1 Masudul Alam Choudhury,Islamic Econ and Fin

2006

2007

Islamic finance, which emerged as part of Islamic economics thinking, has gained roots in the global financial system in recent years. In this novel and alternative financing method, Shari'ah compliance, as a mandatory aspect in terms of legal and mechanical terms, is essential and important. It is also important in a consequential manner that Islamic financing must fulfil the foundational principles and aspirations of Islamic economics. In this particular point, recent developments indicate that Islamic finance is moving in a 'capitalist' direction away from an Islamic economic value system. Therefore, the essentialisation of an Islamic economic system is necessary to asses whether Islamic finance is merely an alternative mode of capitalist production or a unique and egalitarian alternative economic order, which aims to be a 'moral economy', as coined by Tripp [2006]. This paper, thus, is an attempt to discuss the systemic nature of Islamic economics, in which it argues that the modern variant of Islamic economics is a development that began in the 1970s with an alternative system understanding to the existing capitalist modes of production. In this new discourse, Islamic economics held that the capitalist economic order was responsible for the failure of economic development and environmental issues in developing countries. Therefore, it claimed to be an alternative economic system, that, also, owed its development to the emergence of identity politics in the 1970s. With the rapid development of Islamic finance, research focusing on the foundational base, namely Islamic economics, has been largely ignored. However, without establishing the foundational norms, which is the ethical system of this new paradigm, it is not possible to have a robust financial system, as in Islamic finance. This paper, therefore, explores the original wisdom in revealing the systemic and alternative system discourse of Islamic economics regardless whether such a system is a possible or not. 2. Islamic Economics as a System Before delving into discussion on the systemic nature of Islamic economics, it is important to define what a 'system' is. A 'system' is defined as the "functional components that together make certain sectors of the ethico-economic order work" [Choudhury and Malik 1992: 15], which, therefore, refers to an integrated whole as part of an order. Islam, in this respect, represents the overall order, and within that larger framework Islamic economics, as well as other systems related to everyday day life, is possible. "An 'order' is thus a totality of several systems integrated together through the bond of ethical relationships" [Choudhury and Malik 1992: 15]. Various systems, therefore, in the Islamic order are linked through the ethical propositions of Islam. Consequently,

2016

Islamic economics has of late landed in confusion and neglect and much concern is being voiced on this state of affairs. The divergence of views on various aspects of the subject tends to grow, cohesive efforts are missing. It is in this context that the present paper takes a look at the nature and significance of Islamic economics and examines the issues of its definition, nature and scope, the questions of methods and methodology, system approach, the problems that seems to hinder its growth, the challenges Islamic economics faces today and how the same can be faced. Since the differences between the Islamic and mainstream economic disciplines stem from the divergent worldviews that condition them, the discussion opens on the topic as background material. This paper is a part of draft Chapter of a book under preparation on Islamic economics and finance. Comments and suggestions are welcome but the paper or its parts cannot be put to any commercial or unfair use.

journal of king Abdulaziz University Islamic Economics

This paper provides fresh deliberations on the method and substance of Islamic economics by relying on the structure and contents of Nienhaus (2013). Introspective arguments are furnished to soundly argue that Islamic economics is still a widely disregarded field; it is an integrated science; its normative dimension is not a deterrent element; ‘Islamic economics light’ studies are one inseparable part of the discipline; and Islamic economics is a political economy. On the aforementioned issues, we essentially make further elaborations on our Islamic economics definition, ‘Qur’ānic framework’, Islamic epistemology and Islamic criteria originating from our paper Mahyudi and Abdul Aziz (2017). The elaborations are extended to expound on their positive impact to the ‘Islamization of Knowledge’ agenda. We also utilize Bakar (2016) to reduce the observed tension between Sharīʿah scholars and Islamic economists that is triggered by issues surrounding legal form and economic reasoning of Is...

Intellectual Discourse, 2016

This study sheds light on the philosophical underpinnings of Islamic economics, especially its version of a social and moral economic system. The prospect of value-laden economics, the gap between the theory and practice of the Islamic economic system, and an epistemological exposition on the observed gap are discussed. On the first aspect, the study indicates that the future for Islamic economics as one alternative of a value-based approach is indeed promising with the ongoing replacement of Robbin’s fact/value dichotomy with Putnam’s entanglement of fact and value notion. Interestingly, the widely reported gap, in the form of non-achievement of social goals, has led the study to identify a serious flaw in the micro-foundational aspect of Islamic economics; one that has not been noticed before. A more holistic reading of the Qur’ān could solve this micro-foundation issue. Therefore, the study calls for a fresh epistemological approach in Islamic economics methodology that could set...

