In one of the earlier chapters I have explained the Principleof Ethical Endogeneity. In this theory, ethics was shown as an analytical treatment of morals and values in the light of a pervasive knowledge-based world view. In this knowledge-based world view emanating from the premise of the Unity of God and its externalization in the socio-scientific order by means of the flows of knowledge, is enabled the rule-formation function of the Islamic political economy. This process model and methodology of ethical integration as a systemic reality and not as something merely introduced into the socio-scientific order exogenously, we termed as the Shuratic Process. Hence, in this chapter the nature of ethics as such an endogenous essence of all socio-scientific order, is once again propounded. Our focus here will not be in repeating the concept and methodology of Ethical Endogeneity, as much as it is now to attend to the following two issues. First, we will show how the economic instruments are institutions get endogenized in the ethical framework of the Shuratic Process. Second, we will make a contrast between the treatment of ethics in Islamic political economy and Islamic economics. Thus we will once again bring out the central need for studying Islamic economic, social and scientific problems in light of the Principle of Ethical Endogeneity.

In received economic theory and Islamic economics, which we have shown emulates simply the mainstream economic doctrines with some Islamic ethical values introduced into these theories, ethics is a behavioural attribute that must be linked with both preference formation and the institutional as well social background under which such ethics are formed and pervaded. Preference formation as a part and parcel of neoclassical economics was intriduced into economic theory by the marginalist conception formalized first under utilitarianism and then formalized mathematically by Walras, Marshall, Jevons and others.

In utilitarianism, the concept of utility as an ethic based on the measurement of the possibility for happiness and its maximization by the largest number of individuals in a liberal social order, meant that each individuals/groups motivated by the utilitarian ethics was methodologically an altruistic self-seeking maximizing agent. Now in a state of self-seeking and optimization of this type, even an assumption of prior condition of interactions among agent to arrive at a social consensus, which liberalism would have us believe in, the interactions are dissipated as the optimum conditions of happiness are attained by altruistic agents through interactions. In this way, the process whereby the optimum is attained becomes unimportant finally, as the level of analysis is made to rest upon the end-result of the hidden process. Liberalism as an institutional process is made to result into utilitarian ethics, namely the maximum utility for altruistic self-seeking agents with the capacity for attaining maximum happiness. The form of the utility function for such a liberal society is then expressed expressed as a lateral aggregation of the maximum utility functions of all the individual agents.

Let us define for example, a space {U(h([i,j]} of utilities of levels of happiness h for the individuals i across numbers of interactions j, in a liberal political economy. Since the classical economic theory based on self-interest must yield Max{h(i)}, which then by the monotonicity property of utility function must imply that, Max{h(i)} => Max. {U(h(i)}, which in turn must imply that any monotonic positive transformation of these relations, namely say, Max.{h'(i)} => Max. {U'(h'(i))}, where h' is a montonic transformation of h and consequently, U' is a consequential monotonic transformation of U, etc. therefore, any number of such monotonic transformations between h's and U's can be thought of. We can associate any such monotonic transformation with a given interaction (j). Hence, h(i) -> h'(i) due to an interaction j; U(h(i)) -> U'(h'(i)) during the same interaction j.

Since these relations are merely monotonic transformations of each other, and on the basis of which the properties of maximal utility analysis remains unchanged for the agents, therefore, neither preferences change nor is the structure of resource allocation changed by the monotonicity. This means that interactions have no role to play in changing preferences and the nature of resource allocation in utilitarian ethics. The terms, the structure or nature of resource allocation mean that marginalist assumption between conflicting goods/services, agents, institutions, policies etc. must necessarily and pervasively exist in order to cause optimality and equilibrium to exist in the utilitarian framework. For instance, income change will shift the magnitudes of its allocation between goods/services in different proporations, but the guiding formula for this must yet be the observed relative prices of competing goods/services in terms of their scarcity prices or opportunity cost.

In the idealism of perfectly competitive markets, the rational choice of allocations is determined by the markets and interactions, preference change or institutional relevance are non- existent. Relative prices are market-determined and fully observed. In institutional presence along with the market order, the non- market influences of institutions, values and factors that play a certain role of choices are forgotten. Now relative prices are once again forced to reflect the allocations even though marginalism dilute the relevance of such other important factors. In other words, the realism that resource allocation requires embodiment of so many other complementary socio-economic factors, is not invoked in the final analytical plane of utlitarianism and utility analysis.

Thus, the foundation of economic behaviour where really values and ethics are to be formed, namely at the preference formation level, remains benign and absent in such analysis. With this also, the pervasiveness of the same character of analysis as is found in neoclassical institutionalism, becomes methodologically useless for social analysis. Neoclassicism assumes that economic preferences remain interactively disjoint from social preferences. The use of social welfare is a misnomer in this social sense in neoclassical economic theory, so is also the treatment of neoclassical notions of political economy and economic historicism, useless for the same reason (see Srivastava, Douglas North).

Now that utilities and utilitarian concept of self-seeking maximal levels of happiness leaves an intrinsic methodological benignity to liberalism, therefore, the intersection of all U(h(i)) being independent of j, must be disjoint of each other. This is why a utilitarian form of the aggregate utility function (Harsanyi, Hammond others) is a lateral aggregation of the group-specific individual utilities. It is not unusual to find that a vehement criticism of such methodological orientation in economic and social analysis has been launched for a long time now. Rousseau wrote, "It is sais that Japanese mountebanks can cut up a child under the eyes of spectators, throw the different parts into the air, and then make the child come down, alive and all of a piece. This is more or less the trick that our political theorists perform -- after dismembering the social body with a sleight of hand worthy of the fairground, they put the pieces together again anyhow."(Cranston's translation). The utility analysis of economic optimality and equilibrium has been strongly criticised by Shackle. On the basis of a deontological analysis of human behaviour, Sen too has criticised such neoclassical optimal behavioural leanings.

The utilitarian ethics and its consequent methodology of independence and lateral aggregation of preferences, is a legacy of the Greeks. In Ethics and Politics, one finds a functional political theory being based on the transformation of agents and state into pure ethical category and this was a possibility given to the philosopher-king, the Greek telos and the elitist gods. Hence, political theory emerged as a hegemonic representation of those who were assumed to be perfectly moral, ethical -- that is the elitist philosopher-king.

The concept of happiness in Aristotle's Ethics was considered to be the highest form of virtue and accomplishment. Yet the same concept of happiness survived to be the most dispelling confusion among theorists and philosophers for a long time now: Was happiness a bundle of material acquisitions? Was it a bundle of spiritual desires? Was it some form of combination of the material and the spiritual? When looked from the latter developments in terms of Benthamite utilitarianism and neoclassical consumer/social welfare analysis, happiness was inevitably a bundle of material desires. While spiritual desires may exist in the frame, this must necessarily be in marginalist tradeoff with material ends. Hence a conflict between material and spiritual essences, such as between social justice and economic growth/efficiency, has pervasively marked the nature of marginalist resource allocation in neoclassicism. By the same token, as in public choice theory and a behavioural theory of institutions (North, Buchanan, Tolinson, Nordhaus etc.), the marginalist principle of happiness in the midst of the above-mentioned social conflict has been pervasive. A Darwinian world has overshadowed the entire social, economic and scientific order of the West -- of neoclassicism and its extensive roots.

