The Logic of Economic Activity from the Perspective of Allama Tabatabai Compared to Classical Economics

Seyyed Muhammad Kazem Raja’ee / associate professor at IKI           smk_rajaee@yahoo.co.uk

Received: 2016/03/12 - Accepted: 2016/07/18


In classical economics, economic man is selfish, materialistic and pleasure seeking. He seeks to maximize his personal material gain: manufacturer tries to maximize his personal material profit and consumer looks for maximum utility i.e. sheer material pleasure. Personal material gain is the criterion for man’s selections and preferences .Using analytical method, this paper investigates the views of Allameh Tabatabaei about the logic of economic activity. The research hypothesis is that Allameh Tabatabai regards personal gain and inherent pleasure and pain as the logic behind the decision-making of economic human. Based on the research findings, Allameh believes that the natural benefits and pleasures of the action and possessions make the action attractive in man’s view. However, we are faced with three types of material pleasures: pleasures that are intellectual and in accordance with innate nature, pleasures that are intellectual and in opposition to the innate nature and pleasures that are consistent with carnal desires. Type I and Type II are in harmony with innate nature and consistent with legislative guidance, but the third type is the source of human’s conflicts and their taking advantage from each other. With their Revealed books, the divine prophets and friends of God are delegated to lead humanity to lasting pleasure that is consistent with man’s innate nature. Creational guidance together with revealed guidance guide man towards true perfection, happiness and lasting pleasure.

Key words: Islamic economics, classical economics, personal gain, the logic of economic activity, economic man, pleasure and pain.

Classification JEL: B49, B23, B12, P4.

A Comparative Study of the Government’s Objectives in the Conventional and Islamic Economics

Saeed Farahani Fard / associate professor at the University of Qom          saeed.farahanifard@gmail.com

Vahid Bigdelli / PhD student of Islamic economics                                                                vahidbigdely@gmail.com

Received: 2015/10/26 - Accepted: 2016/03/30


Setting and ranking the government’s goals in the Islamic economics has a significant impact on economic policymaking. Different economic schools offer different views on this issue. This paper seeks to study and rank the objectives of government in the Islamic economics. It makes use of meta-analysis to investigate the works of Muslim writers in this area. According to the research hypothesis, as two main objectives of the Islamic state, justice and economic growth are ranked in order to fulfill the governments’ ultimate goal of contributing to the development of the society in the light of nearness to god .The research findings show that most of schools of economics regard welfare and economic growth as the goal of economy and largely leave ensuring it to the market mechanisms. From the perspective of Muslim economists, Islamic government seeks justice and economic growth and , together with people, plays an active role to meet these objectives. Accomplishment of these goals is an introduction to the role of government in contributing to the development of society. Accordingly, in case of conflict among the economic objectives of Islamic government, the objective is given priority that assists the government in achieving its ultimate goal, i.e. training people for perfection and nearness to God.

Key words: theory of government, the Islamic state, the objectives of Islamic state, the government's objectives, Islamic economics, conventional economics.

Classification JEL: H79, Q48, P4, B30.

The Philosophical Limitations
of Using Game Theory in the Interactive Analysis of Islamic Economics

Mohammad Hadi Zahedi Vafa / associate professor at the Faculty of Islamic Sciences and Economics, University of Imam Sadeq (AS)                                                                                                                                                                                                               Zahedi@isu.ac.ir

Mohammad Mahdi Askari / associate professor at the Faculty of Islamic Sciences and Economics, University of Imam Sadeq           (AS) M.askari@isu.ac.ir

Muhammad Ne’mati / assistant professor at the Faculty of Islamic Sciences and Economics, University of Imam Sadeq (AS)                                                                                                                                                                                                            Nematy@isu.ac.ir

Mehdi Movahedi Beknazar / PhD of Economic Sciences, researcher at Roshd Center of the University of Imam Sadeq (AS)                                                                                                                                                                                                       Movahedi@isu.ac.ir

Received: 2016/02/14 - Accepted: 2016/08/10


Expanding the use of Game Theory in economics has paved the way for greater use of mathematical techniques in the analysis of interactive behaviors. In the meantime, scholars of Islamic economics, like the other economists, use the (apparently neutral) mathematical language or tools to analyze the interactive behaviors studied in Islamic economics. Nevertheless, it seems that Game Theory is not as neutral as it is claimed to be. The present paper deals with the considerations that should be taken into account in case of using this theory for explaining the issues in Islamic economics. According to the research hypothesis, using Game Theory in the interactive analyses of Islamic economics is faced with some philosophical limitations. The findings show that Game Theory is based on four philosophical foundations: (1) the primacy of consistent understanding over empirical truth; (2) instrumentalism without acceptable prediction (3) the primacy of formal truth based on axioms over empirical truth and (4) resorting to instrumental rationality. The dependence of this theory on the above controversial principles creates some restrictions on its application in the study of Islamic economics. Accordingly, before using Game Theory, the scholars of Islamic economics should be aware of the effects of adopting these principles on the results of their analysis.

Key words: Game Theory, Islamic economics, the philosophical foundations of economy, methodology.

Classification JEL: B00, B40, C02, C18, C70, P4.

