MICROECONOMICS FROM ISLAMIC PERSPECTIVE

1.0           INTRODUCTION

The main objective of the present chapter is to discuss in broad and general terms the methodology of Islamic economics and to show in what respects it differs from the methodology of the mainstream economics. Many of the economist Islamic have been debate on these issue that issue have make the people interesting to investigate this issue.We shall also take up, some related issues such as the Islamic approach towards the mainstream economics, the roles of revelation and reason, the assumption of an ideal Islamic society in Islamic economics.We do not intend, however, to discuss or appraise the methodology of the mainstream economics. Some of the methodology of Islamic economics are different from mainstream economics, it’s make islam is very unique religion. The each of method have their on reason, why they have to use that methodology and why not we can just use of mainstream economics methodology.

2.0 COMPARISON OF THE TWO METHODOLOGIES

There are five comparison of the two methodologies in this chapter. In this section we explain the details of comparison of the two methodologies. First, Islamic economics uses a framework derived from the divine texts. Al-Quran and Al- Sunnah. This framework is sacred and immutable. Human criticism does not apply to the divine texts. From mainstream economic explain the fundamental paradigm is also subject to criticism and can also undergo change. The interpretations of the divine texts are not sacred, and thus not final and infallible. Second, Islamic economic uses a combination of both methods inductive and deductive. Primarily method in Islamic economic is inductive method. It testifies the truth of falsity of the assumptions as well as predictions on the twin criteria of rationality (should be true) and empirical evidence (confirm). The deductive method is more common for mainstream economic. The assumptions of the economists need not always be realistic. The basic assumptions of self-interest, rationally, perfect knowledge and man’s ability to know what is best from him. Next, is Islamic economic builds ethical values such as justice, benevolence, moderation, sacrifice, caring for others into analysis as behavioural parameter. The debate whether economics should contain value judgement is a lengthy one. The ethical values of Islam would continue to be a part of economic theories and they would not be falsified for any hypothesis-testing along with the factual data. In mainstream economic the balance of the argument suggests that there is no escape from the value judgements. In the process of hypothesis-testing, personal, social or political prejudices and value judgement should be eliminated. Fourth, Islamic economic is a normative discipline. It explores the ways and means to change the existing economies into truly Islamic economies. On the hand, mainstream economic claims to be a positive science which studies the existing economic phenomena without being overly concerned with altering that phenomena. Lastly, Islamic economic asks questions which are different from those asked by the mainstream economics. It concerned with the falah of man, and with creating the social and institutional conditions which maximize falah in society. All knowledge has a purpose. That purpose is derived from the over-all worldview of Islam. In mainstream economics no such criterion exists in unambiguous term. As a result, it pursues research for the sake of research or knowledge for the sake of knowledge.

3.0 SOME RELATED ISSUE

This section, is story about the some related issue that recently being debate or being talking about in the forums of related issue.

3.1 ROLE OF REVELATION

QURAN AND SUNNAH

The general principles of Islamic methodology is that before anything else reference should be made to the Quran and the Sunnah for seeking guidance on any issue but there is a limit to what we can get from these sources. The Quran and the traditions of the Prophet (peace be upon him) do not treat this issues in the manner they are treated in scientific disciplines including economics. They contain broad and general principles an provide the basic framework. The details have to be worked out by people themselves in each age. But in their enthusiasm. The muslim economist occasionally try to read such meanings into the verses of the Quran which are not there or which not be searched for in the Quran because they are common knowledge and are confirmed by casual observation. The point is that if a fact can be seen and confirmed by observation or reason there is hardly any reason to search for an evidence in the Quran or the Sunnah which often has to be established by laboured interpretations. For examples, there can hardly be a dispute that a well-looked-after worker would be more productive than a neglected worker. Some people have unnecessarily tried to drag in the Islamic texts such as Quranic verses and traditions of the prophet and have also resorted to a somewhat laboured interpretations relating to the slaves of the early Islamic era to prove this point.

PERSPECTIVE “ISLAMIC” AND “ISLAMIC FRAMEWORK”

A related point concern the confusion which often takes place by not recognizing the distinction between Islamic and Islamic framework. By Islamic mean something sacred , something revealed by God or enjoined by the prophet. Whatever is Islamic sense is immutable. But, some people append the adjective “Islamic” with the concept propunded by human being. Such as Islamic profit, Islamic bank, Islamic business. Sometimes the adjective Islamic is not appended but the discussion implies that the writer or the speaker intends to attach a sanctity to it. This needs to be clarified. All that is said within Islamic framework need to be Islamic in the sense of having a permanent validity, since it is a product of human thought and is thus open to examination.

