This paper begins with a brief look at the development of economics through the last two centuries, focusing on the major methodological approaches, although we have something to say about earlier periods also to set the perspective right. We try to identify the issues which engaged attention of the masters of the disciplines and the problems facing man and society that engaged their attention. We note in this regard the gradual ascendency of formalism in economic theory and the meaning and purpose of economics gradually yielding ground to tools and technique of analysis. This would bring us to the second quarter of the twentieth century when economics was again forced to come face to face with reality and a methodological crisis ensued. We shall note the contemporary contents of economics and the various methodological approaches before we pass on to the next part of the paper which deals with its major theme: relevance of Islam to our discipline.