Building Islamic Economics from Theological Roots

Abstract

Most of the literature published under the nomenclature of ‘Islamic economics’ deals with Islamic guidelines that address Muslims only. However, there is a vast area of economic subjects dealt in the Qur’an and (also hadith of the Prophet) that addresses the entire humanity in the form of positive statements. The paper suggests a methodology for building Islamic economics as a social science from these statements. For sake of illustration, the paper first presents a selection of positive statements derived from the Qur’an having an obvious or direct relevance for human happiness and misery both at macro and micro levels. The Invisible Hand of God, that responds to human behavior expressed through such variables as faith in the Unity of God, ethical values, gratitude for God’s graciousness, God-consciousness, contentment and patience and spending on others, acts as an over-arching factor and influences human decision-making and outcome of the decisions. The paper argues that by understanding the operation of the Invisible Hand of God, the humanity would enhance its understanding about the prevalent prosperity and misery across nations and among individuals. For benefitting from the Islamic economic statements the paper suggests a methodology which could help transform these statements into economic theory.

Keywords: Islamic economics theory; theology and Islamic economics; Invisible Hand of God;

JEL Classification: A13, B49, D03, D31, Z12