Prophecy, Piety, and Profits: A Conceptual and Comparative History of Islamic Economic Thought

A Conceptual and Comparative History of Islamic Economic Thought
  • Book Title:
 A Conceptual And Comparative History Of Islamic
  • Book Author:
Ayman Reda
  • Total Pages
397
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A CONCEPTUAL AND COMPARATIVE HISTORY OF ISLAMIC – Book Sample

Abundance and Scarcity: Introduction

There is much disagreement among historians of economic thought on the precise origins of economics as a distinct intellectual discipline, and even more disparity on the question of the genesis of economic analysis. While the majority of economists recognize the seventeenth century as a legitimate point of departure, some believe, “[t]he roots of modern eco-nomic analysis extend much further back in time” (Gordon 1975, xi).

The specification of such dating, argues Spengler (1954, 6), depends on the precise definition of “economics.”1 Such definition, however, is itself derivative of what is believed to fall under the purview of “economic analysis” or “economic phenomena,” theoretical boundaries that, especially with the rational choice paradigm of the last few decades, have proven to be highly elastic.

What is more commonly agreed upon, however, is that “intellectual efforts that men have made in order to understand economic phenomena” are almost universal; that human discourse on the nature and substance of economic issues is nearly ubiquitous across time and place (Schumpeter 1986, 3).2 A principal and consistent object of such efforts is what has been commonly referred to as “the economic problem.”

Although “one finds [records of] sophisticated economic relationships” in the ancient civilizations of Mesopotamia and Egypt, there is a notable “lack [of] treatises” that convey a profound level of inquiry into economic matters. The situation was quite different, however, in the case of Athens and Greece, for which we have evidence of substantial intellectual activity

(Spengler 1954, 30). In Athens, the “earliest stirrings of economic analysis” to provide an “exposition of the ‘economic problem’” was in the poetry of Hesiod, in his Works and Days. Hesiod begins his economic analysis with the question of why man is destined to a lifetime of labor, and not one of ease and peace. The answer, Hesiod believes, is in the scarcity of the “means of life [that the] gods keep hidden from men” (Gordon, Economic Analysis Before Adam Smith: Hesiod to Lessius 1975, 2–4).

With the passing of the Golden Age of Eden, a paradise of boundless abundance, man is henceforth destined to an enduring and difficult coexistence with the eco-nomic problem of scarcity (Rothbard 2006, 8–9). It is a remarkable intellectual phenomenon, to say the least, that Hesiod’s analysis of the economic problem, and regardless of its theoretical or empirical validity, codifies the modern essence of the economic problem, as stipulated by the dominant paradigm of the neoclassical school of economic thought.3

More than two millennia after the Works and Days, in 1930, John Maynard Keynes put forth his bold prediction that barring major wars or extreme population growth, “the economic problem may be solved, or be at least within sight of solution, within a hundred years.”

The economic problem, which Keynes defines as the “struggle for subsistence,” will cease to be “the permanent problem of the human race” (Skidelsky 2015, 81). A little less than a century later, a few years shy of the hundred years promised by Skidelsky and Skidelsky (2013, 6), and in a convincing and unabashed manner, pronounced Keynes’s prophecy a “failure.” Hesiod, or so it seems, has been validated; the economic problem is here to stay. However, a more careful and thorough survey of economic thought, from Hesiod to Keynes and beyond, reveals an immensely more complicated story to be told, one that may not be as progressive or reassuring as some would fancy it to be.

To begin with, the identity of the economic problem has not always been synonymous with scarcity. To Thomas Hobbes, the problem was more political than economic, and consisted in “how to construct a viable order out of a group of isolated individuals who are motivated only by their self-interest” (Campbell 1971, 28). While the problem of social order was of significant concern to economists, and to Adam Smith, in particular, in his discussion of self-interest and the invisible hand, the direction taken by economists was clearly different from that of political philosophers and scientists.4 Adam Smith, considered by many as the father of modern economics, believed wealth to be the essential require-ment for the general welfare of society, with the expansion of wealth made possible due to higher levels of specialization. This expansion will  ultimately

