Paper Title: Mainstream Economics’ War with the Environment: Counter-Critiques from Heterodox Economics and Islamic Economics

Author: Ekrem Yilmaz, Güler Deymencioglu, Mehmet Atas and Fatma Sensoy

Publisher: International Journal of Ethics and Systems, Vol 40(3), pp. 526 – 538.

Planet earth faces massive environmental challenges in the post-industrial revolution age.  The post-industrial revolution age has defied the planetary boundaries causing unprecedented loss of bio-diversity.  Individual  self-interested behavior; money based usurious financial intermediation and detachment of moral values in the post-industrial human relation with ecosystem and environment are the contributing factors to this crisis.

This age is marred with unprecedented burning of fossil fuels, rapid deforestation, contamination of seas and which has caused rise in temperature, frequent heat waves, floods, melting of glaciers and enormous loss of marine and tropical forest species.

Forests cover almost one-third of the planet’s land, and provide vital protection from sandstorms and flooding as well as an essential natural habitat for wildlife. Unfortunately, humans have already chopped down about half of the rainforests that once existed on the planet in the last half century alone. Deforestation simply means clearing of green cover.

Over the last 250 years, surface acidity of the ocean has increased by an estimated 30%. The acidity is expected to increase by 150% by 2100. According to a research published in Nature, by 2050, rising temperatures could lead to the extinction of more than a million species causing enormous loss of biodiversity.

According to the World Health Organization, air pollution is now the world’s largest single environmental health risk. Air pollution is responsible for approximately 3.7 million deaths a year. Going forward, cities will generate approximately 2.2 billion tones of solid waste per year by 2025 which could poison soil and waterways, kill plants, and harm humans and animals.

All these upsetting facts emphasize on the need for pre-emptive action to help change the way humans produce, consume and live. It requires structural transformation of our business processes, food production and technological capacities. Humans need a reflective change in value system to have a more caring relation with the eco-system.

In the Islamic worldview, the concepts of Tawheed, Khilafah and Akhirah govern the Islamic way of life. Belief in the single source of creation (Tawheed) defies racial, ethnic or gender basis of discrimination. According to Islamic worldview, all creations belong to Allah. Animals and plants are partners to humans in the universe (Mian et al., 2013).

Simultaneously, the concept of Khilafah raises the stature of human beings as moral beings with inbuilt and active conscience and which provides the ability to differentiate moral from immoral acts. It inculcates the responsibility of custodianship, trusteeship and stewardship in human beings with regards to the use and ownership of physical property and environmental resources.

While the concept of Tawheed creates an equal basis for humans to use what is bestowed in nature, the concept of Khilafah instils stewardship towards the responsible use of natural and environmental resources without pushing planetary boundaries and causing precious loss of biodiversity. Furthermore, the two worldly view of life in Islam extends the decision horizon of economic agents, be they firms or consumers.

Climate change is a slow, but cumulative process. Individual human lifespan is only an infinitesimally small fraction of the life of environmental resources and eco- system services. Hence, the self-centric view of life is incompatible with the concerns of sustainability and socially responsible behaviour.

Instead of being miser and spendthrift, Islam wants Muslims to have moderation in their consumption, both with respect to contemporaneous consumption as well as intertemporal consumption. Allah in Qur’an says: “And let not your hand be tied (like a miser) to your neck, nor stretch it forth to its utmost reach (like a spendthrift), so that you become blameworthy and in severe poverty” (Al- Qur’an, Al-Isra: 29).

In another verse, Qur’an says: “And those, who, when they spend, are neither extravagant nor niggardly, but hold a medium (way) between those (extremes).” (Al-Qur’an, Al-Furqan: 67). In a Hadith, Prophet Muhammad (pbuh) said: “Spend according to your means; and do not hoard, for Allah will withhold from you” (Source: Al-Muslim, Book of Zakat, Vol 3, Hadith No. 2378).

