Journal of Islamic Business and Management
Developing and Promoting "Economic & Financial System of Islam": Some Suggestions
Shamim Ahmad Siddqui
Published online: December 2014
More than three decades ago a group of Muslim economists took the burden of developing a model of Economic and Financial System of Islām (EFSI) and reform the existing western systems in contemporary Muslim economies. Today, although we find a rapidly expanding Islāmic financial industry, it remains far from achieving the goals initially set for different sectors of this discipline. Leading Islāmic economists of our era are accepting the failure of Islāmic economics and some suggestions are made both about the underlying reasons as well as possible solutions. This paper first describes the goals and objectives of an Islāmic economic system. It argues why an EFSI, deriving its principles from Islāmic sources of knowledge, should put special emphasis on economic justice and equitable distribution of income. It then points out some basic features of the capitalist economies that are in conformity with an Islāmic economic system and discusses the shortcomings of the neoclassical school which provides the intellectual background for the capitalist system. These two exercises lead to comprehend the reasons for our failure: not addressing the issue of distribution of income and putting too much effort in criticizing the neoclassical assumptions on behavioral norms. This paper suggests areas where efforts should be made to transform the existing capitalist system into sustainable Islāmic economies based on Islāmic principles of socio economic justice.
Islāmic Economics; Capitalist System; Neoclassical School; Heterodox Economics; Islāmic Economic and Financial System.