We will now characterize the nature of markets in the Islamic endogenous ethico-economic order. Contrary to Smith�s invisible hands principle and the assumed post-hoc optimality of resource allocation where learning and knowledge cease at the points of optimum and equilibrium either in the midst of full or bounded information (rationality), markets in the Islamic order are ethically guided although not intervened unduly by institutions. 

The interactive, integrative and evolutionary nature (henceforth IIE) of the shuratic process implies that market contracts are continuously made according to simulating rules, choices and resource allocations premised on Shari�ah guided economic and financial instruments. Such processes of discourse and contracts generate continuous flows of knowledge. The interacting legal, ethical, material and institutional elements mark the nature of inter-systemic interactions. On the other hand, the complementarity among prices and quantities for the Shari�ah prescribed orders continuously enhanced by knowledge flows, defines a resource allocation and pricing behaviour that is quite contrary to the methods prescribed by marginal utility on the demand side and by marginal productivity on the supply side. Technological change in the demand, supply, production and social well-being functions is seen as transformation through which emerging processes of requisite knowledge flows are realized and transmitted for implementation in order to attain complementarity across diversity. 

The Social Well-Being Function and the Social Well-Being Index

The social well-being function is now seen as the benefit derived from the consumption choices of bundles of goods and services determined by a continuing shuratic process enabling complementary choices to occur (Choudhury 1996). The concept of utility function is replaced by individual choices of goods and services that are complementary in themselves in providing benefits. Such benefits are themselves the result of another level of complementarity. This is the complementarity between knowledge and material objectivity. Instead of consumer utilities, social well-being indexes understood in the sense of complementarity among goods and services for consumption purposes, functionally characterize the social well-being function (Choudhury 1992). 

The Production Menu

The production menu is the result of complementarity between labour and capital (also other factors of production) in the knowledge-augmented form. This is an issue of technological change, the choice of the goods to produce and to consume, and the institutional participation required to determine such choices by discourse. Thus by the idea of complementarity among factors and goods in the production menu we mean such a complementarity being realized by interactions, integration and creative evolution in the shuratic processes pertaining to a complex of participation among social agents, individuals, variables and their interrelations.

Resources and Prices of Goods and Services

Resources are continuously augmented by knowledge flows. Through the emerging diversities of economic possibilities and complementarity among them, risk and product diversification occurs. Thereby, cost and risk decline. Such a resource generation can be the result of many factors: avoidance of waste, new discoveries through active productive investments, participatory enterprises that develop human resources, choices of dynamic forms of needs fulfillment development regimes, institutional organization based on cooperation and extensive joint ventures, and formal as well as informal ways of guiding the economic agents towards proper modes of production and consumption menus (Choudhury 1998b). 

Prices in such a resource allocation system are those resulting from complementarity among goods and services. That is, they are determined by market exchange with complementarity embedded in it. This property of Islamic resource allocation is similar to price determination in classical economic theory, but the goods are ethically induced by knowledge input from continuously guiding social institutions. Such prices can only occur as a result of extensive systemic linkages, whereby participation in the broad sense of complementarity exists. Also they are the result of a needs-oriented economy where complementarity is necessary to sustain diversity. Development regimes are thus of the dynamic (i.e. evolutionary) needs-oriented type. In this sense therefore, the Islamic market is not different from a classical economic market in terms of the needs-oriented goods and services exchanged. However, ethical endogeneity in exchange alters the nature of exchange relations. 

Profits

Because of this nature of the Islamic economy, profits are generated on the basis of near normal profits, since market contracts will determine the margin of error in the pricing of goods for profits that can be subsequently shared among partners. Such errors in market contracts can result from non-optimal learning games that participants play between themselves. Between consumers and suppliers, prices in exchange are determined by the ethical response to appropriate goods from the side of the knowledge-induced demand and preference functions of the consumer. To this the supply function and the production function respond. Besides, production menus are of the participatory type with discourses and decision making occurring between labour and owners. Such a participatory environment also determines the nature of goods and the menus of production with social awareness in them.

Profits are near normal profits also because of the regime of dynamic basic needs baskets of goods and services that are demanded and supplied in the Islamic economy. Such dynamic needs fulfillment baskets preserve price stability and make the revenues depend principally on the production side. From the side of an appropriate choice of technology, such a regime of development likewise causes profits to be generated on the basis of output. Thus output plays a primary role in the participatory nature of sharing in the resources and returns of production. Prices remain stable at each evolutionary juncture of dynamic basic needs regimes of development. The picture is similar to the classical treatment of needs in market exchange. Yet the resource allocation occurs through complementarity between goods, services and agents of demand and supply. This becomes a function of knowledge flows that enable such complementary interactions to occur and then lead to integration and dynamic emergence of choices of the basic needs regimes of development..

