Scarcity and the Subject Matter of Islamic Economics Ahmad F. Oran Abstract: This study intends to discuss scarcity from Islamic perspective, based mainly on

the Holy Qur'an, to provide the rationale that solidly explains the overdue Islamic stand on it, define scarcity and the economic problem and explain the scope and the nature of Islamic economics, and define it. It can be said without hesitation; contrary to the belief of many, scarcity as understood by orthodox economists’ is not the core of the economic problem.

1. Introduction It has widely been acknowledged and accepted by economists that relative scarcity constitutes the core of the economic problem. Indeed, economics per se, as a science, has become known and shortly defined as “the science of scarcity”. Robbins, in his well-known 1932 essay, presented the widely known and accepted definition for economic science, namely, "the science which studies human behavior as a relationship between ends and scarce means which have alternative uses." (Robbins, 1935, p. 16). Moreover, economists seem to have conspicuously, consciously or not, been affected by the well known views on the population issue attributed to Malthus that postulate man’s procreation capacity far exceeds his ability for food production1. Notwithstanding this stand, an end-means relationship has, been established, generally accepted and used until now by economists. Later on, Neoclassical economics has shifted the attention away from natural resource scarcity, as used by Classical economics, by advancing an abstract concept that relates scarcity to the exchange of commodities (Baumgärtner et al, 2006)2. Consequently, economic theories and policies have been developed where scarcity is in the ‘epicenter’ of the economic problem. Regardless of such stand on scarcity, this has been subject to challenge, even refusal, by 

Professor of economics. I am deeply grateful to Anas Zarqa and Waleed Shawaqfeh for very helpful comments, yet errors are mine. 1 Thomas R. Malthus’ (1766-1834) Essay on Population was first published in 1798 (Blaug, 1985). Moreover, Malthus was not the first to discuss the population issue as Schumpeter asserts that"… there was nothing left for Malthus to say that had not been said before… Malthusian' principle of population sprang fully developed from the brain of Botero [virtus generative versus virtus nutritive] in 1589" (Schumpeter, 1954, p. 255). 2 It is worth noting that, any discussion of richness and poverty became automatically out of the scope of the new notion of scarcity as both rich and poor people face scarcity as it occurs at any level of income!

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some Western writers (Rosenthal, 1999). Such stands stem from the fact that heterodox economists and others find it difficult to understand the notion of scarcity as introduced and used given current worldwide miserable economic. On the other hand, Muslim economists seem to have been divided on the notion of scarcity and consequently on the nature and scope of Islamic economics. While some assert the existence of it, others refute it altogether in one way or another. However, the views of Muslim economists on scarcity seem to have some difficulties to sustain their stands. Indeed, any notion of scarcity from Islamic view must be consistent not only with Muslims' general belief set in the Holy Qur’an where Almighty God assures the sustenance of every living soul, humans and otherwise (Q 11:6), but with the raison d'être of the overwhelmingly accepted economic institutions such as property/ ownership and inheritance as well. It suffices perhaps to remind the reader that God Himself has numerically determined inheritors' shares in the Holy Qur'an. Moreover, if scarcity were not a 'fact' of life, what the rationale for property would be. Greed could not be explained much less justified. Yet, no convincing argument, to my knowledge, has so far been advanced vis-à-vis the above-mentioned points. It seems that Muslims have been led, consciously or not, to consider scarcity solely along the same line of thinking of Neoclassical economics! However, if scarcity were to remain unexplained from Islamic perspective, the scope and the nature of Islamic Economics may not be properly delineated. This study intends to discuss scarcity from Islamic perspective, based on the Holy Qur'an, to provide the rationale that solidly explains the over due Islamic stand on it, define the economic problem and explain the scope and the nature of Islamic economics. It is argued that the current Muslim economists’ stand on scarcity is ambiguous, to say the least, as it has mostly been based on Neoclassical economics' approach rather than on Islamic one. Furthermore, the study maintains that the “paradox” of scarcity can be solved and the economic problem appropriately understood only by invoking the Islamic perspective, not the Neoclassical economics one. Before proceeding, a note is worthwhile mentioning. It might be said that the undertaken analysis in this study is a religious not an economic one; hence, it is not acceptable on economic grounds. Benson observes if religious believers operate out of “faith-religion”, non-religious believers operate out of a series of “faith assumptions”. Hence, we ought to recognize and accept that all humans operate on some basis of faith (Benson, 2000). Indeed, Neoclassical economics is said to be “a religion with equations” (Arnsperger and Varoufakis, 2006, p. n/a). Moreover, operating on value-free, valueneutral, basis is a value per se as would say those who have the affinity of

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using the misleading 'language of values'. Although the discussion of "the bankruptcy" of values framework as noted by Benson (2000, p. 533) is out of the scope of this study, it is imperative to take the opportunity to say that values are not norms or virtues as many writers not only believe, but would like us to believe as well3! As for the structure of the study, section 2 discusses the orthodox (henceforth Neoclassical) economic theory’s stand on scarcity from micro and macro views, needs versus wants, and scarcity and the economic system. Section 3 defines absolute and relative scarcities. Section 4 discusses scarcity from Islamic perspective from geo-political, end-means, and vicegerency approaches. Section 5 discusses the nature and the scope of Islamic economics. Section 6 discusses the subject matter and defines Islamic economics. Section 7 concludes the study. 2. The Orthodox Economic Theory's Stand on Scarcity 2.1 Scarcity from Macro and Micro Views It is widely known among economists that scarcity as postulated by the neoclassical view is a relative concept. Commodities (goods or services; inputs or outputs) when positively priced or have opportunity costs, they are scarce ones (Debreu, 1959). This commodity's feature is said to be essentially derived from the relative demand among commodities. Apparently, the notion of such scarcity is easily understood, while in fact it is not. The difficulty to grasp the meaning of such scarcity stems from some reasons. First, scarcity is applied similarly on both micro and macro levels though they are different. Second, not being readily understood from the demand argument, the relative nature of scarcity requires relating it to other economic concepts, if it is to be meaningfully understood, such as trade-off and choice implicitly followed from Robbin's definition of economics, while explicitly from any other new

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The word "values", in the English language, used to have a specific meaning. Andrew asserts, "Nietzsche was … the first political philosopher to use the language of values outside the realm of market evaluation. In the language of classical political economy, “values” are exchange-values, what we present to others, not use-values, what we enjoy for ourselves…. “Values” … are wrongly presented as something universal, absolute or objective. Whereas one may stand or even die for principle, “values” are the stuff of trade-offs, bargaining and negotiation. (Andrew, 2010, p. 68-69). Moreover, Benson (2000, p.533) quoting Andrew (E.G. Andrew, The Geneology of Values, 1995, p. 170) saying: "the language of values entails that nothing is intrinsically good and nobody is intrinsically worthy".

