RESEARCH ON ISLAMIC ECONOMICS AND FINANCE AND ROLE OF FAITH IN MARKETS AND SOCIETY IN POST MODERN SCIENTIFIC AGE
Muslim economists have employed the mainstream economics tools to explicate consumption in the Islamic framework. Two of the key limitations of these early works are that they used the Keynesian framework without building micro foundations and they did not model the behaviour in an intertemporal context.
There is considerable debate in Islamic economics literature on what shall be the correct response and attitude towards mainstream economics methodology. There are three varied responses among Islamic economists regarding the issue. The first response is to use the methodology of mainstream economics in Islamic economics as is. The second response is to modify it according to the needs and the context of Islamic framework. The third response is to discard it altogether and devise a new methodological framework from scratch.
This article highlights the points of distinction and compatibility between the Islamic and mainstream economics framework. The distinction comes in the decision horizon and the addition of moral filters on the choice set. The difference also appears explicit when one looks at the encouragement and incentive structure for pure altruism in a two-worldly Islamic framework. The distinction is even deeper in values whereby the Islamic framework encourages contentment, pure altruism and self-less behaviour while the mainstream economics framework is at best neutral between the moral content of economic choices.
This article looks at some of the descriptive and prescriptive teachings of Al-Quran and Sunnah (Ways of Prophet Muhammad [pbuh]) on consumption and spending behaviour.
The difference in an Islamic framework would come with the normative distinction between investments which are declared as prohibited in the ethical injunctions of Islamic faith and other investments which are deemed as permissible.
With a predominantly Muslim population which engages in significant private giving, social intermediaries who can transparently and efficiently mobilize charitable giving can enhance the socio-economic impact of private giving. Given the high prevalence of cash based giving and higher trust deficit between people and the public Zakat agency, the Islamic institution of cash Waqf can be suitable for effectively channelizing the charitable giving in the form of cash.
Islam and science are not at odds as commonly perceived. According to World Values Survey Sixth Wave results, 32.73% Muslim respondents completely agreed that science and technology are making our lives healthier, easier, and more comfortable as compared to 24.89% others citing the same opinion.
Qur’an is not a book of science. But, to present its basic message, it focuses our attention on different realities, both within our consciousness and in the outside natural phenomena. Modern science has not found any error in Qur’an’s descriptive statements about nature.
In 763, The House of Wisdom was founded in Baghdad. For every translated book, the state used to pay quantity of gold equal to the weight of the book so as to provide state patronage and incentives.
As far as understanding the properties of matter is concerned with the objective of making our lives useful, religion does not oppose science at all. There is no inherent conflict between science and religion if the scope of both science and faith are duly understood and acknowledged. Islamic worldview does not oppose the use of various tools for obtaining useful knowledge and then using that knowledge for material ends both at an individual and at the societal level.
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