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2023 | Buch

Polar Visions of the Economy Kapitel lesen Erstes Kapitel lesen

Revisiting Islamic Economics

The Organizing Principles of a New Paradigm

verfasst von: Nabil El Maghrebi, Abbas Mirakhor, Tarık Akın, Zamir Iqbal

Verlag: Springer International Publishing

Buchreihe : Palgrave Studies in Islamic Banking, Finance, and Economics

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

This book discusses the need for a paradigm shift from Islamic economics universe of discourse to Iqtisād, a socio-economic system that is entirely independent from other economic doctrines and systems of thought. It provides an overview of critiques of the science and dogma of mainstream, orthodox, neoclassical, or simply Economics, with its axioms of rationality, scarcity, and unlimited wants. There is also a critical analysis of Islamic economics, and its failures to set its own policy agenda and development objectives. Our contention in this book is that Iqtisād--the Qur’an’s vision of how the economy is to be arranged—provides such a paradigm with a radically different philosophical foundation from that of Economics to the point that makes grafting one onto the other Impossible.

Iqtisād offers a genuine and authentic Islamic paradigm with unique etymological and philosophical foundations. It is a unique system that derives its organizing principles from the principal source of the Quran, rather than Economics. The logical coherence of its immutable system of rules compliance, institutional structures, and risk-sharing relations provides the foundations for economic dynamism, financial stability, and shared prosperity. It ensures that resources are efficiently managed, poverty is eradicated, income and wealth mal-distributions are corrected, and the internal sources of economic injustices gripping human societies are eliminated.

The Impossibility Theorem proposed in this book implies that, metaphysically, ontologically, epistemologically, axiologically, and teleologically, the two polar cases of Iqtisād and Economics are so radically different to rule out any grafting of one onto the other in order to present an intermediate paradigm with a synthetic discipline called Islamic economics. Given its multidisciplinary contents, this book will be of interest to a wide audience, including economists, policymakers, philosophers, theologians, and jurists, and can guide also free-thinking readers to a clarity of understanding about the conditions of humanity and the imperative of change with a sincerity of purpose and coherence in knowledge.

