The basic concepts and methodology of Islamic economics are bound to be different from that of western economics. This is because, whereas western economics centres on materialism, Islamic economics looks at material wealth merely as a part of the greater system — the Islamic system of life. Economic problems in the Islamic system is therefore approached in an integrated manner from the perspective of the whole scheme of life. It combines all considerations of human development — spiritual, social, and material etc. In this way Islamic analysis is different from all other economic analysis. For example, the whole of Marxist doctrine is based on the war between the rich and the poor for material wealth while the whole of capitalist system is built on the doctrine of each aquiring as much wealth, as possible.

Objectives

The aim of Islamic economic analysis is to discover the core of the human economic problem and attempt to solve that problem with a view to maintaining or sustaining (and where necessary improving) human civilization.

The aim in the Islamic society is to maximise the benefits for self and the society in this world as well as in the life after death. To achieve this aim the Qur'an and the Sunnah are followed to the letter. Members in the society avoid all forms of laziness, idleness, and wastages.

The aim is to lead a decent and comfortable life with all the bounties Allah has provided and, in doing so, prepare a good home for himself in the hereafter. In the Islamic society means or resources of whatever form are seen as belonging to Allah. Human beings are given these resources by Allah with the stipulation, that:

The beegers and the destitutes have a right to their (the rich) wealth (li: 19).

From the above it should be clear that Islamic economic analysis is an integrated study affecting (and being affected by) all other aspects of human problems.

The nature of the problem and definition

The main economic problem in the West, since Robbins is how to take care of scarcity and how to allow or disallow the market forces to apportion economic resources. The some lists see the main economic problem as that of eliminating capitalist class by all means and providing each individual with at least two meals a day. The Islamic economists see differently. The real economic problem of man is how to prevent social tyranny and injustice, to fulfil nature's demand that every creature should receive its portion and remove those obstacles which cause the faculties and powers of large number of persons to be wasted merely on account of lack of necessary means.⁹ Islamic economic analysis is aimed ensure the implementation of natural justice and fair play the distribution of opportunities and means of satisfying the basic human needs.

Many other Islamic economists have attempted to define the subject matter of Islamic economics but each has either attempted to retain one or two western concepts or neglect to include the fact that Islamic economics concern itself with both this life and the life after death.

It is difficult to provide a definition of Islamic economics Akram Khan defines it as the study of the relationship of scarce but lawful means with tbe end or achieving falah for an aggregate of people in an Islamic society.¹⁰ However, the world scarcity carries western legacy. As an alternative, the following definition is worth considering:

Islamic economics is the study of human behaviour in their attempts to satisfy their NEEDS from the ABUNDANT resources which Allah has provided, within the context of the stipulations of Allah, with a view to maximising the benefit for self and the whole society both in this world and in the hereafter.

This definition therefore rejects the western concepts of unlimited wants, and limited resources or scarcity. Un-restrained wants or free — for — all desires do not occur (or at least are not to be encouraged) in the Islamic system. Ihe components of the definition may be explained as follows:

This definition, emphasises needs not wants. A peson's need is that part of his requirements which when absent can either end his life or make it at best unbearable.¹¹ They include such items as religion, food, clothes, decent shelter or accomodation, reasonable training, happy family, and good health. Man in an Islamic society attempts to satisfy these needs from the abundant resources Allah has bestowed on him.

Other items such as carpets, decorations, cars, etc., are treated as luxuries which are allowed in a moderate quantity but completely abhorred when they are taken in excess quantity.¹² There is no recognition of unrestrained wants in the Islamic society. Islam rejects the western concept of wants in all its ramifications. This is because want pre-supposes that man's willingness to acquire material benefits is not satiable. In fact, man has been equipped with startling qualities such as honesty, hardwork, charity, moderation, and humility, etc. He becomes selfish only when he developes excessive fondness for material possession. However this can be overcome through faith, in Allah, belief in the hereafter, and by noble deeds.

Allah has provided, resources in abundance. They are NOT scarce as the western and socialist economists want us to believe. The Holy Qur'an made it clear:

To thee we have granted the fount (of abundance) (cviii:1).