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ones4. Choice has indeed become "the true substance matter of economic analysis." (Baumgärtner et al, 2006, p. 491). By limiting alternatives, scarcity demands choices to be made; hence, trade-offs become necessary. Since trading-off is not freely made, a cost must incur. That is, by trading-off some amount of a scarce commodity B for an extra unit of a scarce commodity A, a choice has to be made, assuming such possibility (!), where the sacrificed amount of B is the opportunity cost associated with such choice. Hence, scarcity of these commodities manifests itself via the demand for that extra unit of commodity A in relative terms to the demand for commodity B. Trade-offs are taken to be made on both the macro and micro levels and on the production and consumption sides as well. However, “when there are no alternatives, there is no problem of choice and, therefore, no economic problem” (Becker, 1971, p. 1)! On the macro level, when a nation faces the question of "what to produce?", relative scarcity is demonstrated by employing the production possibilities curve (ppc) where the existence of a wide spectrum of production bundles that all can be efficiently produced is assumed. The nation can choose any alternative production bundle if it is to give up other one, as bundles assumed substitutes, by merely reallocating resources from the production of the sacrificed bundle to the chosen one 5. On the micro level, relative scarcity, which underlies firms’ production as well as consumers’ consumption, is said to force producers (consumers) to seek optimization by choosing the optimal bundle to produce (to consume) from the displayed, via the isoquant (indifference) curves, wide spectrum of substitute bundles of production (consumption) of commodities all with similar amount of output (utility). However, given space limitation, the focus here will be on consumption as the discussion of production is quite similar. Although different types of indifference curves are usually discussed, the core of the consumers’ utility maximization is built upon the well-behaved indifference curve that is characterized by two assumed features, monotony and convexity (Varian, 2010)6. The convexity assumption is particularly essential as it implies that goods are to be consumed together, choosing one 4

For instance, economics is defined for instance as; "the study of how people make choice under condition of scarcity and of the results of those choices for society" (Frank and Bernanke, 2009); "the social science concerned with how individuals, institutions, and society make optimal (best) choices under condition of scarcity" (McConnell et al, 2009). 5 The assumed substitutability does not always hold both socially and technically. This is not discussed here for space limitation. 6 According to Debreu, “The convexity assumption is crucial because of its role in all the existing proofs of several fundamental economic theorems” (Debreu, 1959, p. 41).

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good is not a typical choice, lays the needed ground for the substitutability assumption, and that the marginal rate of substitution (MRS) is diminishing7. As a result, consumers' decision for substituting one good for the other hinges only on the obtained quantity of the substituted good regardless of its nature. However, the above-mentioned assumed substitutability does not always hold as will be shown later. 2.2 Needs versus Wants The fact of the matter is that humans' needs have never been classified under one group nor they will be. Even Neoclassical economists acknowledge the existence of at least two groups of humans' needs namely, necessities and luxuries, though defined in terms of the income elasticity of demand. Moreover, it is said that "Economists like to emphasize that once we have achieved bare subsistence levels of consumption (emphasis added) - the amount of food, shelter, and clothing required to maintain our health - we can abandon all reference to needs and speak only in terms of wants." (Frank and Bernanke, 2009, p. 127)8. Historically speaking, humans' needs have been classified into at least two groups: necessity/basic and luxury ones. While the components of the former group are vitally essential for humans' survival and reproduction, the ones of the latter group are not. Ironically, Neoclassical economists explicitly presume that humans' basic needs either are satisfied or can easily be so. Hence, the mere human survival and the provision of the basic needs is no longer of some concern despite the billions count of the poor people globally. Baumgärtner et al are right in pointing out that this understanding follows from the very definition of economics, as necessity needs can never be subject to choice. Thus, "economics as an academic discipline has confined itself to the study of imaginary [luxury] needs." (Baumgärtner et al, 2006, p. 491). Moreover, Neoclassical economists care too much about attaining allocative efficiency for implying that firms produce what buyers want and are willing to pay for; this is simply achieved for a cheap and scarce good by merely raising its relative price. The fate of the excluded consumers by such price

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This rate shows consumer's subjective willingness to substitute one good (B) for the other (A) as more of the first (B) is obtained. 8 Ironically enough, Neoclassical economists cannot dare but to talk, implicitly though, about basic needs. Most, if not all, introductory economic textbooks discuss demand and supply using pizza, corn, wheat, and sometimes ice cream (!), but never Buggatti Veyron SS, McLaren F1, or even caviar (!).

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raise, regardless of its severity and even if that means consumer's starvation, is nobody's business as this is simply a ‘natural’ market outcome! It is believed that the inappropriate distinction between needs and wants, or ignoring necessity needs by assuming their satisfaction, constitute a “theoretical black hole” in many Neoclassical economic theories that renders ambiguous understanding of both the economic problem and the consequent built upon economic theories9. It suffices, however, to say that while real necessities can be measurable and attainable, if this were the goal; wants, being a wish list, can never be so! As a result, the defined economic problem based on such premise can never be managed much less solved. Ironically, most economists seem to be inclined to agree that the regrettable worldwide economic status quo, including poverty, is not necessarily the outcome of any kind of scarcity. Ethically as well as economically speaking, hardly can much, if any, of human hunger be attributed to scarcity. Moreover, the real source of poverty worldwide, as believed by many, is not scarcity but rather policy; not inevitability but politics, and that the real culprits are no other but the undertaken economic policies and the concern about material economic efficiency to the detriment of compassion (Lappe et al., 1998). The “resource curse” phenomenon may be partially helpful to show the role of policies and politics behind poverty indeed. It asserted that resource abundant countries have a lower growth rate as opposed to resource poor countries (Torvik, 2009). It has been said that: “On average, resourceabundant countries have experienced lower growth over the last four decades than their resource-poor counterparts.” (Asanuma, 2008, P. 241). 2.3 Scarcity and the Economic System Scarcity is acknowledged to be as a problem of economic systems. Thus, the definition of an economic system becomes an important element to understand scarcity. However, for the issue at hand, it suffices to focus only on the dimensions of an economic system regardless to its background ideology. All definitions relate economic system to a particular geo-politically organized unit, a nation, state or country. This comes with a complete disregard to both the socio-political circumstances that led to the rise of that country and its natural resource endowment. Consequently, scarcity has usually been discussed from end-means approach as the relative limitedness of the amount of commodities within a closed economic system10. Yet, 9