Inhaltsverzeichnis

Frontmatter
Chapter 1. Polar Visions of the Economy
Abstract
In the last five decades, a paradigm has emerged dominating thinking about how Islam proposes humans, individually and collectively, are to manage resources that their Creator has gifted them. Adopting narrow views of the works surrounding a concept developed in the 1980s called “Islamization of Knowledge,” the paradigm proposed to “Islamize” the dominant paradigm of Economics by adding to it “Islamic values and ethics” to form “Islamic economics.” This development is reminiscent of Christianity's compromise with capitalism in the nineteenth and twentieth centuries. The former abandoned the essential values of grace, selflessness, humility, compassion, sacrifice, and benevolence to accommodate capitalism with its principles of possessive individualism, self-interest, self-promotion, greed, and cutthroat competition. There is genuine risk that adoption of the “Islamic economics” paradigm will lose all sense of authenticity, a crucially important concept that relates to the degree that ideas, behaviour, or phenomena have direct, root connections to Al-Qur'ān. This authenticity is the basis of legitimacy of whatever concepts, ideas, or thoughts that bear “Islam” as prefix.
Nabil El Maghrebi, Abbas Mirakhor, Tarık Akın, Zamir Iqbal
Chapter 2. Critiques of Conventional Economics
Abstract
A brief critical history of political economy and an overview of the science and dogma of neoclassical economics reveals that there are fundamental flaws in the assumptions underlying economic theory. Consumer sovereignty is not consistent with the notion of resource scarcity, as acceptance of the latter logically precludes the former. The rationality postulate holds also a sacrosanct status in neoclassical economics as an empirically irrefutable metaphysical proposition by virtue of ubiquitous self-interest behaviour. Self-interest is taken as self-evident by virtue of the assumptions of economic rationality and resources scarcity, which are, in turn, ascertained as true by virtue of human experience and knowledge from acquaintance. Methodological monism does not admit, indeed, value judgements or references to alternative worldviews, religious beliefs, and moral convictions. Suppressing inconvenient worldviews and ethical beliefs does not promote progress in a subject that is of importance to all humanity. In the absence of a proper understanding of human nature and economic uncertainty, economic theory would have nothing to offer but arid do-nothing policy recommendations.
Nabil El Maghrebi, Abbas Mirakhor, Tarık Akın, Zamir Iqbal
Chapter 3. Critiques of Islamic Economics
Abstract
A brief critical examination of the contents and discontents of Islamic economics, and the secularization of Islamic law suggests that under the current conditions, Islamic economics can neither emerge on its own nor exist within the realm of conventional Economics. It cannot set its own agenda for the organization of an ideal Islamic economy because flawed paradigms are inconsistent with its metaphysical foundations, and are conducive to visions of “ethical capitalism” torn by the tensions of the open-ended processes of secularization and Islamization. The dualism of worldviews cannot be resolved into a harmonious unity as the differences in methodologies and metaphysical foundations are so stark that the dramatic change in Islamic fiqh from innovation to imitation is compromised and reconciliation is rather impossible. Thus, it is difficult to argue that Islamic jurisprudence and Islamic economics have evolved on the basis of the authenticity of Islamic teachings. For now, both Islamic jurisprudence and Islamic economics, which used to go hand in hand, seem to be leaning against the wind.
Nabil El Maghrebi, Abbas Mirakhor, Tarık Akın, Zamir Iqbal
Chapter 4. Ethics of Iqtiṣād
Abstract
Based on the moral philosophy of Islam aimed at promoting economic and social justice, the internalization of rules and virtues of Islam determine all facets of an economy ranging from the rules of market conduct, production, consumption, distribution, and redistribution. Ethics embedded in the prescribed rules and principles guarantee ethical outcomes in economic activities. Risk-sharing in financial transactions and other forms of risk-sharing as advocated by Islam have a rich ethical dimension that fills the gaps observed in prevailing economic systems. Risk-sharing minimizes the exploitation inherent to interest-based or risk-transfer systems, leads to the efficient allocation of resources, reduces typical information asymmetry and agency problems in economic dealings, enhances cooperation and solidarity in societies, and promotes financial and social inclusion. A rich framework of business ethics provides strong governance, transparency, and prudent leadership.
Nabil El Maghrebi, Abbas Mirakhor, Tarık Akın, Zamir Iqbal
Chapter 5. The Crisis of Civilization and the Problem of Knowledge
Abstract
There is a unique collection of philosophical, logical, and critical arguments about the imperative for Muslims to revert to Al-Qur'ān to find solutions to economic problems. The analytic perspectives about the cycle of civilization and the problem of knowledge are provided by eminent philosophers and social critics in the past century and half, including Muhammad Iqbal’s treatise about economic science, Malek Bennabi’s seminal work on the conditions of the renaissance, Sa’eed Nursi’s magnum opus Letters of Light, and As-Shaheed Muhammad Baqir as-Sadr’s comprehensive insights about Islamic economy. Further insights are provided by Sayyid Hossein Nasr and Syed Muhammad Naquib al-Attas on the problem of knowledge and the notion that Al-Qur'ān is the fountainhead of ideas for every generation to conceive and implement its vision for future societies. The consistent insights reinforce the notion that it is impossible to graft Islamic and secular worldviews one onto the other and that in the greater scheme of an Islamic worldview, the current Islamic economic thought is not sustainable.
