Articles on Islamic Economics

Ethics and Economics

Salman Ahmed Shaikh

As much as people can be selfish, they can be altruist as well. They have free will and they can be as much responsible as they can be reckless. What we need is a conditioning mechanism that nurtures positive tendencies. It is striking to note the following facts:

1)    Budget on some films and video games is more than the entire development spending in some countries.

2)    Expenditure on reducing fat is more than expenditure on reducing hunger.

3)    Food crops are burned at some places for price stability while half of planet starves.

4)    62 richest people own more wealth than half of the world’s population.

5)    Some individual persons own more wealth than the GDP of entire countries.

There are approximately one billion poor in the world and if it takes $30 to feed a poor person for a month, then $30 billion can feed all of the world’s poor for one month. With 3.7 trillion dollar combined net worth held by 300 wealthiest people at December 31, 2013, they can feed all of the world’s poor for 10 years at least. Interestingly, at an interest rate of 10%, the 300 wealthiest can earn $370 billion in a year which can alternatively feed all of the world’s poor easily for a year. Thus, even if these 300 wealthiest people forgo only the interest they can earn on wealth and spend it to feed poor, every poor can be fed. The wealthiest 300 people even in recession have accumulated USD 524 billion in their net worth in 2013.

There are more other glaring realities like this. These happen in capitalistic democracies with secularism and liberalism as political doctrine and unfettered markets as an economic doctrine. Can law provide the required conditioning mechanism to foster compassion and righteous behavior? But, can law codify all ethics? The need is to have a social contract or comprehensive doctrine with a conditioning mechanism that can ensure these two characteristics in its worldview: 1) provision of deterministic justice and 2) inculcating ethical social responsibility as an end rather than means to an end.

Religion of Islam can compliment law through engendering compassion and social responsibility. As per Islamic worldview, there are two aspects of human life, i.e. temporary worldly life and permanent life which will begin after this life. Belief in afterlife accountability with understanding its true implications can ensure socially ethical behavior even when it is not codified by law. It is because as per Islam, the ethical choices will be rewarded or punished with deterministic justice in the permanent part of human life.

1 reply »

  1. Dear Sir Salman, The only thing that can determine the fate of world’s hunger is the firm belief of the person who owns enormous resources, but which cannot save him from the truth of death and accountability in life hereafter.


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