Economic Writings Research Articles

Islamic Economic Redefinition and its Methodology Among Contemporary Thinkers


 
 
 
 
 Abstract: The Islamic economic crisis from an epistemological perspective has been going on in recent years, based on many Islamic economic figures' writings. Monzer Kahf argues about Islamic economics's definition that there is no agreement among Muslim economists about the definition of Islamic economics, its scope, its relation to conventional economics, analytical methods and instruments, and even some of its basic assumptions. They view that the Islamic economy epistemologically still needs to be studied, while this Study, which has been going on for 40 years, seems to be running in place. In this Study, researchers used a library research method. This aims to reveal the redefinition of Islamic economics from contemporary economists, the methodological crisis that has hit Islamic economics, and the urgency of developing Islamic economics methodology among contemporary thinkers. The essence of the urgency of developing methodologies and approaches in Islamic economics is tawhid. The central or core concept that permeates all aspects of the epistemology of Islamic economics is tawhid. Tawhîd is the essence of Islam; tawhîd is considered the unity of knowledge and can be broken down into sources, methods and scientific knowledge. Knowledge comes from Allah's revelations to His Prophet, and reasoning, perception, and empiricism. Because of al-Attas, God's first type of knowledge is through direct revelation. The second is through the speculation of rational investigations based on his experience of the plausible and understandable.
 
 
 
 

Was Sismondi a “Smithian” Critic of Industrialization?

The article recasts the economic writings of Jean Charles Léonard Simonde de Sismondi, and his critique of industrialization in particular, in light of Sismondi’s self-proclaimed indebtedness to Adam Smith. Sismondi’s economic thought was shaped by his opposition to Napoleon’s protectionist economic policies and took the form of a critique of monopolies made in the name of the common good. After Waterloo and the collapse of the empire, Sismondi developed a critique of the British school of political economy and its corresponding model of economic development through the generalization of wage labor, mechanization, and large-scale farming. In his last years, during the early 1830s, Sismondi took aim at “industrialism” itself, a term which for him grouped together all those contemporary economic theories asserting that society should be organized by and for production exclusively. However, throughout his career as an economist, in developing these opinions Sismondi claimed to be faithful to Adam Smith’s understanding of what political economy should be. This article seeks to demonstrate that Sismondi’s theoretical production was deeply rooted in his evolving “neo-Smithianism.”

Pudding Economics: Franklin’s “The Way to Wealth” and the Transactional Self

Abstract Benjamin Franklin’s preface to the 1758 edition of Poor Richard’s Almanack, usually titled “The Way to Wealth,” is generally regarded as a sermon on frugality. The very form of the 1758 Preface, with Richard Saunders’s voice framing Father Abraham’s “Harangue,” ironizes Father Abraham’s doctrine of frugality. The effect of this literary performance is to illustrate or even stimulate desire for social interaction that is not frugal in any strict sense, but rather manifests an impulse to expand intercourse. The 1758 preface and Franklin’s extensive writings on economics present an expansive vision of capital formation. Commerce must grow incessantly, not for the accumulation of capital per se but for the prospect of endless growth, to spur and sustain what Adam Smith called “the progressive state.” Franklin’s economic writings delineate the constitution of the subject populating progressive society. Identity and ultimately the character of society are fabricated through ongoing, visible, and expanding transactions. Expansive or progressive identity is not illusory, but constitutive. Self and society must be creditable. This conceptualization was central to economic policy-making in the new nation; it straddles neoliberal critiques of subjectification in late capitalism.

George Berkeley: Forging the Irish Nation

In his political and economic writings George Berkeley presented a concept of ‘true patriotism’. The concept was not based on political views, economic interests, social status, cultural ties or on any commitment to a particular Christian denomination. ‘A true patriotism’ was not created in opposition to the ‘alien’ nor did it aim at its destruction. ‘A true patriotism’ was of a universal character, it applied to the Irish, English or Scots alike. In fact, it applied to any people that accepted the Christian religion and its moral principles. Berkeley perceived a nation as an entity, not as various groups or classes competing with each other for power or wealth. ‘A true patriotism’ was a gift from God and it was also practical in the sense that it sought a safe and prosperous life for the largest possible number of people. Berkeley’s concept of ‘a true patriotism’ should be considered in a wider context, and as one of the battlegrounds between Berkeley and freethinkers. Berkeley provided an alternative, even if somewhat utopian, concept of patriotism and the Irish nation compared to the concept that eventually prevailed and that far too often degenerated into xenophobia, being one of the main causes of bloody conflicts, including conflicts in Ireland.

