This paper presents the ideas of transformative school in Islamic economics. Transformative school of thought in the methodology of Islamic economics is not that much interested in descriptive studies and improving the predictive capability of models to analyze market outcomes and to design policies accordingly. It believes in the transformation of choices through education.
Divine Economics framework provides an empirical basis of behavioural comparison between religious and non-religious agents with regards to their economic and non-economic choices. It incorporates the methodological framework of mainstream economics for the study of religion and economics in each other’s perspective. It looks at religious behaviour from the lens of ‘economic good’ and ‘economic behaviour’ in markets where the choice has economic considerations, such as relative prices, opportunity cost of time, income effect and substitution effect. However, reliance on stated preferences, overlap between religious and non-religious activities, inability to observe the motivation and intention behind choices and to judge the quality of religious activities are some of the challenges in this research framework.
Those scientists who believe in Scientism and hold that the experimental method is the only arbiter in all matters of life need to look no further than the field of economics where the tools and concepts of physics are applied. Even though science cannot be arbiter in morals, defining motives, public policy and politics, but it cannot even be a perfect and sufficient tool in explaining economic behaviour by taking the analogy of animal behaviour which is based on self-interest and survival instincts.
Islamic Economics Project 