Ethics and Universal Values Lecture 1

Content What is economics? How economics originated and deviated from ethics? Difference between economics science and school of economics Difference between normative and positive science Socialism-Capitalism-Islamic Economics System Importance of history and emotions of Muslims in success of economic system for Muslim societies Why not western economic system?

What is economics? "The mechanics of utility and self interest." (W. Stanley Jevons - Late 19th Century) "Economics is the study of people in the ordinary business of life." -- Alfred Marshall, Principles of economics; an introductory volume (London: Macmillan, 1890) "Economics is the science which studies human behavior as a relationship between given ends and scarce means which have alternative uses." -- Lionel Robbins, An Essay on the Nature and Significance of Economic Science (London: MacMillan, 1932) Economics is the "study of how societies use scarce resources to produce valuable commodities and distribute them among different people." -- Paul A. Samuelson, Economics (New York: McGraw-Hill, 1948)

Economics and Ethics Origin of economics Adam Smith and Ethics Marx and Ethics Adam Smith to Amartya Sen Marginalist revolution, Classical and Keynisan era and Ethics Growth, Material Wellbeing and Ethics Modern Economics, Experimental Economics and Ethics

Overview of Economics and its types Microecomics Macro Economics Applied Economics Econometrics Environmental economics Economic System Capitalism vs Socialism vs Islamic Economic System

Economic science vs School of Economics Economics science = Fact finding, Cause finding, Effect finding, calculations of figures, evaluates policies. Phenomenon of Economic life, their interrelationships. Science of economics is just like other science. School of Economics = Ellaborates Ethics, Provides standards for Evaluation, policy for a just economic system, social justice to organize economic life.

Economic Science vs School of Economics Economic System Economic Science Description Elaborates Ethics and values Provides standards for Evaluation Policy for a just economic system Aimed to provide social justice to organize economic life. Same like other sciences Finds fact Finds cause Finds Effect Calculates figures Evaluates policies Studies phenomenon of Economic life Studies interrelationships. Subject Production and Distribution Object To provide social justice Fact finding

School of economics is framework School of economics provides a framework. E.G Free economy is a pre-requisite for Law of Wages https://en.wikipedia.org/wiki/Iron_law_of_wages Wage Subsistence Level

Socialism vs Capitalism vs Islamic Economic System Islamic Eco System Objective is Justice Objective is justice Justice is equality in living standard Justice is equality in freedom Justice lies in equality of certain living standards to all members of society and giving them freedom to earn more Subject is production and distribution ------------------------------------ Values Neutral Values Loaded Ethically limited to equality Ethically blind Ethically rich

History, Emotions and Economic System Every economics system has its own definition and concept of Justice. Justice cannot be measured, it can only be adopted by the economic system through its principles of justice and outlook of life. Every economic system has its own concept of Justice and it judges every economic activity on its basis. For a Muslim society, an economic system is prone to failure which is not compatible with history of Muslims and their emotions/aspirations. An economic system based on the Islamic philosophy of Justice, compatible with values and ethics of Islam seems successful in a Muslim society.

Why not Western Economic System? Western Economic system is based on freedom with no concept of ethics such as responsibility. Economic system of Islam provides the concept of Divine Sovereignty. Faith in Divine Sovereignty and man as vicegerent on earth convince a person to behave ethically with responsibility while enjoying freedom. Whereas, any western economic system is unable to ensure responsible behavior of people where clash of interest comes between two persons or groups, because freedom already eradicated responsibility. Hence, Ethics and values based economic system of Islam seems suitable for sustainable progressive society.

Home assignment Weekly assignment (Marks = To be announced in class) Prepare the review of article by Amartya Sen entitled “….” Journal name …”…” Year…… Mid term assignment (To annexed answer of question 7 in the mid term exam) Convert the class lecture into detailed text enriched by further terms, concepts, definition, theories, holy verses of Quran, Hadith, Bible and quotations of famous philosophers.