Text structures – verbalizers of category of logicality in the economic writings of Ivan Franko

Text structures – verbalizers of category of logicality in the economic writings of Ivan Franko

Rosa Luxemburg e a expansão imanente do capitalismo: destruição, resistência e recriação dos territórios e das relações não capitalistas

O objetivo deste artigo é analisar os escritos econômicos luxemburguianos, sobretudo o manuscrito Introdução à economia política, a partir da hipótese de que Rosa Luxemburg constrói uma tríade da formação das classes sociais capitalistas formulando uma interpretação não etapista e não evolucionista da história: destruição, resistência e recriação dos modos comunitários de produção e do campesinato são possibilidades abertas no processo de expansão do capitalismo sobre seus territórios. A análise da múltipla convivência de modos de produção e a noção de recriação de relações não capitalistas de produção a partir da reflexão de Luxemburg sobre os camponeses e o chamado comunismo primitivo explicitam a crítica ao progresso linear do espaço e da história e à barbárie moderna do capitalismo. A geografia agrária brasileira é tributária das interpretações luxemburguianas, e objetivamos também contribuir com a compreensão desse vínculo teórico e metodológico.

A Note on Animal and Political Economy in Quesnay

ABSTRACTIn this article, I argue that François Quesnay’s physiocratic writings on economics entail the working through not only of formal principles of circulatory flow developed in his earlier physiological writings on “animal economy” but also the construction of a model of political economy that depends directly on an animal economy understood as the efficient administration of animal labor. Although the contradictions of this model already foreshadow those of today’s dominant model of economic administration, I argue that Quesnay’s economic writings nonetheless contain an invitation for us to rethink the connection between the economic and the ecological domains.

From “Usury” to “Financial Alchemy:” Martin Luther’s Economic Writings Revisited

This paper deals with the economic writings of Martin Luther, especially his critique on usury, against the backdrop of the recent financial crisis. It demonstrates that Luther developed several arguments that are still relevant to current problems regarding financial markets. The most remarkable points in Luther’s critique are his warnings against contingency, fraudulent activities and power abuse, and his demand for personal liability of investors. Today, Luther’s arguments should be understood as a call for reform to improve the financial sector’s functioning, especially regarding its task to provide services for consumers and other businesses in a proper way. <italic>JEL Codes: B11, G01, G20</italic>

A sociologia econômica de Simmel e Bourdieu: considerações para um programa de pesquisa

O intento de adentrar algumas das premissas teóricas contidas nos escritoseconômicos de Pierre Bourdieu e Georg Simmel tem como base a compreensãoda importância da investigação sobre práticas e condições econômicas. Ao invésde pressupor, de um lado, que práticas são apenas reflexos inerciais de condiçõeseconômicas, e, de outro, que práticas determinam as condições, mobiliza-se a ideia de uma dinâmica de condicionamento mútuo. Assim sendo, o acesso ao comportamento prospectivo com o dinheiro depende de condições prévias mais ou menos estáveis, permitindo ao agente perceber o uso potencial do dinheiro, não mais circunscrito ao imediato. A reconstrução dos dois autores tem essa preocupação como pano de fundo, buscando contribuir à renovação da teoria de classes.

From “Usury” to “Financial Alchemy:” Martin Luther’s Economic Writings Revisited

This paper deals with the economic writings of Martin Luther, especially his critique on usury, against the backdrop of the recent financial crisis. It demonstrates that Luther developed several arguments that are still relevant to current problems regarding financial markets. The most remarkable points in Luther’s critique are his warnings against contingency, fraudulent activities and power abuse, and his demand for personal liability of investors. Today, Luther’s arguments should be understood as a call for reform to improve the financial sector’s functioning, especially regarding its task to provide services for consumers and other businesses in a proper way. <italic>JEL Codes: B11, G01, G20</italic>

James M. Buchanan: Neoclassical, Austrian, Neither, or Both?

James McGill Buchanan (1919-2013) received the Nobel Memorial Prize in 1986 for his work in public choice theory, set out in his The Calculus of Consent (1962), co-authored with Gordon Tullock. The Virginia School of Political Economy can be seen as a product of the work of Buchanan and Tullock, along with Ronald Coase, who published his ground-breaking paper on “The Problem of Social Cost” in 1960 while he was at the University of Virginia. This school of thought is generally thought to be in some ill-defined sense allied to the Austrian school of economics, mainly perhaps because of a shared pro-market policy stance. On the other hand, links between Buchanan and neoclassical economists such as Friedman and Stigler are frequently drawn, again probably with the pro-market policy recommendations of each in mind. It is notable that Buchanan, Hayek, and Friedman were all at various times presidents of the Mont Pelerin Society. Yet the differences between neoclassical and Austrian perspectives are profound. It has often been said that the one can be characterized as “equilibrium always” and the other as “equilibrium never”. The case of Buchanan and the Virginia School is therefore extremely interesting for the historian of economic thought. Significant questions are raised about the scope for reconciliation between schools of thought at the most profound levels of methodology and social philosophy. I posit that, allowing for a slight amount of breathing room, James Buchanan’s economic writings are more Austrian than anything else. From his earliest writings to his last publications, Buchanan clearly had an Austrian-leaning approach. Additionally, many of the criticisms he laid out about the economics profession were directed toward the more neoclassical minded among his peers. While the act of criticizing neoclassical economists does not indicate that Buchanan was an Austrian, it does seem to lay to rest any conclusions that he was a neoclassical economist himself.

