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Brief Intro: Islamic Alternatives
to Secular Moral Foundation of
Modern Economics
Lead Paper for Discussion: JKAU IE (2021, forthcoming)
Dr. Asad Zaman
https://ssrn.com/abstract=3786667
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3786667
Amartya Sen: Poverty & Famines
Analyzed Causes of Four Major Famines
Scarcity: No Food Entitlement: No Compassion
At height of Bengal Famine, Tons of Rice was shipped
out of Bengal under ARMED GUARD, to buyers able
to pay higher prices.
WHY was food shipped out of famine area?
Economic Theory: Supply & Demand
Products should be sold to highest bidder.
Economics CLAIMS to be POSITIVE
However, Economic Theory is a DISGUISED ideological argument
To JUSTIFY EXPLOITATION of LABOR, LAND, and ACCUMULATION of
Wealth by Capitalists.
European Transition to Secular Modernity
• Society as an Organic Whole, with collective purpose
• Society of individuals, each with his own purpose
• Let everyone be free to pursue his goals – Laissez Faire
• Those with wealth and power get increasing shares.
• Intermediate Goals – MEANS – converted to Purpose of Life
Founding Moral Principles
Capitalism
• Competition
• Individualism
• Hedonism
Islamic
• Cooperation
• Social Responsibility
• Generosity
Three Dimensional
Implementation:
Individual, Legal, Institutional
Individual
• Individual Behavior: Search for EXCELLENCE in Conduct
• Ideal Pattern: Prophet Mohammad SAW as role model
• Mercy to all nations.
• Compassion – he feels your suffering
• Love and service for all creation
• They feed the poor, for the love of Allah
Legal Framework
• Shari’ah
• Need Ijtihad to adapt to modern institutions and environment
• JUSTICE: cooperative search for the “right thing to do”
• Versus: Adversarial – Michael Sandel - Rationality
Institutional Framework
Generosity VERSUS Greed
WAQF: Spend Excess on Needy BANKS: Hoard and Accumulate
Cooperation Versus Competition
Takaful: Taking Care of Each Other Insurance: Taking Advantage of Needy
Service Versus Profits
Service Orientations
Guilds: responsible for service
Firm Structure: Equal partners in
provision of service
Meaningful Labor/Life
Profits: Multinationals
MNC’s: Profits above ALL
Nestle: Killing babies for profits
The Oil Wars: Destruction of Iraq,
Libya, Syria
Firm Structure: Sell lives for
money, Boss is owner, labor is
wage-slave, meaningless lives
Concluding Remarks
• Modern Economic Theory CLAIMS to be positive, objective, factual
• In fact, it is a DEEPLY NORMATIVE theory.
• The purpose of modern economics is to JUSTIFY and IDEALIZE
capitalism: Exploitation of Laborers, Concentration of Wealth
• These are DISASTROUSLY bad moral foundations.
• A revolutionary new approach to economics can be built on the
radically different moral foundations of Islam.

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Islamic Alternatives to Secular Moral Foundations of Economics

  • 1. Brief Intro: Islamic Alternatives to Secular Moral Foundation of Modern Economics Lead Paper for Discussion: JKAU IE (2021, forthcoming) Dr. Asad Zaman https://ssrn.com/abstract=3786667 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3786667
  • 2. Amartya Sen: Poverty & Famines Analyzed Causes of Four Major Famines Scarcity: No Food Entitlement: No Compassion At height of Bengal Famine, Tons of Rice was shipped out of Bengal under ARMED GUARD, to buyers able to pay higher prices.
  • 3. WHY was food shipped out of famine area? Economic Theory: Supply & Demand Products should be sold to highest bidder. Economics CLAIMS to be POSITIVE However, Economic Theory is a DISGUISED ideological argument To JUSTIFY EXPLOITATION of LABOR, LAND, and ACCUMULATION of Wealth by Capitalists.
  • 4. European Transition to Secular Modernity • Society as an Organic Whole, with collective purpose • Society of individuals, each with his own purpose • Let everyone be free to pursue his goals – Laissez Faire • Those with wealth and power get increasing shares. • Intermediate Goals – MEANS – converted to Purpose of Life
  • 5. Founding Moral Principles Capitalism • Competition • Individualism • Hedonism Islamic • Cooperation • Social Responsibility • Generosity
  • 7. Individual • Individual Behavior: Search for EXCELLENCE in Conduct • Ideal Pattern: Prophet Mohammad SAW as role model • Mercy to all nations. • Compassion – he feels your suffering • Love and service for all creation • They feed the poor, for the love of Allah
  • 8. Legal Framework • Shari’ah • Need Ijtihad to adapt to modern institutions and environment • JUSTICE: cooperative search for the “right thing to do” • Versus: Adversarial – Michael Sandel - Rationality
  • 10. Generosity VERSUS Greed WAQF: Spend Excess on Needy BANKS: Hoard and Accumulate
  • 11. Cooperation Versus Competition Takaful: Taking Care of Each Other Insurance: Taking Advantage of Needy
  • 12. Service Versus Profits Service Orientations Guilds: responsible for service Firm Structure: Equal partners in provision of service Meaningful Labor/Life Profits: Multinationals MNC’s: Profits above ALL Nestle: Killing babies for profits The Oil Wars: Destruction of Iraq, Libya, Syria Firm Structure: Sell lives for money, Boss is owner, labor is wage-slave, meaningless lives
  • 13. Concluding Remarks • Modern Economic Theory CLAIMS to be positive, objective, factual • In fact, it is a DEEPLY NORMATIVE theory. • The purpose of modern economics is to JUSTIFY and IDEALIZE capitalism: Exploitation of Laborers, Concentration of Wealth • These are DISASTROUSLY bad moral foundations. • A revolutionary new approach to economics can be built on the radically different moral foundations of Islam.