Question

1. Explain the concept of man and nature in the Islamic worldview. How does these concepts determine the concept of rationality and property rights in Islamic economics? ( 20 mark )

2.Discuss the relevance of the “scarcity concept” in Islamic economics. ( 20 mark)

Answer 1

1. The Islamic worldview is grounded in Allah (God), Mohammad (the ultimate and final prophet of Allah), and the Qur’an (the Word of Allah delivered through Mohammad beginning in about 610 AD). Islam means submission to Allah and a Muslim is one submitted to Allah. About 1/5th of the world’s population is Muslim, about three-quarters of which are non-Arabs.

lam is a comprehensive worldview, as Salam Azzan,

• Islam is a complete way of life. It integrates man with God, awakens in him a new moral consciousness and invites him to deal with all the problems of life— individual and social, economic and political, national and international—in accord with his commitment to God. Islam does not divide life into domains of the spiritual and the secular. It spiritualizes the entire existence of man and produces a social movement to reconstruct human life in the light of principles revealed by God. Prayer and worship in Islam are means to prepare man to fulfill this mission. Islam aims at changing life and producing a new man and a new society, both committed to God and the welfare of mankind. That is why Islam is not a religion in the limited sense of the word; rather it is a complete code of life and a culture-producing factor. Muslim culture profits from all available sources, local and international, but its unique characteristic is that it grows from the foundations of the Qur’an and Sunnah.Hence the distinctiveness of Muslim culture and life in Europe and elsewhere

Islamic economics has been having a revival over the last few decades. However, it is still in a preliminary stage of development. In contrast with this, conventional economics has become a well-developed and sophisticated discipline after going through a long and rigorous process of development over more than a century. Is a new discipline in economics needed? If so, what is Islamic economics, how does it differ from conventional economics, and what contributions has it made over the centuries? This article tries to briefly answer these questions.

It is universally recognized that resources are scarce compared with the claims on them. However, it is also simultaneously recognized by practically all civilizations that the well-being of all human beings needs to be ensured. Given the scarcity of resources, the well-being of all may remain an unrealized dream if the scarce resources are not utilized efficiently and equitably. For this purpose, every society needs to develop an effective strategy, which is consciously or unconsciously conditioned by its worldview. If the worldview is flawed, the strategy may not be able to help the society actualize the well-being of all. Prevailing worldviews may be classified for the sake of ease into two board theoretical constructs (1) secular and materialist, and (2) spiritual and humanitarian.

Secular and materialist worldviews attach maximum importance to the material aspect of human well-being and tend generally to ignore the importance of the spiritual aspect. They often argue that maximum material well-being can be best realized if individuals are given unhindered freedom to pursue their self-interest and to maximize their want satisfaction in keeping with their own tastes and preferences.[1] In their extreme form they do not recognize any role for Divine guidance in human life and place full trust in the ability of human beings to chalk out a proper strategy with the help of their reason. In such a worldview there is little role for values or government intervention in the efficient and equitable allocation and distribution of resources. When asked about how social interest would be served when everyone has unlimited freedom to pursue his/her self-interest, the reply is that market forces will themselves ensure this because competition will keep self-interest under check.

In contrast with this, religious worldviews give attention to both the material as well as the spiritual aspects of human well-being. They do not necessarily reject the role of reason in human development. They, however, recognize the limitations of reason and wish to complement it by revelation. They do not also reject the need for individual freedom or the role that the serving of self-interest can play in human development They, however, emphasize that both freedom and the pursuit of self-interest need to be toned down by moral values and good governance to ensure that everyone’s well-being is realized and that social harmony and family integrity are not hurt in the process of everyone serving his/her self-interest.

2. Scarcity has been a subject of contention among Muslim scholars. Whereas the concept is central to conventional eonomics in relation to choice and efficiency, Muslim scholars differ about it. The purpose of this study is to summarize the differences of opinion and provide a conclusion to this issue. We hypothesise that the difference in the educational backgrounds of Muslim scholars partially explains their diverse opinions on scarcity. Some scholars have a strong background in economics whereas other scholars have a strong background in Islamic law (Shari’ah). Some scholars reject outright the existence of scarcity and believe in abundant resources while others confirm the presence of scarcity. Other scholars believe there is no scarcity at the macro-level but that can be scarcity at the micro-level. Although the Qur’an provides ample evidence of God’s generosity and mercy in providing to humankind, it is still necessary to consider our daily needs and wants, which vary from society to society and from generation to generation. On the contrary, the Qur’an provides evidence that facing scarcity is part of God’s way of testing His creatures.