Islamic Economics: A Framework for Decolonial Political Economy
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Islamic Economics:
A Framework for Decolonial Political Economy
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Islamic Economics (IE) presents a vital, yet often overlooked, challenge to the orthodox economic consensus. It offers a compelling reason for engagement by heterodox economists while simultaneously providing a powerful, indigenous framework for advancing the global decoloniality agenda. IEs intrinsic value lies in its roots as a systemic critique of capitalism, its unwavering ethical orientation, and its integration of non-secular dimensions into economic thought. This inherent alignment with the objectives of post-crisis heterodoxy makes IE a crucial area of study for anyone looking to transcend the limitations of neoclassical models.
IE offers a philosophically rich systemic alternative to heterodox economists, grappling with the failures of market fundamentalism exposed by the financial crises of the 21st century. Unlike theories that merely propose modifications to the existing capitalist structure, Islamic economics in its modern iteration was historically conceptualised as a direct to imperialism and capitalist expansion. Its original philosophical aim is to establish a distinct, systematic approach to the economy, centred on moral and social responsibility. This positions it as a significant intellectual resource for movements that seek comprehensive societal change, rather than incremental reform.
Central to this distinction is the discipline’s ethical and social focus. In the Islamic perspective, economics is not the scientia of optimising individual utility or simply analysing markets; it is bound by the higher purposes of Islamic way of life. The economic system must serve specific social goals, chief among them is the fulfilment of basic material needs for all and the establishment of justice and equity. Discussions within IE philosophy therefore focus on the very nature of justice, morality, and equity in economic transactions and societal organisation. This stands in stark contrast to neoclassical economics, which tends to treat ethical considerations as externalities or secondary policy concerns, a failing that has contributed to glaring global inequality. By forcing economists to integrate morality at the foundational, ontological level, Islamic economics offers a powerful tool for developing truly pro-social economic models.
Furthermore, the discipline introduces a critical dimension absent from most conventional and even much of secular heterodox thought: the integration of the spiritual and material. While neoclassical economics operates strictly within a secular, materialist worldview, the Islamic perspective provides a necessary balance of material and spiritual dimensions of human life. This is not about religious dogma dictating market behaviour; rather, it’s about embedding the pursuit of human happiness within a framework of moral responsibility. As contemporary heterodox thought (specifically areas like behavioural and ecological economics) increasingly recognises the limitations of material acquisitiveness and explores the necessity of finding human well-being beyond pure consumerism, the Islamic perspective offers an established framework for reconciling economic action with higher moral and spiritual ends. A revitalised, decolonised Islamic economics could realise its full potential as an alternative to capitalism, focusing squarely on moral and responsible social behaviour as the bedrock of economic activity.
The relationship between IE and the global decoloniality agenda is not merely complementary; it is one of shared genesis and mutual reinforcement. The discipline’s very existence is an intellectual legacy of the anti-colonial struggle, providing a native epistemic framework essential for dismantling Eurocentric dominance in economic thought. The historical trajectory of IE provides the strongest link to the decolonial project. As a contemporary discipline, it emerged directly from the postcolonial struggles of the 1970s, fundamentally cushioned in the rage against imperialist oppression. Even earlier, during the late nineteenth and early twentieth centuries, scholars consciously sought to develop an economic system rooted in the Islamic tradition to serve as a cornerstone in the struggle for liberation from colonising powers. This effort was a political act of epistemological differentiation, a direct attempt to assert a particular group’s identity and prove that its native thought could be just as scientifically and practically valid as the colonisers’ episteme. Thus, the discipline itself represents a historical assertion of intellectual self-sufficiency and independence.
The decoloniality agenda is defined, in part, as the active elimination of Eurocentric biases from academic research and discourse. IE provides the necessary indigenous structure to effect this transformation in the field of economics. The ongoing challenge for all heterodox economists is that modern economic thinking is often not free from Eurocentric bias, meaning that the dominant structure of economic practices and theories remains rooted in Western liberal ideology. Decoloniality in IE provides the critical tool to counter this traditional dominance of European episteme. It demands an indigenisation of knowledge by focusing on epistemologies indigenous to Islamic discourse. This is achieved by moving beyond superficial adaptations and developing economic philosophy from within the Islamic tradition, grounding concepts in the moral cosmology of Islam and its historical scholarship.
Key to this process is the utilisation of native ontological concepts, such as Tawhidic epistemology (the oneness of God and the unity of the universe). Engaging with this native ontology and philosophical tradition is essential because it prevents the subsumption of IE philosophy by foreign methodologies and languages. This decolonial self-assertion ensures that the field develops its own unique questions, methodologies, and solutions, thereby enriching Global Political Economy (GPE) by providing a genuinely non-Eurocentric perspective and challenging its underlying assumptions.
Crucially, the decolonial project in IE extends beyond challenging Western intellectual dominance. It also necessitates confronting modern power structures between previously colonised nations, or internal hegemons. These are the norm-setting entities within the Islamic world, such as states with vast financial power. Their actively capitalist economic goals often dictate the focus of Islamic economic discourse towards banking and financial products, thereby perpetuating the very neoliberal assimilation the discipline should be fighting. The episteme of liberation theology provides the philosophical grounding necessary for both individual and collective liberation, empowering scholars to break from the supposedly natural hegemons of the religious sphere and advocate for structural change.
In its ideal, decolonised state, IE acts as a potent force for structural change and intellectual liberation. It offers the practical blueprint for cracking the concrete of neoliberal thought that has obscured its origins, allowing the native philosophical seed to grow according to its own ethical and traditional pattern, ultimately working toward a more just and equitable global economic system that prioritizes justice over accumulation.
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Dr Mariam Khawar is a post-doctoral researcher at the University of Helsinki, Finland.
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