China Is Corrupt, but There Is More to the Story

Minxin Pei's China's Crony Capitalism: The Dynamics of Regime Decay is a major contribution, likely to significantly influence discussions about China and its future. He argues that China's political economy is characterized by crony capitalism, manifest in collusion between political and business elites, leading to the fundamental decay of China's Leninist system in its late stages. Moreover, the legacy of crony capitalism bodes poorly for a post-Leninist democratic regime in China.There is much in this work with which I agree. Yet I have some major areas of disagreement as well. Pei uses a principal-agent framework to make his argument. In this framework, he sees lower-level officials (agents) unresponsive to the norms and incentives established by the upper levels of the political system (the principals). The agents use their ability to control and distort information as well as the limited time and resources the principals have to monitor their subordinates to evade central directives and expectations. It is certainly clear from the cases that Pei uses as evidence that there is a great deal of corruption in the Chinese political system. But does this mean that the principals are helpless or that local officials are unresponsive to the incentives established by the center? Corruption may be endemic, but is it the whole story or even the most important part of the story?A significant amount of research has been undertaken suggesting that at least officials who want to rise to higher positions are responsive to upper-level incentives emphasizing economic growth targets, as well social stability and (perhaps until very recently) population control. While corruption has been a characteristic of party-state rule, so too has growth. Moreover, some of the activities that Pei sees as endemic corruption may also be critical to growth. As one study argued, higher land sales in one year correlate with higher transportation infrastructure spending in following years, which are correlated with higher growth. Higher transportation infrastructure spending is also correlated with higher land prices in subsequent years.1 The allocation of land, insider trading, and takings of land from rural communities may all be deeply corrupt activities and an inefficient allocation of scarce resources. But it is not clear that this is as predatory and rapacious as Pei suggests, nor is it clear that the results are not in keeping with overall central (and regime) goals.The principal-agent framework originates from writings in institutional economics and, as with many economic models, assumes that actors are maximizing their preferences or utilities. In this book, it appears that Pei believes that corrupt actors in the Chinese system are maximizing their income and/or power. But as I have suggested above, one might be both corrupt and advancing broader goals. Consider several cases. Mu Suixin was mayor of Shenyang before he was toppled in 2001, having been implicated in a bribery ring exercised by a local criminal element (p. 246). But Mu was also seen as an up-and-comer. He was featured on a PBS documentary, China in the Red, and he gave extensive access to the camera crew. He was portrayed as decisive, working hard to cope with Shenyang's unemployment problems, at least until his arrest (also covered in the documentary). Presumably, he received approval from the Liaoning provincial party committee to have his work so publicly covered. Indeed, PBS access to Mu may have been approved by the party center. He was corrupt, but he also was seen as trying to meet popular demands and respond to central directives.In a similar vein, we might view the situation of Bo Xilai, the former party secretary of Chongqing Municipality who was tried and convicted for corruption (and whose wife was convicted in the murder of a British citizen). Bo also appears to have challenged the leadership arrangement made for the 18th Party Congress, culminating in Xi Jinping's ascendency. …

Understanding Social Market Economy, Francesco Forte and His Interpretation

The social thought which emerges from Francesco Forte’s economic writings proves to be mainly inspired by methodological individualism, though interpreted through a peculiar “personalistic” key. We will analyze the peculiar traits of his thought and the specific contribution that Forte gave to the understanding of a specific economic theory based on the doctrine of “Ordoliberalism” or the “Freiburg School.” In our work, we will show how Forte proposes an interpretation of that doctrine, according to two of his main points of reference in economic and philosophical thought: Luigi Einaudi and Antonio Rosmini Serbati. Finally, we will present an important aspect of Forte’s work: his institutional analysis in the light of the particular civil philosophy expressed by Christian social teaching.