Do ye not see that Allah has subjected to your (use) all things in the heavens and on earth. And has made His bounties flow to you in exceeding measure (both) seen and unsieen (xxix:20).

The two verses indicate clearly that the resources of Allah are unlimited. Just look around you in the sky and on earth and you will see gifts of Allah which have continued to be there for all times. Shortages do exist in the world, but these are caused by man and can be eliminated by correcting man's behaviour and through research, hardwork and complete submission to the will of Allah. Such shortages could be due to the following reasons:

(a) Under-utilization and/or wastage of Allah's resources, This is so obvious in real life that it hardly needs any explanation. Most countries and persons waste resources including water, time, food and so on.

(b) Insufficient knowledge to harness the available resources; the growth of science and technology is rather slow, This, is often due to man's unwillingness to learn new ideas and to exploit the resources.

(c) Failure of man to follow Allah's guidance on how to maintain the world resources.

Economic and non-economic goods

In the western text books non-economic or free goods are those goods which one can have at will without having to pay any price for them. They include air, to a certain extent, water, sun light, etc. They are absolutely free because they are so abundant in supply and man has made no effort to bring them about. The concept of non-economic goods in the Islamic context is very much different.

In the Islamic sense all goods are free gifts of Allah to His servants. Even man's labour is free because he was created by Allah. Man did not create himself. Therefore seemingly free goods in the western sense e.g. water, air, etc., are also economic goods in Islam and are required to be harnessed for the good of self and the society. Any commodity whether commanding price or not which contributes to the benefit of the Islamic society either in this world or in the hereafter can be regarded as economic good in Islam.

The only non-economic goods in the Islamic sense are chose items which Allah in His abundant mercy has prohibited Muslims from eating, keeping or trading in. These items are haram or prohibited items. They include; among others:

1. Carrion (meat of dead animal, death occuring naturally or is killed by another animal);

2. Blood.

3. Pork (swine or pig);

4. Anything slaughtered in the name of beings other than Allah.

5. Alcoholic drinks (and intoxicants);

6. Vain literature and obscene pictures;

7. Vain music and dancing and similar activities.

These are the non-economic commodities in the Islamic framework. They are completely prohibited and can never become economic goods no matter how short in supply they are. Since nobody demands them, they cannot command any attention. All other commodities not in this category are economic goods and the Muslims are at liberty to put these to varying use.

Opportunity cost

Man has been granted free will by Allah in order to test him (man) in this world. Man can choose to use Allah's giftst either to satisfy the vain worldly pursuit or to use the same in the way of Allah and attain success here and the hereafter, If man with his free will should choose to indulge in the luxuries of this world to the neglect of the next world, he will gain the benefits here but lose a bigger benefit in the hereafter, Betterment in the hereafter, therefore, is the opportunity cost (the best alternative forgone) for the benefits he derives in this world. That means the benefits in the two worlds are measured against each other.

In the western and socialist economic analysis opportunity cost concept is used as an earthly measure of gains and losses solely in terms of material gains. In Islamic economic analysis it is extended to cover both the Worlds and assigns heavier weights to gains or benefits in the life after death, as Allah Himself said:

But the heareafter is better and more enduring (cvii:17).

The issue of rationality

In western economic analysis a rational consumer is one who consistently aims at maximising consumption with his given level of income. The essential requirement is that he be consistent (i.e. prefers more to less). In the western context, therefore, wine drinking (and drunkards) could be perfectly rational so long as he reports satisfaction with what he is doing consistently regardless of what other costs he inflicts on himself and the society in the process of this rational behaviour.

In the Islamic context, the western view of rationality is rejected in its entirety. To us, a rational consumer is one who attempts to satisfy his material, spiritual, mental, and social happiness and in doing so helps directly and willingly towards the attainment of the greatest benefit of the Islamic community both in this world and in the hereafter. In this context, therefore, the behaviour of the drunkards spendthrifts, misers, those who do not spend their wealth in the way of Allah, those who eat, trade or manage all or some of the forbidden items, and similar  behaviours are completely irrational even if they can gain material satisfaction in this world.

