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.
The authors highlight the negative effect of colonialism and double standards of Europe to keep the Muslim lands under colonial and imperial rule. They awakened the Muslims to avoid becoming laggards, isolated and mere consumers. Rather, they should also advance knowledge and sciences and do not feel shy in learning from the Western development experience. However, in doing that, they should not be uncritical to take everything European as acceptable, especially when it comes to interest based banking. Given that, there is much to take from socio-economic innovations such as the joint stock companies, mutual insurance, bank-based payment systems. The authors provided positivist explanations of how these institutions and structure avoid the problem of moral hazard, information asymmetry and achieve pooling of funds, risk diversification and efficiency.
Islamic Economics Project 