Asad Zaman — Defining Islamic Economics

More on pluralism in economics. Traditionalism has something to say to liberalism about both substance and process.

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.

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

Related

Economic Justice for All: Pastoral Letter on Catholic Social Teaching and the U.S. EconomyUnited States Catholic Bishops, 1986

Michael Roberts — Pluralism in economics: mainstream, heterodox and Marxist

So it was great that I had been invited to present the case for the contribution of Marxist economics, along with Carolina Alves, the Joan Robinson fellow at Girton College, Cambridge. In my presentation (see my PP here The contribution of Marxian economics), I outlined the differences in theory and policy, both micro and macro between mainstream neoclassical economics, the heterodox alternatives (Keynesian, post-Keynesian, institutional and Austrian) and the Marxist.

I see this as three ‘schools’ of thought – something that some participants from the heterodox wing found strange. Why was Marxian economics not subsumed within the heterodox? For me, the answer was simple. There was one thing that unites the mainstream and the heterodox (in every form) and one thing in which Marxian economics stood out: namely the labour theory of value and surplus value. The neoclassical and all the heterodox from Keynes to Kalecki, Robinson, Minsky, Keen and the MMTers deny the validity and relevance of Marx’s key contribution to understanding the capitalist system: that is it is a system of production for profit; and profits emerge from the exploitation of labour power – where value and surplus value arises. Value does not come from marginal utility (individual satisfaction) or marginal productivity (return on factor input) but from exploitation, realised in the sale of commodities for a profit. 

Capitalism is a monetary economy where production is for profit, not need. This glaringly obvious reality is denied by the mainstream (where there is no profit “at the margin”) and also by the heterodox who either accept marginalism or reckon profit comes from ‘monopoly’ or ‘power’ or from ‘financialisation’ – but not from the exploitation of labour power.

For me, Marx’s explanation is not only correct in reality, it is also necessary in order to clarify the very process of accumulation and endemic crisis within capitalism – all other schools of economics fall short on this.

Michael Roberts Blog
Pluralism in economics: mainstream, heterodox and Marxist

Michael Roberts

Book Announcement — John T. Harvey — CONTENDING PERSPECTIVES IN ECONOMICS

Edward Elgar Publishing
CONTENDING PERSPECTIVES IN ECONOMICS
A Guide to Contemporary Schools of Thought
John T. Harvey, Texas Christian University, US

‘This wise and lucid guide to pluralism in economics embodies the
values of its cause. Generous, open-minded, fair, accurate and
accessible: John Harvey’s new book is a fine achievement that every
economics major should read.’
– James K. Galbraith, The University of Texas at Austin, US

'Fifty years ago I used Robert L. Heilbroner's The Worldly Philosophers to get students excited about economics. Today I would use John T. Harvey's Contending Perspectives in Economics. The book is beautifully written and full of insights into who economists are and why they think the way they do.'
– Paul D. Bush, California State University, US

'Economics is a mess. Oppositional clans ("schools"), pseudo-science, corruption of various kinds and relentless disdain for the real-world predominate. If you are thinking of entering this war-zone, then reading John Harvey's Contending Perspectives in Economics is your best bet for retaining your intellectual health.'
– Edward Fullbrook, University of the West of England, UK

'I just finished reading the book! I feel like I learned so much from it, and not just in terms of the information itself. As I read, it stimulated so much thought I found myself writing many pages on things I'd never even thought about!'
– Marcus Schiebold, Economics Undergraduate Student, University of North Texas, US

John Harvey's accessible book provides a non-technical yet rigorous introduction to various schools of thought in economics. Premised on the idea that economic thinking has been stunted by the almost complete rejection of anything outside the mainstream, the author hopes that this volume will open readers' minds and lead them in new and productive directions. In his exploration of Neoclassical, Marxist, Austrian, Post Keynesian, Institutionalist, New Institutionalist and Feminist schools of thought, unique features of each approach are highlighted, complemented by discussions of methodology, world views, popular themes, and current activities. Accurate and impartial, every chapter covering a heterodox school of thought has been vetted by an acknowledged expert in that field.

2015 168 pp Hardback 978 0 85793 203 7 £65.00 (UK/RoW) • March 2015 $99.95 (N/S America) Elgaronline 978 0 85793 204 4