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A Critical Overview of Islamic Economics from a Welfare-State Perspective

Author

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  • Soldatos, Gerasimos T.

Abstract

This paper builds upon the following critique of Islamic economics: (a) Persistence on the literal interpretation of what the theology of Islamic law implies socioeconomically, (b) Rejection subsequently of the core western economic principle of homo economicus-cum-competition, though homo economicus behavior is innermost to absence of riba al-fadl (of exploitation in the goods markets) in the large atleast impersonal markets of our times, (c) Rejection, because of the ahistorical view of the West and hence, of inability to realize that the Cold War European welfare state with a constitution inspired by social solidarity as it derives not politically but religiously from Islamic law, might be worth followed by Islam, and (d) Identification of riba an-nasiya (of exploitation in the financial markets) with zero interest rate charges and not with zero commercial bank seigniorage.

Suggested Citation

  • Soldatos, Gerasimos T., 2015. "A Critical Overview of Islamic Economics from a Welfare-State Perspective," MPRA Paper 70066, University Library of Munich, Germany, revised 2016.
  • Handle: RePEc:pra:mprapa:70066
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    File URL: https://mpra.ub.uni-muenchen.de/70066/1/MPRA_paper_70066.pdf
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    References listed on IDEAS

    as
    1. Jerry Evensky, 1993. "Retrospectives: Ethics and the Invisible Hand," Journal of Economic Perspectives, American Economic Association, vol. 7(2), pages 197-205, Spring.
    2. Diamond, Douglas W & Dybvig, Philip H, 1986. "Banking Theory, Deposit Insurance, and Bank Regulation," The Journal of Business, University of Chicago Press, vol. 59(1), pages 55-68, January.
    3. Gerasimos T. Soldatos & Erotokritos Varelas, 2014. "A Letter on Full-Reserve Banking and Friedman’s Rule in Chicago Tradition," Credit and Capital Markets, Credit and Capital Markets, vol. 47(4), pages 677-687.
    4. Jerry Evensky, 2005. "Adam Smith's Theory of Moral Sentiments: On Morals and Why They Matter to a Liberal Society of Free People and Free Markets," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 109-130, Summer.
    5. Eichengreen, Barry, 1996. "Golden Fetters: The Gold Standard and the Great Depression, 1919-1939," OUP Catalogue, Oxford University Press, number 9780195101133.
    6. Shams, Rasul, 2004. "A Critical Assessment of Islamic Economics," HWWA Discussion Papers 281, Hamburg Institute of International Economics (HWWA).
    7. repec:mes:jeciss:v:27:y:1993:i:3:p:793-812 is not listed on IDEAS
    8. Shams, Rasul, 2004. "A Critical Assessment of Islamic Economics," Discussion Paper Series 26295, Hamburg Institute of International Economics.
    9. Zaman, Asad, 2008. "Islamic Economics: A Survey of the Literature," MPRA Paper 11024, University Library of Munich, Germany.
    10. Gavin Kennedy, 2009. "Adam Smith and the Invisible Hand: From Metaphor to Myth," Econ Journal Watch, Econ Journal Watch, vol. 6(2), pages 239-263, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Islamic economics; Deduction vs. theologically induced induction; Homo economicus; Riba (exploitation); Welfare State;

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
    • Z12 - Other Special Topics - - Cultural Economics - - - Religion

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