For more on this matter, see Zaman (2010). Some tribes can also have economic systems, even though this does not change the conclusion as tribes did have (do have) a well-defined terrain for each one.

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thinking of scarcity this way implies that it had not been an economic problem until humanity started to organize itself in geo-political units. This stand, however, cannot be acceptable much less substantiated. 3. Defining Scarcity The worldwide known harshness of humans’ livelihood conditions leaves no room whatsoever for the individual country and/or human being for trading-off and choosing. These and similar conditions are not considered by relative scarcity, still they are genuine cases of scarcity. On the other hand, a distinction has been made between relative and absolute scarcities where the nature of needs and wants is taken as an important factor to such distinction (Baumgärtner et al, 2006; Raiklin and Uyar, 1996). Moreover, Baumgärtner et al call the attention to the seemingly implicit assumption on which relative scarcity rests, namely, substitutability11. If commodities are subject to tradeoff, scarcity is relative; otherwise, it is absolute. Thus, relative scarcity is related to luxury needs and absolute scarcity is related to necessity ones. Moreover, it is said that absolute scarcity "manifests itself during time of social disturbance, economic crisis, revolution, war, or as a result of natural disasters; this when the system fails to produce adequate amounts of items needed for survival" (Raiklin and Uyar, 1996, p. 54). Nonetheless, poor resources endowments should have been added to the mentioned causes, as their role in production of the needed items for survival is obvious. On the other hand, it is safe to say that, so far, there is no clear-cut distinction between the two kinds of scarcities much less a generally acceptable definition of either one. Although it is difficult to have a final word concerning the definition of these two concepts and apart from the Neoclassical understanding of scarcity, it is believed that a reasonable definition can be advanced. Having said this, I believe that absolute scarcity is a case applicable when the concern is about the total available, natural or produced, amount of an output is under consideration, given available resources and technology, in a particular time and location. Moreover, relative scarcity is a case applicable when the concern is about the distribution of the available amount of that output given individuals’ income and wealth and preferences, in a particular time and location.

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Substitution is easily inferred from the application of both marginal rate of substitution (MRS) in consumption and marginal rate of technical substitution (MRTS) in production.

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4. Scarcity from Islamic perspective Contrary to the end-means approach widely used by economists while addressing scarcity, this study takes a complete different approach. Regrettably enough, most Muslims economists have been led to follow the same economics' line of thinking by discussing scarcity mostly from endmeans approach in a geo-political unit; while others seem to conceive economic problem only in terms of unlimited wants rather than scarcity of means as pointed out by Akhtar (2000). Muslim economists’ analysis of scarcity, or any other concept for that matter, should start from Islamic grounds if the analysis were to provide a sound Islamic rationale to the concept under consideration. Therefore, the concern here is neither with rejecting nor with defending the economic notion of scarcity, but rather to explain scarcity based on Islamic perspective regardless of the economics' understanding of, or stands on, it. 4.1 Scarcity from the Geo-Political Approach As already mentioned, scarcity, from the end-means approach, refers to the limited amount of commodities given humans' demand for them in a geopolitical unit. However, the Qur'anic discourse, being a message to humanity as a whole, never uses terms in any geo-political sense such as state, country and nation; this would not have been suitable to the universal nature of its call. The fragmentation of the globe into geo-political units has been humanly made for a variety of reasons; human welfare, whatever that might mean, has not never been one of these reasons. Instead of those geo-political terms, the Qur'anic discourse employs earth (Q 2:30), land (Q 7:57) and town, village, or city (Q 17:16) in the geographical and natural senses, when addressing humans in general in all used senses. Moreover, the term 'nation' is used several times in the Holy Qur'an, yet only in the sense of 'a group of people' (Q 4:41). The same applies to the other used terms such as people and tribes (Q 49:13). Therefore, any attempt to explain scarcity under the umbrella of any type of a geo-political dimension does not hold from Islamic perspective as this considers scarcity in geographical and natural senses both globally as well as locally. This does not necessarily mean that scarcity may not be considered and dealt with within a geo-politically unit, all what it means that scarcity from Islamic perspective is not, in essence, a geo-political problem. It is worth observing that humans' partitioning of the earth into geopolitical units is in itself a form of misusing God given resources and a form of fassad (transgression) par excellence as it has mainly been driven by humans’ struggle for these resources. Besides, not only has this struggle been

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taking place for long time, but it has transcended the geo-political units under the pretext of 'national interest' as understood by the powerful countries as well. As a result, the scarcity issue comes in practice back to its original, globally and locally, geographic and natural dimension as laid down by Almighty God despite the attached geo-political feature to it. 4.2 Scarcity from the End-Means Approach Muslims strongly believe that not only the universe has consciously been designed and created by God, but purposely as well: "We created not the heavens, the earth, and all between them, merely in (idle) sport" (Q 44:38-39). And, "Not without purpose did We create heaven and earth and all between!" (Q 38:27). In addition, God is actively and continuously administering all the affairs of the universe: " He rules (all) affairs from the heavens to the earth: in the end will (all affairs) go up to Him, on a Day, the space whereof will be (as) a thousand years of your reckoning." (Q 32:5 see also Q 13:2). Hence, in consistency with the purpose of universe creation, humans ought to be endowed with the needed means and resources (Q 17:20 and Q 31:20 and 67:15 and 23). Once these Godly endowed means and resources are fairly and socio-efficiently employed, humans' survival and the deserved livelihood can be attained12. Furthermore, since "The effect of the acquisition of political and socioeconomic powers on the market must not be underestimated or understated. Therefore, market efficiency for its own sake is not a goal to be pursued." (Oran, 2010, p. 139). Hence, only under the conditionality of fairly and socioefficiently employment of resources should it be believed that humans' survival and the deserved livelihood is attained even though assured by God as He is the ar-Razzaq (All-Provider) of means and resources (see Q 51:58; Q 67:21). Moreover, God assures every individual that his own share of sustenance is completely independent of that of any other individual’s one. For this reason, God tells humans not to fear poverty, in principle, as no one shares the sustenance of another not even one’s own children: “kill not your children on a plea of want - We provide sustenance for you and for them.” (Q 6:151). On the other hand, killing children, or anyone for that matter, renders no gain to the culprit: “Kill not your children for fear of want: We shall