A rational firm in the western economic analysis is one that aims to maximise profit. So long as profit means the wealth, a firm will try to extract the most from the society regardless of the costs to the society. This definition is likewise rejected in the Islamic economic analysis. In the Islamic system a firm aims at maximisation of profit both in this world and in the hereafter. In this sense a meager profit margin in terms of material gains may well be all that an Islamic producer requires to retain him in business, believing as he does that by producing and selling to the Islamic community at a reasonable price, he is gaining an immense profit in the life after death.

Of course an Islamic rational producer would leave a reasonable margin of material profit to maintain himself, his family and his beusiness. But in so doing, he is not allowed to overprice any of his commodities, to hoard these to cause their prices to rise, to cheat in bargaining, to use fraudulent measures and weights, to speculate, and to become a monoplist. All these activities are completely irrational in the Islamic sense by virtue of their high negative reward in the life after death even though they could well be profitable in material sense in this world. In sum, the concept of Islamic rationality refers to maximisation of needs not maximisation of perverse desires of physical goods and material profits.

In conventional western literature a positive economist is one who studies what has been or what will be. He does not give value judgements. In this sense, a western positive economist is like a machine set to test urine or stool or blood It simply analyses the contents of the specimen, the judgment is left to someone else. In the same vain, a positive economist can only analyse the costs and benefits of a certain action, it is not part of his job to say whether the costs are bad and the benefits good or vice-versa. He could analys unemployment in terms of lost hours, etc; he can analyse drinking in terms of lost hours of work, cost of disturbance to society, etc., but it is not his business to say that drinkin is bad. In short, positive economists in the west are sycophant. They justify this positivism on the pretext that it is relatively easy to measure variables and it is easy to settle argument about events by reference to 'facts' as they are.

A normative economist on the other hand is one who studies relationships and advance value judgements on these. He studies what ought to be. Questions such as is monopoly good or bad, is paying tax good, etc., are discussed and answered in this area of economic analysis.

The lack of appeal for this kind of analysis in the eyes of western economists stems from its relative difficulty in finding points of reference and for evaluating the evidences. Argument about this kind of issues cannot be, they argue, settled by refering to the facts because different economists with different temperaments, different social backgrounds will have different evaluation techniques for the same issue.

Debate has been going on as to whether economics is primarily positive or normative. But the debate as we shall see is rather misplaced or unnecessary or both. Economics many western writers are beginning to realise, cannot be studies purely on positive grounds. We can highlight the fallacies of the claim of value freedom as follows:

(i) In an attempt to be positive, western economists make assumptions, The phrase ceteris paribus. or all things being equal is very well known in western paradigm. It implies that other things are ignored or are not important. Economists by using that phrase tactically avoid those items which are difficult to assess or impossible to measure.

(ii) Secondly, to be neutral in this respect is like taking the sides of the status quo and leaving the social setting as it.

(iii) Even the choice of topic to discuss under the positive economics is itself value judgement because it implies that the other topics are not important or they are not good or not worth discussing.

From these and other reasons it is clear that even where positivism is claimed, normativism creeps in. Therefore, the issue of total value freedom does not exist.

Islamic economics does not claim to be value-free. In fact, it is principally a value oriented or normative approach. It uses positive analysis merely as a tool to analyse and understand the implications of Islamic value in economic behaviours.¹³ However, the normative approach of Islamic economics differs from that of the western economics at least in two respects: First, it is the study of what must be i.e. what ought to be is backed by legal force.

Secondly, it has reference to the facts which are enshrined in the Holy Qur'an, Sunnah, and ijma for settling what is good and desirable.

Notes

8. Robins L., An Essay on the Nature and Significance of Economics, Science, 3 rd E dn., London 1932.

9. Mawdudi, S.A., The Economic Problem of Man and Its Islamic Solution, Islamic Publications Ltd, Lahore, 1954.

10. Khan, M.A., "Islamic Economics: Its Need and Nature" Institute of Policy Studies, Islamabad, 1983.

11. Zarqa, A., "Islamic Economics: An Approach to Human Welfare" in Khurshid Ahmad (ed), Studies in Islamic Economics, Islamic Foundation, U.K., 1980.

12. Ibid.

13. Mannan, M.A., "Why is Islamic Economics Important? Seven Reasons for Believing", International Center for Research in Islamic Economics, Jeddah, 1984.