Islamic and Conventional Economics – Dialogue and Ethics

Dialogue and intellectual trade between Islamic economics and
conventional economics has been active and mutually beneficial for more than 40
years. I present some concrete examples of this in the current paper. I then assess recent
calls for a complete break of Islamic economics with conventional economics, and find
them clearly inconsistent with Islam’s actual approach to culture and institutions in preIslamic Arabia. The Islamic approach shuns blanket acceptance or rejection of any
piece of human knowledge, and calls for detailed case by case assessment, then
adoption, rejection, or acceptance after modification. The Islamic approach also insists
on severability wherever possible, to salvage good parts from a bad whole. One
particular argument for total break from conventional economics, is its assumption of
selfishness of economic agents. I demonstrate that this is an overreaction by giving
specific examples of Muslim jurist’s nuanced view of selfishness (or self-interest):
when acceptable, when discouraged, and when completely prohibited. I conclude that
from an Islamic point of view, a break with conventional economics is not justified.
Continued engagement with conventional economics is necessary and mutually
beneficial, provided due attention is given to: (a) the non-selfish sectors, and (b) to
behavioral and institutional reforms. Finally, the paper comments on ethics in
conventional economics and Islamic economics.