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The term livelihood as used refers to all essential goods and services needed for a dignified human life. Moreover, socio-efficient implies to attain, concomitantly, both social priority and technical efficiency.

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provide sustenance for them as well as for you. Verily the killing of them is a great sin.” (Q 17:31).13 Hence, given the above discussion and contrary to the general belief, God given resources are not scarce from end-means sense. A similar conclusion, not known to me, appears to have earlier been reached as Zaman (2010) observes that the Islamic view asserts no scarcity at the need level. However, this stand still dose not show whether scarcity exists or not and if so, what would be the rationale behind it. All in all, "nature" is by no means niggardly, from Islamic view, as charged by others only to justify scarcity. 4.3 Scarcity from the Vicegerency Approach Muslims believe that God has created human as His khalifah (vicegerent) on earth within the general framework of Ibadah: “I created the jinn and humankind only that they might worship Me.” (Q 51:56). In this context, Oran says: "The Almighty God … has created a very special and great creature among His creation, human being, Allah (swt) says: “We have indeed created man in the best of moulds” (95:4), and assigned him a very special and distinct mission, Allah’s khalifah (vicegerent) on earth, Allah (swt) says: “Behold, the Lord said to the angels: I will create a vicegerent on earth” (2:30)" (Oran, 2009, p. 19). In consistency with the Divine objective, all humans are vicegerents and all were conferred special takreem (honor): "We have honoured the sons of Adam; provided them with transport on land and sea; given them for sustenance things good and pure; and conferred on them special favours, above a great part of Our Creation." (Q 17:70). The mentioned mission renders human's life not only a purpose but a meaning as well. The purpose of such mission is isti’mar (constructing and developing) the earth: “He brought you forth from the earth and hath made you husband it.” (Q 11:61), “and make you viceroys in the earth” (Q 7:129), “Do not mischief on the earth After it hath been Set in order” (Q 7:56). In other words, the mission entails promoting humans’ survival and decent 13

Islamic teachings strongly prohibit the killing of children (and others), whether before (abortion, except in the cases allowed by Shari’ah) or after their birth, for economic or any other reasons. The context of (Q 6:151) speaks of someone who is already poor where God demands that poor not kill his children, because Allah provides for him and for them. Yet, the context of (Q 17:31) speaks of someone who is not poor but fears to be poor where Allah demands him not kill his children for fearing of becoming poor or that his children may become poor in the future as Allah provides for them as well as for him. In all cases, kids will never be the cause of poverty and crimes do not pay from Islamic perspective. This sort of inhuman behavior used to be practiced before Islam by a minority of Arabian tribes and Islam abolished such practice forever from the beginning of its era.

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livelihood through the building of a just and human civilization, i.e., fully materializing the shari’ah's main magsad (objective)14. Yet, to be able to carry out such mission, humans ought to be endowed with the necessary means and resources needed for that. Therefore, for humans to be able to successfully and effectively live up to their mission, God has, on the one hand, endowed them with all the necessary physical, spiritual, and mental attributes (Q 67:23); and, on the other, bestowed on humans all the needed material resources (bounties) (Q 31:20). Furthermore, in setting the stage for humans to undertake their mission, consider, for instance, the following Qur'anic verses: "It is Allah Who hath created the heavens and the earth and sendeth down rain from the skies, and with it bringeth out fruits wherewith to feed you: it is He Who hath made the ships subject to you, that they may sail through the sea by His Command; and the rivers (also) hath He made subject to you. And He hath made subject to you the sun and the moon, both diligently pursuing their courses: and the Night and the Day hath He (also) made subject to you. And He giveth you of all that ye ask for. But if ye count the favours of Allah, never will ye be able to number them. Verily, man is given up to injustice and ingratitude. " (Q 14: 32-34)15. From among the above uncountable God's bounties, one in particular, the sun, is singled out as an example. As it is well known, economists usually divide resources into economic resources and free ones where sun light belongs to the second group. One has to contemplate deeply on God's wisdom as He freely and continuously provides sun light to humans. The importance of the sun light to the vegetable and animal kingdoms, consequently human life, in general, and the formation of economic resources, in particular, is an obvious one. If this were not the case, not only humans' mission would have been impossible to be realized, but human's own survival as well. Therefore, human's preparation for such mission is complete. This is consistent with, and well explained by, the Qur'anic verse; "no burden do We place on any soul, but that which it can bear" (Q 7:42). On the other hand, under Ibadah framework, humans are in the position of responsibility before God and accountability to Him. Hence, humans should know that their acts and deeds are closely watched by God and subject 14

The main magsad means: “… promoting and safeguarding of the welfare of human beings, individually and collectively, both in the worldly life and in the Hereafter” (Oran, 2010, P.131). 15 To see more of God's bestowed favors on humans see Q 16: 4-16 not included for space limitation.