Factor Pricing

On the side of pricing of factors of production, the derived demand for factors are functions of factor prices and prices of goods and service. Since productive factors remain complementary due to the factor-augmenting technological change, therefore, their prices also move in the same direction. In all of these cases, knowledge flows as interactions leading to integration and creative evolution of new knowledge as a dynamic process, play the fundamental role. 

The supply of factors of production is not based on factor marginal productivities. Rather, it is determined by the effect transmitted by the demand side. Hence here too, much of the equilibrium aspects of classical factor markets exist, but now with endogenous ethical effects in existence, as caused by the continuous production of knowledge. 

Economic Distribution

Between the demand and supply sides of the factor and product markets we now have the resolution of the economic distribution problem. The true worth of the things exchanged, be these goods or services of factors, is based on their value as determined by use in exchange and by intrinsic value embedded in them. Intrinsic value is discovered through ethically induced market exchange. Although such a value is not measurable yet it influences the net price in exchange. The concept of value in exchange is now that of net value of effort and exchange after intrinsic value, as naturally embedded in the exchangeables, is discounted from the price as a return either to the seller or the productive factor. Intrinsic value is not observed but it is revealed through morally conscious (preference formation) exchange in ethicizing markets toward determining supply prices 

Idea of Priorities and Specialization

In the milieu of complementarity among factors and the simultaneous movement of their prices determining similar consequences on prices in the market for goods and services, the additional question is that of economic priority and specialization. We have already explained that �the principle of universal complementarity across diversity� in the space of goods, factors, resources and prices, completely negates the neo-classical postulate of marginal substitution. 

Similar concepts of marginalism that have inhibited scientific analyses of steady-state change are also re-conceptualized in terms of knowledge-induced simulative methods (Choudhury 1998c). Thus our examination of the topic of priority and specialization must be based on the principle of universal complementarity across diversity in all systems. The principle remains a view polar to the postulate of marginalism( Daly 1992).

If one were to further represent such a knowledge-induced resource allocation across economic possibilities, the trajectory of the allocation will be a perturbed path. Perturbations here are the result of continuous induction of variables and events by knowledge flows. That means both the concept and the methods of optimality and optimization are dispensed with in the light of the attribute of knowledge formation. As we explained earlier, such knowledge flows evolve incrementally through the dynamics of the shuratic process. In spite of the perturbed nature of simulative trajectories, integrity of the knowledge-induced pattern of evolution is maintained as long as knowledge flows are continuously evolved and integrated through interactions. Thus there exist evolutionary equilibria in the Islamic resource allocation regimes in the sense of sustaining the pattern of shuratic epiphenomenon (Grandmont 1989). 

Priority of choice in knowledge-induced resource allocation would nonetheless imply that certain possibilities are incrementally used, preferred and demanded more than other ones. Yet such a choice reflects simply a measurement of the relative degree of variations in the alternatives over space and time. But, in spite of such variations, the movements of alternatives keep in tact the monotonically positive directions of all prices. The idea of prioritizing choices therefore, does not mean marginal substitution of one for another. Rather, the first order change always remains positive, although the second order change may be relatively negative and varying according to the existing moments of knowledge induction as the simulation of the shuratic process proceeds. 

Other arguments arising from the side of the principle of universal complementarity that annuls the neo-classical postulate of marginalism, are that any reversal to a marginalist picture in resource allocation in Islamic markets is a case of temporary or permanent slowdown in knowledge production. In the case of a temporary slowdown in knowledge production we have an instantaneously very short-run event. Such an event has no significance in economic movements and change. On the other hand, only in the case of the long-run permanent demise of knowledge flows can a full return to neoclassical resource allocation be possible. Such a neo-classical state of resource allocation would be once again described by optimal and non-sharing agents. These are also the characteristics of methodological individualism, earlier referred to in terms of independence and marginalism among competing agents. In all such cases the meaning of interactions breeding knowledge flows, process and reality, is lost.

Specialization is seen in the shuratic process order as the �intensity� of certain choices of technologies and means of production to develop linkages across sectors, goods, resources, factors of production and other possibilities. Such linkages being direct functions of knowledge flows caused by the existence of complementarity across diversity, would mean the development of possibilities in the economic space as caused by interactions. Consequently, while specialization would continue to mean an efficient method of attaining output, such a method would not remain opaque but rather will be transparent to all cooperating agents. This idea of a specialization process comes nearer to the innovative learning process of the Austrian economic school that allows for systemic interactions to remain embryonic in the innovative specializing paths of entrepreneurship.