The earlier scholars provided application of Islamic juristic principles to derive and apply the Islamic teachings related to commerce, entrepreneurship and consumption. Muslim scholarship initially focused on public finance and its administration to deal with the practical problems of the newly formed state which expanded rapidly and required sound legal and administrative framework to legislate economic activities centred around agriculture and trade.
Mainstream economic policies often prioritize short-term goals, such as inflation control and GDP growth, over addressing the root causes of unemployment. This short-sighted approach can lead to unemployment persistence, even during periods of apparent economic growth. By contrast, behavioural economics urges policymakers to adopt long-term and holistic strategies that prioritize social welfare and sustainable job creation, offering a more nuanced and comprehensive perspective on addressing unemployment.
Islamic Economics stands at a crossroads. To analyse what is, it must pragmatically adapt mainstream tools—provided they are stripped of reductionist assumptions. To articulate what ought to be, however, it must dare to innovate: developing tawhid-centric models that reflect humanity’s role as Allah’s stewards (khalifah). This dual approach rejects both uncritical integration and isolationist purism. As Dr. Shaikh advocates, pluralistic methodology allows IE to engage the mainstream while retaining its soul. The goal is not to mimic physics-envying economics, but to redefine economics itself—as a science of human flourishing, anchored in divine guidance. In the words of the Quran, “Do they not contemplate the Kingdom of the heavens and the earth?” (7:185). Islamic Economics, at its best, is this contemplation enacted—a discipline where tools serve truth, not the other way around.
Islamic Economics Project 