Globalization and its Challenges 353
developing core principles of Islamic economics, and understanding the
functioning of a fi nancial system operating on a profi t/loss - sharing basis.
On the operational side, issues relating to innovation, intermediation, and
risk management are worthy of attention. Special attention should also be
given to a system - wide implementation. Each of these challenges could take
up a volume of its own, but for our purposes a brief discussion of some of
these challenges will have to suffi ce.
Refi ning Islamic Economics
Whether Islamic economics is considered to be an entirely different disci-
pline from traditional economics — a position justifi ed by its world view, its
view of rationality, its view on man’s nature, its emphasis on the need for
correspondence between behavior and prescribed rules, as well as its other
specifi c dimensions — or as a special sub - fi eld within that discipline, it has
made considerable progress since its revival a little over three decades ago.
This is remarkable, given that there is virtually no organized support for this
effort, in sharp contrast to the multitude of private and public foundations
providing fi nancial support to research traditional economics. Despite the
wealth of resources available in many Muslim societies, there is lamentably
little support for scholarship in Islamic economics. Moreover, even the aca-
demic recognition of research activities in this fi eld is, by and large, lacking
and there is a lack of incentives for scholars to pursue their interest in fur-
thering contemporary thinking in the discipline. Nevertheless, the personal
dedication of scholars has produced a credible body of work that provides a
sense of optimism regarding the future of Islamic economics.
There is no reason to doubt that scholarly activities in this fi eld will
continue and that, at some point in the future, it will develop a rigorous
analytic foundation for policy analysis and prescription to achieve the
objectives of Islam for the economy. Learning from the history of develop-
ment of traditional economics — both its successes and failures — research
in Islamic economics should anchor its progress on an interdisciplinary
approach, paying due attention to historical, philosophical, psychological,
and sociological dimensions of what Islam intends for individual and collec-
tive economic behavior. The immense scholarly works of Muslim philoso-
phers, fuqaha, historians, and social critics provide a valuable legacy that
will be extremely helpful in this process. Developments in traditional eco-
nomics are also a fertile fi eld for researchers in Islamic economics to harvest
as a source of ideas. While the economic history of Muslim societies and
thought can serve as a major source of ideas, special attention should also
be directed at developing a proper language of discourse in Islamic eco-
nomics, with the hope of the emergence of consensus - based, analytical, and
opera tional defi nitions, and descriptions of major concepts that scholars
need in order to further refi ne ideas and generate new insights. A common
language, with its own “grammar” of Islamic economics, is fundamentally
important. For this reason, a plea is made for the development of a coherent,