This document provides a summary of a lecture on Islamic economic principles. The lecture discusses the concepts of gratitude (shukr), contentment (qana'at), and trust in God (tawakkul). It emphasizes being grateful for blessings both large and small, focusing on obeying God rather than desiring specific outcomes, and having confidence that God will provide. The lecture raises questions about whether modern economic theories accurately describe human behavior and suggests they are more normative than positive. It argues theories should be based on Islamic ideals of gratitude, contentment and trust.

1. • "In the Name of Allah, the Merciful, the Compassionate.
• Praise be to Allah, Lord of the Worlds, and blessings and
peace be upon our Master Muhammad, the last of the
Prophets, and upon his family and companions, and all
those who follow them in goodness until the Day of
Judgement.
• O Allah, I ask You, by Your wisdom which comprehends
all things, to make me among those who are eloquent in
their speech, and to grant me the ability to speak about
Your religion.

2. O Allah, I ask You to make my works sincerely
for Your sake, and to make my intentions
solely for Your pleasure.
O Allah, I ask You to make my love for You
greater than my love for anyone else, and to
make my fear of You greater than my fear of
anyone else.
O Allah, I ask You to make me among those
who are guided by You, and to make me
among those who are guided to You."

3. A New Approach to
Islamic Economics
Dr. Asad Zaman
Lecture 1: Gratitude, Contentment, and Tawakkul = Shukr, Qana’at, and Trust.

4. Structural Details
One Live Lecture, every month on First Sundays. Same time, same
ZOOM link. For more details about course, see: http://bit.ly/na2ie
ADDITIONAL, supplementary materials, sent on weekly basis to
members of mailing list: http://bit.ly/AZIEML
Course Materials will also be available from the Al-Nafi Portal via:
https://portal.alnafi.com/courses/islamic-economics
Shortlink: http://bit.ly/IEalnafi

5. Gratitude

6. And remember when your Lord
proclaimed, 'If you are grateful, I will
surely increase you [in favor]; but if you
deny, indeed, My punishment is severe.'" -
Quran 14:7
The secret for success in THIS life!!

7. Strategies for being
Grateful to God
And if you should count the favors of Allah , you could not enumerate them.
Indeed, Allah is Forgiving and Merciful.
COUNT the blessings of Allah.
When you wake up, be grateful for being given life after a mini-
death, and resolve to make the best use of this day granted to you
– which may be the LAST of your days!
Be grateful for health, security, clarity of mind, food, time, youth,
energy, while knowing that you cannot count the blessings.

8. Our Prophet SAW is the Perfect Example
Al-Mughirah ibn Shu’bah reported: The Prophet, peace and blessings
be upon him, would pray until his feet were swollen. It was said to him,
“Why do you do this when Allah has forgiven your past and future
sins?” The Prophet said, “Shall I not be a grateful servant?”
Worship with a feeling of gratitude.
Personal Example: Laziness at Fajr Salat, dispelled by a Sha’r from Iqbal:
Iqbal: You do not love me, you love the comforts of sleep!

9. Two Habits for Gratitude & Contentment (Sabr)
In worldly affairs, look to those who have less than you, and give thank.
In religious matters, look to those who are more advanced, and seek to
follow them.
Allah T’aala will count you among those who give thanks, and those
who are content with what they have been given.

10. The Small Things
The Prophet, peace and blessings be upon him, said, “Whoever is
not grateful for small things will not be grateful for large things.
Whoever does not thank people has not thanked Allah Almighty.”
When you wake up, give thanks for being given life after the
small death. Give thanks for health, security, comforts, and the
precious day.
This day is an opportunity to buy the Jannah with good deeds.
Success lies in here and now – it DOES NOT lie in achieving
desirable outcomes.
When you eat, reflect on how many miracles have created this
food.

