Transcript I. Introduction

A Note on Islamic Economics
I. Introduction
1. Systematic thinking about Islam and economics by professional economists has a
short history compared to the atrophy that followed an earlier remarkable period
of fervent scholarship in the sciences and humanities in the Muslim world. This
‗hibernation‘, as Dr. Chapra calls it,2 occurred after singular achievements in all
areas of thought by Muslim scholars and dynamic economic growth of Muslim
societies, and after the contributions, discoveries, and intermediation of Islamic
sciences helped kick off the development and growth in Western societies and
economies. From the present-day perspectives, however, and especially when
judged against the first three decades of development of other disciplines, the
published writings on the Islamic economics in various languages give a sense
of a vibrant and energetic birth and infancy of a discipline. These efforts are
directed toward the development of a coherent and rigorous explanation of how
Islam proposes to organize an economic system by answering the fundamental
questions of what should be produced, how and for whom, how decisions should
be made and by whom, and, finally, how Islamic institutions could be revived to
address modern societies‘ problems.
2. This assessment may seem odd against two present currents: the first is an
expressed dissatisfaction with the pace and direction of progress made thus far in
Islamic economics as well as an apparent cognitive dissonance among scholars
regarding the concept, methodology, and objective of the discipline. 3 The second
current is an expression of a strident New Weberian critique of Islam, in general,
and Islamic economics, in particular, that views Islamic institutions and thought
as inimical to growth and development of Muslim Societies.4 Neither of these
currents should come as a surprise to those engaged in serious scholarship and
who follow developments in the Muslim world. The first is a feature of the
natural development of disciplines; witness the continuing debates in traditional
economics. For professionals to be self-critical in any discipline only helps to sow
the seeds for further inquiry, thereby providing the potential, if not the impetus for
new ideas. The second current is also natural, given the highly intense, charged,
and noisy background of political developments of the last three decades. It is not
surprising that this background would provide opportunities that, unfortunately,
help to sustain particular phobias. Expressions of the detrimental effects of Islam
and its institutions are not new; moreover, their most recent articulations are based
on mere conjecture, or simple, spurious relationships and distortions designed to
serve certain priors. On the other hand, there have been views rejecting the New
Weberian thesis as, indeed, there were counterarguments against the ‗Old‘ critique.
The preliminary results of recent empirical research on the relationship between
religion and economic growth seem to question the building blocks of this thesis;
at least one recent systematic and methodologically defensible empirical study
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