give occasion to the “general opulence” of the members of society, both rich and poor. If anything, the “economy he envisioned was clearly an econ-omy of abundance, not an economy of scarcity.” Almost two centuries later, John Kenneth Galbraith endorsed such a view, and believed abundance to have already been achieved, a fact easily overlooked as a result of our exces-sive lifestyles (Clark 2002, 415–16; Peach and Dugger 2006, 694–95). Furthermore, Smith and his close acquaintance David Hume, while overly optimistic about the prospects of overcoming the “natural scarcity” of resources, were particularly concerned with a more stubborn form, namely “social scarcity,” that is derivative of social norms and preferences (Xenos 1989, 46–7; Clark 2002, 416). And yet others, such as Henry George, saw in the wealth “engendered by progress” the “common cause” for the poverty of nations and societies (George, Progress and Poverty 1992, 6–8).

Notwithstanding this range of opinions on the economic problem, these views are markedly different from those of other scholars, whose philosophy and interests directed them to distinct paths of inquiry. The greatest of Greek philosophers, Plato and Aristotle, were chiefly concerned with “the nature of the good life,” and gave scant attention to the problem of scarcity.

Poverty, according to Plato, “results from increase of man’s desires, not from diminution of his property,” while to Aristotle, the “economic prob-lem is primarily a problem of selection among competing ends” (Gordon 1975, 34). According to William F. Campbell (1987, 32), “[c]lassical politi-cal philosophy is the exact opposite of the modern formulation. There is no generic problem of scarcity defined in an engineering sense.

The man of infinite wants is the problem, and it is a moral problem, not an amoral engi-neering problem.” The views of medieval scholastics, building upon the philosophical tradition of the Greeks and especially Aristotle, believed all of creation to be a gift from God, and to be treated as such. After the Fall, humanity is delegated the role of stewardship, managing creation as a trust common to all.

Such conceptions tended more toward an abundance, rather than a scarcity, view of the world, and emphasized the functions of faith, worship, and charity [01]Clark 2006, 33; Kennedy 2006, 59; Gordon 1989, ix. Deviations away from this stewardship role will manifest in economic and social problems. As such, the “economic problem has its origins in the enticements of worldly wealth … [and] is the social corollary of a corrupted human nature” [02]Gotsis n.d., 47.

Clearly, these views do question the presumed universality of any one identity of the economic problem, or even any particular definition of scarcity, and inevitably introduce uncertainty and confusion into any

attempted inquiry. Is the economic problem that of scarcity or abundance? Is it a corollary of the Aristotelian notion of the “good life,” or the Hobbesian idea of social order? Is it an individual problem of means-to- ends allocation, or a social problem of achieving the common good? Is it a problem of means only, ends only, or both?

Is it surmounted via the expansive powers of capitalism, or the supposed emancipatory potential of communism? Is it a problem of the world, or of us; that is, is it an exogenous or given quality of the natural and physical world we happen to be part of, or a social prod-uct of our beliefs, choices, and institutions?

Moreover, this sample of variations on the identity of the economic problem suggests a deeper and more profound query: is this even the right question to ask? In other words, is the problem, assuming one does exist, an economic problem?

Or is it of a more holistic nature, and theoretical divisions or classifications are merely artificial constructs of little practical relevance? And finally, on an even more reflective level, the use of the term “problem” automatically sug-gests that a solution is to be sought for a particular human predicament, that mere existence exposes one to a problem and the subsequent need for a solution. I am not sure that such a worldview is self-evident, which is not to say that it is wrong.

The next few chapters will seek to address some of the questions raised in this section, with the hope that some of the uncertainty or confusion will be somewhat alleviated. The chapters will provide a thorough, and loosely chronological, survey of the intellectual economic discourse on the subject of abundance and scarcity, highlighting the changing nature of the conversation over time. But mainly, we seek to introduce a somewhat gen-eral view of Islamic economic thought on the topic, granted that the view presented here is not necessarily representative of all Islamic opinions on the subject.

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References / Footnotes

01Clark 2006, 33; Kennedy 2006, 59; Gordon 1989, ix
02Gotsis n.d., 47