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to either His reward or punishment, in this life and/or in the Hereafter "Did ye then think that We had created you in jest, and that ye would not be brought back to Us (for account)?" (Q 23:115; see also Q 6:165; 10:61; 99:7-8 and 34:3-5). In short, not only humans are endowed with all needed personal capabilities, provided with the required resources, as amanah (trust) on His behalf, but guided by God Himself to perfectly live up to their mission as well. Therefore, they could not, actually and practically, be tested, held responsible and subjected to God's accountability if resources were not scarce as abundant resources are not helpful to at least reasonably judge humans' deeds16. Note that the potential fulfillment of humans' mission needs a rationale behind it if to be explained and understood. This derives exactly from scarcity of resources; the needed practical incentive that gives life both a purpose and a meaning, thus reward or punishment becomes meaningful. The reader is invited to deeply contemplate on the meaning of the following Quar'nic verse: "If Allah were to enlarge the provision for His Servants, they would indeed transgress beyond all bounds through the earth; but He sends (it) down in due measure as He pleases. For He is with His Servants Well-acquainted, Watchful." (Q 42:27). Indeed, if God were to "enlarge the provision" for humans, it would not be a consistent means with the goal of human mission. Undoubtedly, Fassad (transgression) is not part of God's desire for humans as it is verily the opposite of isti’mar the earth. Consequently, resources must necessarily be scarce so that humans' deeds can be meaningful, properly judged, rewarded or punished in this life and/or in the Hereafter (Q 16:97; Q 3:185 ). The rampant poverty worldwide, however, is explained, not justified, on a different Islamic ground. Although this is out of the scope of this study, perhaps one of the meanings that can be derived from the following Qur'anic verse shows the main reason behind poverty: "Mischief has appeared on land and sea because of (the deeds) that the hands of men have earned. That (Allah) may give them a taste of some of their deeds: in order that they may turn back (from Evil)." (Q 30:41). God given global resources are precisely enough when fairly and socio-efficiently used not only to satisfy humans’ needs, but also to provide humans with some luxuries/ornaments: "It is He Who has made the sea subject, that ye may eat thereof flesh that is fresh and tender, and that ye may extract therefrom ornaments to wear" (Q16:14).

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Judging humans deeds includes not only the fair and socio-efficient use of God given resources, but a major aspect of it is society's appropriate behavior towards the less fortunate members of it as well.

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Therefore, both the existence and spread of poverty testify to both humans' misuse and abuse of these resources. Consequently, scarcity of economic resources is asserted indeed from Islamic perspective but only from the vicegerency approach17. Yet, one may ask what is the kind or nature of this scarcity and what does it mean? Well, it is a technical one, i.e. a technical constraint that is inferred from three elements: First, God's assurance of sustenance for all living souls. Second, God’s wisdom in providing the necessary means and resources in due amount that constitutes the main incentive for humans to undertake, continuously, their duties with regard the construction and development of the earth. Third, the necessary human belief in the responsibility and accountability before God in this life and/or in the Hereafter and authorities in this life18. Therefore, scarcity as delineated neither is assumed nor is a random concept, but rather a derived one. On the other hand, the fact that the amounts of resources bestowed on and entrusted by humans is subject to both God's will and wisdom, these are technically scarce meaning that resources are determined in due amount but not necessarily limited as God can enlarge them at any time and rate. In other words, resources are not limited in the sense of not being enough to satisfy the needs, but rather determined in due amount given needs. Hence, resources are properly suitable to test humans' conduct, based on the fact that God places no burden on any soul, but that which it can bear; otherwise, in both cases of 17

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To say that resources are enough and then they are scarce may sound contradictory to some people. It is not indeed. To clarify this, let me use the following analogy. Let us think of a rich and wise individual who cares too much about the future and success of his kid. Being rich, sustenance of his kid is fully assured for he is able to provide everything his kid asks for. However, being a wise individual it is not expected that he would dare to do so. Doing that means not only spoiling the kid by not preparing him properly for the good and bad days of life, but renders him a worthless and meaningless life as well. The humanly undisputed approach asserts providing the kid with enough resources, some guidance and calling upon him to work freely and wisely under his father’s supervision and accountability. If this sort of behavior by a rich and wise human being can be seen logical and rational, one comes a bit close to understand God's wisdom, as He is the Full of Wisdom, Exalted be He, by not enlarging the provision for humans while assuring them sustenance. The unbelief in the Hereafter and humans' accountability to God is simply a call for all types of fassad. Indeed, no other means can be more effective as fassad deterrent than the belief in the Hereafter and the consequent accountability to God as everyone supervises him/herself. States' legal authority, though important, falls too short to be a substitute. Note that, to ensure the needed compliance, Islam made the belief in the Hereafter and the accountability to God an integral part of Muslims' creed!

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shortages or abundance, resources would not be suitable to any test. Let us remember that, at the end, life as a whole is nothing but a test (Zarqa, 1980). As already said, the fulfillment of humans' mission requires that resources be fairly and socio-efficiently employed, and if the advanced definitions of scarcities are accepted, contrary to the Neoclassical economics, both absolute and relative scarcities should be concomitantly considered by Islamic economics. Hence, fair and socio-efficient employment of resources should imply the concern with the use of the available resources and technology to produce 'enough' amounts of commodities, given needs and considering top social priorities. This is the domain of absolute scarcity as defined. On the other hand, fair and socio-efficient employment of resources should also imply the concern with the distribution of the available amounts of those commodities given consumers' income and wealth and preferences, which is the domain of relative scarcity as defined. Having said that, let us turn to discuss the nature, subject matter and scope of Islamic economics. 5. The Subject Matter and the Scope of Islamic Economics Contrary to the belief of most economists, the above discussion shows that relative scarcity does not constitute the core of the economic problem as this is confined to a subset of humans’ needs, namely, wants. Thus, what would be the economic problem from an Islamic perspective? Despite several attempts to delineate the nature and scope of Islamic economics as well as defining it, no consensus, to my knowledge, has been reached by Muslim economists yet. Chapra (1996) in addition to providing his own definition of Islamic economics reproduces perhaps the most known ones. Yet, after discussing those and other definitions, Addas seems to strongly believe that the subject matter of Islamic economics remains not well defined, and concludes by saying that “Islamic economics is still in the early stages of development; it remains more visionary than operational, and has various sorts of deficiencies to be made up.” (Addas, 2010, P. 117). This seems to be an undeniable fact, yet it could not have been different indeed, as the development of a new and workable science requires too much sincere endeavors that takes usually some time. However, this should not be looked upon as a severe shortcoming for the newly born science, namely, the Islamic economics. Interestingly enough, Robbin had observed almost a century ago, a similar phenomenon in the West by saying: “The efforts of economists during the last hundred and fifty years have resulted in the establishment of a body of generalisations … But they have achieved no unanimity concerning the ultimate nature of the common