The Source of Making a Distinction between the Real and False Needs in Islamic Economics

Nasrallah Khalili Tirtashi / assistant professor at Islamic Azad University of Naragh

Received: 2016/04/18 - Accepted: 2016/09/01                                                  vvffrreeddcc@gmail.com


One of the fundamental issues in economic policymaking is determining the needs that must be met. Explaining the source of human needs is among the factors of determining and ranking the human needs. Using a theoretical analysis, this paper analyzes the text and content of traditional and religious sources in this regard. The question here is whether all the desires of man are regarded as his needs and scarce resources should be allocated to satisfy them or a part of them, or are there false and illusory needs with no foundation and basis in human’s existence? In order to distinguish between real and false needs, the origin of human needs should be known. The research hypothesis is that the source of man’s real needs is the inherent talents that God placed in his nature at the beginning of creation, and the origin of man’s false needs is his uncontrolled desires. The research findings confirm the distinction between real and false needs based on man’s inherent talents. Such distinction can contribute to the improvement of theories and policies in Islamic economics.

Key words: Islamic economics, economic needs, real need, false need, perfective movement.

Classification JEL: D78, I39, P4.

A Review of Sugden’s Theory of Natural Justice from the Perspective of Islamic Economics

Seyyed Hadi Arabi / associate professor and faculty member at Qom University           Hadiarabi@Gmail.com

Mohammad Javad Rezaei / PhD of Economic Sciences and Researcher at Roshd Center of Imam Sadiq University             Rezaee.mj@Gmail.com

Received: 2015/11/15 - Accepted: 2016/04/24


Some contemporary economists and philosophers, such as Sugden, have used Game Theory to explain justice. The present paper explains Sugden’s theory about the emergence and persistence of covenants and his evolutionary conception of economic justice and its critical assessment. Sugden’s theory of natural justice is critically investigated by using the theoretical-analytical method and taking advantage of the teachings of Islam. According to the research findings, "emergence of the covenants in the state of chaos as a means of selection of balance" and the "effect of such covenants on people's perception of justice" are among the principles of Sugden’s theory. Although his analysis has the advantage of paying attention to norms, it is confronted by such problems like "irreducibility of some values ​​like justice to facts '' , “opposition of intuitive and Islamic understanding to sustainability criterion as a constitutive element of fair situation" and "inadequacy of adherence to human-centered approaches for resolving the conflict of interests". Sugden's view of justice bears some similarities to the Islamic views, including Allameh Tabatabaei's view about the formation of social agreements. However, one cannot expect to achieve justice through the covenants arising from the pursuit of self-interest, as Sugden believes. The process of reaching agreements on the norm of justice and resolution of conflict of interests in the implementation phase requires benefiting from the Shari’a.

Key words: economic justice, Sugden, Islamic economics, normative expectations, Game Theory, spontaneous order.

Classification JEL: C73, D63, P48, P4


Introducing the Optimal Model of Risk Coverage in the Operational Models of Istisna' Bonds Using AHP and TOPSIS

Mohammad Naghi Nazarpour / Associate Professor of Economics and Political Sciences , Mufid University         nazarpur@mofidu.ac.ir

Ruhollah Ebadi / PhD Student of Economics                                                   Ebadi.ro@gmail.com

Seyyed Hadi Mir Hosseini / MA Student of financial management    s.h.mirhosseyni@gmail.com

Received: 2016/04/29 - Accepted: 2016/09/10


One of the essential measures for expanding Islamic bonds is analyzing the risk of these bonds and trying to cover the risk. Among Islamic bonds, Istisna' bonds are of great importance. For the issuance of these bonds, various operational models have been proposed. One of the criteria for selection among the proposed models is analysis of the actual and potential risks of these bonds in the primary and secondary markets. Such analysis can strengthen the risk coverage of the bonds, and thus help increase their public acceptance. Using the descriptive-analytical and questionnaire methods, this paper assesses the risk of the operational models of Istisna’ bonds and investigates the optimal model for risk coverage. According to the research hypothesis, "the operational model provided by the Stock Exchange is the most optimal model for risk coverage of Istisna' bonds". In order to evaluate this hypothesis, AHP and TOPSIS methods are used to analyze the questionnaire data. The research results show the superiority of the proposed model of exchange in covering the operational risk of Istisna’ bonds compared to the other models. The model of indirect Istisna' bonds, the model of the Central Bank and the model of parallel Istisna' bonds hold the next ranks in terms of risk coverage.

Key words: Istisna’ bonds, Islamic financial system, risk coverage of Istisna' bonds, AHP and TOPSIS.

Classification JEL: G10, E44, G24, P4.

Livelihood Indices in Islamic Human Development

Mohammad Jamal Khalilian Ashkezari / associate professor at IKI                          mg_khalil41@yahoo.com

Mohammad Bidar / PhD student at IKI, bidar                                                                                mohamad@yahoo.com

Received: 2016/03/26 - Accepted: 2016/08/10


One of the indices of Conuontional human development is the index of real per capita income. The present paper examines Islam's viewpoint about this index and introduces the index of livelihood in human development. Using the descriptive-analytical approach, the study deals with the criteria and parameters of evaluation of livelihood in the path of human development from the perspective of Islam. According to the research hypothesis, in the Islamic approach, the indices of providing sufficiency level, fair and balanced distribution of income and expenditure efficiency with the relevant indicators can be used to measure livelihood. Based on the research findings, the proposed indices measure meeting the material and spiritual needs through earning adequate and legal income, fair and balanced distribution of resources and income in line with providing livelihood for families and optimal allocation of income respectively. The four mentioned indices can be documented by the Quranic verses and hadiths of the infallibles (PBUH). The measurement of these indices requires the use of statistical methods including the use of scientific questionnaires to extract the required information along with the existing statistical data.

Key words: livelihood, human development, index, justice, efficiency.

Classification JEL: O15, D6T, D61, P4.