It is easy to establish that many of the core theories used by Economists are false. For example, there is overwhelming empirical evidence against the theory of utility maximization; for a survey of this evidence, see Zaman and Karacuka (2011). Similarly, Romer (2016 ) documents how leading monetary economists persist in believing that monetary policy does not affect… Read More Why Do Economists Persist in Using False Theories?

This is part D of the first lecture on Gratitude, Contentment, and Trust, part of a free online course on A New Approach to Islamic Economics. Register for course via: http://bit.ly/AZIEML In previous parts of this lecture, we discussed the attributes of gratitude, contentment, and trust, as the behavioral bases for an Islamic approach to… Read More Scientism: Flawed Foundation of Economic Methodology

The two World Wars in the 20th century depleted the gold stocks of European governments and made a return to the (UK Sterling based) gold standard impossible. This led to the Bretton Woods conference of 1944, where leaders of the world came together to find an alternative, non-gold-based, global trading system. John Maynard Keynes brought… Read More Origins and Consequences of US Monetary Hegemony

{bit.ly/azGian01A} There is a huge controversy about what money is – especially since the role and function of money has evolved and changed substantially over time. Curzio Giannini’s book “The Age of Central Banks” provides clarity and insight into this topic not easily available elsewhere. We will cover this book in a sequence of posts… Read More State or Market: Mystery of Money

Why does “Sovereign Default” become a hot topic with annoying regularity in Pakistan? The fundamental problem is the huge imbalance between our exports and imports. In 2021, our exports were USD 30 Billion, while our imports were around USD 62 Billion. In general, since 1960 onwards, our imports have averaged about 18%, while exports have… Read More The Debt-Trap and Self-Reliance

Milton Friedman was a powerful magician. His words charmed people into believing that night was day, against the evidence of their own eyes. Friedman’s maxim that “inflation is everywhere and always a monetary phenomenon” is widely believed by economists, even though it is abundantly obvious that costs of production, especially energy costs, play a major… Read More Modern Money and Inflation

This is a write-up of Section E of Chapter 1 “Why We Need A New Approach to Statistics?” of Real Statistics: A Radical Approach. To register for the ongoing online course: http://bit.ly/AZRealStats – This section describes four fundamental flaws in modern statistics, which make it necessary to rebuild the entire discipline on new foundations for the 21st Century.… Read More Four Flaws in Foundations of Statistics

Wikipedia article entitled “Getting to Philosophy” documents a very deep fact about the structure of human knowledge. If we click on the first link in any article, and keep on doing so – click the first link in the subsequent articles, we eventually get to an article in the Philosophy category. It is commonly thought… Read More Impact of Positivism on Economics & Statistics

Introduction: Logical Positivism is a toxic philosophy which forms the foundations of a Western education. Like my fellow students, I absorbed its basic tenets without even learning its name, because it is so deeply embedded as to be invisible. Time after time I ran into problems because the ways of reasoning taught by this philosophy… Read More The Poison of Positivism

O, wad some Power the giftie gie us. To see oursels as others see us! – Robert Burns. The essay below is my personal perspective, from an Islamic point of view, of certain aspects of the European intellectual traditions. The abstract mathematics of modern economics contain messages directly opposite to teachings of Islam. Economics says that rational behavior… Read More European Rejection of Unobservables