study on this note: “Fortunately there are signs that the virtues of unchecked global capitalism are being questioned, and in the most unexpected venues. The need to place limits on global capital was a basic theme at the early 1997 meeting of the august Davos Conference, which brings together economic and political leaders from around the world. Reporting on the thrust of the conference, Thomas Friedman of the New York Times raised the possibility that “the backlash against those who would like to construct the world on a one-dimensional basis, where commerce is everything, where only financial accounting matters,” he writes, “could easily encounter a potential moral blacklash against globalization”. (The Judas Economy: The Triumph of Capital and the Betrayal of Work by William Wolman and Anne Colamosca, Addison-Wesley, New York, 1997, p.221.)
Strands of serious critical rethinking are visible in the writings of leading economists. Notable Laureate Paul Samuelson of MIT laments the disarray into which economic theory has fallen. He warns, “there are no signs that we are converging towards a philosopher’s stone that will cause all the pieces to fall neatly into place”. Professor Otto Eckstein of Harvard says, “we are always one inflation too late in specifying the exact form of the price-forecasting equation”. Robert Heilbroner goes a step further when he says, “Economists are beginning to realise that they have built a rather elaborate edifice on rather insubstantial narrow foundations.” (See “Crisis in Economy or Economics” by Wilfred Beckerman, New Statesman, London, 23 January 1976).
The economic paradigm, which has held sway for the last two centuries, is not only showing cracks, its very theoretical foundations, its underlying assumptions and its capacity to successfully predict future modes of behaviour, are being challenged. Discussion is no longer confined to changes within the paradigm; the current debate is moving more and more towards the need for the change of the paradigm itself. “Challenged”, writes Amitai Etzioni, “is the entrenched utilitarian, rationalistic, individualistic, neo-classical paradigm which is applied not merely to the economy but also, increasingly to the full array of social relations.” (Amitai Etzioni, The Moral Dimension: Towards a New Economics, New York, Macmillan, 1988, p.ix.)
The economic paradigm is being challenged at its very core: the neo-classical paradigm does not merely ignore the moral dimension, it actually opposes its inclusion within the paradigm. The new emerging paradigm, on the other hand, visualizes assigning “a key role for moral values”. Then alone it may be possible, underscores Etzioni, to “seek both what is right and what is pleasurable” (ibid., pp.ix, x). Cristovam Buarque, a well-known Brazilian economist and a former Rector of the University of Brasilia, makes a more dispassionate plea for this new approach to economics in his The End of Economics: Ethics and the Disorder of Progress, translated by Mark Ridd (London, Zed Books, 1993). The failure of economics, in his view, lies in ignoring social and ethical values. “Social objectives”, he says, “have been subordinated and viewed as a consequence of technical progress rather than as the purpose of civilization. Ethical values, meanwhile, have been discarded” (p.xi). What is needed is a fundamental change of approach and a total reordering of priorities. He comes to the conclusion: “Just as physics stumbled upon the need for regulatory ethics the moment it became aware of its catastrophic potential, so Economics sorely needs to rediscover Ethics. The present dilemma will not be dispelled merely by re-evaluating the means and totting up new costs – as one does in project assessment. Rather it is a matter of changing the core objectives of the social process, delivering it from the economistic strait-jacket of the last two centuries ...Without subverting the traditional notion of progress, it will be impossible to grapple with the problem of growing poverty and inequality, and impossible to incorporate ecological balance into social purposes. The issue of economic development thus demands a fresh theoretical approach founded on three pillars: an ethics for redefining the very objectives of civilization; a new definition of the object and field of study, capable of taking in the ecological dimension; and a new rationale for Economics as a discipline (ibid., p.xii). The result of this approach would be that: “Technological options must be determined by an economic rationale subordinate to social objectives formulated by ethical values. The hierarchical order: technical values/economic rationale/social objectives/ethical values, would thus be reversed” (ibid., p.164).
The predicament of economics has also been searchingly examined by a group of leading economists in a valuable study, Economics in the Future: Towards a New Paradigm. The near consensus that emerges in this book is that what is needed to salvage economics from the throes of crisis in which it is caught is not just some new interpretation of this or that economic theory or some changes within the current paradigm of economics, but that the need is to change the paradigm itself and move towards a new paradigm under which economic problems are not studied in isolation but in the context of an entire social system, whose ideals, vision of society and moral values are not hidden, but go to make up the parameters that influence economic decision-making. The modern economy has failed to ensure distributive justice, sustained growth, balanced human development, social harmony and regional equity for a vast majority of mankind and is confronted at home and abroad with the menaces of prolonged recession, persistent unemployment, stagflation, unrestrained monetary expansion, staggering mountains of domestic and foreign debt, and co-existence of extremes of affluence and stark poverty within each country as well as among the community of nations. The link between moral values and economic judgement and behaviour, both at individual as well as governmental levels, which had sustained humanity through the millennia, had been torn asunder during the age of secular capitalistic ascendance and the economists as well as the common man are now trying to re-discover that missing ethical link.
James Robertson, in a very perceptive study, writes: “Unlike both the capitalist and socialist versions of conventional economics, the 21st century economy must be based on recognition that people are moral beings whose freedom as such should not be narrowly bound by impersonal parameters laid down by market and state. The 21st century economy must accept, as an aspect of self-reliance, that people need space in which to exercise moral responsibility and choice in their economic lives. Measures designed to allow this free space to people as individuals, and also to groupings of people in local economies and national economies (especially in the Third World), must be part of the new economic order ... The new economics must thus transcend the materialist assumptions of a conventional economics: that economic life is reducible to production and consumption; that wealth is a kind of product that has to be created before it can be consumed; and that wealth production and wealth consumption are successive stages in a linear process which converts resources into waste. It must reinterpret the manipulative concern of conventional economics with the production and distribution of wealth and the allocation of resources, into a developmental concern with how to enable people to meet their needs, develop themselves, and enhance the resources and qualities of the natural world. It must recognise that because human beings are moral beings the basic questions about economics are moral questions.” (Future Wealth: A New Economics for the 21st Century, Cassell Publications, London, 1990, pp.21–8.)
‘Islamic Economics’ represents a systematic effort by Muslim economists to take a fresh look at the entire economic problem, including the methodology of economics, with a view to coming up with fresh solutions to old and persisting problems. This approach is still in its early phases of growth. We are aware that Muslim economists have a long way to go, but there is no doubt that a beginning has been made in this direction. This beginning bears great promise for the future.
Dr. Umer Chapra is a leading Muslim economist. A Faisal Laureate, his earlier works, particularly, Towards a Just Monetary System and Islam and the Economic Challenge, have established his credentials as a leading intellectual influence in the contemporary Muslim world. Dr. Chapra has blazed a new trail in the present work. The Future of Economics: An Islamic Perspective is a seminal contribution not only to Islamic economic literature, but also to the contemporary economic debate as such. A work of profound scholarship and innovative thinking, it is a powerful yet balanced critique of mainstream economics and makes a forceful plea for taking economics out of its secular and Occident-centred cocoon. He has made a formidable case to re-link economics with moral and egalitarian concerns so as to harness
