investigated and validated or otherwise. As
mentioned earlier, pluralism is natural since the interpretation of
revelation and the systematization process can still vary within the
parameters set in Islamic scholarship. For example, the
prohibition of Works of past and
present scholars would be referred to and the economic vision adequately
modified. This stage is similar to how accumulated knowledge and ‘authority’
is dealt with in economics. Since no human being in infallible, all views of
past and present scholars are subject to critical evaluation. Since in the
last 400 years, Muslim scholars have generally not played a leading role in
developing economics/science, critical interaction with modern economics, with
the full spectrum of views from both orthodox and heterodox schools is
called for. Just as the post-autistic economics movement calls for a critical
view of standard economics, so too would Islamic economics. It would be
totally naive and unrealistic to believe that an Islamic perspective would
have a unique view on every matter and issue from the whole range of western
economics. Selective assimilation cannot be ruled out as a valid
ingredient in economic theory building in Islam. 2.
Establish
principles, laws, assumptions, hypothesis, models i.e. the tentative theory
(what should be: normative) This step is found also in
standard economic model/theory building. Based on the assumptions founded on
the Islamic economic vision and after the vision is revised and modified,
empirical studies would naturally constitute part of the process of
developing an acceptable body of economic thought. 3. Test hypothesis and models i.e.
empirical studies (what is: positive) ·
If
empirical tests verify (or do not falsify yet) the hypothesis, they are
accepted and if repeatedly observed, they become ultimately the building
blocs for theory. From an Islamic perspective, this step would also be
acceptable. ·
If
empirical tests do not support the hypothesis, all aspects of steps 1-2
including the technical aspects of the survey etc, are rechecked. This would
also be acceptable in Islamic economics. There would be a need to ensure that
our assumptions, variables and their ‘intuitive’ relationships correctly
reflect the economic vision. Since there should not be a contradiction
between the position of revelation and that of sense-observation, this
double-checking would be very important. If this review manages to solve the
divergence, then the problem is solved. ·
If
after this review, there is still a divergence between the tentative theory
and the practice observed, conventional economics moves to change theory to
suit practice since ‘practice determines theory’. For religious based
economics’, sense experience does not provide the absolute proof for
“truth.” In Islamic methodology, facts
must be distinguished from truth. While “proofs” from sense experience have
certain authority, in Islamic epistemology, secondary sources cannot escape
the criteria and proofs from revelation.
‘Reality’ will include revelation. If ‘correct’ interpretation of
“revelation” is established, i.e. the economic vision is correct (something
that is prone to debate and difference of opinion), it could be equally possible
that it should be what undergoes change (via policy).
Section 2: Can There Be A Religious Based
Economics? From the preceding paragraphs,
an affirmative answer has been put forward giving Islamic economics as a case
study. Many may not agree with this and see it as unacceptable primarily from
ontological and epistemological perspectives. This is very much due to the
western European experience from which sciences that we know today have been
developed and classified. The same may not be true in many parts of Latin
America, Asia and Africa where religion is still a very important determinant
of not only individual life but social/public life as well. If the 17th
century witnessed the advent of the secularization process, the last quarter
of the 20th century has seen events that have been termed the ‘unsecularization of the world’14. Even as far
as the ‘Western’ world is concerned, the World Values Survey has shown the
USA as not following strictly to the expected modernization/secularization
model of development. Therefore, trying to propose a
religious-based economics as part of an alternative economics movement like
the AHE needs more discussion/debate between
economists and religious scholars. Some efforts in the past have been attempted.
Brennan/Waterman (1994)15 report of a meeting between liberation
theologians and economists with a few of the latter group known to have
religious beliefs. They report that the meeting was one of ‘no engagement’
where members of the two groups were almost talking on ‘different
wavelengths’. They conclude that ‘a useful distinction between economics and
religion is possible- and indeed necessary, since economics was ‘freed from
religion’ and had its own ‘rules’ since as far back as the late 19th Century16.
In the second volume of the series, Dean/Waterman (1999)17 also
viewed economics as ‘autonomous’ with regard to theology and saw it as futile
to talk of a ‘Christian’, ‘Islamic’ or ‘Atheist’ economics. However, by no means was there
unanimity in this view. Some like Dow18 argued that since
economics dealt with human beings and human behavior,
religion had a role to play in understanding the subject concerned. In fact,
looking through the PAER and other alternative
economics literature, many proponents of social economics (formerly described
as Catholic economic thought by some) see the possibility of a religious
based economics, albeit cautiously. Based on the overall evaluation of the
limited references on the relationship between economics and religion (at
least as far as the West is concerned), there seems to be a preference to
maintain separation. Rather, it seems to be easier to talk of ‘ethical
economics’ rather than religious based economics in the West. Many, like
Charles Wilber19, state that since economists and economic actors
have values and social institutions and society in general add ethical
dimensions to supplement economic evaluations in society, ethics has to be
part of economics.
