Social Heteronomy and Contrasting Economic Epistemology a Mathematical Approach

AbstractAn original socio-scientific theory is developed out of a contrast with the rationalist paradigm. This new worldview arises from the epistemology of unity of knowledge and its functional ontological implication of unity of the world-system. The Kantian epistemological meaning of heteronomy is shown to be one of the permanent socio-scientific problems of rationalism. The methodology is of the topological mathematical nature by virtue of the complex problem that inheres in the criticism of Kantian heteronomy and rationalism. The emergence of the new epistemological worldview of unity of knowledge and the world-system is formalized. Several theoretical constructs and applications of the episteme of unity of knowledge are pointed out in diverse fields

Circular Causation

Circular causation epistemic outlook and model to address the interactively integrated and ever-learning sustainability perspectives in every issue and problem of socio-scientific extensiveness is a novel abstracto-empirical field in contrast to economic and econometric theory in all these aspects. The ensuing episteme and the substantive model of circular causation are introduced. The episteme of unity of knowledge is shown to be the centerpiece of all socio-scientific problems and outlook that methodologically unify by complementarities the otherwise differentiated areas of investigation in the exogenous approach to ethics in economic and econometric theory. Yet this is an introductory paper. The theme of circular causation being distinct from economic and econometric theory is of a vastly methodological nature

Survey article : Islamic political economy

The budding field of Islamic political economy as premised on the epistemological roots of Divine Oneness as explained by the Qur'an and the Sunnah (guidance of the Prophet Muhammad) is explained. Several mainstream economic ideas are thus critically examined and their alternative treatment under Islamic political economy is expounded .The process-oriented model termed in this paper as the Shuratic process or the interactive, integrative and evolutionary process (IIE-process) is shown to be central to the methodology of the circular causation and continuity model of unified reality in Islamic political economy

The Family as a Socioeconomic Management System

The family is a social miniscule in every culture. It is a central theme of gender-development issue. As such it has a distinct and abiding effect on the nature of the socioeconomic order in terms of preference formation relating to the kinds of artifacts that get exchanged and thus play a key role in socioeconomic development. The totality of these issues comprises the study of the family as a socioeconomic management system. The intergenerational interaction and co-evolution of the family in concert with the social complex is differently explainable in neoclassical economic and Islamic contexts. Consequently, the triangular circular interrelationships between the individual, the household and the socioeconomic order leave different effects in the above two paradigms. These in turn have profound influence on the future of socioeconomic development according to these paradigms. This paper formalizes an interrelationship between the inter-generational family and the socioeconomic order using the concept of circular causation of unity of knowledge in Islam and the methodological individualism in neoclassical economic theory. The inter temporal context of the theme is included with family extensions and their socioeconomic effects over populations of grandfathers and grandchildren.   Keywords: Microeconomics of family, socioeconomic management system, inter-generational endogenous preferences, culture and political economy

Tawhidi Islamic economics in reference to the methodology arising from the Qurʾān and the Sunnah

Purpose - The purpose of this paper is to lay down the methodological structure of the epistemology of tawhid (Oneness of Allah). In this paper, the meaning of tawhid also refers to the monotheistic unity of knowledge (consilience) in the cast of its organic pairing by circular causation relations between the moral and material possibilities. The paper thereby raises the critique of mainstream economic reasoning and its imitation by existing Islamic economics. Consequently, by the ontological, epistemological and phenomenological foundation of tawhidi methodological worldview, an altogether new socio-scientific reasoning in generality and economic reasoning in particular is introduced. Design/methodology/approach - The socio-scientific methodological reasoning of unity of knowledge according to the tawhidi methodological worldview is introduced contrary to the inept rational choice postulates of mainstream economic reasoning and its imitation by existing notions of Islamic economics. The method of instructing students in the light of this approach according to Tawhidi Islamic Economics (TIE) is introduced from the existing literature. Findings - The existing nature of mainstream economics and its imitation by Islamic economics is critically deconstructed and replaced by the true epistemological, ontological and phenomenological perspectives of TIE in the world of learning. Some inner properties of such a methodological study of TIE are laid bare for further investigation. Originality/value - This is the first paper of its kind in this journal to expound the original and most creative methodological worldview that Islamic economics must bear. This is the foundation of the development of the true stance of Islamic economics and finance