Moral geometry in Restoration Ireland: Samuel Foley’s ‘Computatio universalis’ (1684) and the science of colonisation

AbstractDespite the importance of the new science in the colonisation of Stuart Ireland, and the many Irish links to major figures in the Scientific Revolution, these connections remain relatively little studied outside of major episodes such as the Down Survey. This article examines a much smaller project, the ‘Computatio Universalis’ (1684) of Church of Ireland clergyman (later bishop of Down and Connor) Samuel Foley (1655–1695). Submitted to the Dublin Philosophical Society in 1684 as an attempt to ‘to demonstrate a universal standard’ of value, Foley’s project was in fact a guide to the achievement of ‘happiness’ through the careful stewardship of time and wealth. Foley’s project recalls earlier Christian humanist and Protestant concern with stewardship, however, and also reflects seventeenth-century economic writers’ and moral reformers’ concern with avoiding idleness. In the context of Restoration Ireland, however, it can also be seen more specifically as a project harnessing new methods of quantification for the cultural maintenance of a ruling Protestant elite historically threatened by degeneration in a colonial setting, as well as a reflection of Protestant anxieties about the Catholic church’s control over time.

Peter J. Boettke and Peter T. Leeson (Eds.), The Economic Role of the State : The International Library of Critical Writings in Economics

Peter J. Boettke and Peter T. Leeson (Eds.), The Economic Role of the State : The International Library of Critical Writings in Economics

Challenging the Historical Paradigm: Tories, Whigs, and Economic Writing, 1680–1714

This essay challenges the paradigm that depicts Whigs as progressive champions of free-market economics doing battle against the land-based and regressive economic policies of the Tories. Particularly in the period after the Glorious Revolution, Tory economic writers such as Charles Davenant, Nicholas Barbon, and Sir Dudley North argued for free trade and the relaxation of government tariffs, particularly as exercised against luxuries imported by the East India Company. Whig economic writers such as John Locke, John Pollexfen, Sir Francis Brewster, and John Cary continued, on the contrary, to equate wealth with the accumulation of bullion, arguing that England must curtail the import of luxuries in order to protect domestic manufacture. This debate reached its climax during the controversy over the commercial pact attached to the Treaty of Utrecht (1713). Tories argued for free trade in their journal the Mercantor while Whigs continued to urge for protection against imports in the British Merchant. A revised understanding of the economic policies of Tories and Whigs should lead to a reinterpretation of poems such as Alexander Pope's Windsor-Forest (1713) as well as to a reconsideration of the economic debate between Whigs and Tories after 1714.

Book Review: The Complete Works of Rosa Luxemburg, Volume I, Economic Writings

Book Review: The Complete Works of Rosa Luxemburg, Volume I, Economic Writings

The unresolved problem of gratuitous credit in Austrian banking theory

Ludwig von Mises called gratuitous credit, the ability banks have to create new credit, the chief problem in a theory of banking. This paper traces how Mises and succeeding generations of Austrian-school economists have grappled with this problem, but have failed to find resolution. The result is that Austrian economists disagree on a variety of issues in banking and business cycle theory, such as whether there is an endogenous business cycle under free banking, or cycles only occur under central banking. Before a resolution can be attempted, current thinking must be clarified. This paper divides Austrian economists into five schools of thought. It points to a possible resolution in the economic development writings of Joseph Schumpeter.

&lt;em&gt;Monopoly Capital&lt;/em&gt; in the Classroom

In 1964, I began my graduate studies at Cambridge University. The reading list included a book by Josef Steindl with the intriguing title Maturity and Stagnation in American Capitalism. I read it, and was immediately drawn to the last chapter, "Karl Marx and the Accumulation of Capital." Aside from reading the first few chapters of Capital in a study group, I had not yet read any of Marx's economic writings (predictably, none had been assigned in any of my college courses). However, that last chapter persuaded me that Steindl's analysis aligned with what I understood to be Marx's general vision about the "laws of motion" of capitalist economies.… This set the stage for my reading of Baran and Sweezy's Monopoly Capital in the spring of 1966. I devoured that book. I doubt that I got up from the kitchen table until I had read it from cover to cover.Click here to purchase a PDF version of this article at the Monthly Review website.

The ‘return to Europe’: intellectual debates on the global place of Czechoslovakia in the interwar period

In the East Central European context, the phrase ‘return to Europe’ has been used mainly in the period after 1989, referring to political, economic and social changes as well as mental relocations towards a ‘Western’ system. However, debates about the national whereabouts on a mental map – whether one was part of Eastern, Central or Western Europe – also abounded in the years following the founding of the nation-states after the First World War. Concentrating on Czech discourses on the national whereabouts both in a European and a global perspective in the years preceding and following the great upheaval of 1918, this article traces the changing Czech national identity, ranging from a self-perception as a ‘small nation’ in the Habsburg Empire to a European power with colonial ambitions after the foundation of the Czechoslovak republic, and finally to the acknowledgement in the 1930s that these ambitions could not be met. The study is based on sources ranging from Czech travelogues mainly to Africa and Asia, but also South America, to economic writings and colonial brochures, which offer a broad range of debates on the role and location of both the Czech nation and the Czechoslovak state both in Europe and the world.