It can be shown (Choudhury) that Kantianism and also in some sense Ghazzali took to such Greek roots of social and political theory and to a theory of personal psychology to entrench a dualism in socio-scientific epistemology. Kant dissociated the a priori from the a posteriori sources of pure and practical reason, respectively. The foundation of knowledge then became a dissociative picture in segmented developments. Within this dualism of God remained apart from social reality, only to be determined by the force of reason. Morality was thus a creation of human rationalism, not an endowed Divine Law. Thus we find that eversince the eighteenth century Enlightenment, Judeo-Christian religious elements were removed from all scientific reasoning. This however did not affect the Islamic scholastic fold. What effect entered the Muslim world during its dark days of Western hegemony, colonialism and imperialism over her, was by way of a suppression of scientific inquiry under the Shuratic Process as this defines Ijtehad. This was intellectual oppression by the rulers in the Muslim world and the influence of western hegemony over the shackled Muslim world for a long time now. Hence, the treatment of Divinity and Unity in socio-scientific thought was polar between Islam and the Occident. In Islam science is fortified by logical and well-developed tradition of epistemology premised on Unity and Divine Origins. In the Occident, this very practice by a metaphysical church with its esoteric and often oppressive rulings over science was a source of intellectual opposition.

In the case of Ghazzali, who we can view very briefly here, the legacy of utilitarianism as a methodology on lateral aggregation of optimal forms, emanates from his position on the concept of ideal type self-actualization -- Fana. Society is created, social, political and economic behaviour of ideal types are made to denote the ideal society on earth. Yet Fana is not an attribute of the ordinary, but of the truly God-loving. This was a state of optimality, which came to the philosopher-kings of the Greeks. It now appears in the Godly people who have acquired Fana. Yet Ghazzali is truly instrumental in using the Divine Laws through the processes of society at large, although his emphasis lies on psychological readiness as Fana is being attained. God to Ghazzali is the source of all direct Ahkams in society at large (Book II of Ihya Ulum-Id-Deen -- Book of Worldly Usage). Hence although both Kant and Ghazzali are found to invoke the end state of optimality in human behaviour to define the ideal type categories, their source of eoistemology are quite different. Kant like the Greeks base their epistemological beginnings on rationalistic premise. Ghazzali premises this on Tawhid and he has many deep ways of explaining this causation in his Ihya.

What has occurred to the self-seeking disjoint preferences of optimal agents in utilitarianism and utility analysis of neoclassical consumer/social welfare economics, is now extended to the domain of goods/alternatives as well. The reader can conceptualize this as follows: Take the utility bundles {Ui(h(i))}, for individual groups i. Next write h(i)={c1i,c2i}, for two bundles, c1i denoting say material happiness for the ith individual (group); c2i denoting say spiritual happiness for the ith individual (group). By our previous arguments, these are disjoint of each other in marginalist analysis. Hence we can write, h(i)=c1i+ci2; and Ui(h(i))=Ui(c1i+c2i). Since Ui are mappings, so by using either monotonic transformation of Ui or by considering them to be measure-theoretic, we can write,

The conclusion of all these perspectives on neoclassical preference exoegeneity and benignity of interactions is that such behaviour cannot generate ethics as endogenous force across economic, social and scientific systems, which together in interactive forms bring about human transformations. The latter is the true picture of the study of political economy. This type of methodological individualism is extensive across material planes of happiness, freedom, goods and individuals taken up in their neoclassical attributes.

Invoking now the Shuratic Process whose singular epistemological premise is the Unification Epistemology (see other chapters in this lecture series), ths endemic principle in this order is the Principle of Universal Complementarity among goods/services, alternatives, agents and systems. This principle is in turn translated into the endogeneity of ethics inter- systemically, called the Principle of Ethical Endogeneity.(see another chapter in this series). In this way, exactly the opposite picture on resource allocation, choices, preferences, processes underlying these, market formation and the nature of goods (socially shared and ecologically balanced goods as opposed to hedonic goods but preserving individual claims on needs that turn out to be dynamic in nature=see another chapter in this series on graduated basket of needs) is established in Islamic political economy.

By the force of the Principle of Universal Complementarity, there appears the important need to interface instruments, institutions, markets and Shari'ah goals. The conscious simulation among these areas is carried out by the human presence fortified by the logic of Shuratic Process. Socio-scientific change then becomes visible and not guided by the Invisible Hand Principle of Smithian economics, later emulated by the benignity of preference changes and interactions in all of western theories of economics, politics, society and science (Popper & Kuhn). The Shuratic world view and the Occidental approach to the study of socio-scientific order, the consequent organization of institutions and behaviour, rationality and programs of actions and discursions leading the former, are thus found to be polar to each other. The methods and results of science and society including politics and economics in the West can at best be treated as observations for instrumental adoption but not substantive construction of the Islamic Ummah and its world view. This difference is as wide apart as is Tawhidi Unity world view from methodological and behavioural dualism, pluralism, perceptions and organistic competition for survival of the fittest. (Choudhury, recently Nasr).

The principal goals of Islamic socio-scientific order are attainment of the semblance of Divine Unity within diversity in all details of the socio-scientific order. This is the unique epistemological framework as formalized in terms of the Unification Epistemology and forms the ontological premise leaving out the functional aspects for the time at this level, of the Shuratic Process. This singular epistemology involves attainment of the goals of social justice, freedom and material betterment through complementarity of ends and means. The concept of happiness is meant in terms of such a complementarity of means and ends. The diverse bundles of means and ends involve organization of the machinery and instruments that enable the Principle of Universal Complementarity to work on the plane of Shari'ah. The world view of Shari'ah is epistemologically prescribed but its diversity is discursively developed by participation that form interactions leading to Ahkam and preferences evolutions -- the creative order. This part now assumes the externalization of Divine Unity in the order of reality by the anthropic manifestation of the Shuratic Process in action. In such a comprehensive meaning of Shuratic Process and Shar'iah, neither of these is limited by sheer political and legalistic forms. Contrarily, these expressions are partial application of the two among the widest understanding of the relational order of the Ayaths (Signs of Allah) in the extensive order of reality. The latter evolves as knowledge flows appear and cumulative creative advance takes place.

In Islamic political economy seen as the Shuratic world in the interactive phenomena of economics, society, institutions and the pertaining sciences and technology, the goals are manifest as follows (see diagram on homepage):

Here, T is shown to be the mathematical union of Qur'an and Sunnah, since one supports the other. D denotes discursions (interactions and knowledge formation=Ahkam formation). I denotes Ijtehad (deriving rules from the essential epistemology of Tawhid). D and I are shown to be commonly evolved by the mathematical intersection sign, INT.

The instruments are given as:

The two-way arrows mean that there is no particular primacy given for ascertaining change. For example, Iran has taken a more determinate first step to abolish interest rate toward realizing the program of Islamic transformation. Pakistan has taken the first step to be institutionalizing Zakah followed by phased in elimination of interest rate. Malaysia has taken a phased in elimination of interest rate, development of Mudarabah-Musharakah type financial instruments and implementing Zakah. The Islamic Development Bank has introduced a program toward recycling the animals slaughtered during the pilgrimage of Hajj among poor Muslim countries. Almost all Muslim countries have had some form of Islamic banking and financial intermediary during the last twenth years or so.(International Association of Islamic Banks)

At the end, the market transformation in Islamic perspectives is brought about the totality of interactions among the goals and their socio-economic variables using discursions according to evolving Ahkams of Shari'ah. Thus, if the problem at hand is international trade of a future integrating Ummah, then, T is invoked by means of the verses on trade and social well-being, felicity and rememberance of the Divine Bliss in this human function for the common good and well-being. Such an originary Qur'anic Ahkam is next evolved to realize the goal of social justice by means of the Qur'anic Ahkam on international trade in an integrating Ummah. Likewise the goal of entitlement and property rights, empowerment and material well-being, freedom etc. are taken up to reinforce the goal of social justice as derived from T on the basis of the Qur'anic Ahkam. The process is cyclical and evolutionary, as is represented by the rise of continuity from the Ayaths of the Ahkam based on the trade issue at hand, to the reaffirmation of greater degrees of knowledge-induced confirmation of Tawhid. Here the attributes of knowledge formation in the Qur'an work out their functional role to recreate knowledge to higher levels. These attributes have been explained elsewhere in the series of lectures here as being, Justice, Purpose, Certainty, Felicity, Recreation. The endogeneity of the attributes and hence of knowledge flows is activated by the recreative dynamics of evolutionary epistemology. In the political economy working at the level of goals, a simulative anthropic process of institutionalism, human ecological relations and market transformation working together cause preferences to emerge and integrate through simulational methods.