This is certainly a possible way of finding common ground since
proponents of religious based economics would cite religion as the source of
ethics. Earlier writers like Sen (1987) have also
pointed out that while economics had two ‘origins’ i.e. ethics and
‘engineering’ (meaning the technical side), it has been the latter that has
dominated. He argues, like many in the PAER that
economics has become impoverished due to this distance between ethics and
economics. Sen suggests that economics can actually
be ‘more productive’ by paying greater and more explicit attention to the
ethical considerations that shape human behaviour and judgement.
In relation to the numerous petitions of students and academics
calling for ‘reform’ in economics education, all call for pluralism. Could
this pluralism include a religious based economics?
Looking through the PAER, there seems to be
divided opinions on the matter. Most proponents of alternative economics
would agree with King (PAER, Issue no. 23) that
there is not one, single and correct alternative to neoclassical economics.
Many reasons are put forward. Human beings are complex, economics is complex,
economic theories are time-specific or context based etc. However, it can
also be agreed as stated by Hodgson (quoted in King, PAER
issue no. 23) that being a proponent of pluralism does not mean support for
‘unqualified relativism’ and logical incoherence. There is indeed a need to
ensure ‘logic, coherence and consistency’ in arguments.20 Dow’s
categorization of modified pluralism (King, PAER
issue no. 23) is probably a good basis on which to proceed with our discourse
on a religious based economics. Worldview and theory of
knowledge cannot be eradicated; yet recognition of differences at this level
allows for reasoned debate over appraisal criteria and analysis of different
methodologies (Dow, 1996: 45-46).
It would seem, at least in the western experience, that economics and
theology/religion, speak different languages, have different goals and have
different criteria to judge outcomes (Dean/Waterman, 1999). These differences
can be acknowledged as indeed has been clear from much of the literature.
However, for there to be any ‘reasoned debate’ by proponents of the two sides
as proposed by Dow, there is a ‘need to have some common ground for
differences’ (Brennan/Waterman, 1994, p.4). This may be a more difficult area
to get agreement as seen by the views expressed in the two volumes mentioned
earlier. This point is expressed in a different context by Davidson (PAER, Issue no. 24) who argues that there must be ‘one’
benchmark (Keynesian economics according to him) that acts as the foundation
of all other alternative models.
The present writer does not see the problem of religious based
economics being argued ‘rationally’. However, the criteria to judge this
rationality may pose a problem for Davidson and others who have certain set
views on this. The view that somehow a religious based economics (and its
theories of human behavior) would be able to claim
absolute authority is rejected in our view since theories are also a product of
the human intellect as they have to undergo a process of theory/model
building. Many of the natural constraints quoted by proponents of alternative
economics would also be valid for religious based economics. As stated very
clearly in Section 1 of the paper, Islamic economics can and has been
presented as a ‘spectrum’ rather than a monolithic body of knowledge.21
Finally, proponents of alternative economics have consistently argued
that neoclassical economics is all about a mythical creature called rational
economic man. Numerous articles in the PAER have
taken to task neoclassical economics for being oblivious to reality, i.e. to
the practice of economics and to more ‘holistic’ explanations of human
behaviour. If we accept this call to look at reality, to see economic
behaviour and the way people in different societies perceive economic life
and explain the factors that effect economic decision making, then certainly
there is a case to accept the possibility of a religious based economics.
