Abstract

A comparative examination of mainstream economic doctrines and their recent developments is undertaken with a view to find out how ethics has been treated in these. The principal focus here is to identify the new paradigm that can treat ethics endogenously in preference formation, the market and the economic order. The quest for this paradigm leads us to an examination of Islamic economics. Islamic economics is presented in terms of its epistemological roots. Thereby, a general systems view of interactions, integration and creative evolution among economic and social possibilities is shown to lead to the paradigm of Islamic political economy. Some Islamic financial and economic instruments are examined to bring out the pervasive causality of the principle of universal complementarity across diversity in a general systems perspective of Islamic political economy as premised on its epistemological roots.

Our principal objective in this paper is to place Islamic economic thinking in a distinctive paradigm of its own in comparative perspective of economic theory as it has evolved and indeed as Islamic economics itself has evolved. Thus we will take a critical examination of these alternative premises of economic thinking while laying down the epistemological foundation of the worldview of human inquiry in Islam. Within this world view can be discoursed economic, social and scientific issues and problems. We will then explain some usually known Islamic economic and financial instruments within the paradigmatic worldview that we will establish on epistemological grounds. 

In occidental history of economic thought there were two major path-breaking revolutions, classicism and Keynesianism. Although many other ones can be taken up within these major classes of thinking, we will devote to the parent ones only. We will also see that the search for new thinking in economics in recent times has once again found itself gripped in one or the other of these schools or a combination of the two.

The First Revolution in Economic Thought: The Classical Economic School

Classical Economic Orthodoxy: Adam Smith
Neo-Classicism
Marx Briefly

The Second Revolution in Economic Thought: The Keynesian School

The Economic Orthodoxy of John Maynard Keynes

Ethics and Economics: Recent Economic Thought

Sen�s Ethics and Economics

Need for Endogenous Ethics in Economics; Systems Approach

The Structure of Islamic Systems Oriented Reasoning : Endogenizing Ethics

What is Knowledge?
Endogeneity of Ethics in Islamic Socio-Scientific Order

Markets According to the Principle of Ethical Endogeneity in Islamic Economics

The Social Well-Being Function and the Social Well-Being Index
The Production Menu
Resources and Prices of Goods and Services
Profits
Factor Pricing
Economic Distribution
Idea of Priorities and Specialization

The Central Role of the Principle of Universal Complementarity across Diversity

The Instruments of Islamic Economy

Abolition of Interest
Profit-sharing Under Economic Cooperation
Joint Ventures and Equity Participation
The Institution of Charity
Avoidance of Wasteful Use of Resources

Systemic Linkages among Islamic Financial and Economic Instruments

Conclusion