The fundamental assumption in the above process is that the Divine Laws are ingrained in the order of things and instruments have been endowed to mankind to discover the laws in epistemological and practical terms.

It is now possible to develop a huge nexus of simulative interrelationships among the instruments and goals. Every interaction in the small and large scale of operations in the politico-economic system of epistemology, markets, goals and instruments, as shown in the homepage diagram, denotes creation and recreation of knowledge flows. This process carries with it the ever-evolving presence of Divine Unity, which interactively integrates and evolves the systems of relationships together. Such is a conjoint function of Unification Epistemology, institutions, instruments and socio-scientific agents.

Using this grand politico-economic system, convergence (social consensus=integration=Ijma or Islamization), evolution (simulation of the process), diversities (alternatives within Ijtehadi rules) and post-evaluation followed by corrections of previous Ahkams, can be enacted. The world order reflects this process as it is assumed that the world is pervasive on the Ayaths that lend themselves to discovery of their inherent attributes of Divine Laws in them. In such perspectives, the neoclassical and other mainstream concepts of optimality, equilibrium, marginalism and ethically-neutral or ethically exogenous systems, are totally reversed. Islamic political economy is thus distinct from the study of political economy and economics as carried out in an ethically empty world.

The onslaughts of such morally misguided scientific venture has note left the Islamic economists from the same kinds of vacuity. We have argued elsewhere in some of the chapters in this series of lectures, that Islamic economics has had nothing new to offer as paradigmatic freshness in the world of thought. We repeat the same here now with regards to how ethics has been treated by Islamic economists when they could not and have not invoked ethical endogeneity of Tawhidi Unification Epistemology and build up a logical structure upon this. I will use the recent book by Naqvi, Islam, Economics and Society, to bring out the common kind of treatment of ethics by Islamic economists in the literature.

Professor Syed Nawab Haider Naqvi has in this book replenished his ideas presented in an earlier book entitled, Ethics and Economics: An Islamic Synthesis (1981) and several other papers on the same topic that he has written eversince. There is also one portion of this book that comprises his paper presented at the Seminar on Monetary and Fiscal Economics of Islam, Makkah, Saudi Arabia, October 1978. Thus, much of the ideas presented in the book under review are a compilation of the views held by the author over the years on ethics and economics from comparative Islamic viewpoints.

The central theme of this book is first, an attempt toward formulating a normative aspect of the author's understanding of Islamic economics. In this he starts by pointing out that the singular difference between Islamic economics and mainstream economics is the ethical foundation of the former and ethical neutrality of the latter. Ethics to the author means a set of minimally provided universal laws derivable from the Qur'an and that are claimed to centre around four axioms. These are namely, Unity (Tawhid), Equilibrium (Al Adl and Ihsan), Free Will (Ikhti'yar) and Responsibility (Fardh).

Axiom of Unity: Divine Unity (Tawhid) to the author is seen as the vertical dimension of Islamic systems, while all the other axioms form a horizontal dimension. This means that economic reality is seen to evolve along the axioms of Unity, Equilibrium, Free Will and Responsibility by independent reference to these axioms. In this framework, ethics according to Naqvi is seen to emanate not solely from Unity primordially. Rather, he considers the horizontal domain to play their own independent functions as well in defining Islamic ethics. Naqvi treats Tawhid along with the other axioms as the representative Muslim's awarness toward integrating ethics in his economic and social dealings. Thus Unity represents not the sole unidimensional source of human consciousness in Naqvi's book. Rather, like the other axioms, Unity or Tawhid remains separately exogenous sources of ethics. Islamic Economics is then defined by the author as a study of ethical behaviour formed by the impact of the four axioms on the representative Muslim's relations with problems of economics.

Axiom of Equilibrium: Equilibrium to the author means both the state of just balance in which the universe is created according to the Qur'an as well as the field of convergence to this state of just balance by a Muslim society. In this sense, the present state of Islamic imperfections must approximate to the just state over time. Alongwith the axiom of Equilibrium, Naqvi includes a notion of socioeconomic balance between distributive equity and economic welfare. He also equates the notion of Equilibrium to concepts such as maximization of social welfare, minimization of cost, maximization of employment and the like. Equilibrium is taken as an independent element in what the author refers to as the spanning basis vector of the economic space made up of the four independent basis elements.

The dynamic nature of Equilibrium is presented as a problem in optimal control theory based on maximization of the discounted utility index (with consumption alone or with money and consumer good as two commodities) by means of the positive time preference rate. The optimization constraint is the usual national income accounting equation under perfect foresight. The ethical conditions of this dynamic optimization problem are the implied effects of the positive rate of time preference, that Naqvi claims to be justified in Islamic economics. He finds this rate to protect the real rate of return against depreciation of the value of savings and capital depreciation.

Axiom of Free Will: Free Will is sometimes equated with the idea of Freedom and sometimes with rational choice, both of which Naqvi claims to stem from the condition of non-coercion in the agent's choice set. Thus, the author goes on to accept Arrow's condition of non-dictatorship in the Impossibility Theorem of Welfare Economics by accepting the non-coercive nature of the consumers' (social) choice set. Yet the author wants to reject utilitarianism by stating that the notion of Happiness that enters the utility function in utilitarian concept, not only ignores an explicit reference to ethical values but is also an inadequate means of making value judgements on resource allocations between the rich and the poor. In other words, an interpersonal comparison of utilities of the rich and the poor is impossible in the utilitarian framework.

But even though Naqvi rejects utilitarianism as an ethically neutral approach to resource allocation and its valuation across groups, he accepts the concept of total welfare as the Harsanyi type and earlier Benthamite formulation of social welfare additive over utility indexes. The author says, that while marginal utility cannot be ethically viable in Islamic framework yet the concept of total welfare (respecting consumption of any one good) is acceptable to him. The definition of total social welfare is the sum-total of marginal social utilities. Naqvi legitimates the concept of utility function and its constrained maximization in both the static and dynamic sense subject to ethically prescribed constraints, in Islamic economic analysis.

There is also an attempt to first negate neoclassicism respecting the efficiency and equity tradeoff (marginal substitution) debate on the one hand. Whereas secondly, he accepts the marginalist substitution, optimization and allocational approaches of utility analysis, on the other hand. Here Naqvi uses Rawls' Difference Principle (maximization of the social welfare of the most underprivileged) and the Original Principle (perfect equality state of monadism in Rawls) to generate what he claims are Islamically acceptable ideas and approaches to social justice and fairness. A second best neoclassical methodology of resource allocation is thus found to be acceptable to Naqvi for Islamic economic analysis.

