23 the other part of the islamic economists task ie

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Unformatted text preview: ther is the predominant role assigned to interest in the allocation of resources. This had to wait until the modern literature on Islamic banking in order to start to be shaken. Another example is the exagerated role of market, in the classical theory, as a sole allocator of resources and distributor of income. This has already been challenged by many Western economists. 32 economics because of the very nature of the social phenomenon and its characteristics in comparison with physical phenomenae. In the economic postulates, values and ideas intermingle with the objective observation to an extent that many of the givings of this discipline are interwoven of normative and positive statements. Take, for instance, the measurement of national income and the objective function of utility. In national income several items are not included although they affect the individual and aggregate welfare of a nation, such as housewives work, output of preachers in Mosques and other places of worship, the value of learning acquired by students, affluence of smiles in interpersonal relations,58 etc. The exclusion of such valuable elements from national income, although they affect welfare, is an obvious result of a value-oriented presumption about each of these items. The utility function includes the amount of goods and services consumed by a consumer, but only by a value-biased presumption that the consumer theory does not include goods and services consumed by one’s own children. One can hardly argue that the welfare of the consumer does not improve by an increase in the consumption of the consumer’s own children.59 In an Islamic society, one may strongly argue that the consumer’s welfare is also influenced by the consumer’s parents and neighbors, as stated in 58 The Prophet is reported to have said “your smile, when you face your brother, is a sadaqah”. 59 Refer, as an example, to the saying of ‘A’ishah that she gave a begger one date and the latter, instead of eating it, divided it in two halves and gave them to her own daughters. 33 many sayings of the Prophet (Pbuh) and as observed in contemporary Muslim societies.60 However, the complexity of the task of purifying economics from value judgements derived from the ideas, beliefs and values of the researchers and their environment may allow us to resign to accepting making such presumptions explicit rather than hoping to removing them all together. 23. The other part of the Islamic economists’ task, i.e., the incorporation in economics of positive postulates derived from Shari’ah, is not a task easier nor simpler than the first. Muslims believe in God as the most knowing and Most merciful to all His servants, and whatever He sent down in term of His Divine Message is to the best of Mankind. This is one of the basic implications of the Islamic faith, but it does not represent a common ground with non-Muslims and in the positive part of economics, i.e., when we do not talk about the Islamic economic system and its application, we are required to take from the Shari’ah those ideas that are faith-neutral because only these have the nature of universal economic laws whose existence is a sin-qua-non of economics.61 60 For more examples, see, M.A. Zarqa, “Methodology of Islamic Economics” in Monzer Kahf, ed., Lessons in Islamic Economics, forthcoming, IRTI, Jeddah. 61 Zarqa asserts that the Shari’ah points out to the existence of universal laws not only in economics, but in all social sciences; he adds that the existence of such universal laws 34 The Qur’an and the Sunnah have several “positive” statements about the economic behaviour of human beings such as “Truly human was created very impatient; fretful when evil touches him, and niggardly when good (or prosperity) reaches him”; (70:19-21) “Human souls are swayed by greed”; (4:128); “He (Human) was indeed unjust and ignorant”; “Ornamented in the eyes of people is the love of lust from women, sons and heaped up hoards of gold and silver ...” (3:14); etc. These and similar Revelation-based positive statements need to be interwoven with human observations, explanation and rationalization in order to formulate the laws of economics. 24. In performing the tasks of Takhliyah (taking out the incorrect) and Tahliyah (adding in the good), a clear distinction between premises and tools is also necessary. Islamic economists have little dispute with conventional economics as far as the tools of analysis are concerned. The essentials of mathematical logics and empiricism are common tools for all economists, Islamic and western alike, keeping in mind that the process of correcting the discipline would entail some shifting of emphasis and sometimes a different formulation of certain questions, but such a modification in the tools of analysis is a natural represents the “basic logic” for sending one religion to guide all human beings and societies until the Last Day. See: M.A. Zarqa, ibid. 35 and continuous process...
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This note was uploaded on 11/27/2011 for the course ECON 101 taught by Professor Robert during the Fall '08 term at Montgomery College.

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