Islamic Economics: A Survey of the Literature

My extensive survey entitled: “Islamic Economics: A Survey of the Literature” (IESL hereafter) is due to be published as a book shortly. IESL selects from the vast literature on Islamic Economics according to certain guidelines discussed below.

Given the large number of variant definition available, the first issue that arises is “What is Islamic Economics?”  This is discussed briefly in the survey. An extensive discussion is provided separately in “Re-defining Islamic Economics”.    Originally, economic teachings are embedded within, and not separable from social, political, and spiritual teaching of Islam. However, early twentieth century saw the rise of capitalism and communism as competing economic paradigms for the newly liberated Islamic nations. These historical developments promoting Capitalism, Communism and Socialism as ideal economic systems forced Muslim thinkers to organize Islamic teachings related to economics into a unified body of knowledge to create a genuine alternative to dominant Western models.

Western economic theory is presented as a “positive” theory; a collection of facts. In contrast, a central thesis of IESL is that social science is the study of human experience, and hence is strongly conditioned by history. Modern Western political, economic and social structures have emerged as a consequence of the repudiation of religion associated with the Enlightenment and are based on secular principles (see Origins of Western Social Sciences for details). Many of these are in fact antithetical to Islamic principles, and cannot be adapted to an Islamic society. My article on Islam Versus Economics highlights these differences. Muslim societies achieved freedom from colonial rule towards the middle of the twentieth century and have sought to construct institutions in conformity with Islam. The development of Islamic economics is part of this process of transition away from Western colonial institutions.

The development of modern economics is part of the “Great Transformation” in Europe, where traditional societies were radically transformed to secular capitalist societies. For a brief discussion of the far reaching effects on this transformation on European thought, see “A Summary of Polanyi’s Great Transformation”. In IESL, we argue that the founding principles of Islamic Economics are similar to pre-modern western thought, and entirely different from those upon which modern Western economics is based. There is no possibility of merging the two approaches, or of modifying Western economic theories to arrive at Islamic Economics. One of the goals of this survey is to highlight the contrast between these two approaches to economics.

Many areas where Islamic methodology differs from the dominant Western approach are discussed in the survey. Perhaps the most fundamental is the definition of knowledge itself. The tremendous loss resulting from the promotion of the idea that science is the only definitive source of knowledge is discussed in detail in “The Deification of Science and Its Disastrous Consequences.”  In contrast to scientific objectivity and detachment, Islam explicitly prohibits neutrality when injustices are observed. We are required to actively engage with the world to bring about the good, and to eliminate evil. Knowledge is created in this process of engagement with the struggle for good. This attitude informs IESL, which is not a neutral and unbiased report of what is contained in the literature. Rather it is an attempt to guide research towards fruitful directions, in accordance with views spelled out in the survey.

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