The Humanomic Structure of Islamic Economic Theory: A Critical Review of Literature in Normative and Positive Economics

Abstract

The author reviews earlier attempts at formulating a humanistic political economy. Then a principle of Ethical Endogeneity is established which shows that society maximizes its social welfare through consensus among decision-makers with the choice of goals and policy variables. In the Islamic economy these goals and policies are uniquely set by the shari'ah. The principle of tawheed and brotherhood, of work and production and that of distributive equity characterize the Islamic economy which realises these goals through zakah, abolition of interest and profit-sharing.