3.2 THE ASSUMPTION OF AN IDEAL ISLAMIC SOCIETY

Most from literature from Islamic economics, that’s they are regard that assumes of an ideal Islamic society it does not exist from anywhere and they assume that ideal Islamic society is hard to getting in  nowadays and making further away from it. Like a theory of consumption in Islamic perspective have to consume in halal, prohibited consume on haram and not moderation but in nowadays are they have exist in world? From that is hard to getting ideal in Islamic society?. That the weakest is by method, in Islamic economy the methodologies used normative discipline and mainstream economics to be a positive science , studies the existing economics. Should the Muslim economist continue making this assumption?

From M.Akram Khan books he said that the Muslim economist should realize that the ideal Islamic society is a special case within a large range of possibilities. That ideal Islamic society may continue to be an ideal achieve. But it necessary that the concrete social reality of the actual Islamic society should be studied. This will help in shedding some of the romanticism in which many way Muslim economist rejoice most of the time.

Idealism of muslim economists has also done some harm to the scope of Islamic economics. Since the analysis is perceived in the contexts of ideal Islamic conditions, most of the ugly problems such as unemployment, inflation there is tendency to assume that problems would not simply on there. The muslim economist tend feel that not need even seriously study them. These problem are real life issues and there is no believe that they woud not arise in an ideal Islamic economy. Therefore M.Akram Khan said muslim economist should face the reality and discuss the real problem.

3.3 GENERAL THEORY OF ISLAMIC ECONOMY

Islamic economics is at times criticzed on the ground that it has no general theory of an Islamic economy. A general theory of economy can emerge from the study of real life conditions. Islamic economic experts have a released a theory from a general theory only because theory should be released and after we study or investigate that theory . So the they can only  released a general theory such as theory of Islamic consumption, Islamic economics and so on. Because not adapt yet. What is the role of Muslim economist in this context? Should they sit back and wait for opportune moment till a general accepted theory of charge emerges? From the M. Akram Khan said Muslim economist have both the responsibility and the capacity to break the ice and take necessary initiative.

We believe that a theory of transition to Islamic economy, much less than the general theory of Islamic economy, cannot emerge from the level of discussion and the methodology of research in vogue.

From the above, the diagram shows how general theory come out. First we need three important points. A beginning should be made by doing research on the real life social and economic conditions of the Muslim countries. A person who want to come out with general theory have to awareness of social reality, he/she have to know the awareness  of social reality, have to know the situation of people and latest issue, the slamic economist should join to know the situation of people. Next, we have to analysis of public policies, of course he should or the person should  analysis public policies that related of all . Thirdly, role of social and educational institutions, this it can say the side effect to the economy such as pollution, environment and so on. So we combined the three of this and then come out with hypothesis for change. So there will be theory of transition. But before that it have issue on this situation, have issue on the islamization that we islamize the economy system that have prepared before this. Some of the debate said we have to book 100% Islamic economy cannot islamize that before have a economy system. , one more method islamization we have to use the existing economic and we can move the prohibited in islam or wrong with islam. So here from the perspective M. Akram Khan more to the islamize that use the existing economy and islamize that economy. Before we want to come out with general theory we should come out with theory of transition. We should aware of this three important. Then the theory transiction and then we can enter to the application of shariah .Then we try to apply Islamic society. After that we should make a hypothesis impact of shariah and finally we can come out with general theory of Islamic economy.

4.0 CONCLUSION

In general , we know that a methodology of Islamic economics are the hard core, role of reason, assumption and method,deductive and inductive reasoning and so on. That methodologies of Islamic is really different form mainstream economics that they have a contra between this two. When we make a comparison between mainstream economics are really different with Islamic economics. Because Islamic economics is very unique. For example the references to mainstream economics that just use a knowledge that they know and they make a own a conclusion. Lastly, it is important to note that the methodological controversy in economic theory is not yet over. Hence, Islamic economists who, rightly, reject homoeconomucus models, do not stand alone in this regards, as many conventional economists are already dejected with such models.65 This means that the rigidity of the neoclassical theorists is no more popular among the conventional economists themselves. It has become established in the economic profession that economics, as a social science, cannot be separated from other branches of social studies nor from the ideology and values of its professionals.