A passing mention is made to public choice theory as a follower of social choice theory (Arrow). Naqvi agrees with the methodology of institutional structuralism (Rawls) in public choice theory as an acceptable delineation of institutional behaviour in an Islamic economy. Naqvi rejects Nozick's ideas of fairness on grounds Nozick invokes autonomy of the individual and of the minimal state presence in redistribution and institutional directions in his entitlement theory. Naqvi accepts the Prisoner's Dillemma model of non-interacting individuals (convicts) to legitimate cooperation as an acceptable Islamic behaviour derived from this cooperative game.

Thus in summary, the axiom of Free Will is invoked to justify rational choice by economic agents. Rational choice is then considered to be acceptable in Islamic economic analysis on ethical grounds if the ethical balance can be established. The concept of Freedom is sometimes equated with Free Will when it is taken up in the sense of individual rational choice. This itself is subjected to consistency assumption of rational choice theory. That is, an obviously Truth statement at one period of time cannot be contradicted by a Truth statement at a subsequent time by the same agent. But since such a decision also implies reflexive behaviour, therefore, given Islamic ethical norms, Naqvi's concept of moral rationality becomes identical with all of Robbin's and Marchak's axioms for rational choice. Indeed such axioms must be accepted in order to make utility maximization and ethical rational choice possible for the author.

Within the Free Will and Freedom axioms, Naqvi rejects the validity of Pareto Optimality in Islamic economic analysis. He thereby accepts externalities in his design of an Islamic economy, but treats all these as priceable items in the neoclassical second best sense. Consequently, government intervention in economic matters becomes central to Naqvi's model of an Islamic economy with state in it. The Islamic state is seen as a powerfully interventionist social welfare state in most matters involving resource control and allocation for attaining distributive justice, property rights, fiscal and monetary policies. Hence, the criterion of social welfare function is shown to be maximizable in the Rawlsian sense by fiscal and monetary instruments, state control over property rights, exercise of liberal tax policies, control of commons and distribution of rights and privileges by the Islamic state.

The Kantian perspective of Freedom is partially accepted by Naqvi in the sense of human Free Will axiom being independently primordial. However, Naqvi wants the Free Will to act in accordance with the injunctions of the Divine Law and not by sheer rationalistic attributes. Consequently, Naqvi rejects the solely a priori (deductive) approach to the study of Islamic economics. Instead, he lays greater emphasis on Popper's method of scientific falsification, which he applies to Islamic economic theory and policy. Falisificationism according to Popper is an inductive method of rejecting and revising theories alongwith the theoretical axioms by means of testability or logical positivism. This process of the open universe conjecture is incessant and intrinsic to scientific inquiry according to Popper.

Axiom of Responsibility: Responsibility as an axiom is used by Naqvi as another independent `basis' element of the spanning vector for the economic space. Responsibility is shown to reflect the ethical consequences of the other axioms in preference formation by the representative Muslim in an Islamic economy. Self-seeking behaviour of the representative Muslim is thus rejected by Naqvi as a preference forming factor under the Responsibility axiom. A critique of Adam Smith and the Protestant Ethics of capitalism is made with regards to economic self-interest. Other issues governed by the Responsibility axiom are distributive justice, social welfare maximization in preference to individual consumer utility maximization and private ownership as a form of trusteeship under Shari'ah (Islamic Law) and a strong state intervention toward promoting social justice.

The Spanning Basis Vector: The axioms of Unity, Equilibrium, Free Will and Responsibility form the critical elements of Naqvi's basis vector. These comprise Naqvi's minimal and irreducible set of axioms, by means of which, the author claims that all other ethico-economic realities can be universally explained. Yet being in the basis vector, each of these elements (coordinates) lie in a Euclidean plane and are independent of each other. Thus for example, the axiom of Unity exists independently of the other ones; the axiom of Equilibrium exists independently and so on.

Naqvi holds the view unlike many other Islamic economists, that the Unity axiom by itself cannot be sufficient for explaining the total design of the Islamic economic universe. Naqvi then argues that the other axioms cannot be deduced from Unity and that these must exist independently in Naqvi's description of the economic universe.

The author rejects the possibility of any further reducibility of his axiomatic set -- that is, to the Tawhidi epistemology alone. Rather in his Euclidean configuration of the axioms in relation to the economic space, each of these axioms impact upon economic variables independently and additively to give them ethical meaning. Ethics then would seem to be an output of this vectorially independent relationship between each of the axioms and the economic variables when taken up singly or in vectors and matrices. Thus, when Naqvi considers ethical forms of consumption, production and distributional menus, the axioms impact upon these activities independently across and within these activities. The fact of the matter is, that Naqvi wants to treat interdependence among the critical activities by means of ethical values and also suggests an interdependent treatment of utility indexes with production menus (already done by Henderson and Quandt for sometime now). Yet he must hold the axioms as mutually independent.

One result of the constrained optimization problem that Naqvi uses for efficient resource allocation, leads him to determine the share of factor incomes in national income by deducting the wage share of total output. Hence a linear aggregation methodology is used for national accounting in determining factor shares. Also Naqvi's social welfare function is an aggregate of the individual utility indexes (see treatment of Harsanyi, Bentham, Hammond etc. in Fiewel). His total social welfare is an aggregate of marginal social welfare contributions attained from the consumption of specific goods or services.

Naqvi claims that his axiomatic treatment of Islamic economics forms what he calls, following Popper's terminology, a falsifiable doctrine for checking the testability of Islamic economic theory and policy. Here he wants to bring into the picture the inductive nature of Islamic economics. He states that Islamic economic relations are to be falsifiable, subject to the constraints of his axioms, in order for Islamic economics to be a scientific endeavour and constructive of economic realism. Although the author has not mentioned it, falsification of the Popper's type means testability followed by replacement of even the axioms or assumptions of theory. Consequently, the underlying dialectical process of rejection, revision and continuity in Popper, forms an entropic form of Darwinian vintage, proceeding from one level to subsequent levels of scientific knowledge incessantly.

Intersystemic Content: By accepting falsifiability in Islamic economic theory and policy, Free Will and non-coercion assumption in consumer possibility set while combining distributive justice with economic growth, efficiency, progress etc. with it, Naqvi says, that it is the ethical element of Islamic economics that makes the latter different from either Marxism or Capitalism. The axiom of Responsibility under the minimal condition premise is made the basis for ethical preferences of individual and institutional agents, enabling them to choose the balance between distributive justice, economic growth, property rights, fiscal and monetary matters, taxes, capital-labour ratios for choice of technology, etc.

The intertemporal problem of resource allocation for social welfare maximization is taken up as a utility maximization problem subject to the usual contraints of a dynamic optimal control theory for optimizing consumption-based utility index with appropriate discount rates. In this sense then, Naqvi accepts all the rationale of neoclassicism and a national income accounting. Saving becomes a central target variable. Consumption flows as state variable and the positive time-preference rate for valuation of present against future allocations, become fully accepted as in standard neoclassical economic theory. Only ethics introduced exogenously from outside the economic system, are made to determine choice using the axioms of Unity, Equilibrium, Responsibility and Free Will.

State and Markets: Policy Issues: The market order is upheld, but the Islamic state is seen to play a significantly interventionist role in Naqvi's design of an Islamic economy with government. Thus, transfers in the form of social expenditure become critical for Naqvi's Islamic Government. The demand for social justice is seen to trigger changing facets of Islamic arrangements (falsifiability) over time. During the interim period, governments are empowered to take up unilateral actions to establish social justice. In this sense, the Islamic Government is seen to come nearer to socialism (hence Marxism). Even the existence of private property though conditioned by the ethical prerogative of relative ownership under Islamic Law, is seen to be controllable by the Islamic Government. This too makes the Islamic economy share elements of socialism and capitalism, only with the ethical twist in it.

