205
Moutaz Abojeib, Mohamed Aslam Haneef, and Mustafa Omar Mohammed (Eds.) Islamic Economics: Principles and Analysis
International Shari’ah Research Academy for Islamic Finance Kuala Lumpur, 2018, pp. 813
Reviewed by: Abdullahi Abubakar Lamido PhD Candidate, Department of Economics International Islamic University, Malaysia
Received: 21 January 2021, Revised: 11 February 2021, Accepted: 22 February 2021
ABSTRACT. Islamic economics is at an important crossroads. Leading scholars have continued to reassess the journey so far in its development, offering fresh looks into its future directions. At the core of all the debates on the development of Islamic economics lies the need for standard texts that would guide the teaching of the new discipline. Islamic economics: Principles and analysis, published forty-two years after the formal ‘birth’ of the nascent discipline, represents one of the most important steps in that direction. This paper makes a critical review of the book and offers some insights towards its further improvement. The book has succeeded remarkably in summarizing, evaluating, and simplifying the most important materials on the concept, philosophy, principles, methodology, and frontiers of Islamic economics. It details the analysis of such topics as Islamic microeconomics, macroeconomics, economic development, Islamic finance, Islamic social finance, and the challenges and future directions of Islamic economics. It stands unique given its coverage of essential topics, the caliber of scholars that contributed chapters and made reviews, as well as its rigorous editorial process. Even with areas that need improvement, it is envisaged that the book can spark a new wave of convergence towards consensus on some key concepts in Islamic economics.
KEYWORDS: Islamic economics, Islamic finance, Principles of Islamic economics.
JELCLASSIFICATION: A10, A12, A19, D00 KAUJIECLASSIFICATION: H0, H1, H2, H3
Islamic economics: Principles and analysis repre- sents a positive step in the efforts to satisfy the yearn- ing for comprehensive texts on Islamic economics.
The book tries, with remarkable success, to summa- rize and evaluate in a volume, the four decades of research, debates, deliberations, and publications on the concept, philosophy, principles, methodology, and frontiers of Islamic economics, covering most of the hitherto scattered materials on the major topics in the field.
The volume is organized in five broad parts, with- in twenty-one chapters. After the foundational chap- ters that expound the philosophical and methodologi- cal basics of Islamic economics, most other chapters, specifically chapters five to sixteen, are to a certain extent, arranged along the key microeconomic and macroeconomic topics normally covered in standard economic textbooks, punctuating the book with fa- miliar economic terms. However, in all topics, the analysis is widened to cover major concepts and is- sues peculiar to Islamic economics. Under Islamic microeconomics for instance, in addition to the anal- ysis of the familiar topics, the chapter also discusses the role of zakāh, waqf, and ṣadaqah in the three- sector macroeconomic model, among others.
Unnecessary prolonged discussions and polemical debates have been principally avoided, and where necessary, unresolved debates are summarized and reduced to boxes for interested readers. Each chapter begins with “Learning Outcomes” and ends with a summary, while also outlining key items, references, further readings, and review questions. Chapters are also frequently interluded with pictures and boxes that summarize key messages of the topics. Although relatively long, the book’s quality print, plain style, simplified expressions, less use of jargons, and chap- ter summaries, all help in making it reader friendly.
The philosophy of the book stems from the inte- grationist approach which does not discard the worthwhile legacies of conventional economics, but acknowledges and utilizes its theories and analytical tools after a critical evaluation based on the overall Islamic economic vision, values, and objectives. Each chapter begins with an overview of the topic under discussion from its conventional perspective, fol- lowed by an Islamic appraisal of the concept, after which the alternative Islamic paradigm is presented.
Conventional critiques of modern economics have
also been utilized in establishing the need for an alternative. This approach not only refreshes those familiar with mainstream economics, but also pro- vides a fair grasp of the concepts as an important step to understanding the Islamic alternative perspective.
