This book is a challenging inquiry using the foundational epistemology that establishes the Islamic worldview and its applications to all socio-scientif theory, issues and problems. Preface; Professor Masudul Alam Choudhury is one of the most prolific writers in the field of Islamic economics whose pioneering work has made a substantial contribution to the development of the discipline. In writing this advanced exposition he has teamed up with Mohammad Ziaul Hoque, a fellow researcher at Sultan Qaboos University in Muscat. Together they have produced this interesting collection of essays that throw new light on some of the issues that those working in the field of Islamic economics have grappled with in recent years. The approach is centred on the Islamic concept of Tawhid, the unity of divine knowledge and the oneness of Allah, and it is this that brings the diverse elements together and provides a common thread. In particular by applying the principles of Shura or consultation to intellectual debate, the authors develop an interactive, integrative and evolutionary process to tackle each of the issues addressed.
Although not always easy to follow, the interested reader who adopts this methodology will be rewarded with pertinent insights. Most Muslim economies can of course be classified as developing, and in this context it is perhaps appropriate that in the first substantive chapter of the book the authors provide an Islamic critique of conventional approaches to development. The stress is on community based development and group rather than individual empowerment, with a particular focus on the elimination of poverty as a development objective. Population growth is viewed positively rather than negatively, with population change classified as an endogenous phenomenon rather than been treated exogenously. The authors believe that the demographic transition to aging societies that has occurred in Europe, Japan and China will not happen in Muslim countries that will continue to enjoy high birth rates because of political and moral imperatives. The essay on corporate governance is interesting, as it is only during the last decade that Islamic economists have turned their attention to these issues.
Striking the optimal balance between the different stakeholders in conventional business enterprises is difficult, as there will always be conflicts of interest between the management, the shareholders as owners and the workers. Choudhury and Hoque propose a very different business model for Islamic societies based on the principles of Shura or consultation where all stakeholders share the same goal of Tawhid or divine unity. Given this objective issues such as financial reporting and transparency are not imposed on an unwilling management, but rather insider knowledge is willingly shared and the concepts of private and public domains become fused. As might be expected in any book on Islamic economics and finance, the treatment of the latter accounts for much of the writing. Paper money is seen as destabilising, and a case is argued for asset-backed money, notably an Islamic Dinar backed by gold. Although Choudhury and Hoque admit that the price of gold has not always been stable in the short run, they assert that it has been a good store of value in the longer term.
The return to a gold standard system should facilitate monetary integration and trade between Muslim countries if they adhere to such a standard. The authors support the concept of an one hundred percent reserve requirement being imposed on commercial banks in the interests of financial stability, and discuss this in the context of the Islamic prohibition of Riba or interest. There is also an interesting technical treatment of Takaful, Islamic insurance. The title indicates that this work is an advanced exposition, and the interested reader will need to persevere to extract the implications of the arguments. Nevertheless the struggle will be worthwhile, as the work contains many interesting insights. Too often the ideas of authors that are ahead of their time are dismissed as unrealistic, but reality itself changes. Ultimately economic behaviour is determined by beliefs and aspirations. Those who share the goal of Tawhid can in the long run benefit from a financial and monetary system that is more just and less confrontational than that prevailing in the present imperfect world where man too often puts his own interests above those of the Creator.
Professor Rodney Wilson, University of Durham Institute for Middle Eastern and Islamic Studies