A Note on Islamic Economics

For an excellent paper that in a short space of thirty pages covers methodological

issues of major significance, see Jon D. Wisman ―Towards a Humanist Reconstructionof Economic Science.‖ Journal of Economic Issues, Vol. XIII, No. 1, March 1979(pp. 19-48), (notes and references are also valuable contributions in themselves).He suggests that ―economics‘ pretense to ethical neutrality is a delusion‖ (p. 33),along the same line see his paper ―Legitimation, Ideology-Critique and Economics‖in Social Research, (pp. 291-320), in which he addresses the question ―whethereconomic theory‘s particular mode of legitimation serves to further the unfolding ofhuman potential or, conversely, acts to wart liberation and thereby enslave humans.‖He concludes, echoing Polanyi, that ‗the economic problem can be viewed as bothmaterial and social. To the extent that the material problem of overcoming privation andscarcity entails the control and manipulation of material reality, positivist or objectivistmethodology-guided by a technical interest and utilizing means-ends rationality is agreat utility. However, ultimately the economic problem must be viewed as social orpolitical. As such economic science must be guided by practical interest in achievingunderstanding as to the ethical norms consonant with a good and just economic order.A liberating economic science cannot eschew values‖ (pp. 319-320).

17 See Elias L. Khalil ―On the Scope of Economics: What is the Question?‖ FinnishEconomic Papers, Vol. 8, No. 1, Spring 1995 (pp. 40–55), for a useful discussionof ‗means-end‘ definition of economics. In a curious and cryptic footnote 2 (p.42), he says: ―Ironically, the etymology of the English word ‗economics‘ in Greek:‗oikonomikos‘ (literally: house management) does not concur with Robbin‘s meaningof the word. Incidentally, the Arabic word for economics, ‗iktisad‘ squarely fitsRobbins‘s sense.‖ It is difficult to see how an etymology of iqtisad (OÉ°üàBG) couldpossibly square with the definition of economics by Robbins. The derivatives of thisterm from the root ‗qasada‘ (ó°üB) appears in the Quran, and in its own form OÉ°üàBG

appears in the earliest sources, including in the Ahadeeth of the Messengerº≪°SH ¬DBGH ¬«≪Y ˆG ≈≪°U and refers to a much deeper and more complex constellation

behavioral rules and norms. It is so desirable, as a mode of behavior, that it is made asubject of prayer and supplication (see note 1 above).

18 Kenneth J. Arrow, ―Economic Theory and the Hypothesis of Rationality,‖ TheWorld of Economics (p. 198). J.C. Harasanyi ―Morality and the Theory of RationalBehavior,‖ Social Research 44 (pp. 623-656). On rationality, see the collection ofessays in Rationality in Economics: Alternative Perspectives , edited by KennethDennis; Kluwer Academic Publishers, 1998. On the criticism of neoclassicalassumptions from the perspective of methodology of subjectivism, see Subjectivism,Intelligibility and Economic Understanding , New York University Press. It is acollection of 24 essays in honor of Ludwig M. Lachman, nearly all which constitutecriticism of the assumptions of neoclassical economics, including rationality, perfectinformation and perfect foresight, and the competitive equilibrium. The volumeincludes ideas useful to development of Islamic economics, including a paper byDon Lavoie on Hermeneutics, and another by Willie Meyer on ―Beyond Choice.‖The list of references of the papers in this volume are also useful.

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