Naqvi uses his axioms of an Islamic economy to formulate his economic policies. Among these are distributive justice, economic growth and property rights in the relative sense. Other issues, such as macroeconomic policies, poverty alleviation, income and wealth distribution, equalization of opportunities, incidence of taxes, education, environmental protection (intertemporality) etc, are all taken up within this broad package of the macroeconomic policies.

The monetary instrument is of particular importance to note. The rate of interest is to be replaced gradually rather than suddenly by other instruments, such as Mudarabah (profit sharing), Musharakah (equity). The latter instruments are not found to be effective. Naqvi finds them to be often detrimental in protecting small enterprises. Declining rates of return in the M-M financial instruments for risk-averse investors against interest-bearing financial windows, are seen to be the case in Pakistan. Consequently, a positive rate of return on money capital that would protect the investor against risk in uncertain ventures, is upheld as an efficient method for maintaining the axiom of Equilibrium in an Islamic economy. The nature of arguments here is similar to allowing the real rate of interest to protect the individual against inflation.

While many faults are pointed out with the rentier/feudal perspectives and the valuation of uncertainties using profit (sharing) rates in risky investment environments, household savings are seen not to be driven by such instruments. Naqvi recommends that Islamic Governments may guarantee certain fixed rates and simply declaring them as being Islamically acceptable.

On the other hand, it is not the fixity or variability of the rates of return on capital that is seen to qualify a return as interest rate or not. This problem of discernment is shown to rest on the existence of certainty (certainty equivalent) or uncertainty in financial transactions. In the case of perfectly competitive capital markets, fixity of the rate of return is seen to be an incentive to savers. In the case of uncertainty, a positive time preference rate is seen to be necessary for intertemporal valuation of assets. Otherwise, Naqvi argues, the present generation will be heavily penalized and therefore unduly discounted against the future. Such an argument is made to legitimate Naqvi's use of a positive time-preference rate for future valuation.

Naqvi is overly concerned with the problem of saving as a centrally driving medium of an Islamic economy. Hence, he carries out a long debate (second part of book) on the acceptability and modus operandi of eliminating the rate of interest, nature of positivity of the time preference rate, intertemporal valuation by means of such rates for risk-averse and risk-neutral (government). In the neoclassical intertemporal capital formation problem with positive time preference rates that Naqvi uses, savings appear not as a Keynesian type instantaneous medium converting saving as liquidity into investment. Instead, Naqvi's savings are long-run resources for capital formation. Thus his capital formation locus is seen to be determined by the incentive of a return to impatient savers and long-run investors. Interest rate as the positive time- preference rate, thus becomes important in determining such an intertemporal resource allocative locus. On the other hand, there is no categorical mention followed by analysis of spending as opposed to saving, in any intertemporal frame in Naqvi's book.

On the same theme, avoidance of deficit financing is seen to be problematic unless an economy-wide transformation can be realized based on replacing interest rates by other instruments, which according to Naqvi could perform the same (efficiency) function as interest rate does. Naqvi states that this can be realized by offering higher profit rates than interest rates. Long- run investments as opposed to short-run investments are found to be important for the Islamic financial portfolio. No particular mention of risk diversification, economic and financial complementarity by choice of appropriate instruments, are suggested by the author to back up his argument that while analyzing interest rates, the term structure is to be considered and not simply one interest rate indicator as quoted by the Central Bank.

Naqvi sees the possibility for relativism and flexibility in the interpretation of Shari'ah and the choice of appropriate Islamic policy instruments for purposes of Islamizing the economy. His concept of economic Islamization is based first, on accepting the behavioural norms of an Islamic society. These would be provided by the Islamic tenets and would form the normative aspect of Islamic economics. Second, economic Islamization means subjecting the evolutionary aspects of policies and choices to falsifiability. Naqvi's axiomatic approach to Islamic economic theory as an independent discipline of study, thus accepts revisions in theories, approaches, programs and policies. The deductive and inductive perspectives are subjected to changes by means of testability or falsifiability.

Critical Review: It will not be possible to include all aspects of a critical review of Naqvi's book in this paper. These happen to be too profuse. They extend from page to page of the book due to a continuity of argumentative and methodological flaws. The errors and methodological inadequacies are of a fundamental nature. By the time this reviewer ended reading the book, the whole work alongwith its terrain of arguments and prescriptions, proved to dissolve into many irresolvable confusions. Thus I will leave the more detailed parts of the critical review to be taken up as rejoinders to this review, if there are any.

In what follows, a general methodological critique is presented. In this, just a few critical points are selected for reasons of space and focus. These points are premised on the the principle of ethical endogeneity necessary for studying ethics in world systems (the economy being a subsystem); the Qur'anic epistemologically soundness of the work; the systemic viability of Naqvi's axioms; the methodology of analysis of the inherent mathematical models and of Naqvi's selection of his policy instruments.

The Epistemological Critique: Naqvi rejects the epistemological Precept of Unity (Tawhid) to be capable by itself of an independent (solely exogenous) necessary and sufficient axiom for explaining all other attributes and functions of an Islamic economy. His `basis vector' spans an Euclidean space, within which he wants to integrate ethics. Yet, derivation of the Islamic intellection process (Ahkam) from the Qur'an suggests, that the most elemental substance of the universe is knowledge (Al-Ilm). Al- Ilm must then be of the nature of Unity of Allah (Tawhid) by cause and effect. That is why the fullness of knowledge that creates all things in originary form, is mentioned in the Qur'an by the term Lauh Mahfuz, the soul and fulllness of essence of the Qur'an and of Allah as the primal Creator, Lauh Mahfuz as primal essence of Creation.

From this complete Stock of Knowledge emanates creation in all its diverse forms: Allah is the Evolver and Bestower of Forms. Thus, the originary Stock assumes the property of a supercardinal topology that is completely divisive across domains. From the divisive form of the Stock across systems, emanate Flows of knowledge in the form of manifestation of Allah's Ayaths (Signs) in material and moral forms. "We shall show them Our portents on the horizons and within themselves until it will be manifest unto them that it is the Truth". The Qur'an also says, refer back all matters of dispute to Allah, His Apostle and those in authorities among you. Flows are relations to explain Unity by cause and effect in the experiential order.

The primary Unity-Stock is the most unified form of Originary Knowledge, as it Absolutely comprehends everything of creation. From Allah emanate everything and return back to Him for a final determination. The Stock is therefore complete and compact in the supercardinal topological sense. The Flows are evolutionary derivations of rules, relations, laws for explaining Allah's essence of Unity in moral-material complementarity that spans creation, past, present and future indefinitely. This makes up the nature of the continuously recreative prowess of the Divine Laws.

Thus, the nature of Unity and of the unification process (Flows) that arises from the Stock, share in the same unifying character of the universe inter- and intra-systemically. Whichever way you turn, you see Allah's Signs. The epistemological foundation of Islamic world system (the world view) is thus inter- and intra- systemic unification by means of the continuous flows of knowledge arising from interactions, leading to integration and continuing by evolutionary epistemologies of the same unifying types. The Law applies to the animate and inanimate worlds. The Qur'an says that Allah is continuously reoriginating creation towards a predetermined goal, that of ascertaining Truth to all through the process of creation into Hereafter (Akhira) as the Supreme Reality. Thus inter- and intra-systemic unification is a law that holds universally as Divine Praxis in spite of the differences in problem specificity.

