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The institutions of 'waqfs,' that is foundations, stand before us as an intermediate option between collectivist and individualistic societies. These foundations provide for societal and individual needs in many areas including religion, education, finance, health, and infrastructure. One of the most important forms is the cash waqf, which acts as both a charity and financial intermediary and has evolved to become an option to today's conventional lending mechanism. Waqfs have historically solved the most important financial needs of the period by considering the sensitivities of the society. This study will discuss the potential solutions that the cash waqfs can bring to the problems that modern-day societies are currently experiencing in finance., Introduction In our global world, the economic problems caused by the modern economic mind do not only affect the country where the crisis emerges. As the rate of integration in [...]

1. Preamble In the wake of the 2007-2009 financial and economic meltdown, a lot of intellectual and practical work is being done in the area of monetary and economic reform. [...]

The Islamic Gift Economy (IGE) is an integrative Islamic economic system that is autonomous and can stand and prosper on its own ethical and economic principles while in constructive engagement with current neo-liberalism, instead of one that is co-opted, wittingly or unwittingly, into the mainstream, free-market capitalist system, as is largely the case with what currently goes by the name of Islamic Banking & Finance (IBF). Keywords: Islamic Gift Economy, mu'amala, partnership, cooperation, moderation, economics of abundance, waqf, common good., Introduction The Islamic Gift Economy (IGE; al-Iqtisad al-Infaqi) can be envisioned as an integrative economic system based on the operative principles of cooperation (ta'awun), (2) mutual consent ('an taradin/muradattin) (3) [...]

Ja'far ibn 'Ali al-Dimashqi (circa 600/1200) is an important thinker in the history of Islamic economic thought. His ideas resonate rather well with current economic rethinking in view of the ongoing financial and economic turmoil. Here, four interesting excerpts from his Kitab al-Isharat ila Mahasin al-Tijarat are translated with light annotations. Keywords: Ja'far ibn 'All al-Dimashqi, Islamic economics, Kitab al-Isharat ila Mahasin al-Tijarat, community, gold, silver, commerce, expenditure, good management., Introduction: The Author and His Work He is the Damascene Shaykh, father of al-Fadl, Ja'far son of 'Ali (al-Shaykh Abu al-Fadl Ja'far ibn 'Ali al-Dimashqi), and the work for which [...]

Islamic economics is an intellectual and economic enterprise, and its central claim is that Islam provides an all-encompassing model for social, economic, and political life. It is a modern movement, which asserts that Islamic traditions of law and organization provide a more just and equitable model for economic growth than do the rival systems of Western capitalism and socialism.

Islamic banking, based on the prohibition of interest, is well established throughout the Muslim world. Attention has now turned towards applying Islamic principles in equity markets. The search for alternatives to Western style markets has been given added impetus in Muslim countries by the turmoil in Asian financial markets in 1997. Common stocks are a legitimate form of instrument in Islam, but many of the practices associated with stock trading are not. In this paper the instruments traded and the structure and practices of stock markets are examined from an Islamic perspective. Speculation is not acceptable in Islam and measures would have to be taken to control speculative trading. In addition short selling and margin trading are severely restricted. The use of stock index and equity futures and options are also unlikely to be acceptable within an Islamic market. Regulatory authorities in Muslim countries will therefore find a vast array of problems in attempting to structure a trading system that will be acceptable.

The financial vehicle known as the Participating Growth Bill (PGB) is examined, focusing on its possible benefits to Muslim nations in need of alternative debt financing methods due to religious regulations. A comparison of PGB, the Capital Structure Irrelevance Theorem, and Capital Assets Pricing Model is presented.

The Islamic and Western approaches to the unification of knowledge are examined and compared. The analysis focuses on the epistemologies of Abu Hamid Muhammad Ghazzali and Immanuel Kant, two excellent representatives of the differing schools of thought. Ghazzali's problematique of fana' and Kant's problematique of heteronomy are examined and critiqued by means of evolutionary 'Tawhidi' epistemology.

Article examines the relation between functionalist and economic explanations with reference to Jean Ensminger's article 'Transaction Costs and Islam: Conversion in Africa'. Ensminger's article is sometimes ambiguous because she fails to clarify the nature of the relationship between an 'actor-oriented perspective' and the 'society-wide economic benefits' which converting to Islam brought. An economic, actor-oriented analysis of conversion to Islam can be explained by factors including the invisible-hand explanation, collective action and differential attraction.

Article discusses the impact of religion on the character and setting up of legal institutions which could ultimately hinder or promote economic development. Timur Kuran explains the underdeveloped economies of many Islamic nations by pointing to the difference between Islam's communalist view of the world and the individualistic perspective seen in the West. It is often assumed that the immutability of Muslim law is linked to a lack of economic success. However much modern literature points to the importance of non-formal forms of reciprocity, and suggests that communitarian attitudes might be compatible with economic success.

