Looking Beyond – a Transdisciplinary Contribution to the Theory Development of Islamic Economics
Frauke Demuth, PhD candidate, Durham University, UK
Theory development in Islamic economics has largely been based on the foundational texts of Islam, the Qur’an and Sunnah. In order to set new impulses, the study presented in this paper chose a different approach. In line with the research method of Grounded Theory, the basis for theory development in this research were semi-structured elite interviews with representatives of Muslim civil society in Germany on questions regarding the economy in general and businesses in particular in connection with issues of ethics and sustainable development. Both research design and analysis are based on transdisciplinarity, which is characterised by integrating both different academic disciplines as well as practitioners in the research process. The interviews were analysed with the aid of a framework stemming from economic sociology (Portes, 2010), resulting in a theoretical model of an Islamic economy.
The purpose of this paper is twofold: to present the model briefly and to reflect on the chances deriving from this particular research methodology and non-economic points of reference (civil society actors, economic sociology and anthropology) for enliven and refresh theory development within Islamic economics.
In line with Portes’ framework, the model consists of three parts: culture, social structure and embeddedness. These parts are further divided into levels of causal influence ranging from deep, non-visible levels to visible and collective levels. These levels (from deep to visible) are values, norms, roles and institutions in the case of culture; and power, class structure, status hierarchies and organisations in the part of social structure. Embeddedness was subdivided into foundational relations, ‘defining the value base’, and a section I called ‘politics’.
Looking at the part of culture, the Islamic economy model is based on rizq as its core value with supporting values such as basic needs, moderation and responsible profit. Decent production and moderate consumption can be seen as major behavioural norms. Within the Islamic economy model institutions such as businesses and the state should be ultimately oriented towards supporting and maintaining families and communities.
In terms of social structure in the ideal Islamic economy power relations are guided by the principle of partnership rather than exploitation. This is for instance manifested in the implementation of redistributive systems such as zakat and in the governance of organisations including their ownership structure.
Moving on to the level of embeddedness, I differentiated three different kinds of foundational relationships; the relationship of people with God that is realised in acts of worship (ibadat) and in good deeds (amalu salihat), the relationship of people with nature that is expressed in the concept of khilafa and the relationship of people among one another, which is guided by notions of equity and fairness. Instruments that help to define the value base of any economy are the seeking and dissemination of knowledge from various sources and institutionalised mechanisms of consultation. On a macro-level I discuss further instruments that aim at actively re-embedding the economy into society, for instance by strengthening alternative economic mechanisms such as reciprocity and householding.
My research enriches the theory development in Islamic economics, because it introduces new concepts such rizq and alternative economic mechanisms that have not been explored in Islamic economics before and that open new avenues of enquiry. For instance, the concept of rizq shows that there is a fundamental belief that God provides for everyone in the sense of an assurance to the individual that God gives everyone their sustenance. There is a social side to the concept of rizq as well, expressed in the idea that if some are wasteful, others do not have enough. Therefore, when rizq is at the heart of the economic system, it can be seen as a measuring rod for how well this economic system is equipped to realise God’s promise to each individual that they are provided for or how well balanced the system is.
It also enlivens the debate, because it has introduced new voices that have not been considered so far in Islamic economics. Voices such as those of Muslim civil society actors are important to give the field a reality check, make the theoretical foundations more meaningful and move them closer to the Lebenswelt (lifeworld) of Muslims today. They also show the great diversity of interpretations of Islamic concepts in the Muslim community.
The research has shown that we need to reconsider and refine some of the basic assumptions in Islamic economics such as the axioms and the notion that theory development can only be based on the foundational texts of Islam. For this refinement it will be helpful to venture out of the discipline of economics altogether and instead look into theories and frameworks from economic sociology and anthropology. For any attempt to introduce a more ethical perspective into the field of economics, these two are essential starting points as they have more realistic idea of man in general. For example, the concept of homo economicus in conventional economics has been replaced with homo islamicus in Islamic economics. However, when we look at social action as defined by Max Weber (see Portes, 2010: 14f.), we realise that humans do not only base their decisions on instrumental rational behaviour altogether and therefore both concepts fall short of capturing a realistic idea of man.
In summary, this paper presents an Islamic economy model based on transdisciplinary research methods. It reflects on the chances deriving from this particular research methodology and from using non-economic points of reference (civil society actors, economic sociology and anthropology) for enliven and refresh theory development within Islamic economics.
Literature
Portes, A. (2010). Economic Sociology. A Systematic Inquiry. Princeton: Princeton University Press.