A Note on Islamic Economics by Abbas Mirakhor

Top 20 FREQUENT WORDS

economics 253 islamic 194 economic 167 behavior 59 islam 58 muslim 56 rules 53 vol 45 institutions 40 professor 36 theory 36 hermeneutics 33 justice 32 understanding 32 development 31 quran 30 scholars 29 social 29 individual 28 university 28

DOCUMENT KEY POINTS

• this a hibernation as doctor chapra calls it occurred after singular achievements in all areas of thought by muslim scholars and dynamic economic growth of muslim societies and after the contributions discoveries and intermediation of islamic sciences helped kick off the development and growth in western societies and economies
• these efforts are directed toward the development of a coherent and rigorous explanation of how islam proposes to organize an economic system by answering the fundamental questions of what should be produced how and for whom how decisions should be made and by whom and i nally how islamic institutions could be revived to address modern societies proble miss

• the need to tap deeply into the legacy of the wealth of information in islamic sourcesa the quran sunnah scholarly writings i qh ethics philosophy history of muslim societies and history of thoughta for the development of islamic economics calls for patience with the pace of progress of the discipline

• d at the present the most important function of islamic economics as a discipline is to develop a language with enough precision that can lead to a consensus among researchers regarding the meaning and function of terms ideas rules and nor miss given the large number of terms and concepts needed for proper analysis in the i eld this may seem to be a daunting challenge
• b dei ning an economic system as a collection of institutions dealing with production exchange distribution and redistribution and dei ning institutions a la north as rules and norms islam proposes a distinct economic system that differs in many important respects from those recommended by other schools of thoughts regarding how an economy is to be organized

• such a a paradigm in doctor siddiqi s conception also shared by other scholars is specii ed in its juxtaposition to another a paradigm which contains a three features a it is focused on the individual society or community and appears as a mere aggregate having no independent signii cance b the individual is motivated by self interest and focused on private gain and c maximization is the norm in this individual s pursuit of proi t in enterprise satisfaction in consumption page

• in this effort it is critical that the words of professor ali khan are heeded that in the phrase islamic economics one cannot give meaning to the noun without understanding the adjective and that such understanding can never be i nal and complete for any generation of scholars
• this could not and should not be interpreted that there are no immutable propositions principles rules and norms in islam relating to economic behavior but that any generation s understanding of them should not be assumed i nal

• man knows the presence and force of these rules and the ethical values from the revelationa either directly from the quran or indirectly from the actions and sayings of the behavior that represented the most perfect implementation of the rules of the quran that of the messenger a sh dbgh a y g a a u
• a note on islamic economics effort the present generation will need to clearly position its understanding of islam as it pertains to the economic in its substantive meaning behavior as well as on the applicability of formal economics and its methods as they relate to that understanding

• new institutional economicsa particularly as it is being extended to understanding ideologya seems to hold promises of fruitful investigation for islamic economics since islam is rules based and the new institutional economics dei nes institutions in terms of rules and nor miss research work in this area could be extended to understand islamic economic institutions and to analyze the extent or even existence of these institutions and their operation at the present in muslim societies

• it is therefore the right of those interested in the development of islamic economics to borrow any useful ideas in this regard just as it was the practice of the european scholars in the middle ages to borrow from musli miss second moral philosophy gave birth to political economy out of which grew the present discipline of economics
• further in depth research in this area is important for a variety of reasons i rst it would show that ideas developed anywhere belong to humanity as a whole and that borrowing of the results of investigations of one segment of humanity from another is a normal course of evolution of ideas

• given the broad based philosophical views of adam smith and in particular the depth of thinking in the theory of moral sentiments the economic man with pure seli shness as his mover seems too narrow and too one dimensional to correspond to the understanding of the ethical and moral concerns of adam smith which are so apparent in his writings and lectures
• assuming merchants observe all the rules of market behavior would there be any prohibition on the proi t motive while a muslim merchant may have other motives there is no evidencea from the sacred sources the economic history of medina during the lifetime of the messenger a sh dbgh a y g a a u or the writings