Jean Ensminger's article 'Transaction Costs and Islam: Conversion in Africa' explains African societies' conversion to Islam partly by its economic benefits, but sometimes conversion might be explained by a rational choice institutionalist framework. For example factors such as opportunism and coercion might be significant in response to conquest or proselytization. Ensminger points to the fact that converting to Islam appears to have helped cut some of the transaction costs of long-distance trade. However, in some contexts Islam might have increased some transaction costs.

Many factors have been put forward to explain the underdeveloped nature of many predominantly Muslim countries, but the role of public discourse has been largely neglected. Countries with a mainly Muslim population account for a disproportionately large number of the world's poorest nations. The factors which might explain this include communalism, political structure and the role of Islam itself as a permanent barrier to development. However public discourse in Muslim countries also plays a major role, by keeping individuals from noticing or questioning social inefficiencies.

Economists who criticize Islamic economics due to its alleged failure in improving economic productivity have not yet understood the real meaning of the subject. The goal of Islamic economics is not to improve economic performance but to control the infusion of Western economic concepts into the minds of Moslems. It also attempts to propagate the conflict between the 'Homo Economicus' and the 'Homo Islamicus' sectors of the Moslem community.

Literature on Islamic economics began to emerge during the mid-20thcentury. The literature declares that an Islamic economy would bring together the strengths of capitalism and socialism. Many countries that have opened interest-free Islamic banks have been profitable. The Islamic economy has been able to provide benefits which secular economic institutions can not give.

Kuran's work on the behavioral norms of Islamic economics emphasizes the unrealistic expectations of several Islamic economists regarding the potential effectiveness of norms in a complex economy. These economists exaggerate the possibility of achieving order and cooperation solely from internalized norms. The social virtues of altruism are overrated while those of selfishness are underrated. In addition, Islamic economics does not have any empirical evidence regarding a large society whose economic successes are attributed to internalized norms alone.

Timur Kuran's 1983 work titled 'Behavioral Norms In The Islamic Doctrine Of Economics' has several functional inaccuracies and misrepresentation. The work may appear to have been written without considering several relevant material that contradict Kuran's contentions. Islamic banking and economics has surged since Kuran's paper was published. This may be attributed to the rationality and effectiveness of Islamic banking, which is based on actual experiences of Muslim and non-Muslim nations and is supported by empirical proof.

The development of an Islamic economics curriculum in Iranian universities is discussed. The process began following the demands of student groups for the Islamization of the academic system in April 1980. Existing academic and Islamic economic theories were compared to establish a true form of Islamic economics. These efforts spawned a philosophy that valued economic growth against social equity and supported the quest for profit.

In this paper, the author describes - against the background of the general principles of trade in Islam, which are based on the value patterns deeply ingrained in the Islamic faith - the rules regulating consumer credit and debt financing in an Islamic economy. In the exposition of the Islamic viewpoint on these issues, guidelines adopted by Malaysian economists and financial institutions are used as a basis. The author explains which forms of trade and credit are regarded as usurious in nature and hence prohibited. Charging interest on loans is not permissible, but there are several forms of deferred contracts of exchange which can be used in order to enable consumers to make purchases on credit. The most common of these forms are described in some detail. They have in common that consumers have absolute ownership over the object of trade during the period in which they pay their instalments. An inability-to-pay clause, taking into account that a consumer may not always be in a position to fulfil the obligation to pay because of unavoidable or pressing circumstances, is always part of these credit forms. Some proposed solutions to the problems of alleviating the impact of inflation on credit transactions are also briefly described. In the final section, it is pointed out that even within the Islamic ambit, there can exist a multiplicity of approaches to issues such as consumer credit, depending on the various priorities set in a particular Islamic country. Furthermore, in a country such as Malaysia, although much conversion to an Islamic approach has taken place, Islamic and conventional systems exist side by side, and the future will show which of the systems is the more receptive to public needs.

The potential impact of Islamic doctrine on western-bred economic relationships is considered through a study on the prohibition of interest in Islamic economics. Alternative ways of renumeration, such as through mudarabah profit-and-loss sharing, are seen to enhance capital investment through its ability to act as an efficient revelation device. By applying the method of mudarabah in the Western contract literature, the contract between a project manager and an investor syndicate may greatly be improved in terms of informational asymmetries.

In view of the economic problems of the present age and the inability of neoclassical economics to analyse them and suggest acceptable solutions, Islamic economics holds promise for the future. This article consists of four parts. The first introduces the Islamic worldview and economic objectives of Islam. The second part argues that only Islamic economics has the potential to respond to the economic problems of the future. Part three sheds light on major Islamic economic institutions as they exist today. It points out the problems and challenges of these institutions. The last part presents some concluding remarks. (Reprinted by permission of the publisher.)