Salman Ahmed Shaikh

Islamic law is derived from holy Quran and teachings of Prophet Muhamad (pbuh). Analogical deduction of specific juristic applications based on core principles is part of Fiqh. But, to be meritorious as a separate field of inquiry, Islamic economics cannot confine itself just to explaining and deducing laws in economic matters based on core principles. Since this function is already performed by the discipline of Islamic jurisprudence, there is no need for a separate discipline in the name of Islamic economics.

Even though the principles like prohibition of Riba and Zakat are binding as rules, they also have an important economic rationale and function in economic matters of an Islamic society. Hence, the mandate of Islamic economics will be to explain their economic merit using experimental and observational data and by applying statistical and other suited techniques to establish certain analytical hypothesis.

Even before that, a coherent theory is to be established with a sound and consistent methodology. Economic analysis need not use completely different methodology even in Islamic economics. Use of mathematics to establish relations between variables may very well be a suitable approach for theoretical research. It will also increase the interdisciplinary communication and comparative discussions. Islamic economics will not have the mandate to suggest changes in Islamic rules. It will be focused on economic analysis of these principles, their applications and their suitability in solving various economic issues. The mandate will also include suggesting economic policy making for various economic issues within the framework of Islamic principles and rules.

Next, we discuss whether we need the label ‘Islamic’ with economics. It must be appreciated that there are some unique Islamic institutions and policy tools. For instance, Zakat and Waqf can be used to reduce poverty and resource inequality. If separate labeling helps in projection of unique Islamic institutions more effectively, then the separate labeling could be used. The separate labeling may also be useful to avoid unnecessary expectation and comparison at very minute level with mainstream economics. Unique academic identity is also a useful thing sometimes. For instance, Keynesians like to keep association with Keynes even though, there are differences in original Keynes’s work and today’s New and Post Keynesians. Same goes for Analytical Marxism and Old Marxism. Since the inspiration of these respective disciplines and schools come from the pioneer works of Keynes and Marx, Muslim economists taking inspiration from Islamic sources could also use a separate label for themselves. But, it must be noted and understood that a sociological and economic study of principles, injunctions and institutions of Islam or any other religion is different from the task of defining and expanding the religious body of knowledge through jurisprudence.