Journal of Critical Realism in Socio-Economics, 2023

All science is mirroring a Weltansicht, or worldview-that is, a comprehensive framework through which individuals or cultures interpret and understand the world around them. Worldviews not only provide a broader context for interpreting the data, but also influence research directions, methodological preferences, and final conclusions. Economics is no exception to this phenomenon. This modest essay aims to open up the epistemological foundations of modern economics to closer scrutiny with a view to pinpointing the tacit assumptions, cultural or other biases, and preconceived notions operating beneath the surface of economic theories, models, methods, and approaches. In addition, this essay also explores the controversial idea of Islamic economics which its exponents say recognizes the interdependence between economic outcomes and ethical choices, and take into account the importance of aligning economic activities with universally accepted human values.

2013

The paper aims at explaining the need for a starting point for developing an Islamic theory of economics. The paper emphasizes that what is needed is not a 'theory of Islamic economics' but an 'Islamic theory of economics'. It is not merely semantics. The paper explains what difference it makes in theorizing Islamic economics. The point emphasized in the paper is that it is the lack of strategic vision that is responsible for not reaching where we want to be. The paper describes various positions of Islamic economists and suggests that it is time we select one of them as the destination. The paper then goes into identifying a more realistic framework which can provide a basis for deriving principles of Islamic economic analysis. The paper suggests divorcing the framework derived from mathematics and physics (not linked to human social behavior in any aspect) and marrying it with biology and physiology -sciences dealing with study of life (unlike physics that studies life-less bodies). The paper discusses what difference it would make to use the framework borrowed from biology and physiology in analyzing human economic behavior.

iefpedia.com

After decades of its birth, Islamic economics has undoubtedly gaining its strength. However, it could not be regarded as yet, inevitably, as being a zero-defect discipline. Although the debate on Islamic economics seems to be almost rather settled, but a revisit to it is still indispensable. This is exactly what this paper intends to do. It attempts to revisit the mainstream Islamic economics and explore two unresolved concerns that are observed to have prevailed in it, so as efforts to overcome them could entail with a more proper development of the discipline. The two unresolved concerns are the untransformed structure of and the remaining of the conventional economics assumptions within the Islamic economics itself. This effort comes with awareness that these two unresolved concerns are not the only unresolved concerns still lingering around the Islamic economics. There are at least five more, viz. an absence of the redefinition of operating concepts, inaccurate ultimate aim, pseudo-Islamic operational mechanisms, erroneous research methodology, and knowledgepractice dichotomy of the Islamic economists themselves. However, due to space limitation, these five unresolved concerns will have to be dealt with elsewhere. The concentration of this paper therefore would only be on the untransformed structure and the remaining of the conventional economics assumptions of the mainstream Islamic economics.

Islamic economics is not a social science yet. It is a work in progress. Islamic economists differ on methodology for developing Islamic economic thought into a social science. They face several dilemmas surrounding religion, Islamic law, conventional economics, contents of Islamic economics, current practice of Islamic finance and zakah 3 , etc. Until fog clears around these dilemmas the objective of developing Islamic economics as a social science will remain unaccomplished. The paper discusses 11 dilemmas and suggests possible way forward. It aims at providing a platform for discussing and developing the Islamic economic thought into a social science.

This article critically analyzes the fundamental theories of Islamic economics and conventional economics, specifically focusing on the well-known theory of “infinite human demand, limited resources” within the context of Islamic thought. It explores how this theory, central to classical economic frameworks, is proven incorrect in light of Islamic economics, which posits that human needs are limited and resources are abundant when utilized ethically and sustainably. Through this examination, the article highlights the key differences between these two economic models, showing that Islamic economics provides a more holistic, ethical and balanced approach to managing economic activity, in contrast to the individualistic growth-driven nature of conventional economics. Additionally, it delves into the foundational aspects of Islamic economics such as the prohibition of interest (ribā), the institution of zakāt and the emphasis on charity, which underscore its commitment to justice, equity and social welfare.