Islamic Economics

Abstract

Islamic economics is an important alternative to the market-based (often termed “Western”) economic model that, in one variant or another, is now found in most formal economic systems worldwide. Islamic economics is, perforce, confined to Muslim-majority countries, but there is no Muslim country whose economy can actually be described as “Islamic.” However, Islamic revivalism worldwide, the sheer number (one billion plus) of Muslims, and their predominance among the world’s petroleum exporters – Saudi Arabia, Kuwait, Iran, United Arab Emirates, and Libya (plus some key emerging market economies, such as Malaysia and Turkey) – ensures that Islamic economics will continue to be a serious alternative to Western-style market capitalism. For its advocates, Islamic economics is the “third way” between the two main Western extremes of free market capitalism (with its emphasis on the rational individual’s self-maximizing behavior) and socialism (with its emphasis on social ownership of the means of production and the sublimation of the individual’s needs to those of society’s).