Islam expects Muslims to avoid being spendthrift and extravagant. Allah in Qur’an says: “… Waste not by extravagance. Verily, He likes not Al- Musrifun (those who waste by extravagance).” (Al-Qur’an, Al-Anam: 141). In another verse, Allah in Qur’an says: “And give to the kindred his due and to the Miskin (poor) and to the wayfarer. But spend not wastefully (your wealth) in the manner of a spendthrift.” (Al-Qur’an, Al-Isra: 26).

Prophet Muhammad (pbuh) exemplified modesty in His life both before and after the political rise of Islam. In one hadith, Prophet Muhammad (pbuh) said: “Richness is not in having many possessions, but richness is being contented with oneself” (Jamai-at- Tirmidhi, Chapters on Zuhd, Vol 4, Hadith No. 2373).

As per neoclassical economics, people engage in impure altruism when they contribute in charity or donate for public goods since these charitable acts also emanate from self-interest, i.e. to get fame, satisfy ego or change the living environment to improve one’s own social experience and relations.

On the other hand, the Islamic economic principles have reformative content which lacks in neoclassical economics. Islamic morality warms the cold economic calculus so that all human endeavours shall not just be seen in the light of pleasure-pain calculus. Islam does not recognize impure altruism to satisfy ego and to achieve fame and recognition.

Prophet Muhammad (pbuh) advised anonymity and secrecy in charitable giving such that the right-hand does not know what the left hand is giving (Source: Al-Muslim, Book of Zakat, Vol 3, Hadith No. 2380.). Allah says of the ideal believers in Qur’an: “And they give food, in spite of their love for it to Miskin (poor), the orphan, and the captive. (Saying): ‘We feed you seeking Allah’s countenance only. We wish for no reward, nor thanks from you’.” (Al-Qur’an, Al- Insaan: 8-9).

Qur’an urges believers to spend what they love in order to achieve righteousness (A’le-Qur’an, Al-Imran: 92), spend throughout their lives (Al-Qur’an, Al- Munafiqun: 10) and the ideal is to spend whatever is beyond their needs (Al- Qur’an, Al-Baqarah: 219).

Since Islam only accepts pure altruism, it promises numerous incentives for it in its two-worldly view of life. Several verses in Qur’an promise due reward for pure altruism (Al-Qur’an, Al-Qur’an, Al-Tauba: 121; Al-Qur’an, Fatir: 29; Al-Qur’an, Al-Hadid: 7).

In several other verses, spending in charitable ways for the sake of Allah is compared to a good loan which Allah will repay with a manifold increase (Al- Qur’an, Al-Hadid: 11; Al-Qur’an, Al-Hadid 18; Al-Qur’an, Al-Taghabun: 17; Al- Qur’an, Al-Muzammil: 20). In several Ahadith also, Muslims are encouraged to spend so that Allah also spends on them with His blessings (Source: Al-Bukhari, Book of Commentary, Vol 6, Hadith No. 4684).

The authors write that heterodox economists often criticize mainstream economics for their views on environmental problems. Mainstream economics tends to view environmental issues as externalities, or problems that can be solved through the use of market mechanisms, such as cap and trade or pollution taxes.

However, heterodox economists argue that these solutions are often insufficient and may exacerbate existing inequalities. They also question the assumption that economic growth and environmental sustainability can be achieved simultaneously.

Instead, heterodox economists propose a more radical approach to environmental problems, which prioritizes social and ecological justice, and places limits on economic growth. By critiquing mainstream economics, heterodox economists seek to offer more holistic and inclusive solutions to the pressing environmental challenges facing our world.

Islamic economics framework is not only inclusive of these ideas, but includes moral and spiritual teachings to affect preferences and values more deeply, organically and indigenously. The principles of modesty, self-restraint and contentment can counter the unbridled chase of positional goods, consumerism and resource wastage. Instead, if the excess means possessed by the rich beyond their basic needs are redistributed in philanthropic causes, it can help to fight hunger and deprivation.