The Economic Problem: Can Islam Play an Effective Role in Solving it Efficiently as well as Equitably?

M Umer Chapra

No 1432-1, Working Papers from The Islamic Research and Teaching Institute (IRTI)

Abstract: The generally recognized economic problem of mankind is how best to satisfy the basic needs of all people around the world in spite of the prevailing scarcity of resources. Since this is not happening, the paper argues that the primary reason is the secular worldview which has weakened the social and ethical foundations of human life and placed primary reliance on the market mechanism to ensure efficiency as well as justice in the use of resources. This has inadvertently ended up providing sanctity to the social-Darwinist principles of ‘struggle for existence’ and ‘survival of the fittest’. The result is that the concepts of economic man and the serving of self-interest by maximizing wealth and want satisfaction have gained supremacy. In sharp contrast with this, the worldview of most religions, and particularly that of Islam, emphasizes the concepts of human brotherhood and the well-being of all and provides certain moral restraints on the serving of self-interest. While it recognizes the important role of the market mechanism for this purpose, it does not consider it to be sufficient. It provides a moral orientation to all human activity, including the market mechanism, so that they operate within the framework of moral principles emanating from Divine revelations which treat all human beings as brothers and the resources at their disposal as a trust from God. The whole paper hovers around a discussion of how such a worldview can help solve the economic problem efficiently as well as equitably.

Pages: 22 pages
Date: 2015-01-20
New Economics Papers: this item is included in nep-hme and nep-hpe
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Working Paper: The Economic Problem: Can Islam Play an Effective Role in Solving it Efficiently as well as Equitably? (2015)
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