In modern economics, we are used to a purely materialistic and secular approach that does not allow religious concepts to interfere with its theories and concepts, on the premise that economy is outside the domain of religion. It is, however, an interesting irony that every dollar note has the admission: “In God we trust”, but when it comes to develop theories to earn dollars or to distribute or spend them, trust is placed only on human ideas based on personal assessments; God is held totally out of picture, as being irrelevant to economic activities!
It is perhaps for the first time that, as an aftermath of the present financial crisis, when different quarters are coming up with different suggestions to solve the problem, the ‘World Economic Forum’ has invited representatives of religion to give their input to the initiative of reshaping the economic set-up on the basis of values, principles and fresh thoughts. This commendable initiative deserves full support from religious circles. As a humble student of Islamic disciplines, and particularly of Islamic economic principles, I would like to highlight some basic points, derived from Islamic economic precepts, that I believe, are essential for
independent and fresh consideration while seeking solutions to our economic problems.
at-Tahawi 
Jazakumullah Khair Sidi for this wonderful post as well as the attachment of Mufti Taqi’s thoughts on the Post Crisis. Its presented with such a gentle approach. Masha Allah.
Jawad
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I know Mufti Taqi Usmani has done a lot of other useful work, but I feel somehow uncomfortable when respected scholars like him get into the business of criticizing work outside of their fields of expertise. From the perspective of an academic economics student, I have a number of concerns. I admit at the onset that I’m going to be guilty of some of my own criticism by not fully fleshing out my own arguments.
Probably most importantly, and that’s often the case, there seems to be a misunderstanding of what (most) economists do (other than the few involved in policy making). For instance, economists did not invent profit maximization because they think it’s the “right” thing for businesses to do. They use it as a modeling tool because that’s a good approximation of what people actually do. So in a sense, for the most part articles like this one should be taken as (possibly fair) criticism of society, but not of the economics profession.
Then a number of the issues that he raises can (and are) solved within a standard economic framework, once it’s made a bit more rich than the most basic one he has in mind. For instance, the discussion about how transactions that are mutually consenting are not always “just”, or in the best interest of society, can be resolved within a standard economic framework once one starts talking about externalities.
The “modern” economists he quotes are not academic economists and I doubt many real economists are aware of their work, let alone take it seriously.
Finally I don’t think islamic economics/finance is really taken very seriously by economists, other than being recognized as being a good profit-generating business. Of course, there are always exceptions. I’m aware of one academic economist (El Gamal at Rice University) who has done work on Islamic Economics. That being said, I remember reading somewhere on his blog (or elsewhere) that his getting into that “business” hurt him professionally. So I don’t think there is any victory worth claiming at the moment for the “Islamic” Economics camp.
A few questions
“Then a number of the issues that he raises can (and are) solved within a standard economic framework, once it’s made a bit more rich than the most basic one he has in mind.”
Could you please elaborate on enrichment (sorry for the pun) of the most basic model of Mufti Taqi Usmani
Mr Jaber,
I guess Mufti Taqi’s grievance is precisely that economic justice and equitable distribution of wealth is considered an ‘externality’ by modern economists, which may or may not be pursued in ‘a standard economic framework.’
The case he is making actually identifies the problem in the root of the contemporary economic structure. Whether economists invented the problem or not is not of primary importance as much as is the question about what they have actually done in order to mitigate the effects of evils it has most certainly nourished and nurtured.
In a nutshell, policymakers do not operate outside of the economists’ remit, and hence, culpability for many of humanity’s failures must equally be traced back to economists.
Thanks a lot Cheikh for that very valuable analysis