the abbasìd’s golden age 213mithaq, covenant with God, and other concepts introduced later by
those after them, the school was beginning to take a coherent con-
ceptual formation. It was the time when flùfìsm, Sunni by convic-
tion and non-political by choice, began to contribute to the prevailing
culture of religio-philosophy or theosophy.
The Economic Implications of Sùfìsm
Looking at flùfìsm from an economic perspective, the problem, it
seems, is that if the flùfìs reject the accustomed lifestyle and apply
austerity to their own model of consumption and earning, as indi-
viduals, this will not raise an economic concern at the macro level.
But when the call for the return to asceticism is publicly declared
as the ideal way in which God ought to be served, and to which
all pious Muslims should adhere, flùfìsm is bound to raise a few
concerns from the economic point of view. This can be highlighted
as follows:
First, while austerity is advocated, and sometimes advised, as an
economic policy in the case of inflationary economy it is not rec-
ommended in the case of deflationary economy. Austerity helps curb
the demand-pull forces in an inflationary economy that is caused by
the effect of the increase in aggregate demand for the goods and
services available. Nevertheless, when the economy is in a state of
deflation, as a result of not having sufficient demand for the supply
of goods and services available, the deflationary effect, other things
being held constant, is expected to be worsened in a flùfìeconomy.
By contrast, as a means of creating, or increasing, aggregate demand,
governments, more often than not, pursue a policy, or policies, that
activate demand including the direct injection of voucher money that
is aimed particularly at increasing consumption, not saving.
Second, with limiting the aggregate demand for goods and ser-
vices, sales will decrease, leading to decreasing entrepreneurial profits
and/or generating losses. If that persists, enterprises will be forced
out of business as a result of not being able to cover their costs and
of the rate of return on capital being less than the cost of capital.
This leads to loss of production. Production, after a period of pil-
ing up, will decrease as a result of decreasing sale, and total pro-
duction in the economy will decrease as a result of both the productive
enterprises being forced out of the market and the surviving enter-
prises decreasing their production. The aggregate supply of goods