Islamic and Conventional Economics – Dialogue and Ethics

Dialogue and intellectual trade between Islamic economics and conventional economics has been active and mutually beneficial for more than 40 years. I present some concrete examples of this in the current paper. I then assess recent calls for a complete break of Islamic economics with conventional economics, and find them clearly inconsistent with Islam’s actual approach to culture and institutions in preIslamic Arabia. The Islamic approach shuns blanket acceptance or rejection of any piece of human knowledge, and calls for detailed case by case assessment, then adoption, rejection, or acceptance after modification. The Islamic approach also insists on severability wherever possible, to salvage good parts from a bad whole. One particular argument for total break from conventional economics, is its assumption of selfishness of economic agents. I demonstrate that this is an overreaction by giving specific examples of Muslim jurist’s nuanced view of selfishness (or self-interest): when acceptable, when discouraged, and when completely prohibited. I conclude that from an Islamic point of view, a break with conventional economics is not justified. Continued engagement with conventional economics is necessary and mutually beneficial, provided due attention is given to: (a) the non-selfish sectors, and (b) to behavioral and institutional reforms. Finally, the paper comments on ethics in conventional economics and Islamic economics.