Economics and Business

Maximization Postulates and Their Efficacy for Islamic Economics

Abstract : This paper examines the nature and role of maximization postulates concerning profit and utility in the mainstream price theory formation, from a methodological perspective. Mainstream economics retains these postulates, despite much criticism, mainly for two reasons. Firstly, they help establish cause-effect linkages among economic variables and markets. In that they greatly facilitate predictions and their empirical verification over a wide field of inquiry. Secondly, no other behavioral rule has so far been established that gives equally valid, if not superior, results over such range. It is argued that the postulates are required in Islamic economics as well for the same reasons. Maximization, per se, is not un-Islamic: what is maximized, how and for what purpose are the real issues to investigate before passing judgment. Contrary to the current position in the literature, we find it preferable to include moral values and social considerations of Islam in the assumptions of economic theorems, rather than attempting to include them in the objective elements of the models, until Islamic economics evolves as an independent subject. For maximization is a mathematical concept, and cannot fruitfully accommodate what cannot somehow be measured.

Prof. Zubair wins IDB’s Islamic economics prize

Dear Prof. Zubair                                                           

Assalamu Alaikum Wa Rehmatullahi Wa Barakatuhu

I pray to Allah that you will be in the best of health and happiness.

Our heartiest congratulations for the award of the Islamic Development Bank for the year 1430 H (2009) in Islamic Economics.  May Allah bless you and help you to make even more contribution in this field, especially the philosophy of the Islamic economics, its system and its major institutions and tools, which is very much needed by both Muslims and non Muslims.

Please also convey our congratulations to your family and our mutual friends.

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