To understand the process of unification, it is not sufficient to construe simply the end result of any state a priori. There must exist cause and effect (better as cause-effect) between the Divine Laws, the knowledge domain and the cognitive domain. In this way, the a priori and the a posteriori are conjointly interconnected in the unification process. The unification process as Flows out of the Tawhidi Stock with the same essence in it, means several equivalent things. It means inter- and intra-systemic interactions-integration followed by circular continuity; epistemic (a priori) and ontic (a posteriori) continuity; the principle of ethical endogeneity; universal complementarity by means of flows of knowledge; and partitioning of the universal space of possibilities into three categories. These are Truth, Falsehood and a temporary existence that is finally discerned either as Truth or Falsehood with the process of knowledge formation. This third category of temporarily undetermined phenemena is known as Mubah.

Hence, if a Flow of knowledge T1 is derived from the Divine root, T (Tawhid) in the epistemological sense of topological completeness of T, then primally, T -> T1, creating a Flow -- an Ayath. Subsequently, the impact of T1 creates materiality, say X1, through Ahkams, f1 say. X1 is also an Ayath. Subsequently, X1=f1(T1) generates more Ayaths through fresh Flows, T2 say, by means of fresh Ahkams, f2 say.

In this way, a `complete' simple process is shown by T->T1 ->f1 X1 ->f2 T2 ->....-> T=A. When written down, a simple localized process as a subprocess will appear as, T2=f2of1(T1) with two interactive subprocesses that are then integrated to each other by the above compound relationship denoted by o. These subprocesses are, T2=f2(X1), X1=f1(T1). The continuity of the knowledge process in this sense is pervasive inter- and intra-systems, leading to complex interactive-integrative and evolutionary forms. All moral and material forms in this order are induced and recreated by knowledge flows that are of the Tawhidi origin and thus of the unifying essence. Such a cause and effect interrelationship between the ontic phenomena (X) and the epistemic phenomena (T's), determines the endogenous nature of ethics in Islamic world systems of which the Economy is a particular form.

Finally, in the above simple formalization we note that the chain of circular causation and continuity interrelationships between X's and T's cumulates and converges to T once again. T is then equated with the Stock of Knowledge in Hereafter (A). Thereby, the same Optimal Knowledge appears once at originary point T, and repeats and equates in the sense of supercardinality in Hereafter (T=A=Akhira). This `completion' from T to T through the medium of the unfication process of the universe, is the idea of a `complete and compact' Tawhidi knowledge-based world view in the supercardinal topological sense.

Such dynamic processes can be powerfully treated by means of periodic functionals in Chaos Theory. They convey a new methodology of Attracting Fixed Points (Halal=Truth, but can also be separately applied to Falsehood. This is a substantive issue beyond the scope of this review paper.), Repelling Fixed Points (between Halal and Haram=Falsehood) Fixed Points and Switching Attracting-Repelling Fixed Points in localized domains (Mubah=temporarily undetermined).

In Naqvi's treatment of rationality, the consistency assumption ignores the temporarily undetermined reality (Mubah). The state of Mubah remains a real possibility during the dynamics of systemic evolution. In this, some events will most possibly appear as questionable in subsequent points in time and thus be rationally `inconsistent' with previously held perceptions on them.

Such a fact is seen even in the relativistically evolutionary condition of falsificationism that Naqvi utilizes. But Naqvi's terminology falls short of the more entropic concept of the same held by Popper. Although Naqvi uses this terminology for implying a degree of testability of systems premised on his axioms, methods and policies, yet the linear nature of their relationship in the Euclidean space he treats, causes the state and policy variables to become linearly influenced by the axioms. Therefore, in a state of causality, any monotonic change in the state and policy variables will convey the same to axioms in there methodologically independent sense. The implication then is, that falsificationism even in its limited application to state and policy variables, must imply testability and revision of the axioms as well. Naqvi's idea of falsifiability is thus methodologically flawed on account of this entropic consequence of falsifiability.

Ethico-Economic Critique: The understanding of ethics in economics as in all Islamic world systems, in the sense of the above-mentioned principle of ethical endogeneity that determines the unification process, is critically important. In this principle, it is the singularly most reduced premise (Tawhid=unification epistemology) that defines the recreative characteristic of any Islamic order. Hence Knowledge, that is the Unity premise (Tawhid), becomes the most reduced and the only solely exogenous irreducible axiom. It alone must and can endow any type of moving equilibrium to the economic order. All other axioms given by Naqvi are of the nature of T's or X's. They must hence be determined as cognitive phenomena and be driven endogenously by knowledge induction.

The dynamics of these attributes as found in the Qur'an is, (Just Balance -> Just Purpose -> Certainty -> Wellbeing -> Creativity) followed by continuity and circularity between them. Naqvi's Equilibrium is just balance in the neoclassical sense, as mentioned in the foregoing overview of his book. When he accepts Rawlsian social justice, public choice approach, Marxist-capitalist systemic orientations for defining distributive equity and its realization in an Islamic economy, Naqvi is simply using second best results of neoclassical economics. In this, the concept of just balance in favour of equity remains substantially the same as using neoclassical marginalist substitution methodology for explaining social claim on equity. The neoclassical methodology is thus deepened in Naqvi's understanding of balance. Neither can the notion of Equilibrium be one of cosmic balance alone. Instead, the creative process of the Qur'an evolves a micro general equilibrium system in the sense of evolutionary epistemology, into larger more unified ones. Here is the essence of the micro-macro interface that is inherent in the nature of Islamic world system, which Naqvi has failed to address. In this way, the evolutionary continuity and circularity of the knowledge-centered universe are re-established in the Tawhidi order. Hence we use the term for this praxis underlying the unification process -- the circular causation and continuity model of unified reality.

Critique of Mathematical Independence in Axiomatic Spanning Vector: Naqvi's basis vectors allow no interactions among themselves and Unity remains outside the domain of interactions. The Euclidean space of forms leaves ethics to be neutral, void and silent. You can sound ethics exogenously only from outside Naqvi's system; there is no endogenous creative method to regenerate ethics within Naqvi's system. Hence, no unification by inter- and intra- systemic interactions and integration can be performed in Naqvi's system. The epistemological meaning and functional centricity of Tawhid is lost. There is then no Qur'anic epistemological soundness of the axiomatic approach presented in Naqvi's ethically neutral and ethically exogenous design of an Islamic economy.

The fact of the matter is what the philosopher-poet, Muhammad Iqbal once wrote, those who proclaim Allahu Akbar (God is Great), cannot be accomodated simply within the space of four dimensions. Indeed, the endogenous ethical phenomena as briefly explained above, elevates the inter- and intra-systemic experience into non-linear or multilinear spaces. Naqvi's space is linear and independent and thus ethically mute. Instead, Tawhidi space is tensorial in contravariant and covariant mappings that define inter- and intra-systemic interrelationship on the plane of unification. Such multilinearity properties of Tawhidi space in world systems can also be shown to be of the Hahn-Banach extension type.

Critique of Axioms: If now we take up Naqvi's other axioms, we find them to be of the nature of the `created' cognitive X- variables. Human Will (Free Will) is thus a created phenomenon. It cannot therefore be a primal axiom as in Kant. It is not even a fundamental attribute, for it fails to be inter-systemic across physical systems, markets and institutions. Only a Qur'anic attribute that can inter- and intra-systemically unify (interactive-integrative) can qualify as an acceptable foundational attribute. Free Will must therefore be determined by the same circular causation and continuity model of unified reality as defined above. Hence the same Qur'anic attributes mentioned earlier, that provide the dynamics to this process, must also remain irreducibly fundamental. Likewise, Responsibility too must be determined by such a process to be ethically endogenous in the Islamic world system. Thereby, the Qur'anic attributes are again most fundamental -- irreducible and minimal when derived from the irreducible epistemological premise of Tawhid. Naqvi's axioms are cognitively determined like many other similar ones in the circular causation and continuity model of unified reality. They cannot then be unique and axiomatic anymore. Some of these other qualities of this type are Islah (Purity), Freedom as the state of truth and not rationalistic Free Will, Entitlement as a comprehensive idea of ownership, rights and duties, and Khilafah (Vicegerency). Thus none of these are unique and more reduced than knowledge as the essence of the unification process with the fundamental Qur'anic attributes as mentioned above.

