Articles on Islamic Economics

Islamic Economics and Consumer Behavior

Salman Ahmed Shaikh

Purpose behind human existence is one the basic questions in philosophy. Centuries ago, pioneer philosophers used to study and discuss ‘why we exist’, but after renaissance in Europe and revolt against Church, social philosophers came to the front and raised issues of society and left the study of ‘why we exist’. René Descartes said “I think, therefore I am”.

Then, in the post-renaissance period, science developed more speedily, material life improved and economics became just the study of material progress and how we can achieve it.

In the twenty first century, we have things that were enjoyed by kings only in past. But, most of the happiness studies show that in general, a majority of us is not happy. We are not happy as we suffer by comparison. As we compare ourselves with our peers on material possessions, that comparison in any developed capitalistic society shows us huge disparity.

The idea of material progress and well being enabling the people to forget fear and religion and Question of ‘why we exist’, has failed. Ignoring the purpose of existence and trying to replace it with material self pursuit does not and has not solved the fundamental human quest of ‘why we exist’.

Religion offers an answer to ‘why we exist’. The basic premise of Islam is that we have been created by One and Only Allah so that we obey Him and that if we do, we will be rewarded by Him in afterlife. Only religion provides the deterministic and absolute justice which is desired by every human being. Only the place in heaven provides us the incentive to have freedom from limitations of this world, to have no regrets of the past and no concerns for the future. Only the belief in life hereafter provides the incentive to do good deeds in all situations and avoid bad deeds in all circumstances as there is good reward for all right things and bad reward for all wrong things. Only Allah has the complete knowledge and complete authority to make it happen in life hereafter.

Economics says that there is a trade-off in every resource use as every resource has alternate uses. One may feel that striving for success in life hereafter would require a drastic trade-off between material pursuits and following Allah’s will. Indeed, if material lust is preferred over Allah’s will, there will be permanent loss in life hereafter, but that does not preclude us from not having the ability to benefit from Allah’s blessings in this world.

Islam does not discourage seeking Allah’s bounty in the world. One prayer in Qur’an reads as follows:

“…But of mankind there are some who say: “Our Lord! Give us (Your Bounties) in this world!” and for such there will be no portion in the Hereafter. And of them there are some who say: “Our Lord! Give us in this world that which is good and in the Hereafter that which is good…”

(Al-Baqarah: 200-201)

In economics terminology, Islam does not ask us to have a corner solution when the two goods in question are ‘worldly benefits’ and ‘investment for life hereafter benefits’. Islam does not require us to completely abstain from blessings of this world, but to have a balanced life and a balanced composition of the two resource allocation choices mentioned above.

Free ride on the use of natural resources without legal accountability can lead to over exploitation of common property resources and can also cause disturbance in the ecological balance. Afterlife accountability enables us to observe ethical values which are not easily enforceable through legal systems made by humans after all. Question of fairness and equity can only be sufficiently dealt with and incorporated into the preferences and behavior with belief in religion. Islam besides having a comprehensive perspective on justice, also recommends ‘Ihsan’ which requires Muslims to bring about fairness and equity with resources they have as blessings of Allah and which they should regard as a trust and act always with spiritual rationality of afterlife accountability.

5 replies »

  1. Assalam O Alaekum!

    It’s a very nice read. Religion has the answer that ‘why we exist’ leads to another question that which religion has the answer that ‘why we exist’. If it is assumed that every religion has the answer that ‘why we exist’ then there must be a complete harmony among humans which is unfortunately rare. And probably the purpose of our existence varies across religions due to different interpretations, which is not the core of your article I reckon.

    Coming to the Islamic economics and consumer behaviour, one thing is important that it is not the consumer behaviour that modifies the Islamic systems rather Islamic systems lead to the consumer behaviour. If it is true, then we have to see the Islamic economic system / Islamic banking system in this context.

    May Allah guide and help us (aa’meen)!

    Regards, Yasir


    • Wa Alaikum Assalam,

      Indeed, when we agree on the importance of turning towards religion and spiritual guidance, Islam comes as the most authentic message of Islam due to its complete coherence and its unaltered teachings. Secondly, it is correct that rather than providing just the solutions to human needs, Islam first clearly explains human’s role in this world and after explaining the relationship between humans, universe and Allah, Islam then also has teachings on the right conduct to be observed in all capacities, roles and spheres of life and its philosophy guides towards righteousness in all walks of life.


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