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subject-matter of these generalisations.” (Robbin, 1935, P. 1). Having said that, let us turn to the subject matter of the Islamic economics. It has been said that economic resources that are in due amount from the end-means approach are technically scarce from vicegerncy approach. God's assurance of sustenance to humans, in its primary form and in principle, is a necessary condition indeed for attaining humans' survival and decent livelihood, and ultimately isti’mar the earth. However, technically speaking, that assurance is not per se a sufficient condition, hard and sincere work is needed so that the fair and socio-efficient employment of the available economic resources is realized and the desired goal is attained. "If the people of the towns had but believed and feared Allah, We should indeed have opened out to them (all kinds of) blessings from heaven and earth; but they rejected (the truth), and We brought them to book for their misdeeds." (Q 7:96). That is, in economic terms, if people were faithfully committed to their mission and fairly and socio-efficiently employed the Godly endowed resources; surely they would have been successful in their worldly endeavors. Human mission entails checks, balances and accountability to God and human's authority as well: “And say: "Work (righteousness): soon will Allah observe your work, and His Messenger, and the Believers: soon will ye be brought back to the Knower of what is hidden and what is open: then will He show you the truth of all that ye did." (Q 9:105). Nonetheless, the question that one should necessarily ask is what should be the subject to checks, balances and accountability? The Holy Qur’an itself gives straight away the answer to this question: "that He might try you, which of you is best in conduct." (Q 11:7; see also 6:165; 67:2). What one can easily conclude from the above and other verses in the Holy Qur'an is that human behavior vis-à-vis the fair and socio-efficient use of the God given resources is the core of the matter. Let us recall the Qur’anic verse: "If Allah were to enlarge the provision for His Servants, …" (Q 42:27). Again, enlarging provisions would not be consistent neither with human mission, nor with its goal that is totally contrary to fassad. Moreover, the Qur’anic discourse keeps demanding humans to do good deeds and assuring them that God loves those who do so. Furthermore, humans are also warned that God closely watches all their deeds, and that they are accordingly either rewarded or punished by Him: "Therefore, by thy Lord, We will of a surety, call them to account (*) For all their deeds." (Q 15: 92-93). Let us not forget that resources never take decisions, but humans do! The above discussion not only defines the economic problem from Islamic perspective, but Islamic economics as well. The fulfillment of the mission entails employing fairly and socio-efficiently economic resources via

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serious, sincere and faithful human endeavors, to achieve the major goal, constructing and developing of the earth. This goal can be understood, in worldly terms, to mean the provision of all needed means for human survival and dignified livelihood. "Allah sets forth a Parable: a city enjoying security and quiet, abundantly supplied with sustenance from every place: yet was it ungrateful for the favours of Allah: so Allah made it taste of hunger and terror (in extremes) (closing in on it) like a garment (from every side), because of the (evil) which (its people) wrought." (Q 16:112). Through this parable, God shows us that His greatest worldly reward or punishment is consistent with society’s gratitude or ingratitude towards God's graces. Thus, God rewards a grateful society by ensuring to it the necessary core means for its worldly life, namely, security and sustenance; while the ungrateful one is punished by not only depriving it from those means, but also by substituting them by the least humanly undesirable ones namely, hunger and terror. In another instance, God shows Quraish how great the favors and mercy He had bestowed on it were. God shows that He Himself secured Makkah, Quraish’s home, and provided it with the necessary core means for Quraish’s survival and dignified livelihood. "For the covenants (of security and safeguard enjoyed) by the Quraish, Their covenants (covering) journeys by winter and summer, Let them adore the Lord of this House, Who provides them with food against hunger, and with security against fear (of danger)." (Q 106:1-4) 19. From the above two Qur'anic verses, it can easily be seen that God's collective highest worldly reward in contrast to His mostly severe worldly punishment are summarized in 'food against hunger, and security against

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Some say that this Surah is a continuation of the preceding one, Al-Fil (the Elephant), in which God tells that He miraculously saved Ka'bah, from Abrahah Ashram's, the Abyssinians ruler of Yemen at that time, attack with the intention to destroy Ka'bah. Had the attackers succeeded in their mission, Quraish's enjoyed high socio-economic and religious status, being the custodian of Ka'bah, among all Arab tribes would have been vanished and with that, its own survival and livelihood that used to depend on such status and on its seasonal commercial trips North and South. Regardless of the this stand, I believe that Quraish's enjoyed high social status and prosperity, before Islam, was due to the God's provision of sustenance and security to the city of Makkah itself given Prophet Ibrahim's prayer long before the rise of Quraish and for the sake of Ka'bah. The Qura'nic verses sarcastically, perhaps, point out Quraish's conspicuous affinity to its trips rather than to God as He is the provider of the core elements of its status and prosperity, while its commercial trips are but means. Then God demands Quraish to worship Him otherwise, after the emergence of Islam, there is no other way to ensures God's provision of sustenance and security but God worshiping (see Q 2:126).

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fear'20. It should be noted though that 'food and security' or their opposites 'hunger and fear' ought to be understood in their extended meanings rather than restricting them to their literal ones. Hence, food should be understood as consumption goods and services, and security as individual and social one21. While food represents an economic need, security represents a social one, yet both are composed of a set of commodities accordingly. As no term could indeed accommodate the full meaning of 'food and security', I can legitimately, for want of a better term; label social-safety22. Given the above discussion, I am inclined to say that the core of the economic problem, hence, the subject matter of the Islamic economics should be humans' behavior and endeavors that are directly and indirectly related to the (mis)use of the technically scarce resources to achieve social- safety and fulfill their mission within the framework of ibadah. In other words, behaving according to God's guidance, and employing fairly and socio-efficiently God's given resources to constructing and developing the earth, attaining 'food and security', humans will be on their way towards fulfilling their preset mission. Hence, a workable definition for Islamic economics can be formulated as the social science that studies, from Islamic perspectives, the socio-economic agent's behavior with regard to the fair and socio-efficient employment of the technically scarce economic resources to attain social-safety23. If socialsafety, i.e. fully satisfy a set of socio-economic commodities, is not attained, not only humans fail to materialize isti’mar the earth, live up to the Godly assigned mission, but ultimately not performing the highest level of ibadah: "I have only created jinns and men, that they may serve Me" (Q 51: 56).