In many parts of Asia and Africa, religion is still seen as an
important part of individual and social life of communities. This is
certainly true for Muslim countries as diverse and pluralistic as Malaysia
and Indonesia in Southeast Asia as well in the more central regions of the
Muslim world. As stated by Stauth (1998)22,
Islam seems to have entered a new position of ‘relative centrality’ that has
become the motor of an ‘Islamic’ modernity. Alternative economics proponents
must be aware of this fact. Conclusion
This paper has attempted to put forward a
case for religious based economics as part of the call for pluralism in the
teaching and development of alternative economics. In many parts of the
world, religion is still an important part of public life. Trying to
understand and explain human economic behavior then
must take into consideration this fact. While it is accepted that the
economics that we inherit today is an economics that has been molded on the experiences of mainly Western European
society, the vast spectrum of views found in economics can certainly be open
to the possibility of a religious based economics. If the economics
discipline, inclusive of all its diverse schools of thought, can break free
from the constraints of seeing economics as a product of the ‘European
project of modernity’ and if the proponents of pluralism can connect to the
various alternative responses to the
‘universality of western knowledge’ thesis, heterodox economics could
certainly accommodate a religious based economics. Referring to religion does
not have to be seen as ‘irrational’ or backward. While we in no way are
supporters of an unlimited ‘anything goes’ view, it must be equally
unacceptable to insist that only certain views are within the ambit of
‘economics’, while more than two thirds of humanity may have a ‘religious’
orientation and want to see this orientation in their way of understanding
and practicing economics. While we hope that this paper has tried to show
that there can be a religious based economics, whether or not there should
be a religious based economics is another, potentially more sensitive
question that I leave to another occasion Notes 1 While students are exposed to some ‘Islamic perspective’ in
these two courses, it is very minimal as the emphasis is to provide the
standard textbook economics to students. Any comparison and critique is
provided in FIE, another course called Issues in Islamic Economics and to a
lesser extent in the Intermediate courses in Microeconomics and Macroeconomics. 2 Kuran,
Timur, Islam
and Mammon, Princeton University Press, 2004. 3 Schumpeter, J.A., History of
Economic Analysis, 1961 Edition, London: George Allen and Unwin, 1954. 4 Heilbroner,
Robert, Behind the Veil of Economics,
Ontario: W.W. Norton and Company, 1988. 5 Mill, John Stuart, Essays on Some Unsettled Questions of
Political Economy, 1948 Edition, London: London School of Economics and
Political Science, 1836. 6 See Mircea Elliade, Encyclopedia of
Religions, Vol. 12, 1987. 7 Watt, William
Montgomery, What is Islam? (2nd
Edition), London: Longman, 1979. 8 See Mohamed Aslam Haneef, ‘Islam, Its
Worldview and Islamic Economics’, IIUM Journal of
Economics and Management, Volume 5 No.1, 1997. 9 Nasr, Seyyed Hossein, ‘Islam and the
Environmental Crisis’, MAAS Journal of
Islamic Science, No. 2, 1990. 10 See Goodwin, Neva/Nelson, Julie A./Ackerman,
Frank/Weisskopf, Thomas, ‘A Post Autistic
Introduction to Economic Behavior’, post-autistic
economics review, Issue no. 28. 11 There is an important
distinction to be drawn between self-interest as defined by Adam Smith and
selfishness that seems to be used synonymously today. The former may be
considered a virtue. See Lux, Kenneth, Adam’s Smith’s Mistake- How a Moral
Philosopher Invented Economics and Ended Morality, Boston: Shambala Publications, 1990. 12 Bakar, Osman, Tawhid and Science,
Kuala Lumpur: Secretariat for Islamic Philosophy and Science/Nurin Enterprise, 1991. This view is also shared by some
western scholars with their view of ‘adequatio’,
i.e. different levels of being/knowledge require different modes or channels
of knowing. See for example Maritain, J., The Degrees of Knowledge, London: G.Bles/The Centenary Press, 1937 and Schumacher, E.F., A Guide for
the Perplexed, London: Jonathan Cape Ltd., 1977. 13 While the first
interpretation would call for the abolition of interest rates as a
fundamental requirement in an Islamic economic system, the second and third
may neither consider it fully necessary, and definitely not sufficient, and
would also require some form of structural reforms such as those involving
land reforms and redistribution. While
the first group may not disagree on structural reforms, they do not see it as
proceeding from the verses on the prohibition of riba. 14 Quote from Weigel in Huntingdon, Samuel, ‘Clash of Civilizations’, Foreign Affairs, no. 72, 1993. Also
scholars like Peter Berger discuss this phenomena. 15 Brennan, H.Geoffrey/Waterman, A.M.C.
(eds.), Economics and Religion: Are
They Distinct?, AH Dordrecht: Kluwer Academic Publishers, 1994. 16 This liberation is
even seen by some to go back to Adam Smith. For example Minowitz,
Peter (1993), Profits, Priests and
Princes- Adam Smith’s Emancipation of Economics from Politics and Religion,
Stanford University Press. 17 Dean, James M./Waterman,
A.M.C. (eds), Religion and Economics: Normative Social
Theory, AH Dordrecht, Kluwer
Academic Publishers, 1999. 18 See
Brennan/Waterman above. 19 PAER,
Issue no. 21. 20 See for example
Cole, Ken/Cameron, John and Edwards, Chris, Why Economists Disagree: The Political Economy of Economics (2nd
Edition), London: Longman, 1991. 21 See Mohamed Aslam Haneef, Contemporary Islamic Economic Thought: A
Selective Comparative Analysis, Kuala Lumpur: Iqrak/S.A
Majeed Publishers, 1995. 22 Stauth,
Georg (Ed.), Islam-Motoror
Challenge of Modernity, New Jersey: Transaction Publishers, Rutgers
University, 1998, pp. 8-9. Author contact: mdaslam@iiu.edu.my or matagbak@yahoo.com ___________________________ SUGGESTED
CITATION: |
is din
and does
not limit itself to the personal rituals and faith/dogma as usually
understood by the term religion.
who no
longer considers himself to be an 
,
“prudence alone does not guarantee restraint and moderation and requires the
aid of revelation.” This proposition is at present considered “unscientific”
in neoclassical economics. 
