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Contents

Foreword

Preface

Introduction: Is it Necessary to Have Economics with an Islamic Perspective?

The Vision

The Mechanisms

Role of the Worldview

The Method

Where Do We End Up?

Chapter 1: Conventional Economics

The Towering Achievement

Conflict Between Goals and Worldview

The Worldview

Rational Economic Man

Positivism

Government Non-Intervention: The Symmetry Between Public and Private Interests

The Keynesian Consensus and its Breakdown

The Crucial Question

The Impossible Conditions

The Incomplete Scientific Revolution

The Method

The Desired Reform

Breakdown of Family and Social Solidarity

A Disappointment

The Silver Lining

The Relevance of Islamic Economics

Chapter 2: The Islamic Paradigm Through History

The Fundamentals

The Paradigm Through History

Rational Economic Man

Positivism?

Justice

Pareto Optimum?

Efficiency

State Non-Intervention?

Ḥisbah

Not Totalitarian

The Dilemma: The Ideal and the Reality

Chapter 3: Can Science be Built on a Religious Paradigm? (The Conflict of Reason and Revelation in the Muslim World and its Modern Implications)

The Rationalist Movement in the Muslim World

Reasons for the Downfall of the Rationalists

Al-Ghazālī and Ibn Rushd

Contrast with the Western Enlightenment Movement

The Future of Rationalism in the Muslim World

Economics and Fiqh

Chapter 4: Islamic Economics:What Should It Be?

The Islamic Optimum

The Maqāṣid and the Mechanism

The Role of Faith

Self, Intellect, Posterity and Wealth

Unmanageable?

Definition and Scope

Methodology

Some Logical Steps

A Word of Caution

Science, Unseen Objects and Value Judgements

Realistic Assumptions

Chapter 5: Socio-Economic Dynamics of Classical Islamic Economics

Ibn Khaldūn’s Contribution

Interdisciplinary, Dynamic Model

The Role of the People (N), Justice (j) and the State (G)

The Role of the Sharīʿah (S)

The Role of Wealth (W) and Development (g)

Other Contributions of Ibn Khaldūn

Supply and Demand

Public Finance

Later Developments

Al-Maqrīzī

Shāh Walīullāh al-Dihlawī

Chapter 6: The Causes of Muslim Decline: Applying Ibn Khaldūn’s Analysis to Muslim History

Introduction

Part I: Are Islam and Moral Degeneration the Causes of Decline?

Is Islam the Cause of Decline?

Transformation of Human Beings and Institutions

Agricultural and Rural Advance

Urban Prosperity

Intellectual Advance

Is Moral Degeneration the Cause?

Part II: The Trigger Mechanism and its Effects

The Wrong Turn: The End of al-Khilāfah al-Rāshidah

Khilāfah and Democracy

Consolidation of Illegitimacy

Restraining Influence of the Sharīʿah

Living Beyond Means: Fiscal Imbalances

Grants of Large Iqṭāʿs and Tīmārs

Unjust Taxation

Debasing the Currency

External Borrowing

Corruption and Sale of Political Positions

Economic and Political Decline

Cracks in Solidarity Between G and N

The Stagnation of Fiqh

The Role of Sufism

Deterioration in the Position of Women

Decline in Education

Part III: Some ʿIbar (Lessons) of Muslim History

First Lesson

Second Lesson

Third Lesson

Fourth Lesson

Fifth Lesson

The Soft Landing

Failure to Learn the Lessons

Chapter 7: The Recent Revival: A Survey

Introduction

Centuries of Hibernation

The Rise from Slumber

Part I: Money, Banking and Monetary Policy

The Perplexing Question of Ribā

The Alternative

The Rationale

The Dream and the Reality

Establishment of Islamic Banks

Teething Problems

Some Criticisms

Evaluation of the Criticisms

Islamization of the Whole Financial System

Criteria for Evaluation

The Case of Pakistan

The Cases of Iran and Sudan

Monetary Management

Some Unanswered Questions

Why Did Islamic Modes of Financing Lose Ground?

Indexation

Late Settlement of Financial Obligations?

Concluding Remarks

Part II: Macroeconomics and its Microfoundations

Macroeconomics

Need Fulfilment

Optimum Growth and Full Employment

Equitable Distribution

Economic Stability

Microeconomics

The Theoretical Underpinning

Hypothetical Conclusions

The Unfinished Task

Part III: Public Finance

Taxation

Zakāt

Other Taxes

Principles of Spending

Restrained Deficits

Chapter 8: The Future Course of Action

Where to Start?

The Need for Political Reform

Can Peaceful Struggle be Successful?

Can the Revival of Islam be Helpful?

Is Islamic Economics on the Right Track?

Can Moral Values and Family and Social Solidarity be Dispensed With?

Are Institutions Necessary?

What About Solutions to Crucial Problems?

The Future Course of Action

A Task Far More Difficult than Conventional Economics

Bibliography

Index

The Future of Economics

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