Abstract:
his paper investigates the conformity of market participants’ decisions with the Islamic codes of conduct from the economic and philosophical perspectives. At the outset, the contributions of the renowned contemporary Muslim philosophers on the epistemological issues between the “is” and the “ought” are presented. Subsequently, a synthesized construct that would resolve the dichotomy between the normative and positive economy is outlined. The approach and the conclusions of this paper are expected to alleviate the dissatisfaction expressed by many Muslim economists for the sole application of the normative or positive economic methodology in the field. Furthermore, the paper validates arriving at conclusions in line with Islamic ethical norms by an empirical study of the actual economic behavior of market participants. The conclusions of this paper are not limited to economics but are expected to be applicable to all Islamic social sciences where similar issues are disputed.
Machine summary:
Furthermore, the paper validates arriving at conclusions in line with Islamic ethical norms by an empirical study of the actual economic behavior of market participants.
1. Introduction Many Islamic economists contend that the economic study of private and public sectors of the economy should incorporate Islamic rules and ethics with the actual observable performance of the agents.
To investigate the possibility of this integration, we need to analyse the ontology of the “is” phenomena that actually exist in the economy, as well as the “ought” concepts as manifested in ethical values that motivate the participants’ decisions.
The posited issues are critical for conducting any Islamic economic study and this paper aims to investigate those from the contemporary Muslim philosophers and economists’ perspectives.
Is there a logical relationship between the “is” and the “ought” statements as put forth by Hume (1888), or is there a complete dichotomy between normative and positive economics as claimed by Rubbins (1935) and Freidman (1953)?
Hairi (1982) follows this classification and states that ethical judgment and the events that are created by human volition all belong to practical reason.
Therefore, following the scientific methodology would extend the doctrine of Martyr Sadr to be applicable to real world condition prior to the period that they are completely identical with a true Islamic state.
Labelling the latter studies as positive and the former as normative does not contribute to the process of acquiring knowledge, since both studies are analytical and deal logically with real beings created or occurred with or without human participation.