Incorporating Values in Economics through an Integrative Methodology
DOI:
https://doi.org/10.33102/jmifr.648Keywords:
Islamic economics, self-interested behaviour, utility maximisation, profit maximisation, marginal analysisAbstract
To effectively address the issues of environmental and social sustainability, this study makes the case for an economics framework that is driven by values. Religious worldview and revealed knowledge shapes people’s preferences and choices. It also establishes moral standards and guidelines for both individual and collective life. Through financial intermediation and redistribution, religious institutions also have an impact on markets, and exchange outside of them. As a categorical variable, religion is used as an institution in mainstream economics to examine its effects on economic outcomes. However, religiosity as a continuous variable is not incorporated in mainstream economics paradigm. Neoclassical economics can analyse how the faith-conscious agents behave in market segments like Halal food, Halal cosmetics, Halal medicines, Halal financial services, and so forth. However, when analysing the allocation and distribution of economic resources outside of markets, where the motivation goes beyond private self-interest, mainstream economics does not have a suitable and pluralistic paradigm. To maintain the analytical distinction between economic behaviour in markets and non-economic behaviour beyond market, this study advocates for methodological pluralism through an integrative methodology in Islamic economics.
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