The Disintegrating Force of Rationalism on Economics: What it means for Islamic Economics

In the last of this three-part study, the impact of the two dominant epistemologies of modernity on economics is fully explained. The intrusion of their ideas profoundly shaped both the content and methodology of the discipline, eventually instigating the separation of the field from the other social sciences that invariably bear on economic decisions and outcomes. The economists, notwithstanding these interdisciplinary linkages, continued to pattern their field of study after the natural sciences, further alienating the discipline from the humanities. These developments set off several rounds of methodological controversies within economics, which split the profession into irreconcilable camps. These disputes are analysed, helping to clarify why deep divisions within the discipline persist up to this day. Mainstream economics then gravitated further towards quantification and mathematisation, the implications of which have been enormous for the discipline. Ethical and normative considerations were altogether explicitly banished from economic science. To overcome these limitations, Muslim economists attempted to erect a separate discipline of economics based on the ethical values of Islam, whilst remaining largely committed to the methodology of neoclassical economics. They have registered little success in this effort. The reasons for this are explained and an alternative framework, centred on the precept of Tawhid in the unity of knowledge, is then suggested.

Working paper 611
1 May 2016