Dr. Mahmoud El Gamal is a researcher on Islamic Economics at Rice University. He has some insights into the abuse of the term "Islamic" when attached to economics, finance and banking.
The second group is much more interesting, but it appears to be suffering an identity crisis. They seek to live according to an Islamic ideal, but quickly discover that the Islamic ideal is largely fictional. This group includes well-meaning Muslims who turn to religious studies, only to discover the irrelevance and corruption of what they had considered scholarly circles. It includes MBA-holders who decide to get into "Islamic finance", only to discover that it is a racket for enriching cynical English bankers and lawyers, along with some corrupt, gullible, or greedy Muslims.
Most importantly, the second group includes most of the masses in Egypt, Pakistan, Indonesia, Malaysia, Turkey, and elsewhere, who would like to embrace the slogan "Islam is the solution", but fail to see how that solution would work in reality. This is the greatest failure of the school of thought generally known as "Islamic Economics", which sought to develop an understanding of Political Economy from "an Islamic perspective".
The difficulty is this: to find or develop and workable "Islamic solution", one must abandon historical and pietist utopianism. Islamic history, from its earliest days, has never painted a rosy picture. Islamic societies prospered when they were open to learning from others: Sassanid, Byzantine, etc. The famous Prophetic tradition said: "seek knowledge (`ilm), even [if you have to go to] China", and yet our young still seek knowledge (`ilm) only by going to Saudi Arabia, Pakistan, or Egypt, centuries after the Islamic world ceased to be a main depositary of knowledge.
The result is "Islamic finance", "Islamic jeans", and "Islamic Cola", along with satellite channels that broadcast feel good televangelist speeches about Islam, and broadcasting songs about Hijab and the Prophet in between MTV-style videoclips. This pattern cannot satisfy the increasing Islamist sentiment for long. Suspicions about the Muslim Brotherhood, Hamas, and other political Islamist groups notwithstanding, it seems almost inevitable that the growing wave of Islamism will bring a wave of political Islamists to power throughout the region.
The choice is most likely restricted to one of three scenarios:
(1) If they use the current pietist/historical brands of Islamism, those Islamist groups will fail, just like their predecessors did in Pakistan, Iran, and Sudan. Advocates of western capitalism will point to that failure to advocate abanadoning the Islamist identity. The Islamists will increase in their opposition to western capitalism, arguing that the fault was not with the ideal, but with its implementation. The rift between the two groups grows until every country in the region looks like Turkey.
(2) Some may follow the Erdogan route, but that is really just western capitalism dressed in Islamist garb, and thus unlikely to serve any long-term socioeconomic goals. In the meantime, as we learned from the recent Turkish presidency campaign fallout, the secularists will not allow even some token symbolic victories to Islamists. To survive, the Islamists must make more compromises to prove that they are "moderates", but they will only be tolerated if they become effectively more secularist than the secularists.
(3) A new definition of Islamic-democratic political economy emerges. It is not clear that Muslims have the requisite political and intellectual human capital to develop such a paradigm over the course of few decades. Daunting as the task may be, this seems to be the least painful of the available options, and the one most conducive to bona fide economic and social development in the short to medium term.
Dr. El Gamal points to Dr Timur Kuran's book: Islam and Mammon as a source.
The article does not touch on a topic that we have observed for a long time.
In 1980s Egypt, the likes of Al Rayyan, Al Saad and many others promoted Islamic investment, only to be exposed as a non viable pyramid scheme. The government there was to reactive and caused millions of pounds to be lost by average people who bought into the rhetoric.
Similarly today in the West, there are some organizations offering "Islamic home financing" and other financial services, only to extort a captive segment of the market who have little or no choice, and cannot go to othe providers who compete fairly.
Read the full article Rising Islamism and (Bad) Islamic Economics.