Early Economic Thought

Thinking men and women have always paid attention to economic matters: poverty and riches; barter, money and trade, price fluctuations, taxes and interference by the rulers. Sometimes they also pondered over rise and fall of civilizations, accompanied by prosperity and economic backwardness. In doing so, they described as well as prescribed. They were, generally speaking, not bound by any particular method though induction may be regarded as the more popular one. During the periods when large populations were inspired by one of the great religions, namely Hinduism, Buddhism, Judaism, Christianity or Islam, scriptural injunctions and religious law dictated policies or recommended approaches which were interpreted and debated by scholars providing fresh food for thought. This applies even to the devices for circumventing some of the prohibitions like that of interest. But the religious inspiration accounted for much more than that in the evolution of economic thought. It provided a point of reference for well meaning critiques of social institutions, the rulers and the dominant classes of society.

This was the situation, broadly speaking, till Adam Smith and the birth of “classical” economics. Mercantilism, the strand of thought preceding the classical school, was devoid of the tendency to abstract, generalize or to deduce a priori notions about human behavior. The Mercantilist writers did not construct imaginary models nor did they strive after discovery of universal laws. They were practical people thinking and writing like participants in a process designed to realize certain ends. It never occurred to them to pose as spectators interested in giving a detached positive analysis of the reality they observed.

Source: Dr. Muhammad Nejatullah Siddiqi, Economics An Islamic Approach. Republished with permission.