Open AccessConsumption Function in Islamic Economics
Author(s) -
Syed Iqbal Mahdi
Publication year - 2021
Publication title -
american journal of islam and society
Language(s) - English
Resource type - Journals
eISSN - 2690-3741
pISSN - 2690-3733
DOI - 10.35632/ajis.v1i2.2803
Subject(s) - consumption (sociology) , islam , consumption function , islamic economics , function (biology) , economics , macro , positive economics , neoclassical economics , marketing , sociology , microeconomics , social science , business , production (economics) , computer science , philosophy , theology , evolutionary biology , programming language , biology
M. Fahim Khan, “Macro Consumption Function in an IslamicFramework,” Journal of Research in Islamic Economics (JRIE), Vol. 1,No. 2, Winter 1404/1984, pp. 1-24.Prof. M. Fahim Khan’s paper suffers from a number of deficiencieswhich may be grouped under the following categories:1. Inaccuracies in the description of positions relating to modernsecular economics.2. Questionable interpretation of Islamic positions.3. Technical and logical errors in model construction.I shall take up these points in turn.To begin with, Prof. Khan’s description of the premises of moderneconomic theory of consumer behavior and its subsequent critique isinaccurate. According to him, “Modern economic theory studiesconsumer behavior under the following premises: i) It is assumed that aconsumer will decide what to consume and how much to consume only togain the material benefits and satisfaction. ii) It is generally assumedthat all his consumption is geared to satisfy his own needs. He is notbothered to satisfy anyone else’s needs. iii) It is assumed that a consumerbehaves rationally. This among other things, means:(a) the consumer will neither be a miser nor an unnecesssry spendthrift.(b) he will not hoard his wealth.” (p. 2)Modern economic theory of consumer behavior do&e not assume any ofthe said premises given by Prof. Khan. What modern theory msumes isthat a consumer with given income allocates his spending on differentgoods and services in such a way that he maximizes his utility orsatisfaction. According to modern theory, it does not matter whether aconsumer is a miser, spendthrift or a hoarder. Also it does not matter ...