The first part of the book which discusses the foundations of Islamic economics is among its most unique parts. The first chapter here discusses the rel- evance of religion to economics from the lenses of both conventional and Islamic economics. It argues that between economics and religion exists “an in- separable interrelationship” which establishes “a con- stant interaction between religion and ideas and prac- tices” (p.4) at both the micro and macro levels. For instance, religion is a major determinant of supply and demand in a particular market. Muslim consum- ers would have no “taste” or “preference” from non- ḥalāl goods just as non-kosher meat would record zero demand in a Jewish market (p. 4). This religion- economic connection is ignored by the dominant neoclassical economic paradigm which rather side- lines religion and embraces secularism, materialism, and Benthamian utilitarianism as the primary build- ing blocks of its worldview and theories. Importantly, this paradigm is currently under tense criticism which has led to the birth of a heterodox movement that seeks to question its foundations and revisit the issue of exclusion of non-empirical facts in economic anal- ysis. In Islam, religion is a complete life code that guides humans in everything, economics inclusive.
Where neo-classical economics suppresses religion, Islamic economics takes exception, making religion its primary root.
In keeping with the above, the book presents Is- lamic economics as “a school of economics based on the worldview of Islam” (p. 19). It elucidates the roots, essence, and core elements of the Islamic worldview. Key points here are the concept of Allah as the Creator, the Owner of the universe and its re- sources, the Provider of livelihood (rizq) and the Ul- timate Provider of laws that govern economic life.
Other issues relate to the question of man and his rationality as well as his life goal and motives. The departure between Islamic and conventional econom- ics, therefore, begins from the worldview question. In the conventional worldview, the focus is only on the temporal world, while Islamic economics balances between material and metaphysical and afterworld
welfare. While conventional economics only claims positivism, Islamic economics combines normative ideals and positive facts, evaluating empirical proof based on textual evidence.
Chapter two discusses the scope and methodology of Islamic economics. It defines Islamic economics as “a social science that studies the economic prob- lems of humanity and evaluates their solutions from the perspective of the Islamic worldview and values, as well as human reasoning” (p. 32). This definition, which approaches Islamic economics from essential- ly methodological-epistemological lenses, incorpo- rates important elements mostly ignored by other definitions, such as the extent to which Islamic eco- nomics is ‘scientific’ as a discipline. An essential element missing, however, is the question of the goal of the discipline, which is connected to dual prosperi- ty; that is, wellbeing (falāḥ or saʿādah) in the two worlds. If the Islamic economic worldview empha- sizes the need to combine metaphysical and spiritual welfare, then, in addition to the positive and norma- tive concerns, it should be presented as a goal- oriented discipline; one that seeks to ensure wellbe- ing in the two worlds. An all-encompassing defini- tion will require capturing all these concerns, particu- larly the overall end or maqāṣid of the discipline, as emphasized by some other definitions.
The chapter also discusses the features, objectives, scope, and components of Islamic economics, pre- senting it as a social, political, and multidisciplinary science. In analyzing its methodology, a “three- pronged approach” (p.46) to the discipline is pre- ferred. This involves negation, which means rejecting any concept, theory, or model that is antithetical to Islamic precepts; integration which allows for adopt- ing and adapting any conventional wisdom that is in conformity with the Islamic worldview, principles, and values, and the value addition approach which involves introducing fresh dimensions, such as the spiritual dimensions, into economic analysis. This value addition is not necessarily in terms of inventing new concepts, but more importantly, in redefining existing ones and triggering fresher and more creative insights into the analysis (pp. 46-47). It will be useful if the book elaborates further on this based on recent debates.
In an engaging manner, the 3rd chapter elaborately expounds the issue of theory building in Islamic eco- nomics (pp. 55-89). This is then followed by chapters on Islamic ethics and economics (chapter 4), and economic systems (chapter 5) where the selected features of Islamic economics, capitalism, and social- ism are enunciated.
The book’s 2nd part (chapters 6-10) is dedicated to Islamic microeconomics. Chapter 6 provides an Is- lamic framework for the analysis of consumer behav- ior, including the Qur’ānic normative frame-work guiding consumer behavior. Consumer in the Islamic framework needs to see himself first as Allah’s serv- ant (ʿabd) and vicegerent (khalīfah) before being an economic agent. The book tries to present a moderate stand on the unresolved debate about the rationality assumption. Rationality is accepted and self-interest is recognized as a human feature, but rationality “puts a restrain on self-interest by linking it with individual and social responsibility and morality in general” (p.
