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FALSAFAH EKONOMI ISLAM
(PHILOSOPHY OF ISLAMIC ECONOMICS)
DR. HAFAS FURQANI M.Ec
CENTRIEFP – FEBI
UIN AR-RANIRY
Kuliah Umum Ekonomi Islam Seri 1, Biro Rektor, UIN Ar-Raniry,
23 September 2016
INTRODUCTION

The Emergence of Islamic economics:
 Formal emergence: 1976 (1st International Conference on Islamic
Economics, Makkah)
 Main Driven:



Practical: to rearrange economic life in accordance with Islamic principles --institutions
Intellectual: to develop economics in accordance with Islamic principles --IOK, Islamic economics discipline
Supporting Factors:
o Mainstream economic crisis:
–
The mainstream body of knowledge of economics based on the neoclassical
school is increasingly criticized for its shortcomings and lack of coherence in
“understanding” of real economic problems; lacks “appropriate
methodology” to deal with problems and hence “solutions” provided are not
comprehensive.
ISLAMIC ECONOMICS SCIENTIFIC
COMMUNITY’S RESPONSE

Responses:
1970’s – 1980’s: bigger picture as a system of Islamic
economics
 1990’s – now: downstream areas of banking and finance
M. Fahim Khan (Essays in Islamic Economics) Observes:
After 40 Years, Islamic Economics is not yet recognized as
a distinct discipline. Some scholars who have involved in
this project have taken U Turn and no more believe that
IE is potential to be a discipline. Some have taken position
that there is no need for a separate discipline.
Conventional (Neo-Classical economics) is sufficient to
explain Islamic economics behavior.


PROBLEMS IN CURRENT MOVEMENT
•
Insufficient response and gaps in Islamic economics research
program
–
•
Islamic economics as a discipline is still at formative stage.
Nevertheless, the discourse of an Islamic economic philosophy that discusses the foundations of Islamic economics to be a
discipline – is limited and rather ‘elementary’ as the scientific
community shifted the discussion into downstream areas of
banking and finance.
Lack of foundation of Islamic economics
–
Developing an Islamic body of knowledge of economics, and/or
Islamizing modern economics, cannot be done properly without a
clear and coherent philosophical foundation that is projected from
an Islamic worldview or vision. Only then can the discipline sustain
itself or to provide ‘genuine Islamic alternatives’ to contemporary
mainstream economics with the indigenous solutions requested.
CHALLENGE FOR ISLAMIC ECONOMICS
A serious challenge for Islamic economics is whether
it qualifies to be called a “discipline”?
 Discipline criteria ( Acikgenc, 2003):





clear subject matter,
well-defined body of knowledge,
methodology or methodologies,
continuous flow of theories and knowledge accumulation.
Does Islamic Economics
have the above?
THE PHILOSOPHY OF ISLAMIC ECONOMICS SCIENCE
ONTOLOGY
EPISTEMOLOGY
AXIOLOGY
• Islamic understanding of
economic realities
• Islamic economic conceptual
foundation
New
“perspective
of economics
• Islamic economic methodology
• Islamic economic key-concepts
• Islamic economic conceptual
scheme
New
“approach”
of economics
• Scrutinizing the Value-Bias in
Mainstream Economics
• Infusing Islamic Ethics in
Economics
New “valueorientation”
of economics
DISIPLINE
DIMENSIONS:
Definition,
Subject-matter.
Scope,
Sources of
knowledge,
Purpose and
criteria of theory
appraisal,
Microfoundations
of discipline
WORLDVIEW SYSTEMATIZATION IN THE DISCIPLINE
CONSTRUCTION
Developing the Islamic
economics philosophical
foundations
Understanding economic
phenomena/realities
Developing the Islamic
economics conceptual
scheme/framework
Developing Islamic economics
key-terminologies
Developing an Islamic economic
methodology to appraise and
justify theories in Islamic
economics
Developing an Islamic economic
ethical framework and incorporating
those ethics into the body of
knowledge and its theories
The Epistemological Challenge of Islamic
Economics Science

The unity of doctrine and realities, ideals and facts, haqiqah and
haqq,

The Interaction of doctrine, realities, and theory .
The Purpose of Theory Appraisal in Islamic
Economics
The purpose of theory
Appraisal in Islamic
Economic
Methodology
To produce economic
theory that could
“link” the ideals and
realities, doctrine and
factual experience,
values and facts
To produce economic
theory that is able to
“explain” realities
and their relationship
in totality
To produce
economic
theory that
could help in
“goal
realization”
THE