11. Ingratitude: From Excess
"And let not the abundance of (worldly) goods divert you,
O man, from the remembrance of Allah; and whoever is
ungrateful, then verily Allah is Self-sufficient, above all
wants." - Quran 28:77
And if Allah were to enlarge the provision for His slaves
they would surely rebel in the earth, but He sendeth down
by measure as He willeth. Lo! He is Informed, a Seer of His
bondmen. (Qur’ān, 42:27)
Qaroon, when asked to spend of his wealth, says
that he is entitled to it – he earned it due to his
knowledge.

12. No Envy
(4:32) Do not covet what Allah has conferred more abundantly on some of you
than others. Failure of Gratitude => Feeling Superiority or Equality.
Remedy: Think of yourself as the worst person on the planet.
How? What you have done is in relation to what you have been given.
When you see someone in worse condition, give thanks that Allah
T’aala has protected you from their condition.
When you see someone in better condition, make dua for them that
they may succeed in this difficult test, and make thanks that you have
not been placed in this test.

13. Attitude:
When you see someone in worse condition, give thanks that Allah T’aala has
protected you from their condition.
When you see someone in better condition, make dua for them that they may
succeed in this difficult test, and make thanks that you have not been placed
in this test.
NO!

14. And as for man, when his Lord tries him and [thus] is generous to him and favors him, he says, "My Lord
has honored me."
But when He tries him and restricts his provision, he says, "My Lord has humiliated me."But when He
tries him and restricts his provision, he says, "My Lord has humiliated me."

15. Contentment
• Abu Huraira narrated that the Prophet said: Wealth is not in
having vast riches, it is in contentment. (Bukhari, Muslim).

16. Deep Strategy for Contentment
Learn that success lie in finding and obeying the orders of Allah
pertaining to the current situation.
It DOES not lie in reaching a desirable outcome.
This requires overcoming a lifetime of training.
We have learned that some states of the world are better (for us) than
others. Our job in life is to work to create a better external reality.
This leads to DISCONTENT: We do not like some aspect of external
reality, and work to improve it.

17. Process Versus Outcomes
In every circumstance, success lies in obeying orders of Allah.
The King and the Peasant are equally capable of passing and failing.
Giving a piece a date as Sadqa can bring the reward of mountains.
Sacrificing one’s life in holy Jihad can be in vain.
EVERY circumstance is equally a Test (though some are hard and others
are easy).
The issue is not to improve circumstances, but to find and obey orders
of Allah suitable to present circumstance.

18. (Allah) who created death and life to test you [as to] which of you is best in deed -
and He is the Exalted in Might, the Forgiving
Our goal is to collect the BEST DEEDS. These can be done in ANY
circumstances.
Abu Aqil (a sahabi) gave a handful of dates, earned by labor, on the
occasion of Tabuk, when others were giving huge amounts. Prophet
SAW appreciated his effort, and Allah T’aala revealed (Q 9:79) in his
support, when some hypocrites ridiculed this small contribution.

19. Goal of Life: Doing the BEST deeds
• The smallest of deeds, done with sincerity, counts heavily with Allah.
• The greatest of deeds, done without sincerity, counts for nothing.
In any circumstance, good or bad in outlook, it is possible to do
greatest of deeds.
Thus, there is no point in striving to improve our circumstances.
Instead, we should look towards the best we can do (to please Allah) in
the current circumstances.
In fact, Allah T’aala has CHOSEN the circumstances we face, as the ideal
training ground for us, to make progress in journey towards Allah.

20. Quran: Focus on the Hereafter
1-In one place, Allah informs us in
Surah Al-Kahf that we should not
over indulge in the good things; i.e.,
wealth and children:” Wealth and sons
are allurements of the life of this world.
But the things that endure, good deeds are
best in the sight of your Lord, as rewards,
and best as the foundation for hopes.” (Al-
Kahf: 46)
My name is Ozymandias, King of Kings
Look upon my works, ye might, and despair

21. Quran: Focus on the Hereafter
2. In another place, Allah informs us in Surah Al-Hadid that the worldly
affairs are temporary entertainment where people may be deceived:”
And what is the life of this world, but goods and chattels of deception?” (Al-
Hadid: 20)