211). Islamic rationality, therefore, implies compli- ance to the Sharīʿah in terms of spending, avoiding extravagance, and seeking to maximize wellbeing through seeking Allah’s pleasure. From a maqāṣidic perspective, the rational consumer prioritizes his con- sumption based on the pyramid of needs represented by the necessities first, then the complementarities, followed finally – subject to budget and Sharīʿah constraints – by the embellishments. All consumption is to be located within the parameters of permissibil- ity, moderation, and prioritization according to the standard Islamic values.
In chapter 8, the “philosophical foundation of production in Islamic economics” (pp. 241-264) is illustrated, which is based on three interconnected concepts. The first is the concept of taskhīr (nature’s subservience to humans) which explains the purpose of creating resources (Qur’ān, 2:29). This is key to the analysis of producer behavior. The second con- cept is that of khilāfah (human’s role as a vicegerent) which explains man’s responsibility as the manager of the earthly resources on behalf of Allah, holding the duty of utilizing the resources properly. The third is amānah which views humans as trustees whose good actions would fetch them rewards, while evil actions can attract punishable sin. Allah, as the Abso- lute Owner of resources, has entrusted man to
safeguard and utilize the resources according to His stipulations. Again, this analysis would have been richer if these three concepts are analyzed alongside the concept of ʿimāraẗ al-arḍ as a fourth, independent concept. If khilāfah appoints man as the manager of the resources, taskhīr makes the resources subservi- ent to him, and amānah charges him to be trustwor- thy in dealing with the resources. Then, what tasks him to employ all these three in cultivating the land, harnessing and developing the earthly resources in productive ways for human wellbeing and develop- ment is the concept of ʿimāraẗ al-arḍ. It therefore deserves equal, particular attention also, especially given its particular connection with exploring, har- nessing, developing, and utilization of resources.
Part 3 of the book treats Islamic macroeconomics in 6 chapters. One key issue here is the fact that un- like the two-sector model, Islamic macro-economics comprises of three entities; private, public (which also has bayt al-māl) and the third, voluntary sector.
The third sector has a formal sub-sector that is made up of charity organizations, awqāf and trusts, and the informal sub-sector comprising non-organized direct donations. Contrary to neoclassical economics, Is- lamic economics pays particular attention to the third sector at least for two reasons. The first is the reli- gious reason, as Islam advocates for the sector to flourish in the economy. Then the economic reason, as it accommodates “all the three agents defined for market segment; namely household, business and government” (p. 362).
The Islamic financial system is discussed in three chapters (17-19) under the 4th part of the book. This covers the contemporary financial system and the real economy, the challenges of the Islamic financial sys- tem and the way forward, and Islamic social finance.
One major challenge is the issue of ineffective role of Islamic finance, as it is practiced today, in delivering a positive and sustainable impact on the wider econ- omy. In Islamic finance, priority is often given more to the compliance aspects than the real impact of financial transactions in actualizing the goals of Is- lamic finance. Important as it is, compliance is a means to an end; the end being making impact through Islamic financial transactions. Other chal- lenges discussed are the “murabahah syndrome” and the question of ensuring harmonized global Islamic finance standards (p. 673). As a way to enhance the
impact of Islamic finance, the book recommends
“value-based intermediation” (pp. 76-677), using investment accounts to harness investment opportuni- ties, enhancing shared prosperity through long-term infrastructure investment ṣukūk, and the empower- ment of business development and social entrepre- neurship.
Chapter 19 dwells on Islamic social finance. It highlights the social welfare role of various economic agents and institutions. These include the public treasury (bayt al-māl), zakāh and waqf institutions, non-governmental and charitable originations, private sector businesses, banks (including microfinance banks), as well as takāful and micro-takāful. The analysis on zakāh and waqf takes a leave from the usual romanticizing of the historical past of the two institutions to a more realistic analysis of their rele- vant place in the modern economic landscape, situat- ing them as mechanisms for poverty reduction and multidimensional socio-economic development.
Two chapters form the final part of the book.
Chapter 20 discusses economic development.
