Chapter 3: The Islamic economy
Islamic jurists have by and large been silent on the financial system for centuries until interest revived after the Second World War (Chapra 2007, p._346). Then Maududi, al-Sadr, Qutb and others stood up and sought ways to Islamize the economy. Islamic economics is about the rules that should be followed by Muslims. It is normative economics. There have also been calls to develop an Islamic theoretical system of economics, including Islamic microeconomics and Islamic macroeconomics (Chapra 2000), but so far these have met with little success. Masudul Alam Choudhury would like to see such a system based on a specifically Islamic epistemology, itself founded on tawheed, the oneness of God. He complains that Islamic thinking on finance and economics accepts ‘the postulates of resource scarcity, competition and opportunity cost of resource allocation, and the existence and the axiom of optimality. These deny the intrinsic property of the Islamic worldview to learn across knowledge, time and space dimensions’. This worldview starts from the oneness of God, as ‘There can be no intellection in anything without the conscious invoking of Tawhid, the oneness of God – equivalently, the unity of divine law and the knowledge and its representation in the constructed world-systems derived from the Tawhidi epistemological foundation’. Belief, knowledge and application of knowledge cannot be separated (Choudhury 2012).
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