Syed Nawab Haider Naqvi - Islam, Economics, and Society

ROUTLEDGE LIBRARY EDITIONS:
POLITICS OF ISLAM

ISLAM, ECONOMICS, AND SOCIETY

ISLAM, ECONOMICS, AND SOCIETY

SYED NAWAB HAIDER NAQVI

Volume 5

First published 1994

This edition first published in 2013
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1994 Syed Nawab Haider Naqvi

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ISBN: 978-0-415-64437-2 (set)
ISBN: 978-0-203-07906-5 (set)
ISBN: 978-0-415-83079-9 (other)
ISBN: 978-0-203-38137-3 (other)

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ISLAM, ECONOMICS, AND SOCIETY

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Syed Nawab Haider Naqvi, 1994

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Naqvi, Syed Nawab Haider

Islam, Economics, and Society
I. Title
297.19785

ISBN 0-7103-0470-6

Naqvi, Syed Nawab Haider.

Islam, economies, and society I Syed Nawab Haider Naqvi.

180pp. 22cm.

Includes bibliographical references (p.l64) and index.

ISBN 0-7103-0470-6

1. EconomicsReligious aspectsIslam. 2. Islam Economic

aspects. I. Title.

BP173.75.N3734 1993

330. 1dc20 93 2443

CIP

Dedicated
to
my wife Saeeda
and our daughters
Andalib, Tehmina, Qurratulain
and Neelofar

IN THE NAME OF ALLAH,
THE MERCIFUL,
THE MERCY-GIVING

While the mainstream economic paradigm remains entrenched in the corridors of learning and research, the real-world situation is persuading an increasing number of economists and economic policy-makers seriously to doubt the universality, realism, productivity, and even morality of some of the basic assumptions and core concepts of this paradigm. Thomas Ulen captures the mood of a sizeable number of the community of economists when he says: many of the most recent presidential addresses to the American Economic Association have been highly critical of received micro- and macro-economic theory. However, there has not yet been an offering of a new paradigm (Thomas S. Ulen, Review of Nelson and Winker's, An Evolutionary Theory of Economic Change in Business History Review, 1983, vol. 37, no. 4). Dissent and disagreement are no longer confined to the periphery; they are making serious dents on the centre core. What is being re-examined does not relate merely to policy perceptions and end-products; in fact the very assumptions about human nature, motivation, effort, and enterprise on which mainstream economics is based and the institutional framework in which the economic agent is expected to operate are placed under the spotlight. The current debate cannot be described as a search for new methodologies, formulations and prescriptions within the paradigm; it represents a serious effort to search for a new paradigm (Lester C. Thurrow, Dangerous Currents, Random House, New York, 1983; Amitai Etzioni, The Moral Dimension: Towards a New Economics, Macmillan, New York, 1988).

This is a very challenging moment in the history of the evolution of economics. Peter Drucker surmises: Reality has outgrown existing theories. This has happened twice before. The first occasion was in the years of the divide of the 1870s. Then the neo-classicists, Karl Menger in Austria, Stanley Jevons in England, and Leon Walras in France, created modern economics with their marginal utility theory. Then sixty years later, when the Great Depression confounded neo-classical theory, John Maynard Keynes created a new synthesis, the economic theory of the nation-state, in which the neo-classicists marginal utility theory is a sub-set, a building block rechristened as microeconomics. Since then there have been only minor adjustments. Milton Friedman and the supply siders are post-Keynesian rather than anti-Keynesian (Peter F. Drucker, The New Realities, Oxford, 1989, p. 149).

The challenges that remain unresponded to are legion: inflation along with unemployment, recession that fails to respond to traditional stimuli, growth without social justice, breakdown of social security systems, budgetary deficits that defy control, mounting debts, both domestic and international, ecological crisis, emergence of the supra-national state without supra-national mechanisms and agents for economic policymaking, development fiasco in a large number of Third World countries, and increasing constraints for the developed world to play an effective role in alleviating the misery of a large part of suffering humanity.

An economic theory encased within the assumptions of the classical and neo-classical paradigm looks askance at this situation. The issues and challenges that confront the economist today are more complex, even more fundamental, than the ones faced by his predecessors. Challenged, writes Amitai Etzioni, is the entrenched utilitarian, rationalistic, individualistic, neoclassical paradigm which is applied not merely to the economy but also, increasingly to the full array of social relations, from crion to family (op. cit., p. ix). In fact, the economic paradigm is being challenged at its very core: the neo-classical paradigm does not merely ignore the moral dimensions but actively opposes its inclusion. The new paradigm, on the other hand, visualises assigning a key role for moral values. Then alone may it be possible to seek both what is right