Economics and morality from an Islamic perspective

Rodney Wilson

Chapter 14 in Handbook on Islam and Economic Life, 2014, pp iii-iii from Edward Elgar Publishing

Abstract: Morality involves differentiating right from wrong and making judgements. Islamic teaching can guide these judgements, enabling the faithful to appreciate what is halal and avoid the temptations of the haram. This moral code can be applied to economic choices, with Islamic teaching providing guidance for policy makers. In particular those framing economic policy should be aware of the social consequences of their decisions. Economic power, like political power, brings responsibility, and ultimately policy makers will be accountable to the Almighty for their actions. Economic policy making has moral implications and cannot be considered value free. There will inevitably be winners and losers from fiscal policy choices, but it would be unjust if the rich gain at the expense of the poor. Islam provides for wealth redistribution through zakat and has strict rules on inheritance, but the faithful should also be concerned with wider tax and government spending policies in the realm of macroeconomics. Similarly at the microeconomic level competition policy and the workings of markets should be viewed through a spiritual prism. Where the poor get priced out of markets, should prices be reduced through subsidies or is it better to provide social security payments to empower the excluded? If the choices can be validated as being consistent with Islamic teaching, this may make the unpalatable involving sacrifice and short-term hardship more acceptable provided in the longer term the policies bring social justice.

Keywords: Asian Studies; Economics and Finance (search for similar items in EconPapers)
Date: 2014
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