Next, regarding Equilibrium, Naqvi's mention of the process towards a Just Balance combined by his extensive use and reliance on neoclassical orientation, assimilation of mainstream principles (most importantly Marxist, capitalist, Rawlsian and marginal substitution ideas), do not explain the Qur'anic dynamics of the Precepts of Just Balance and Just Purpose. A host of errors and misconceptions then follows by missing out these latter substantive attributes. The arguments are similar to thise given above.

The fact of the matter is that since knowledge Flows (interactions-integration-evolution, unification process) are continuous in nature, therefore, there cannot be any long-run unique or steady state equilibrium. Only in the very instantaneously short run (Stigler's market period) can there exist a momentary equilibrium. But such an instantaneous case is of no practical and academic interest for the study of extensively interactive world systems. Hence, there can exist no case for social welfare maximization, cost minimization and dynamic optimization problem using utility function and discount rates. All of these Naqvi invokes for his neoclassical treatment of an Islamic economy in the name of his axioms.

There are too many flaws involved here, whose critical evaluation would lead us too far in our present discourse. To mention one, the use of utility function -- with or without money as commodity in it -- in spite of Naqvi's critique of neoclassicism on grounds of self-interest and rationality axioms, entrenches marginal substitution into Naqvi's resource allocation problem. Prices must then necessarily exist for both fungible and monetary commodities. Otherwise, the utility functions cannot exist; the integrand of the optimal control theory problem reproduced here by Naqvi from his 1978 paper, cannot otherwise be convergent. With marginalist substitution so entrenched in Naqvi's work, the principle of universal complementarity between the commodities, resources, agents, goals, is ruled out. This negates the unification process in Naqvi's model of an Islamic economy.

Indeed, every epiphenomena of the circular causation and continuity model of unified world view must be premised in interactions, integration and evolution. Hence the principle of universal complementarity must be an instrumentalizing factor for global decision making and resource allocation in the Islamic economy. The neoclassical idea of marginalist substitution is contrary to the principle of unification. It eliminates the possibility for interactions and causes the unethical consequence by replacing a `good' by a `bad', a `good' by a `good', a `bad' by a `bad'. It accepts all these ethically contradictory results in non-interactive economic states that eliminate universal (not partial) complementarity among `goods' with the process of knowledge evolution in the unification frame.

Critique of Policy Perspectives: In a two-commodity case with money, money as a commodity plays a role distinct from the idea of the real sector commodity money (Walrasian currency as money or Fisherian Social Credit). Now the independent price of money is interest rate. This is what makes Naqvi defend the transition phase of interest rate regimes in his neoclassical intertemporal treatment of a social welfare function-based (consumption utility) dynamic constrained optimization model. Yet the fact of the matter is, that a neoclassical model remains inherently non-prescriptive. It does not and cannot define a process, rather it computes only and simply the terminal equilibrium and optimal state of resource allocation. In such an a priori terminal regime that is really not of our making and thereby fictitous, a positive time-preference rate becomes logically necessary. Hence, Naqvi must legitimate a positive time- preference rate for an Islamic intertemporal valuation of assets in the neoclassical frame.

Let us see what happens to Naqvi's dynamic constrained problem by introducing the knowledge parameter in the discount factor and other variables. Now try to optimize the same criterion as given by Naqvi. The integrand of the optimal control model becomes non-convergent. No purpose exists then in using the kinds of nice neoclassical models used by Naqvi to fit standard economic theory of the old vintage. Consequently, such neoclassical models and niceties must be totally abandoned from any Islamic social, institutional and economic analysis. They are to be replaced by simulation models instead, or simply by anthropic interactions of discursive phenomena on issues at point.

The fact of the matter is, that the intertemporal allocation using any time-preference rate remains an indeterminate one. Since an actual contract is not made between the present and future generations and present decisions remain incomplete, therefore, no precise weights and hence allocative indicators, can be assigned for the future generation. The saving problem remains unsolved, as was pointed out by Phelps with respect to Rawls' intertemporal Difference Principle. There cannot then be any meaningful discounting possible either. The best that can be done in such an indeterminate situation of intertemporal resource allocation for future wellbeing, is to strengthen Islamic behaviour of the present generation toward establishing a humanly ecological environment. Then over an Islamizing trajectory of the social, institutional and economic systems, this behaviour must be perpetuated. In other words, this brings to the forefront the most elemental responsibility of an Islamic state toward its citizenry. It is to impart Shari'ah knowledge and arrange the existing political economy along this path. The Islamic state is not to distract itself into costly intervention with burdening taxes and public sector projects. It can cooperate in joint venture with the private sector and provide Shari'ah directions and advice through a process of Shura (consultation) with all agents. Privatization, ethical market transformation and enabling participation and knowledge simulation must always be the primal roles of an Islamic Government.

Beyond the eclectic approach of transforming behaviour of present generation, social wellbeing of the citizenry would thus be looked after by joint ventures between the state and the private sector in social projects yielding long-run benefits to be paid to future generation. When such project- oriented decisions are made, valuation in the Islamic sense treats discount factors as spot rates, not as rates that are actually paid to any agent in the economy. Hence, Naqvi's dichotomy between fixed and variable time- preference rates (rates of return) is a non-sequiter on matters differentiating valuation from financial transactions.

Likewise, Naqvi's emphasis on savings and his complete silence on the Qur'anic precept of spending for social wellbeing, is a point of worry. Neoclassical saving is of the long-run type. Keynesian savings are temporary in the sense of supply of liquidity. This supply must be wiped out by investment demand. Thus the financial return on neoclassical saving as liquidity is interest rate; the return on Keynesian saving as investment is the return on productive investment. This is what determines the income multiplier in Keynes' general equilibrium system.

In Islamic ethico-economic thought, the Qur'anic emphasis on spending in moderation and in the good cause for moral embelishments of self and others (society), must necessarily reject the neoclassical notion of saving. Consequently, the long-run positive return on neoclassical saving (which is interest or a time-preference rate) must logically remain untenable in Islamic economics. The questions relating to the intertemporal allocation of capital that I mentioned above, must negate all emphasis on the classical and neoclassical notions of saving in an Islamic economy. Instead, even in the short-run case, households are to be supplied with cashable vouchers that can be liquidated at will, like any bank cheque across the bank counter. Such a flexibility would be necessary either to meet investment needs (holding Mudarabah- Musharakah shares) or spending needs, and all financial speculation must be eradicated. Over and above this, productive investments necessitate complementarity and diversification of real and financial investments in the absence of speculation. These are the ways for generating long-run positive returns while reducing service charges to clients.

Critique of Interest Rate Treatment: Naqvi's analysis of interest rate is not methodologically embedded in a milieu of Ummatic transformation in spite of his futuristic outlook in the last two chapters of the book. Rather, he takes things as they are and wishes to Islamize them, without a demand on fundamental changes at the level of microenterprises, grassroots, institutions and governments, capital markets, trade and economic integration etc. Such a comprehensive transformation is indeed the concept of the Ummatic transformation as the Islamic world view of objective globalization. Only in such an evolving situation can the expectations of the Islamic world system, positive returns on investment and financial assets, stability and control, shine out the instruments of distraction posed by existing evils (Munkir).