CRITERIA IN ISLAMIC ECONOMICS THEORY APPRAISAL
The INTERNAL-INTEGRITY Criteria:
 To see internal fitness of a
theory
The RELATIONAL-UNITY Criteria:
 unity of doctrinal, logical and
factual dimensions.
 unity of understanding and
explaining realities;
transcendental, logical and
empirical realm.
 unity of doctrine and practical
realities, ideals/goals and
factual experiences, values
and facts, normative and
positive dimensions, a priori
and a posteriori.
Doctrinal
Integrity
THEORY
Factual
integrity
Logical
Integrity
Methodological Unity (Tawhidic
Methodology)



A methodology that attempts to unify the object of study;
the Realities, doctrine and practical experiences, ideals and
facts, normative and positive aspects, haqiqah and haqq.
A methodology that is going to fulfill the integrity and unity
criteria in Islamic economic theory.
Characteristics:





INTERACTIVE and INTEGRATIVE approach rather than DISSOCIATIVE
or REDUCTIONIST.
MULTIPLICITY (plurality) of METHODS in scientific enquiry
Gives EQUALITY to all methods of inquiry, but it aims at
THEORETICAL INTEGRITY and UNITY to arrive at total understanding
and coherent interpretation of reality and reach the ultimate truth.
METHODOLOGICAL UNITY: the unity framework of doctrinal, rational
and empirical dimensions.
Goal: THE UNIFICATION OF MULTIPLE TRUTH: doctrinal truth,
logical truth and empirical truth.
ISLAMIC ECONOMIC AGENT?
Kirzner (2000: 14): “it has long
been recognized that economics
depends for the derivation of its
theoretical propositions, upon its
understanding of human nature.”
The assumptions of economic
man (homo economicus) are
essentially constructed from
certain ‘visions’ put by
economists based on a certain
worldview that will guide further
development of economics as a
science.
The notion of economic man is
not a value free concept (it is
“what ought to”, not “what is”).
The basis of the
microfoundations
of Islamic
economics
Islamic
Man?
Equipped with
“Islamic
assumptions” on
his economic
behavior
The scientific
basis as well as
directions in
terms of research
in Islamic
economics
APPROACH
Substantial
Approach
(Man in Islamic
economics)
To look at the ideal characteristics of man
without ascribing to them an ‘Islamic’ title:
• Restrictiveness and exclusiveness of Islam
• Classificatory (‘type’ instead of ‘types’ of
behavior)
• Unfortunate situation/ lack of example
Explicit reference to homo Islamicus with
‘Islamic’ terminological values:
Formal
• Identification of the field of study
Approach
• scientific clarification based on the
(Islamic
framework and criteria developed in
economic man)
behavioral analysis
• Strong response in scientific community
THE CHARACTERISTICS OF ISLAMIC MAN:
EXPLORING FRAMEWORKS AND KEY-CONCEPTS

Conceptual Challenges:




In developing appropriate “concepts” that are able to
capture those messages or spirit
In developing a “framework” of how human behavior is to
be approached and analyzed.
In developing “key-terminologies” to capture the dynamic
relationship of individual, state, society and nature in
individual agent behavior in Islamic economics.
Technical challenges:



Genuine (derived from Islamic worldview)
Not a patchwork modification
Implies the shift of paradigm
THE NATURE OF MAN IN ISLAM
Process of
creation
Self-sacrifice or
benevolence
Nature of
Self
Enlightened selfinterest
Raison
d’etre?
His
existence in
realities
Self-interested but
without hurting others’
interest
Selfish behavior
The basis of human behavior: Self-interest versus huquq
Self-Interest
Huquq
 Unitary and atomistic self-view (emphasizing
individual identity)
 Unitary (static) type of behavior (Self-centred)
 Static process of choice; self-interest/selfutility as ref.
 Holistic/Integrated self-view (human is having
both individual and social identity)
 Reciprocity (dynamic) type of behavior
 Dynamic process of choice- considering other’s
interest
The motive of economic agent: Utility versus maslahah
Utility
Maslahah
 The basis: pain and pleasure defined and
calculated at the level of individual
 Subjective concept, measured at the level of
individual (personal basis)
 Individual’s utility is relatively (might or might
be) inconsistent with society’s utility
 Utility is not measurable or comparable
 The basis: benefits and harms defined and
calculated to the self and others
 Objective criteria of beneficial and harm (good
and bad, vice and virtue)
 Individual’s maslahah is relatively consistent
with society’s maslahah
 Maslahah is a measurable and comparable
concept
The cardinal virtue of economic agent: Rationality versus taqwa
Rationality
Taqwa
 Self-interest is the foundation of rationality
Self-interest as balance sheet of rationaity
 A rational individual is a utility maximize
 All his actions are directed to maximize his selfutility
 Huquq preservation as foundation of taqwa
behavior
 Huquq as balance sheet of taqwa individual
calculation
 A taqwa individual is a maslahah maximizer
 Taqwa behavior aims at maximizing maslahah in
all aspects/dimensions of life
WASSALAMU’ALAIKUM
THANK YOU