What is Islamic Economics? A paper by Hafas Furqani “Defining Islamic Economics: Scholars’ Approach, Clarifying The Nature, Scope and Subject-Matter of The Discipline” lists more than 21 definitions, citing in addition several authors who state that there is no need for such a definition. Why is there such a variety of definitions, and what can be done to arrive at consensus regarding this matter? The problem is deeper and more complex than it appears on the surface. We list two major obstacles in the path of its solution:
An Islamic Worldview
Defining Islamic Economics
Asad Zaman | Vice Chancellor, Pakistan Institute of Development Economics and former Director General, International Institute of Islamic Economics, International Islamic University Islamabad
Regarding Western economics, in which he is rigorously trained, Asad Zaman is probably closest to Institutionalism and Post Keynesianism, even though he is an econometrician and statistician. He has recently been writing on Islamic economics, as well as on economic pedagogy.
See also
The US Catholic bishops advocate an economics integrated with social democracy and "natural law" as the basis of human rights, human behavior, and human interaction.
Defining Islamic Economics
Asad Zaman | Vice Chancellor, Pakistan Institute of Development Economics and former Director General, International Institute of Islamic Economics, International Islamic University Islamabad
Regarding Western economics, in which he is rigorously trained, Asad Zaman is probably closest to Institutionalism and Post Keynesianism, even though he is an econometrician and statistician. He has recently been writing on Islamic economics, as well as on economic pedagogy.
Asad Zaman (born 1953) is a Pakistani Professor, Economist and social scientist. He is currently Vice Chancellor of the Pakistan Institute of Development Economics, Islamabad.[1] Previously he was Director General of International Institute of Islamic Economics, International Islamic University, Islamabad. He earned his PhD in Economics from Stanford University in 1978, MS Statistics from Stanford University in 1976 and BS in Mathematics from MIT in 1974. He is also a member of Monetary Policy Committee of State Bank of Pakistan and Editor of International Econometric Review.[2] He has been appointed as member of Economic Advisory Council formulated by Imran Khan, the Prime Minister of Pakistan.
Zaman finished high school in Karachi, Pakistan in 1971, and moved to MIT, Boston for higher Education. He finished his BS in Math in 1974. He finished his Ph.D. in Economics from Stanford University in another three years from 1974 to 1977, picking up a Masters in Statistics along the way. He was unique in taking first year graduate sequences at Economics, Mathematics, and Statistics simultaneously. This was because he planned a doctorate in Econometrics, which required knowledge of all three fields.[citation needed]
Zaman did a post-Doctoral year at the Center for Operations Research and Econometrics (CORE), at the Universite Catholique de Louvain, Louvain-la-Neuve, Belgium from 1977 to 78. — Wikipedia.
See also
The US Catholic bishops advocate an economics integrated with social democracy and "natural law" as the basis of human rights, human behavior, and human interaction.
We urge Catholics to use the following ethical framework for economic life as principles for reflection, criteria for judgment and directions for action. These principles are drawn directly from Catholic teaching on economic life.
1. The economy exists for the person, not the person for the economy.
2. All economic life should be shaped by moral principles. Economic choices and institutions must be judged by how they protect or undermine the life and dignity of the human person, support the family and serve the common good.
3. A fundamental moral measure of any economy is how the poor and vulnerable are faring.
4. All people have a right to life and to secure the basic necessities of life (e.g., food, clothing, shelter, education, health care, safe environment, economic security.)
5. All people have the right to economic initiative, to productive work, to just wages and benefits, to decent working conditions as well as to organize and join unions or other associations.
6. All people, to the extent they are able, have a corresponding duty to work, a responsibility to provide the needs of their families and an obligation to contribute to the broader society.
7. In economic life, free markets have both clear advantages and limits; government has essential responsibilities and limitations; voluntary groups have irreplaceable roles, but cannot substitute for the proper working of the market and the just policies of the state.
8. Society has a moral obligation, including governmental action where necessary, to assure opportunity, meet basic human needs, and pursue justice in economic life.
9. Workers, owners, managers, stockholders and consumers are moral agents in economic life. By our choices, initiative, creativity and investment, we enhance or diminish economic opportunity, community life and social justice.
10. The global economy has moral dimensions and human consequences. Decisions on investment, trade, aid and development should protect human life and promote human rights, especially for those most in need wherever they might live on this globe.
United States Conference of Catholic Bishops
Catholic Framework for Economic Life
Catholic Framework for Economic Life
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4 comments:
Having read a large amount about banking and written a lot about it, I'm always struck by the absence of any references in the literature to Islamic banking.