Critique by Means of Shuratic Process World View: The Ummatic transformation approach is the Qur'anic process based world view embedded in the Shuratic process (derived from the term Shura as a universal interaction and consultation process that politicizes physical and social systems, all systems and their agents). We do not find the slightest inkling of such a methodological approach in the entire book by Naqvi. The net result of valuation in the Shuratic process of specific issues under study, invokes the powerful concept of Social Wellbeing. This is a functional that dynamizes complementary behaviour of Shari'ah- determined state and policy variables within an extensively discursive process world view. Its philosophical lineage rests with the Tawhidi unification epistemology singularly. Its dynamic character rests with the ethically endogenous circular causation and continuity model that invokes knowledge-induced simulation models. An introduction to this was given earlier in this review.

Apart from a mention of social welfare maximization, which is a neoclassical concept, quite different from the concept of social wellbeing, Naqvi has nowhere used this latter concept to discuss issues such as Fard Ayn (obligatory Islamic learning), Fard Kifaya (recommended Islamic learning), Falah (wellbeing), Tazkiyyah (purification) and the Qur'anic attributes in an actually methodological process. All these go into the formation of an Islamic society, institutionalism and economy. As it was mentioned earlier, the acceptance of neoclassical models with exogenous Islamic values to them, cannot address these profound issues. Islamic thinking of whatever vintage must thus be indispensably ingrained in the Qur'anic-Sunnatic epistemological moorings with an altogether new world view of reality, science, understanding, application, inference and an unequivocal end to uncritical acceptance of western and questionable authority (end of Taqlid). There may be incidental commonality between the Islamic and other systems. But this validation is to be proven by the independence of an authentically Islamic epistemological approach. The validation (Naqvi's falsifiability) can follow testing the Islamic approach by non-Islamic perceptions, as we have seen particularly in the case of his accepted neoclassicism.

Critique by Means of Islamic Political Economy Viewpoint: The policy consequences of the above methodological remiss have caused Naqvi to propose and analyze contradictory and questionable policy recommendations. Naqvi's lament over the impossibility of eradicating interest rate and the usual excuse of needed long-run Islamization process of change on the issues, is due to his failure to treat the broader critical question of relevance of Islamic economics as a comprehensive Islamic discipline. His Islamic behaviouralist definition of Islamic economics and its methodological independence, totally miss out the otherwise indispensable demand for the study of global interactions that pervade between economics, society, institutions and the globalization process. Such an interactive field of study taken up in the unification process model of Tawhidi genre, is of great meaning and relevance to reality. The neoclassical view and the absence of ethical endogeneity cannot address this richness.

Such an alternative academic pursuit has come to be known today as Islamic Political Economy. Naqvi's book is totally silent on these most relevant and important developments. Hence, the economic method fails to conceptualize the Ummatic (world nation of Islam) integration, trade, capital markets and the attendant financial and investment instruments that must accompany Ummatic transformation. Such treatments can otherwise throw substantial light on the relevance of the transformation process, on ethical transformation of markets using endogenous preferences and interactive politico-economic forces.

The role of Islamic Government in this milieu could then be appropriately understood as one that principally inculcates Tawhidi knowledge promotion and its fusion into the ecological order, so that not costly intervention (at least minimally intervened) but endogenous preference transformation respecting the principal economic and other interactive activities, are realized. Naqvi's book has nothing to offer in these most critical areas.

Naqvi's mention of declining popularity and inefficiency of Islamic financial instruments in Pakistan can be counteracted by the success story of Islamic financial institutions in Malaysia. But this is not the crux of the matter. What is important academically is to build up the praxis of the Tawhidi process world view of the Ummatic transformation. It must be one that can make economic integration, trade, development, capital markets and institutionalism viable by means of the unification process of change. Policy instruments toward realizing this change must be bold on the political, institutional and thus on the social and economic fronts, in the present decrepit Muslim world ruled by kings, sheiks, demagogues and submissive policies rendered to Western Eurocentric designs. Islamic economics as an independent discipline cannot address such a dynamics of Ummatic change. To date Islamic economics has prescribed illogical western models of no real worth. The approach by and large has been far removed from epistemological inquiries emerging from Qur'an and Sunnah. The relevance of Islamic political economy as a study of Tawhidi unification process of interactions-integration and evolution in an inter- and intra-systemic domains is therefore the proper recourse for an Ummatic study.

One does not find in Naqvi's book anything about endogenous preferences and their role in realizing ethicized market transformation. The minimal state concept -- beyond limited intervention required for promotion of Shari'ah knowledge, security (including financial matters) and basic needs -- is contradicted in Naqvi's much statal interventionist policy for realizing distributive equity, limiting private property, burdening taxes, and so on. Naqvi had thus to define an Islamic state as a welfare state. Whereas, the role of the Islamic state must be fundamentally focused on promoting moral-material reality of human potential in an institutional, market and social environment.

Indeed, a minimal state intervention and an ethical transformation of human systems instead, is the essence of Qur'anic-Sunnatic transformation menu. The Shuratic process when applied to the politico-economic order, takes over sheer government intervention by decentralized discursions among those with deep and respectful Shari'ah knowledge and with a broader outlook on Shari'ah possibilities in an evolving world. Naqvi's mention of such a process in the last chapter of his book is cursory and far from being substantive in a methodological and consistent sense.

As a result, one finds that Naqvi gives exclusive emphasis on economic growth as a policy target. He then argues that economic growth will create the needed equitable distribution. Economic history has not proved this, except for totalitarian nations and with substantial IMF-World Bank conditionalities, which includes hegemony over developing countries' self-reliant choices. Growth- with-distribution is the old Chenery-Ahluwalia argument applying the neoclassical concept of `balance' as substitution between growth and distribution. Growth would then always substitute ethics, distribution etc. The concept of development on the other hand, is a complementarity-based study of interrelationships among agents, sectors and forces in the institutional and socioeconomic order. Herein, the most relevant and interesting ideas of extensive interactions among sustainability, human ecology, markets and institutions while treating issues of policies, become richly endowed. These are areas that remain absent in Naqvi's book. Thus, much of the policy implications in it become empty of ethico- theoretical and applied content.

Critique of Reference Section: Examining the Reference Section in Naqvi's book shows a lamentable absence of the reams of published literature on ethics and economics that have appeared in recent times. I am surprised why these were not used and why the book was not extended beyond Naqvi's 1981 writing on ethics and economics? The central theme of ethical endogeneity in any ethico- economic study, the unitary process world view of change, the theory of ethico-economics itself, and a host of methodological developments in these areas, have all been left out in writing this book. Even in his treatment of the social welfare concepts from Islamic viewpoints, Naqvi has ignored so many original contributions that have been made in this area recent years, let alone the dynamic concept of social wellbeing.

What is true of Naqvi's book in regards to the treatment of ethics in Islamic economics is true of all those contributions by Islamic economists that I have seen. The grand problem, one that makes Islamic economics non-functional in a truly Qur'anic sense, is its methodological inability to treat the endogeneity of ethics in an intra- and inter-systemic sense. To move into these directions would mean the abandonement by discursive rejection of all that is mainstream economics, leaving this body of human volition as relic of imagery on rationalism, rationality, meaningful scientific rationality totally devoid of a theory of ethics in it. On the other hand, to leave the methodology of manistream of economics for the development of the Qur'anic socio- scientific order in human volitions means a challenge to be faced in Islamic political economy with its substantive Tawhidi Unification Epistemology, its singular Shuratic Process, its Principle of Universal Complementarity and its Principle of Ethical Endogeneity. Islamic economists have totally missed this central address. Turn to it!