Viewed as a multidimensional concept, development in Islam is conceptualized on the philosophical foun- dation of monotheism (tawḥīd), Lordship (rubūbiy- yah), vicegerency (khilāfah) and purification (tazkiyah). After discussing the characteristics of economic development, the chapter analyzes the question of development and poverty in the Muslim world. With only some exceptions, OIC countries are characterized by “war, poor healthcare, poverty and violations of human rights, illiteracy, lack of pro- gress, dictatorship, lack of transparency, ethnic con- flict, and regional divisions” (p. 744). These seems to be a result of the “religion-development dichotomy”
(p. 744) among Muslim countries, and even though they hold to Islamic beliefs, they mostly approach development un-Islamically. Addressing poverty and engendering development would require entrenching an effective system of redistribution, as well as the strategic intervention of the public and the third sec- tors in addressing the limitations of the market.
Growth is key to development. It however has to go
‘hand-in-hand’ with effective mechanisms for equi- table wealth redistribution to translate into develop- ment. Islam envisions a holistic development model with a goal of making people rich “spiritually and materially” (p. 750).
In the last chapter, an overview of the challenges facing Islamic economics is made based on the exist- ing critiques against the discipline. Despite the appre- ciable progress made in Islamic economics, there are however challenges at both theoretical and practical levels. They include the divide between theory and practice, absence of an entrenched Islamic economic system, unsatisfactory level of critical thinking, seg- mented focus in literature, and replication of conven- tional economics in some cases. There is also the dearth of textbooks, a gap which the present book contributes towards filling-in.
The book submits that the future direction of Is- lamic economics would depend on the extent to which the 3Ps are harnessed and managed; political will from Muslim countries, effective policies, and enough qualified people who are the conceivers, ini- tiators, implementers, promoters and even evaluators of reform (pp. 772-773). Support from formal and informal institutions are strategic, being the laborato- ries for testing new ideas and theories. Reinventing the wheel would be counterproductive. What is need- ed is critical evaluation, creative synthesis, and inno- vative value additions based on the standard Islamic principles and criteria as well as maqāṣid-based pri- oritization. Key to all this is the question of Islamic economics research and education. This requires sufficient human and financial resources to engender a renewed research regime in the basic, applied, and theoretical areas of the discipline. Without funds, the
‘non-commercial’ research areas would continue to suffer neglect, even with their critical relevance in building a concrete edifice of Islamic economics.
Paradoxically, a major weakness of the book lies in one of its major strengths, the number and caliber of contributors, editors, and reviewers. The book draws from a collective resourcefulness of 28 con- tributors, 38 reviewers, and three editors, with inputs from most of the topmost names in Islamic econom- ics and finance, including Monzer Kahf, Muhammad Anas Zarqa, Mabid Al-Jarhi, Muhammad Fahim
Khan, Muhammad Akram Khan, Asad Zaman, Mo- hamed Aslam Haneef, Zubair Hasan, Rodney Wil- son, Munawar Iqbal, etc. This is in addition to others from the emerging generation of Islamic economists.
The volume de-emphasizes the differences of opin- ions among scholars and tries to project a moderate stand on issues. This is despite the varied nature of the authors, reviewers, and editors, and the divergent views and approaches they adopt on several concepts and methodological concerns. Although thorough review has been made, one notices some differences in writing styles between chapters. Some chapters appear more of being text-oriented, others are more analytical, with yet some being more historical in approach. Now, could the cross-generational nature of the contributors and the moderate presentation of concepts in the book be seen as a new page in con- sensus building on certain key concepts in Islamic economics?
Again, while acknowledging the fact that the book tries to avoid what may be called decorative Islami- zation, giving additional attention to peculiar Islamic economics topics would add to its uniqueness and further reduce the tendency to view it as a volume on Islamic perspective on economics, rather than a text- book of Islamic economics that it truly should be.
Overall, Islamic economics: Principles and analy- sis, is a reliable compendium for scholars and re- searchers, informative to policymakers, handy to students, and friendly to the non-economists. It is a reference for Islamic banking and finance researchers and practitioners, and a comprehensive text for those wanting to study Islamic economics in its broad sense. While some scholars may take exception from its approach and some of its conclusions, the book is, nevertheless, a unique starting point in its own right.
As the future development of Islamic economics, like any other discipline, lies significantly on the devel- opment of textbooks, this work, published 42 years after the formal ‘birth’ of Islamic economics, pro- vides a strategic milestone in its making as an emerg- ing discipline.
