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The Relevance of Islamic Economics Essay

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Summary

The article refers to both Islamic and conventional economics. Conventional economics has been studied for a long time, unlike Islamic economics. As much as both forms of economics have very similar concepts, they also differ greatly. Some of the concepts that Chapra (2000) discusses in the article include vision, mechanism, worldview, and the method. The vision of Islamic economics is to study the allocation of resources in many of the Islamic based countries. There are a few countries that still govern using Sharia Law. Some of these countries are, however, not very strict on the Sharia Law given that they would like to fit in the other non-Muslim circles. This creates a difficulty in realizing the vision of the study.

The mechanism, on the other hand, is defined as how the allocation of materials is done. There are three main factors to consider when discussing types of mechanisms. These are filtering motivation, and socio-economic restructuring. The role of the worldview is to give an individual their political perspective among other perspectives. For example, if Muslims believe that it is wrong to steal, they will also believe that cutting the hand of a thief so that he cannot steal again is acceptable.

Key Learning Points

When it comes to the history of Islamic economics, Chapra (2000) argues that there are very many scholars who have aided in expanding the subject. He mentions Shah Waliyullah and Abi Yusuf, among others, as some of the scholars who have contributed greatly to the study. According to these scholars, Islamic economics is very different from some of the conventional economics that are present in the world today.The key learning points are the vision, the relevance of Islamic economics, history, and the future of Islamic economics. The vision is what Islamic economics wants to achieve. Even though this presents a good challenge to all scholars, it is very difficult to study the exact impacts of Islamic economics because there are very few countries that use Islamic economics at the moment. The relevance of Islamic economics has also been debated over the years. Several scholars have explained that there is no relevance in studying Islamic economics since it is already categorized under the conventional economics of today’s world.

Last, but not least, the learning point is the future prospects of the study. Many scholars believe that Islamic economics will not survive in the future. According to Chapra, Islamic economics has focused on explaining itself and how its concepts can change the current world economy for the better. It has not explained how different it is from the other known economies. The concepts involved in Islamic economics also entail the use of the Islamic religion. Most of the world’s population is not Muslim. This makes the future of Islamic economics very dim.

Relevant Statements to the Session

The relevant statements in the session include:

Chapra (2000) mentions that “If well-being were to be defined in a purely material and hedonist sense, then it would be perfectly rational for economics to give prominence to the serving of self-interest and the maximization of wealth, bodily pleasures, and sensual satisfactions” (p. 23).

“If the market, the family, the society, and the state all have a role to play in human well-being then the question is how to make them play their roles in a manner that complements and does not hinder the effective performance of their roles by others” (Chapra, 2000, p. 24).

“If the mechanisms chosen by economics are not in conformity with the desired concept of well being, or if the desired restructuring is not, or cannot be brought about, then that kind of well being can fail to be realized” (Chapra, 2000, p. 27).

Critical Analysis

Chapra’s argument supports Islamic economics in some ways. However, there are several things that go against this kind of economics. One of these reasons is that all religious economics are treated as conventional economics. Separating Islamic economics from other religious and conventional economics will, therefore, be impossible. He also argues that Islamic economics is very different from both Capitalist and Communist economies. The Capitalist economy has been known to encourage self-growth in terms of acquiring a lot of wealth and bodily pleasures. Islamic economics is against this. The communist economy, on the other hand, encourages social growth and selflessness. This is very similar to what Islamic economics encourages. This goes to show that Islamic economics borrows mostly from the Sharia Law and the other systems of economics. However, Chapra (2000) still argues that the two types of economics are different in other aspects.

It can be argued that Islamic and conventional economics are not very different. Chapra (2000) explains that the Islamic worldview is almost similar to the worldview of the other religious entities in the world today. However, all these religious worldviews are different from conventional economics’ worldview. The argument presented is that the Islamic worldview does not encourage secularism, Darwinism, and materialist behaviors. These are all present in conventional economics, but the issue of whether conventional economics supports them is not conclusive.

The Islamic worldview suggests that everyone is equal and everything on the earth is owned by God. Therefore, the allocation of resources should be done with this fact in mind. This worldview upholds the well-being of human beings. However, this is not practical in the real world today. Looking at the countries that support Sharia Law, there is still inequality in terms of the distribution of wealth and resources, despite the fact that most of the countries with Sharia Law also encourage Islamic economics (Azhar, 2010).

Practical Implications

Islamic economics would not have worked in a real business scenario in a cosmopolitan country. This argument is based on the fact that many clients today are not religious, yet Islamic economics revolves around the Muslim religion. However, some aspects of this type of economics can be used in a real business scenario. For example, one of the concepts of Islamic economics is the upholding of everyone’s well-being. This can be useful in any business setting as it allows the employer to make better decisions with regard to the welfare of the employees. Employing Islamic economics in such a scenario would result in better payments and better working conditions and encourage mutual respect among the employees.

Learning Reflections

I have learned that Islamic economics is a bit different from conventional economics. Islamic economics should, therefore, be studied as a different entity, instead of combining it with conventional economics. The future of Islamic economics is very bleak considering that the world gets more secular as the days go by. However, the relevance of Islamic economics should not be ignored. Islamic economics was very prominent in the past and it should, therefore, be studied further today.

References

Azhar, R. A. (2010). Economics of an Islamic economy. Leiden, The Netherlands: ICD Publishers.

Chapra, M. U. (2000). Is it necessary to have Islamic economics? Journal of Socio-Economics, 29, 21-37

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IvyPanda. "The Relevance of Islamic Economics." February 26, 2021. https://ivypanda.com/essays/the-relevance-of-islamic-economics/.

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IvyPanda. 2021. "The Relevance of Islamic Economics." February 26, 2021. https://ivypanda.com/essays/the-relevance-of-islamic-economics/.

References

IvyPanda. (2021) 'The Relevance of Islamic Economics'. 26 February.

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