All economic schools of thought tirelessly strive to seek a way out of economic distress in order to form a wealthy, prosperous nation possessing the highest levels of education, health, and well-being. However, the pyramid of each school of thought is elaborated upon certain bases that are different from each other. For instance, highlighting the Paradox of Thrift, the Keynesian perspective explains how stagnation derives from inadequate effective demand in the aggregate good market. Hence, the only appropriate solution to the prospect of chronic stagnation is to employ a sort of expansionary economic policy that can keep effective demand high. Other schools of thought may evaluate this Keynesian solution as a drain of limited resources diverted to unproductive activities or as a crowding out through which the private sector loses its importance and weakens. Neoclassical economics for one, denies the effectiveness of any kind of artificial policy and its impact on the real economic variables, by rejecting any kind of money illusion or rigidity in the labor market as well as by offering the rational expectation model. Instead, it underlines the importance of the saving rate as the most significant factor to achieve a higher steady state growth trend. On the other hand, supply side economists ignore both Keynesian and neoclassical approaches and focus merely on all factors that support motivation system of the supplier to increase production, such as the decrease of the tax rate. More recently, knowledge-based economics puts significant emphasis on human capital, communication as fundamental to knowledge flows, social structures, cultural context and other factors to increase the stock of social capital. In short, since every economic school of thought finds a way of approaching the problem from a different individual angle, there are different analyses of the reality of the economy and hence different solutions and suggestions.
Although each approach reflects a sense of reality and the prescriptions issued by it can remedy some specific economic problems, the more we can synthesize these approaches comprehensively, the more they will reflect reality and the more effective their remedy will appear. To achieve to a higher standard of effectiveness, there furthermore needs to be a worldview that connects and gathers together all components such as ethical, political, cultural and economic subsystems in a coherent comprehensive system. Besides, it should be capable to synthesize the different economic perspectives.
I argue that the Islamic worldview as translated briefly in this article is potentially able to provide a firm consistency between all subsystems through which we can simultaneously expect an adequate effective demand in the aggregate good market, high marginal propensity to save, and strong motive power in the supply side. In addition, it is capable enough to motivate society to increase the stock of human capital, social capital, as well as strong infrastructure necessary for development. Hence, Islamic piety not only is consistent with wealth creation but also drives society to the highest and loftiest quality of life possible full of respect and human dignity.
This argument never denies some realized facts concerning Muslim countries. There is no doubt that the economic performance of Muslim countries is quite weak. Their economies mostly rely on oil, mining, raw materials, tourism, agricultural products and from nationals living abroad who transfer money to relatives living in these countries. Their residents usually suffer from the lack of a strong welfare state, weakness of public goods as well as poverty. It seems that their economic reform programs have already failed or have not yet started. Although a small minority of these countries - like Indonesia, Malaysia and Singapore - can be considered as Newly Industrialized Countries (NICs), the importance of the Muslims’ role in their economies is only trifle. In my opinion, no society – whether it is the modern, secular state or the traditional, religious one – embodies Islamic teachings enough. Therefore, although these miserable situations have been derived from our religious culture or understandings of our religion, there is nothing in Islam, in a pure sense, that causes these consequences. Instead, there are many Islamic teachings that can potentially motivate us to strengthen our economic performance and actively create wealth. That is, Islamic teachings change our worldview evolutionally toward a moral consciousness about humankind, affect our social views, and can create a more just society, but they are not prescriptions for certain, specific state actions.
In this article I would like to highlight how Islam might accomplish such evolutions. To do that, I begin by explaining briefly the Islamic worldview regarding economic affairs. Presenting my definition of wealth, I clarify the importance of wealth in an Islamic assessment. Extracting and elaborating some Islamic economic principles, I show how this worldview can potentially drive individuals and societies toward wealth creation. Due to the strong association between Islamic teachings on the transcendental self and the issue of love as a necessary basis for the mature society, it can be easily shown that a pious Muslim is more likely motivated to produce public goods beneficial to the whole society including himself, than to be a mere and naive profit maximizer in an egotistic sense. It is expected that in a mature environment only a sustainable development process will be viable to accomplish - That is, a development process which keeps natural resources, as well as the biological food chain and natural cycles, safe and useable for future generations. Hence, in the last section of this article I shall explain briefly how an Islamic environment is consistent with only a sustainable development process.