MODERN ECONOMICS AND THE ISLAMIC ALTERNATIVE: DISCIPLINARY EVOLUTION AND CURRENT CRISIS

Mainstream economics has come under scathing criticism from various circles of thought. Within the territory of the discipline, there is a contestation. While one faction (supporters) considers economics a science, engaging with the real world, providing tools for solving fundamental problems to guide policy, another faction (critics) considers it to be under the sway of ideology (of capitalism and free markets) in which arid mathematical formalism is regarded as an end in itself, having no or harmful practical policy implications. Various communities of scholars have emerged that advocate alternative heterodox approaches to the subject, Islamic economics being one among them. In this context the present paper will attempt to provide an account of the recent history of modern economics and shed light on the present state of its crisis. The paper will also attempt to enquire into recent progress and the present state of Islamic economics as an alternative paradigm to mainstream economics. We attempt to answer the question that irrespective of the crisis in mainstream economic thinking, why did the alternative perspective of Islamic economics fail to make a long-lasting mark in academic circles and why did a Kuhnian paradigmatic shift fail to occur within economics? Lastly the paper will point out various theoretical and methodological roots of the present crisis of mainstream economics, which should not be ignored by Islamic economists when formulating the basis of Islamic economics.