Nabil El Maghrebi, Abbas Mirakhor, Tarık Akın, Zamir Iqbal
Chapter 6. Islamization of Economics? An Impossibility Theorem
Abstract
The foundational pillars of Iqtiṣād, Al-Qur’ān's vision of how individuals and collectivities must manage the resources gifted to them by their Creator, are shown to be so radically different from the foundational structure of Economics as to render each alien to the other. In its fundamental nature, Iqtiṣād constitutes a polar case to Economics as it derives its ontology directly from Al-Qur’ān. It comes into existence when members of society decide to manage the resources Allah has placed at their disposal according to the rules He has prescribed. Once Iqtiṣād comes into being, it has a sacred, not profane, presence. A synthesis of “Islamic Economics” from fundamentally irreconcilable visions is a logical impossibility. Not only the intellectual history of Economics but its philosophy contradicts Islam’s major tenets from metaphysics through teleology to the point that renders grafting the two polar cases one onto another impossible. Iqtiṣād presents an authentic Islamic paradigm for resource management to eradicate poverty, correct economic inequalities, and eliminate the economic injustice gripping human societies.
Nabil El Maghrebi, Abbas Mirakhor, Tarık Akın, Zamir Iqbal
Chapter 7. Behavioural Norms and Institutional Structure of Iqtiṣād
Abstract
Iqtiṣād, the Islamic vision of an ideal economy rests on the Qur’anic foundations of solid belief system, correct knowledge, and rules-based behaviour. Its institutional framework is based on a unique set of principles governing property rights, and contracts, which derive directly from the Islamic worldview. The institution of markets is also built on the three pillars of property rights, contracts, and trust. The organic relationships between these institutions depend on compliance with behaviour norms at each level, and on incentive systems that promote trust, information transparency, and risk-sharing. The behavioural norms and institutional rules, which are designed to resonate in the entire fabric of society and economic life, are asserted in the Qur’an and demonstrated by the Noble Prophet with a level of clarity and consistency that renders recourse to alternative paradigms necessarily associated with a loss of authenticity. The rules for the creation, exchange, and transfer of property rights are immutable, but the institutional structure is flexible to accommodate the shifting economic dynamics over time and space.
Nabil El Maghrebi, Abbas Mirakhor, Tarık Akın, Zamir Iqbal
Chapter 8. Rethinking the Essence of Macroeconomic Policies in the Iqtiṣād Paradigm
Abstract
Given the growing evidence that risk-transfer arrangements constitute an important driver of economic inequalities, there is a need for viable redistribution mechanisms based on the organizing principle of risk-sharing. Indeed, the redistribution proposals by mainstream economic thinking may not be sufficient to mitigate the ever-increasing wealth inequality. In contrast, risk-sharing agreements can provide remedies to the inherently unstable interest-based financial systems and ensure effective redistribution mechanisms. The ideas of asset-based redistribution and risk-sharing universal basic assets are potential substitutes for current redistribution proposals. For instance, the Public Basic Asset Fund, a blueprint for the implementation of asset-based redistribution and risk-sharing universal basic assets, provides opportunities for investment in the real economy and for the generation of stable income from development projects. Thus, it is important to rethink the essence of macroeconomic policies as both fiscal and monetary policies used to regulate economic activity based on the very interest-based mechanism that promotes economic rents, cannot arguably be part of the solution to the problem of economic inequalities.
Nabil El Maghrebi, Abbas Mirakhor, Tarık Akın, Zamir Iqbal
Chapter 9. The Risk-Sharing Organizing Principle of Iqtiṣād
Abstract
The stabilizing role of risk-sharing in an Iqtiṣād-driven system can be understood in relation to the nature of economic uncertainty. There is an irreducible amount of randomness in economic systems, which implies that failure to predict the future cannot be simply explained by flaws inherent to human knowledge. The notion that uncertainty and imperfect knowledge are part of economic life precludes the argument that it is also possible for certain economic agents to insulate themselves from losses through debt agreements based on risk transfer. There is evidence that interest-bearing debt is the source of financial instability. and that central bankers are losing traction of the interest-rate transmission mechanism, and thereby, control of monetary policy. In contrast, risk-sharing in an Iqtiṣād system promote financial stability, which is conditio sine qua non for economic development and full employment. This organizing principle provides remedies to the central contradiction of capitalism as it prevents capital from reproducing itself faster than output increases, and the past from devouring the future.
Nabil El Maghrebi, Abbas Mirakhor, Tarık Akın, Zamir Iqbal
Backmatter
Metadaten
Titel
Revisiting Islamic Economics
verfasst von
Nabil El Maghrebi
Abbas Mirakhor
Tarık Akın
Zamir Iqbal
Copyright-Jahr
2023
Electronic ISBN
978-3-031-41134-2
Print ISBN
978-3-031-41133-5
DOI
https://doi.org/10.1007/978-3-031-41134-2

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