The Notion of Risk in Economics Revisited in the Light of Arab-Muslim Classical Literature

10 Pages Posted: 31 Oct 2017

See all articles by Abderrazak Belabes

Abderrazak Belabes

King Abdulaziz University - Islamic Economic Institute

Date Written: 2017

Abstract

The aim of this study is to show how Arab-Muslim societies, from Indonesia to Andalusia, did not wait for the modern era in order to learn how to live with risk. Rather, they developed codes of conduct, modes of thinking and moral values. At first sight, the main issue of the notion of risk that emerged in the light of classical Arab-Muslim literature lies in distinguishing between two types of risk: that associated with the real economy and linked to common goods and trade; and that which is associated with gambling and speculation. Taking risk is generally encouraged if it is bound to serve the productive economy from which everyone will benefit. It is, however, prohibited to take such a risk should it feed a game where a person’s gain is obtained at the expense of another. From our analysis, it appears that the notion of risk is not confined to the legal approach or the question of a probabilistic computation of uncertainty which characterizes the modernist approach to risk. This broader definition of risk opens-up the perspective to field studies incorporating notions such as vulnerability developed by some Muslim travelers. Our analysis also emphasizes the importance of studying historical manuscripts to explore alternative notions of risk.

Keywords: Risk, Gharar, Maysir, uncertainty, vulnerability, Arab-Muslim literature

JEL Classification: B1, B19, Z12

Suggested Citation

Belabes, Abderrazak, The Notion of Risk in Economics Revisited in the Light of Arab-Muslim Classical Literature (2017). Journal of King Abdulaziz University: Islamic Economics, Vol. 30, No. 2, 2017, Available at SSRN: https://ssrn.com/abstract=3061441

Abderrazak Belabes (Contact Author)

King Abdulaziz University - Islamic Economic Institute ( email )

Jeddah, 21589
Saudi Arabia

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