22. Quran: Focus on the Hereafter
3. In another place, Allah instruct us in Surah Al-Imran not to be
overwhelming by the worldly enticements, and its attractions:” Fair in
the eyes of men is the love of things they covet: women and sons; heaped-up hoards
of gold and silver; horses branded for blood and excellence; and wealth of cattle
and well-tilled land. Such are the possessions of this world’s life; but in nearness
to God is the best of the goals to return to.” (Al-Imran: 14)

23. Strategies for Contentment
Never complain about personal situation, or the world,
except to Allah.
We are in this world for only a moment – focus on
eternal success.
All situations are tests: Excess wealth and less than
enough. Focus on what Allah T’aala wants from you, to
get closer to God in all situations.
Concentrate on doing the best deeds – service to
creation of God, for the sake of the love of God.

24. Tawakkul: Trust in God.

25. Tawakkul: Trust in God.
And whoever puts all his trust in Allah, He will be enough for him. (Q 65:3)
And put all your trust [in Allah], if you truly are believers. (Q 5:23)
He is Rabb of the east and west, there is no deity except Him, so take him as your
Protector. (Q 73:9)
Put your trust in the living Allah who never dies, and celebrate His praise. (Q
25:58)
In Allah should the trustful trust. (Q 14:12)

26. No Regrets over What Might Have Been
No disaster strikes upon the earth or among yourselves except that it is in a
register before We bring it into being - indeed that, for Allah , is easy -
In order that you not despair over what has eluded you and not exult [in pride]
over what He has given you. And Allah does not like everyone self-deluded and
boastful -

27. No Anxiety or Worry
Carry out the orders of Allah, and put your trust in Allah to create the
best outcomes.
Even if outcomes APPEAR unfavorable, even highly unfavorable,
BELIEVE that Allah T’aala has hidden great KHAIR in them.

28. Patience and Perseverance
All troubles occur for a reason.
Trouble: Cause of forgiveness of sins
Trouble: Sent to turn you back towards Allah
Trouble: To cause elevation in your degrees
So, no need to lose heart, TRUST in Allah that HE has created the best
possible circumstances for you, that there is KHAIR hidden in apparent
difficulties.

29. Empowerment and Confidence
"And whoever relies upon Allah - then He is sufficient for him" (Quran, 65:3)
"And whoever fears Allah - He will make for him a way out. And will provide for
him from where he does not expect. And whoever relies upon Allah - then He is
sufficient for him. Indeed, Allah will accomplish His purpose. Allah has already
set for everything a [decreed] extent." (Quran, 65:2-3)

30. End of Part 1:
Gratitude,
Contentment,
Trust

31. Part 2: Many Questions
The discussion above raises many questions, and even more among those trained
as economists. This part provides answers to some of these questions.

32. Economic Theory claims to be POSITIVE:
An objective description of reality.
Is this true?

33. The Normative Positive Question
The material is presented is NORMATIVE – it tells us about ideal forms
of behavior. It is PRESCRIPTIVE: how one should behave.
Science is POSITIVE – it describes actual behavior (DESCRIPTIVE).
Modern Economics is a positive science.

34. Answer: Behavioral Theory of
Economics:
Modern Economics: Rational Behavior consists of
maximizing the pleasure we obtain from consumption of
goods and services.
Is this DESCRIPTIVE?
“Rational” is a normative label. Someone who does not
behave like this is Irrational. The question is
DO people behave in the way described in Micro-
Economics textbooks?
Answer: Overwhelming Empirical Evidence AGAINST
utility Maximization.

35. Ultimatum and Dictator Games
One Person is asked to share a pile of money with Second
Person. He can take as much as he likes for himself. The
Second Person gets what he leaves in the pile.
Rational Behavior: Take EVERYTHING.
Actual Behavior: 50-50 splits are most common (about
30%). Vast majority of people take between 50% and
80%, and leave at least 20% for others.
ONLY people with training in Economics take everything,
and even then, only a few of them.