The Future of Monetary Reform and the Real Economy: A Problem of Trade Versus Interest

The prologue is our starting premise.   The Qur’an (2: 275) declares, “As for those who devour interest, they behave as the one whom Satan has confounded with his touch. Seized in this state they say: ‘Trade is but a kind of interest’, even though Allah has made trade lawful, and interest unlawfulâ€.   Keynes (1930, p. 368) picked up such wisdom of the inverse relationship between trade and interest and wrote, “The strenuous purposeful moneymakers may carry all of us along with them into the lap of economic abundance. But it will be those peoples, who can keep alive, and cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes.†  Such are the messages of moral highness and wisdom picked up in this paper. The fundamental point here is to establish the fact that the only way of phasing out interest rate from Islamic activities is to understand and implement the formalism of the inverse relationship that permanently exists between trade in the good things of life and the rate of interest as the impediment to the free flow of resources into such tradable activities.   The central bank and commercial banks and fi nancial intermediaries as practitioners must understand this organic relational concept of intellection in relation to money and the real economy. The monetary system and the real economy with the financial instruments between would thus be shown to formalize the intellection paradigm – which indeed is a truly scientific revolution. The result is replacement of the fractional reserve requirement monetary system by the 100 per cent reserve requirement monetary system backed by the gold standard. Likewise, the organic relationships of such a monetary arrangement including its monetary policy and transmission mechanism would structurally change the nature of markets and its institutional relations and individual preferences. The result at the end will be a phased down interest rate regime into a trade-related one by the rise of the tradable relationships that are generated. The foundational methodology that enters this kind of organically relational worldview with the episteme of unity of knowledge (the divine law in Islam) provides the functional ontology of the socially and morally constructed money, production and real economy circular causation. It models the legitimacy of trade as the resource mobilization instrument, while rejecting interest as the permanent impediment of resource mobilization.   Keywords: Monetary economics, Islamic economics and finance, Islamic political economy and world-system, social economics, ethics and economics

Fiscalism as Spending and Monetary Integration

Macroeconomic policy coordination and the fi eld of micro-foundation of the macroeconomic theory have been riddled with the contest of claimed effi cacy between the Keynesian school and the monetarist school. Keynesianism upheld the predominance of fi scalism (spending) in economic stabilization on the one side. Friedman’s monetarist theory vouched for the same on the other side. As a result of the monetary and fi scal contest between the two schools a convergence between them could not be att ained. Such a divide is similar in economic science as it has been a fi asco thus far in the physical sciences between Quantum Mechanics explaining the small world phenomenon, and Relativity Physics explaining the large world phenomenon. The nonhomogenous views of a unique reality in economics, as in science, have defied the unifi cation of theories and application for the greater objective of wellbeing in an embedded social economy, beyond sheer address of the stabilization question. Our paper strides out in the new direction of a socioscientific epistemological worldview of the unifi cation of monetary and fi scal (spending) regimes in a consolidated theory of complementarities between them. The paper does this by breaking new grounds that are based on the model of organic unity of knowledge, which acts upon the simulation of well being with the method of circular causation. A review of the literature and introduction of formalism are undertaken to expound the theme of economic stabilization by means of complementing monetary and fi scal (spending) regimes in a unifi ed theory, while addressing the simulation of well-being in a learning model of unity of knowledge. The emergent methodology presents the description of a system of inter-variables circular causation relations. An extensive review of the literature is undertaken. An empirical presentation and a case study establish the validity of the well-being model with circular causation.   Keywords: Monetary and spending regimes, epistemology and economics, economic stabilization, well-being

Islamic Dinar and 100 Percent Reserve Requirements Monetary System

The Gold Dinar/Islamic Dinar is studied as a currency that mobilises financial resources into Shari’ah-compliant ends within a general system approach to complement relations between money, finance, and the real economy. Thus, a 100% Reserve Requirement Monetary System (100% RRMS) is formalized in the context of the gold standard that mobilises resources and stabilizes currency value within the money, finance, and real economy complementary relations. Such complementary relations are established by circular causation on the basis of the Islamic epistemology of unity of knowledge applied to systemic relations. Unity of knowledge as the epistemology ultimately, arises from the unity of the divine law (Tawhid). Upon this episteme, the arguments stand the reasoning and formalism of the Islamic socio-scientific system.