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It is true that the punishment that the peoples of 'Ad, Thamud and others were subjected to is the most worldly severe one. Yet, le us remember that punishment is proportional to guilt and mischief. The use of fear and hunger is not intended to people’s elimination but rather to make them turn back from Evil (see Q 30:41). Therefore, the most severe worldly punishment should be understood in the context of a 'deviating' society that needs reform in order to come back to the right path. 21 Historically, Quraish used to exchange more than aliments during its journeys North and South, even luxury goods, including alcoholic beverages, used to be traded, for more visit: http://www.witness-pioneer.org/vil/Books/MH_LM/ . Access Date: 17.11.2011. 22 Socio-economic agent refers to an individual that acts out of personal interest within the social framework. Besides, the notion of social-safety here is different from, and much broader than, the recently used one in association with social safety nets. 23 A socio-economic agent is the one that his rationality accounts for his self-interest within the social framework; hence, the agent is not the one that is guided only by economic rationality as widely known.

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6. Nature of Islamic Economics The main question to be asked here is: what approach should Islamic economics as a social science pursue? Should it be the positive approach, the normative one, or other one? I have no doubt that such inquiry has been made before by Muslim economists but it seems that the issue remains unsettled. Science is said to be a “tooled knowledge” as briefly defined, among other definitions, by Schumpeter (1954, p. 7). If so, Islamic economics is expected to employ economic models to explain socio-economic phenomena within its domain as they are, so that course correction can be properly introduced, therefore, the desired results have better chance to be achieved. In other words, without being sufficiently aware of the current state of affairs, or properly diagnosing problems, rarely can real ones, economics or otherwise, be solved or at least managed. Contemplating on the above two Qur'anic verses related to both the case of the city (Q 16: 112) and Quraish (Q 106: 1-4), it seems plausible to conclude that God's discourse focuses on the provision (denial) of the core worldly means for human life conditioned to believing (unbelieving). This should imply that the Islamic economic goal is to be defined only in worldly terms under the umbrella of ibadah24. What it is being attempted to be emphasized here is that the Islamic economic goal, social-safety as earlier defined, comes as a third layer being preceded by the other two higher layers, ibadah and isti'mar, where the former is the top ranking one. Furthermore, accepting the complexity of social sciences and each one’s autonomy within the same group, it would not be reasonable for a social scientist, economist in this case, to insist on searching for all the direct and indirect variables underlying any socio-economic phenomenon to include them in a single workable model. If this view is accepted, Islamic economics needs to focus only on the direct socio-economic variables considered as the would-be determinants of the socio-economic phenomena under its domain. Moreover, isti'mar the earth requires the concomitant interactions of several human dimensions; economics is only one of them. Widening the domain under which economics should be operating by simultaneously attempting to account for other human dimension, leads to nowhere. At the 24

All economists know that production is a function of the quantity of used inputs and technology, yet the traditional formulation of the production function never includes technology. Although technology may be added to the production function, it has always been taken as given. Hence, should the formulation of functions from Islamic view need to include qualitative variables such as rewards, punishment, or the Hereafter? Still, the effect of these variables on humans behavior can be separately studied as has been done with technology.

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end, humans, in one form or another, ought to be dealt with by Islamic economic as humans, not angels. This should come under the assumption that the other human dimensions needed for isti'mar the earth have already and properly dealt with what falls under their domains, especially education in both behavioral and technical senses. If this assumption is not holding, this should directly indicate the existence of a serious problem under the domain of one or more dimensions that need urgently be solved. This is not to say that ethics should not be part of Islamic economics modeling, on the contrary, this must be organically built in. It suffices to remember that Islam is, in one sense, a general call for noble character according to Prophet’s (pbuh) saying “I was sent only to perfect nobility of character” (Oran, 2010, p. 144). Speaking of market regulation from Islamic view, perhaps Oran’s stand their partially clarifies what is being attempted to be conveyed here, he says: "The ex ante policies include the general teaching and educating of human beings according to Shari'ah teaching. These teachings focus on shaping human character in general by clarifying self and social individual rights and obligations and accountability before God in the Hereafter. This lays down the first general and broadest layer of regulation, namely self-regulation." (Oran, 2010, p. 137). Moreover, Ibn Taymiyyah classifies people into three categories each corresponding to one of "the three-fold nature of the self": domineering (ammara), tranquil (mutm'inna) and censorious (lawwama), namely, "Those who live entirely by their own whims", "Those who live according to sound religious principles", and "Those in whom both of the above co-exist", consecutively. He further asserts that those in the third category "constitute the majority of the believers (emphasis added)" (Ibn Taymiyyah, 1982, pp. 97-98). Yet, the current representation of those of the first category seem to be unfortunately no less significant. Given the unstable behavior of the members of the third group, it is expected that this sort of individuals may constitute, behaviorally and practically, the main source of the economic problem. Generally speaking, humans, whether the referred to or others, when dealing with economic affairs are primarily focused on worldly causes and outcomes, by the virtue of being humans and as these are the most immediate ones: "Nay (behold), ye prefer the life of this world" (Q 87: 16). It is worth mentioning here that Shari’ah imposes no constraints on individuals’ use of