36. Empirical Evidence
Rejects Economics
theory
Field of Behavioral Economics created
by psychologists, because utility
maximization does not match actual
behavior.
“The Empirical Evidence Against
Neoclassical Utility Theory: A Review
of the Literature” IJPEE, V. 3 n. 4,
2012- http://bit.ly/AZconflict

37. Major Areas of Conflict
Economic Theory: Humans are selfish,
competitive, unemotional.
Reality: Humans are generous,
cooperation, and emotions often trump
reason and calculation.
Prime Example: Prisoner’s Dilemma –
people often cooperate, contrary to utility
maximization model.
Economists have spent fifty years trying to
explain this cooperation as a case of long-
run selfish behavior. But these
explanations FAIL!

38. Conclusions
Economic Theories CLAIM to be positive, but are in fact normative.
They do not describe human behavior – they prescribe standards for
“rational” behavior.
Many papers show that those trained in Economics learn to be selfish!

39. Three Questions
1. It is well-established that utility maximization (and variants) do not
explain human behavior. WHY do economics textbooks around the
world continue to use this rejected theory of behavior?
2. What about the idea that science is POSITIVE and not NORMATIVE?
If modern economics is normative, why not move to a positive
theory?
3. Clearly, even most Muslims do not have these characteristics of
Gratitude, Contentment, and Trust. How can we build a theory
based on utopian ideals?

40. Q1: Why do Economists
Persist in Using Theories
Strongly in Conflict with
Data?
Photo 108198141 © Vchalup | Dreamstime.com

41. After the Global
Financial Crisis:
Romer: For decades, macroeconomics has gone
backwards, losing precious and hard-won insights.
Today, modern macro produces wildly incorrect
predictions, based on fundamentally flawed
doctrines. http://bit.ly/ACRomer
The Queen of England went to London School of
Economics to ask: Why did no one see it coming?
http://bit.ly/PBwdno
For a complete discussion, see: A Critique of
Conventional Economics – http://bit.ly/AZcoce
For many quotes critical of economics, by leading
academics, see: http://bit.do/azquo

42. The Keynesian Revolution &
The Monetarist Counter-Revolution
• Keynes argued that free markets did not create full
employment. Governments must intervene to do
so.
• Following Keynesian policies led to prosperity for
the masses, but reduces power and wealth share of
top 1%.
• Top 1% plotted a counter-revolution. Chicago
school led the theoretical front, while Reagan-
Thatcher implemented these policies.
• This led to a reversal of fortunes. The masses were
impoverished, while the top 1% made enormous
gains, and inequality increase massively.
• For details see: http://bit.ly/KRMCR

43. Central Insights
Marx: Capitalism works not by forcibly exploiting laborers, but by
making laborers agree to their own exploitation.
This agreement is created via education, into false economic
theories.
Modern Economic Theory is a tool of propaganda, built to create the
impression that our woefully bad economic system is the best for all
people.
There are many propaganda techniques used to accomplish this goal.
The deceptive nature of economic theory is one of the most
powerful.

44. Exactly Why/How is
Economics Deceptive?
See: The Grand Deception: Social
Science http://bit.ly/AZgdss1
Economics was a branch of moral
philosophy.
It CONTINUES to be a branch of moral
philosophy, but the morals have been
concealed, under the pretense that
Economics is an objective description of
reality – a science.

45. The Production Function
Bergmann: Needed, A New Empiricism –
(http://bit.ly/BergNANE) To learn about their behavior,
Biologists studied bottle-nose dolphins for hundreds of
hours. HOWEVER, economists' theories of firms are
based on ZERO hours of study of real world firms.
Alan Blinder’s Survey of real firms: Asking About Prices –
contradicts all economic theories of firms found in
textbooks.
Again: Why do Economists persist in presenting false and
refuted theories to students all over the world?