Abdullahi Abubakar Lamido is a PhD candidate at the Department of Economics, International Islamic University Malaysia. After teaching economics at the Gombe State University, he joined the International Institute of Islamic Banking and Finance (IIIBF), Bayero University, Kano, Nigeria, as a lecturer since 2014. He has attended and presented papers at over a dozen conferences and published in reputable international journals on topics related to Islamic economics and finance. E-mail:
lamidomabudi@gmail.com
وبأ زتعم ( دمحم رمع ىفطصمو ،فينح ملسأ دمحم ،بيج
ت رح ي )ر
ليلحتلاو ئدابلما :يملاسلإا داصتقلاا
،روبلملااوك ،ةيملاسلإا ةيلالما يف ةيعرشلا ثوحبلل ةيلماعلا ةيميداكلأا 2018
م ص ، 813
وديملا ركب وبأ اللهدبع :ةعجارم
مسق ،هاروتكد بلاط ايزيلام ،ةيلماعلا ةيملاسلإا ةعماجلا ،داصتقلاا
صلختسلما ي .
ق ف قيرط قرتفم دنع يملاسلإا داصتقلاا مهم
. ب ادح ام اذهو ءاملعلا رابك
ىلإ نيثحابلاو
لما مييقت ةداعإ ةلحر
ملعلا اذهل ،
ميدقت ىلإ ثيثحلا يعسلا عم .لبقتسلما تاهاجتلا ةديدج ةرظن
لثمتت
لا ةيضقلا رهوج
يف ةي شاقنلا ب قلعتلما يملاسلإا داصتقلاا ريوطت يف
ةجاحلا ةسالما ىلإ ةيعجرم بتك
اهنأش نم يف داجلا يعونلا ماهسلإا
سيردت يفرعلما لقحلا اذه .ديدجلا
" باتك دع ي :يملاسلإا داصتقلاا
ليلحتلاو ئدابلما
"
، رش ن يذلا ئ شانلا ماظنلل ةيمسرلا "ةدلاولا" نم ا ًماع نيعبرأو نينثا دعب
ىدحإ ،
ةمه لما تارداب لما ت .هاجتلاا اذه يف
د ق ةعجارم ةقرولا هذه م ةيملع
تو باتكلل ضرعتس
نم راكفلأا ضعب
.نيسحتلا نم ديزم لجأ دقل
داولما مهأ طيسبتو مييقتو صيخلت يف ظوحلم لكشب باتكلا حجن
يملاسلإا داصتقلاا دودحو ةيجهنمو ئدابمو ةفسلفو موهفمب ةقلعتلما تي ،
حض لذ ةلمج للاخ نم ك
لما تاعووو
؛باتكلا اهيطغ ي يتلا ،يملاسلإا يئزجلا داصتقلاا لثم
و ،يلكلا داصتقلاا و
ةيمنتلا
،ةيداصتقلاا و
،يملاسلإا ليومتلا و
ةيلبقتسلما تاهجوتلاو تايدحتلاو ،يملاسلإا يعامتجلاا ليومتلا
،ةيساسلأا تاعوووملل هتيطغتل اًرظن هعون نم ديرف باتكلاو .يملاسلإا داصتقلال مو ةناكلمو
ىوتس
ءاملعلا نيثحابلاو نيذلا
اومهسأ يف دادعإ لوصف ةعونتلما ه ةيلمع ىلإ ةفاولإاب ،تاعجارم اومدق وأ
لما ريرحتلا ةينه
. دوجوب رارقلإا عمو تلااجم
تاعووومو نيسحت ىلإ جاتحت
- يرشب دهج يأك -
نم ،
لمؤلما نأ مهس ي باتكلا إ يف عامجلإا وحن براقتلا نم ةديدج ةجوم ق لاط لوح
ميهافلما ضعب
يملاسلإا داصتقلاا يف ةيساسلأا ديدجلا صصختلا اذه يف ملعتملل ةديفم نوكت نأ اهنأش نم يتلا ،
.
دلا تاملكلا ةلا
يملاسلإا داصتقلاا ئدابم ،يملاسلإا ليومتلا ،يملاسلإا داصتقلاا : .
فينصت
:JEL A10, A12, A19, D00
فينصت
KAUJIE H0, H1, H2, H3 :