• investigation in this area ties well with another i eld of research that can also prove a fertile ground for contribution to the development of islamic economics hermeneutics a systematic rigorous and analytic economic interpretation of sources of islam the quran the sunnah of the messenger a sh dbgh a y g a a u the economic history of early islam and the writings of scholars and fuqah
• even though the fundamental theorems of the neoclassical economics allowed a limited role for the government to correct market failure it is by and large the price system that rules the market economy

• for example it is possible to argue that the notion of self interest is an essential islamic behavioral postulate provided account is taken of the fact of an ini nite planning horizon for the individual and the collectivity in concordance with the islamic belief in the hereafter ionb g
• economic hermeneutics of the quran s concept of the nafs the explanations provided by the ahadeeth of the messenger a y g a a u a sh dbgh and the writings of muslim scholars on this subject could be immensely valuable here

• application of economic hermeneutics investigation of the of islamic sources on important concepts such as covenant contract trust commitment iman taqwa and other essential notions seems to be an imperative for a clear and rigorous articulation of islam s views on economics the economy i nance market structure poverty and economic development and growth
• similarly extracting economic meaning as to what the sources consider important conditions for economic development and growth as well as the institutions that must exist in the society for these conditions to be met would seem crucial to formulating policy recommendations based on economic analysis

• investigation into the historical evolution of markets in muslim societies beginning with the i rst market established by the messenger a sh dbgh a y g a a u in medina could yield valuable insights into their operations in terms of observance of the rules of shari ah instruments of supervision and regulation of these markets and the role of the prices and the equilibrium process

• the economic hermeneutics of dimensions and meaning of these terms particularly as used in the quran and ahadeeth of the messenger a sh dcgh a y g a a u in the writings of scholars and philosophers would seem indispensable to building rigorous foundation of islamic economic analyses if indeed achieving justice is the major objective of an islamic economy
• based on the already available literature conception of justice plays a major role in the initial allocation of resources production exchange market distribution and redistribution

• in this note while the economic history of muslim societies and thoughts has been emphasized as a major source of ideas special attention has also been directed at developing a proper a language of discourse in islamic economics with the hope of emergence of a consensus based analytic and operational dei nitions and descriptions of major concepts that scholars would need to further rei ne ideas and generate new insights
• whether islamic economics is considered to be an entirely different discipline from what goes as traditional economicsa a position justii ed by its world view its view of rationality its view on man s nature its emphasis on the need for correspondence between behavior and the prescribed rules as well as its other specii c dimensionsa or as a special subi eld within that discipline it has made considerable progress since its revival a little over three decades ago

• for this reason a plea is made for the development of a coherent comprehensive and systematic economic hermeneutics as a foundational structure that would support research dialogue and debate in islamic economics as well as in building the future edii ce of theoretical empirical and policy structure of this discipline
• the momentum of these efforts would be much accelerated if i nancial resources similar to those provided to investigations in traditional economics by major foundations could be mobilized in muslim societies to support such activities

• is the book s analysis of the source of problemsa poor governance lack of politically representative governments unjust taxation debasing the currency inefi ciencies as well as other social economic and political inequitiesa an evidence for drawing an anti western inference is the book s criticism of economics any less objective analytical or more strident than much of the writings of western economists themselves and can any honest scholar reject islamic economics as fraud by ignoring centuries of economic progress of muslim societies before the advent of modern economics as shaheed m

• whereas the former looks at various dimensions and concepts of justice as a systemic phenomena ie allocations exchange market distribution system the latter considers them to be i rst and foremost as part and parcel of individual s adherence to and implementation of the a rights of others
• it is interesting to note that in all these approaches justice is considered as a part of morality in contrast to islamic thought that considers to act morally in accordance with the rules prescribed by the law giver is to be just

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DOCUMENT WORD ANALYSIS

Main Category

AlHuda Material\islamic economics

KeyWords

econometric islam social individual behavior choice liabilities theories muslim institut transact sharia�h risk rulebased asset convential journal concept societies developed

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DOCUMENT REFERENCES

Number of Pages

56

Published Date

2007-05-02 15:10:51

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