Obviously if you Google "Islamic banking" you'll fund stuff on it. But otherwise you'll hardly ever see it mentioned.
Right, Ralph. Asad Zaman has written quite a bit about it. Search on "Asad Zaman Islamic banking finance."
Islamic banking and finance are key in Islamic economics since interest on debt is haram (forbidden). This is mentioned in the post, along with zakat (obligatory charity) as a substitute for interest.
Links on Asad Zaman’s ‘Defining Islamic Economics’
There is NO such thing as Islamic, Christian, Buddhist, etcetera economics. Economics is a science and therefore fundamentally different from religious beliefs/political ideologies. Science deals with knowledge. Non-scientists know NOTHING. Political/religious economists are NOT scientists but stupid/corrupt storytellers.
“There are always many different opinions and conventions concerning any one problem or subject-matter (such as the gods). This shows that they are not all true. For if they conflict, then at best only one of them can be true. Thus it appears that Parmenides ... was the first to distinguish clearly between truth or reality on the one hand, and convention or conventional opinion (hearsay, plausible myth) on the other ...” (Popper)
To this day, economics is NOT a science but political/religious agenda pushing in a scientific/social bluff package.
For details see:
The Supreme Being handed over these Twelve Economics Commandments
https://axecorg.blogspot.com/2018/03/the-supreme-being-handed-over-these.html
If religion is opium of the people, economics is crack of the people
https://axecorg.blogspot.com/2019/01/if-religion-is-opium-of-people.html
Economics is not science, not religion, but proto-scientific garbage
http://axecorg.blogspot.com/2017/07/economics-is-not-science-not-religion.html
Confounding Is and Ought: the economist as moralist
https://axecorg.blogspot.com/2015/09/confounding-is-and-ought-economist-as.html
Beware of the moralizing economist
https://axecorg.blogspot.com/2018/06/beware-of-moralizing-economist.html
Knowledge vs. Belief
https://axecorg.blogspot.com/2015/07/knowledge-vs-belief.html
What is so great about cargo cult science? or, How economists learned to stop worrying about failure
https://axecorg.blogspot.com/2017/05/what-is-so-great-about-cargo-cult.html
Fake religion, fake science, fake news, and false complaints
https://axecorg.blogspot.com/2018/11/fake-religion-fake-science-fake-news.html
Scientists and science actors
https://axecorg.blogspot.com/2016/09/scientists-and-science-actors.html
Throw them out! Orthodox and heterodox economists are unfit for science
http://axecorg.blogspot.com/2017/12/throw-them-out-orthodox-and-heterodox.html
Egmont Kakarot-Handtke
Asad probably should have used the term 'Islamic Finance' as opposed to 'Islamic Economics'.
In an email conversation I had with an economist from Iran, he explained to me usury as follows:
If two neighbours grow tomatoes, and neighbour 1 loses his whole crop to some freak event, he proceeds to ask his neighbour for both some tomatoes (for food) and seeds to start a new crop.
The neighbour who obliges, would be guilty of usury if he does any of the following:
1. He only gives the tomatoes subject to conditions (such as he must pay him back the tomatoes)
2. He lends the seeds at a pre-determined interest rate, such as 10% or whatever.
3. He liens up the neighbours property in case of default.
4. He sues in court if the neighbour breaches the 10% condition.
He is NOT guilty of usury if he:
1. Gives the tomatoes out of compassion and asks nothing in return
2. Lends the seeds under a profit share arrangement whereby he agrees to a certain % of whatever the crop may produce, and if the crop fails he accepts the loss - he does NOT lien or sue, but rather helps work with the borrower including with any education or techniques etc to help insure the crop has more chance of success.
The key differences between these two arrangements, is that in the first arrangement, the contract is legally binding and the lender leaves everything to the borrower to do, because he has pre-determined his profit margin and insured himself against loss - he has thus committed usury.
In the second arrangement, he does not insure himself by the use of contract and lien on property, nor with threat of suing in court, but insures himself by taking it upon himself to help the borrower. This is how not to commit usury.
Now because we have used tomatoes and seeds, we have illustrated the key differences between west and east ideologies using something that is organic and capable in nature to self-reproduce. As far as 'money' is concerned however, this is not possible.
As the Iranian economist explained to me, all money is created based on a pre-determined interest rate. Hence, even if an Islamic financier was to lend money on a profit share arrangement as explained above (such as a business venture), the fact that the money lent was created under usury, the net effect is that the arrangement is still committing usury.
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