Scarcity, self-interest and maximization from Islamic angle
AbstractThis paper clarifies some misinterpretations of three foundational concepts in mainstream economics from Islamic viewpoint. These are scarcity of resources, pursuit of self-interest and maximizing behavior of economic agents. It argues that stocks of resources that God has provided are inexhaustible. But important is the availability of resources out of stocks to mankind. Availability is a function of human effort and the state of knowledge about resources over time and space. In that sense resources are scarce in relation to multiplicity of human wants for Islamic economics as well. Self-interest must be distinguished from selfishness. The motive operates on both ends of human existence: mundane and spiritual. Its pursuit does not preclude altruism from human life. Counter interests keep balance in society and promote civility. Islam recognizes the motive as valid. Maximization relates to quantifiable ex ante variables. Uncertainty of future outcomes of actions makes maximization a heuristic but useful analytical tool. The concept is value neutral. What is maximized, how and to what end alone give rise to moral issues. Modified in the light of Shari’ah requirements the three concepts can provide a firmer definition for Islamic economics centered on the notion of falah.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 31631.
Date of creation: 08 Mar 2011
Date of revision: 17 Jun 2011
Scarcity; self-interest; opportunity cost; maximization; Islamic Economics; israf; heuristics;
Other versions of this item:
- Hasan, Zubair, 2011. "Scarcity, self-interest and maximization from Islamic angle," MPRA Paper 29414, University Library of Munich, Germany.
- A22 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Undergraduate
- B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
- B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Stockholm School)
- B11 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Preclassical (Ancient, Medieval, Mercantilist, Physiocratic)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-25 (All new papers)
- NEP-ARA-2011-06-25 (MENA - Middle East & North Africa)
- NEP-CWA-2011-06-25 (Central & Western Asia)
- NEP-HPE-2011-06-25 (History & Philosophy of Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Addas, Waleed A.J., 2008. "Methodology of Economics: Secular Versus Islamic," MPRA Paper 8264, University Library of Munich, Germany.
- Coase, R H, 1976. "Adam Smith's Views of Man," Journal of Law and Economics, University of Chicago Press, vol. 19(3), pages 529-46, October.
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