i) Chapter 1 presents an overview of the main theses presented in this study. Chapter 2 argues that an integration of ethics and economics offers a richer view of human motivation and conduct than that provided by value-neutral positivism. The basic premise is that such integration should yield a more accurate explanation of economic and human development strategies to convert material affluence into human happiness. Also, the analysis presented here prominently displays those moral values which quicken the pace of economic progress, help distinguish the better from the worse economic institutions, and emphasise restructuring the latter with a view to producing efficient and equitable solutions of economic and social problems. There is a growing body of literature now – known as public-choice theory – which insists that economists cannot sensibly avoid making moral judgements; and that economics would be the more effective for paying explicit attention to ethical concerns.2
ii) Chapter 3 demonstrates that the current practice of excluding religion as a source of universally accepted norms of economic behaviour, i.e., truth, honesty, impartiality, individual liberty, justice, equality, rights, fulfilling contracts, etc., has not at all been helpful, even in Western societies. Elaborate nonbinding general frameworks of ethical rules and norms are no substitutes for clearly articulated and voluntarily-held ethical mores which flow from the religious beliefs that are accepted voluntarily by believers as binding. True, the former embellish intellectual discourse; but they seldom spill over into concrete action. In sharp contrast, the latter get ‘internalised’ in individual consciousness. They act as effective sanctions against unethical practices – e.g., ‘free-riding’, ‘moral hazard’, ‘principal-agency syndrome’, ‘fraud’, etc., – which undermine the efficient working of market-based social and economic institutions. The internalisation of moral values has the entirely wholesome effect of reconciling private interests with collective welfare, at significantly lower ‘policing’ and regulatory costs than secular economic and social systems normally incur. Indeed, in the latter case, such costs are not adequately incurred because they tend to be prohibitively high; but this neglect loosens the moral bindings of the socio-economic fabric. Religious ethical values are now accepted as central to “the functioning of an individualist, contractual economy” [Hirsch (1977); p. 141]; yet this remains a minority opinion in the heavily secularised climate of Western thought.
iii) Chapter 4 asserts that Islamic moral values link the individual to collectivity, by balancing individual freedom with social responsibility; and gives a fairly detailed account of the basics of Islamic morality, especially with reference to central economic issues. Like all religions, Islam can accomplish its social objectives because it does not make excessive demands on the stock of scarce altruistic resources. Performing a morally edifying economic act itself enhances the supply of altruism; and, since it recognises a legitimate role for self-interested objectives (though not self-interested behaviour) in the running of a market economy, the demand for altruism remains manageable. An added attraction here is that, contrary to Western (secular) thought where religion is seen mainly, if at all, as an instrument to achieving better economic results, Islam regards religion to be constitutive of a fuller human life in which material and spiritual urges of humankind coalesce. It then goes on to investigate what that means for a smooth functioning of a market economy.
iv) Chapter 5 gives a thorough analysis of the Islamic ethical system, and its ‘inner’ logical structure. It shows that the system can be effectively used to spell out and implement Islam’s moral vision, and to broaden it by drawing selectively on ‘alien’ philosophies. Chapter 6 attempts to test the implicit hypothesis of the preceding chapter, namely that an ethics-based economic system need not become altogether dysfunctional and that it may even energise economic agents to work for the betterment of society. The supporting empirical evidence, which is presented here for the first time, gives both the strong and the not-so-strong aspects of Muslim practices, and to some extent, of Islamic ethics. The general points that come out are: (a) morality makes a significant impact on an individual’s economic and social behaviour; but that the microscopic power of religious morality makes it even more effective than secular morality in achieving social goals. (b) Religious moral values guide only if these are explicitly and emphatically stated. (c) They misguide if not properly interpreted and if they do not creatively respond to the needs of society. And, finally, (d) a proactive public policy must supplement private morality to maximise collective good.
These are only a few glimpses of the (admittedly modest) effort to make, as Frank Ramsey put it, “a lot of things clearer” (though “nothing absolutely clear”) as regards the large number of moral, social, and economic problems that human societies in general, and the Muslim society in particular must face and respond to. To this end, it draws on apparently diverse fields of knowledge (economics, ethics, mathematical logic, and doctrinal history) to weave together a logically valid, Islamically authentic, historically correct – and yet a readable – account of the many ways in which humankind has endeavoured to crown its incessant quest for achieving greater material prosperity – and to have an ‘inner’ peace – with success. The present work rejects the intentionally vicious doctrine of the “clash of civilisations”, which has already consigned the world to the flames of a deep moral crisis, fanned by mutual hatred and total anarchy in international, political and economic relations; and which, above all, has benumbed the individual’s sense of compassion and morality. Instead, it seeks to cultivate mutual understanding and trust between peoples, nations, and civilisations. Within the confines of its subject-matter, it proposes an intellectual platform where a minimum inter-religious and inter-cultural consensus can be reached about the relationship between morality and human wellbeing, while leaving plenty of room for discussion, debate, and dissent. This platform can even become the basis for launching a bigger political agenda to forge unity in diversity, restore harmony to a world in a state of moral disarray, and help bring some cheer to the hearts of the peoples and nations left behind in the race to economic prosperity – all to fulfil the Divine Purpose: “O Men, We created you from a male and female, and formed you into nations and tribes that you may recognise each other” (49:13).3
Notes
1. A recent example of Western apathy to the idea of acknowledging the fundamental right of the poor to food, health, and fair wages is their stiff opposition to assume obligations under the United Nations International Covenant on Economic, Social, and Cultural Rights. On this see, The Economist (Aug 18-24th, 2001). Muslim countries can take a lead here by fully subscribing to and acting on this Covenant.
2. Public-choice theory is broadly divided into positive and normative theories. The former highlights the efficiency aspects of the nonmarket decision-making process, while the latter focuses on the distributive aspects of this process. This is in line with Musgrave’s (1959) division of government activity between the allocative and redistributive decisions – Musgrave was influenced by Wicksell’s (1896) view of the government “as a quid pro quo exchange among citizens” [Mueller (1979); p. 3]. However, these early insights focused on issues relating to allocative efficiency while assuming that the distributive issues have been decided ‘before-hand’. See Chapter 2 of this book for details.
3. The English translation of the Qur’ānic verses throughout this book draws on Ahmed Ali (1994). The first number in the parenthesis denotes the Chapter (Sūrah)