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causality, in principle, when considering worldly life matters if this falls within the Islamic framework25. Consequently, while Islamic economics cares so much about 'how things ought to be done', it is equally important to care about 'how things are being done'. This is imperative if the economic policies to be undertaken by Islamic economics are to be meaningful, appropriately introduced, and sound results achieved. Still, one may ask, what kind of approach, then, should be taken by Islamic economics? Again, should it be the positive or the normative one? However, why should Muslims confine themselves to anyone of these or even a mix of them, both in terminology and content senses as well? Most capitalist economic thought, in general, and Neoclassical economics, in particular, and their derived theories, which are quite neat in classrooms, have not been proven useful for solving real human problems! The worldwide crisis of 2008, its repercussions, and the European crises of 2011, let alone the globally rampant poverty, are nothing but live testimonies on that. Neoclassical economics though the dominant view is of no avail and should not be taken as a benchmark. This view have mostly been driven by the in vogue trend of “publishing or perishing”, not for caring about the fate of humanity but to maintain its discursive success, by using a huge technical literature most of which is not comprehensible (Arnsperger and Varoufakis, 2005). Moreover, "Economics as a discipline, in teaching, research and policy, is very poor at ethics" as pointed out by Fine (2004, p. 96). Put in other terms, DeMartino asserts that: "We [economists] haven’t explored carefully what it means to be an ethical economist, and what it means for economics to be an ethical profession. It is an ethical fact that we have an obligation to do so." (DeMartino, 2011, p. 42). Let us remember that Islam cares too much about one sort of knowledge, the beneficial one, the one that can effectively contribute to solve real human problems. Prophet Muhammad (pbuh) is reported to say: "O God, grant me benefit in what Thou hast taught me, teach me what will be of benefit to me, and increase my knowledge." (AlTirmidhi, Hadith # 3599). Hence, from Islamic perspective, the economic approach to be used by Islamic economics should enable decision makers to be sufficiently aware of the economics' state of affairs, determine the corrective policies to be undertaken and search for the best workable course of action, then employ the corrective policies to attain social-safety. If this approach is to be tagged, I do not hesitate to call it the main maqsad approach. Let us not forget that the 25

Adeeb Ibrahim Dabbagh in his exposition of Bediuzzaman Said Nursi’s Theory of Knowledge, www.bediuzzamansaidnursi.org/ar/icerik, Access Date: 02.11.2011.

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main goal of Islam, in general, and Islamic economics, in particular, is to improve upon the status quo of humans' life and put things on the straight path through the conversion of the Shari'ah's main maqsad into reality. 7. Conclusion Based on the above discussion, it can be said without hesitation, contrary to the belief of orthodox economists that scarcity is not the core of the economic problem. As Neoclassical economics cannot prove that economic resources are scarce in total terms, not only it reduced de facto the nature of the economic problem to merely an exchange one, it confines itself only to relative scarcity, ignoring the absolute one, and focusing more and more on distribution. As the latter assumes substitutability among commodities for choice to be possible and economic problem to exist, wants become the economic domain, as basic needs are not subject to choice. Focusing only on wants by employing relative scarcity for the sake of optimizing outcomes is, at best, a tiny part of the real economic problem. On the other hand, it is strongly believed that neither is scarcity, absolute and/or relative, the curse of economic development, nor is poverty inevitable fate of humanity. Muslim economists seem to be divided on the issue of scarcity. While some accept its existence, others reject its existence altogether. It is shown here that any Islamic analysis of scarcity should not follow the same line of the Neoclassical thinking. That is, from Islamic perspective, scarcity should not be considered from geopolitical approach, as the Holy Qur'an never deals with this issue in that sense, besides there is no proof to the existence of actual scarcity, in principle, from the end-means approach, considering the basic human needs. Moreover, it is shown also that the Almighty God ensures human sustenance, in principle, regardless of their number and the extent of their needs. However, the study asserts the existence of scarcity from Islamic view but based on other approach namely the vicegerency one where only through this can scarcity be understood. According to this approach, the existence of scarcity is not an actual but rather a technical one, or a technical constraint, that is necessary as a means for both measuring human performance and accountability, given performance, to God not only in this worldly life but in the Hereafter as well and also authorities in this life. It is worth mentioning that the assertion of the existence of scarcity as a technical constraint is not a random or an assumed concept, but rather a derived one. Despite such technical nature of scarcity, it asserted that humans ought to put their utmost endeavors by using economic resources fairly and socio-

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efficiently as God’s assurance of sustenance is but a necessary condition, not a sufficient one, technically speaking. This is indeed a part of human duties towards fulfilling their mission. Once resources are employed as such, Islamic economic should be concomitantly concerned with both absolute and relative scarcities, as defined, in order to achieve the socio-economic goal, socialsafety. This also means Islamic economics as a science should not be neutral towards the ends and that value judgments lie within its scope. Furthermore, the study emphasizes that Islamic economics should pursue its socio-economic goal through what is called ‘the main maqsad approach’. According to which and having in mind the worldly goal of social-safety, human mission, isti'mar the earth, and the ultimate goal of ibadah, Islamic economics should care first about understanding the state of affairs in the economic sphere in order to be able to suggest and employ corrective policy actions from Islamic perspective when and where needed. References Addas, Waleed A. (2008) Methodology of Economics: Secular vs Islamic, 1st Edition, International Islamic University Malaysia Press. Akhtar, Muhammad Ramzan (2000). Definition, Nature And Scope of Islamic Economics- A Review, Journal of Islamic Banking And Finance, Volume 17, No 1, pp: 53-61. Andrew, Eduard (2010). The Unworthiness of Nietzschean Values, Animus 14 (2010) www.swgc.mun.ca/animus, Access Date: 01.05.2011. Arnsperger, Christian and Yanis Varoufakis (2006). What Is Neoclassical Economics? post-autistic economics review, Issue no. 38, article 1, www.paecon.net Asanuma, Shinji (2008). Natural Resource Abundance and Economic Development: A Curse? Or A Blessing? – Lessons from Indonesia’s Experience”. Preliminary draft for discussion, www.policydialogue.org, Access Date: 28.04.2001. Baumgärtner, Stefan, Christian Becker, Malte Faber, Reiner Manstetten (2006). Relative and absolute scarcity of nature. Assessing the roles of economics and ecology for biodiversity conservation, Ecological Economics, 59, pp: 487-498. Becker, Gary S. 1971. Economic Theory. New York: Alfred A. Knopf. Benson, Iain T. (2000). Notes Toward (Re)definition of the "Secular". U. B. C. Law Review, v. 33, pp: 519-549. Blaug, Mark (1985). Economic Theory in Retrospect. Fourth Edition, Cambridge University Press.

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Zarqa, Anas (1980). Islamic Economics: an Approach to Human Welfare. In Khurshid Ahmad (Ed.) "Studies in Islamic Economics", International Center for Research in Islamic Economics/ King Abdul Aziz University and Islamic Foundation/UK.