Friday, March 9, 2012

Demystifying economic behaviour: An Islamic perspective


Humans are much more than utility maximizing machines. They are capable of using both material rationality and moral rationality to differentiate right from wrong and need reinforcement to adopt virtues influenced by an inner urge other than just material interests.
This inner urge can be reawakened by looking beyond utility maximization models to re-acknowledge the principal fact that humans are moral being than just an instrument for maximum material advancement for self.
The unbridled pursuit of greed also requires some external source of guidance than mere reliance on material animalistic instincts of a human soul. Religion provides the ethical check and call to balance material pursuits with attention to misery of the underprivileged people.
Islamic Economics and its knowledge sources, i.e. Quran and teachings of Prophet Muhammad (pbuh) providing the foundation for Islamic Economics address directly the heart and remind the human being of his freedom in choosing actions and that he/she is expected to use that freedom in the manner that makes him/her worthy of eternal and complete happiness in life hereafter. This belief provides a permanent incentive to righteous behaviour even if it does not get rewarded in this life and it also provides a permanent check on wrong behaviour even if it is not codified and prohibited by the worldly institutions and law.This brings in the dynamic model of life a sea of change and truly impacts a human’s heart. It also influences the actions and reinvigorates the spirit of sacrifice and sparkles the moral being in a human.
Macroeconomists have strong disagreements for the economic explanation of events in the short run than in the long run. In the long run, there is lesser disagreement. But, if we consider the model of life in the long run, there will be no disagreement. Life, humans and their behaviour in social context has a lot of complexities which are difficult to model mathematically. But, life’s complex realities still has a deterministic end, which is relevant for all.
Everyone that comes in this world is determined to die and then be answerable for his/her actions. There is no error term to subscribe to. The model of this worldly life is in the perfect perusal of the Creator, Who knows everything as He built everything. There is no error possible in Allah’s judgment of us. We are the one responsible for our own parameters. These parameters are not exogenous to the model of life. We, performing different roles in our lives, are the ones controlling them. It is an awesome power to have it, but it is not without responsibility as it should not have been.History of economic man is fascinating. He has used the nature’s blessings to find and create new and innovative ways of maximizing utility. But, nonetheless, at all points in time, he does not feel satiated. He remains poor ‘relatively’ to the limitless desires and nature’s limitations. The dream of being absolutely apart only remains a dream in everyone’s life. But, then, everyone achieves it one day. There is one place that everyone reaches where he is not accompanied by anyone. It’s his or her grave. Belief in life hereafter is the only thing that gives meaning to this world and life and this is the most important pillar of Islamic Economics.

No comments:

Post a Comment