46. The real arguments are
CONCEALED.
• Marx argued that capitalists exploit labor.
• The production function creates symmetry between labor and
capital. Both get their marginal product – that is both get the
just reward for their contribution to production.
• Moral argument concealed by mathematics.
• Assumptions require competitive markets – they do not work
if there capitalists have market power and labor does not.
• Also, the mathematics is WRONG – The Total Product CANNOT
be partitioned into marginal product for labor and capital in
most cases.

47. Normative
Foundations of
Scarcity
Scarcity arises from confusing
(deliberately) needs and wants.
Islam encourages fulfilment of needs, and
DISCOURAGES pursuing idle desires.
If those with excess above their needs are
encourage to give to those with needs,
then there is no scarcity.
Fundamental economic problem is not
scarcity, but GREED, encouraged by
capitalism. ANTIDOTE to this problem has
already been described.
See: Scarcity: East and West:
https://ssrn.com/abstract=3061271

48. Q2: Science is Positive,
not Normative
Material Objects in the Universe DO NOT
have free will. Therefore, they are subject
to physical laws. We can OBSERVE them,
and study their laws of motion.
Human Beings have free will. Therefore,
there cannot exist any laws of motion to
describe their behavior.

49. DEEPER QUESTION: How did “social
scientists” make such an OBVIOUS mistake?
One cannot apply methods of physical sciences to study of
human beings!
See: The Puzzle of Western Social Science –
http://bit.ly/AZpss
Social Science consists of lessons extracted from European
historical experience. The word “science” makes a false claim
that these are universally applicable.
Many books and articles show that “social sciences” are NOT
science.

50. Massive Methodological
Mistakes
• The Battle of Christianity and “Science” (inflow of
knowledge from Islamic Spain).
• Era of Religious Wars for over a century leads to
rejection of Christianity as basis for organizing society.
• This leads to birth of Social Science on secular ground.
Rejection of God, Judgment, Afterlife, leads to
maximization of pleasure, power, and profits in this
earthly life as goals.
• These are embedded in the foundations of Western
Social Science.

51. Q3: Most Muslims do not have these qualities
So, how can we build a theory on them?
Even in the best of times (Khairul quroon) there
were many hypocrites and non-Muslims within the
Islamic society.
First, we must reject Western understanding of, and
methodology for, the so-called social sciences.
Then we must introduce a new methodology.

52. Uloom-ul-Umran: http://bit.ly/AZUUU
Islamic Alternative to Western Social Science
Three Dimensional Approach:
1. Positive/Descriptive
2. Normative/Prescriptive
3. Transformative
All three dimensions are central to study of
societies.

53. Islamic Methodology
• Our Prophet Mohammad SAW is the ideal model for us in all dimensions.
• Even though this normative ideal is not attainable, it provides us with the
direction for our efforts.
• Some aspects of his character, especially those related to economics, were
given in this lecture.
• If we strive to create a society based on these qualities, there would be no
scarcity. The fundamental principles of economics would change.
• Even if these ideals are un-attainable, the struggle create them will create
good results.

54. Deeper Issue: Different Epistemology
• Western Knowledge is only of external reality
• Eastern Knowledge combines subjective internal reality with external.
• Primary basis for learning is EXPERIENCE – which impacts our hearts,
souls, nafs, and minds
• The four-dimensional model for Islamic psychology originates with
Ghazali, and has received substantial development in modern times.

55. Concluding Dua’s
• From Anas bin Malik ( ‫رضي‬
‫هللا‬
‫عنه‬ ) that he heard the
Messenger of Allah (‫)ﷺ‬ supplicating:
• َّ
َّ‫م‬ُ‫ه‬َّ‫ل‬‫ال‬
‫ي‬ِ‫ن‬ْ‫ع‬َ‫ف‬ْ‫ن‬‫ا‬
‫ا‬َ‫م‬ِ‫ب‬
‫ي‬ِ‫ن‬َ‫ت‬ْ‫م‬َّ‫ل‬َ‫ع‬
،
‫ي‬ِ‫ن‬ْ‫م‬ِ‫َل‬‫ع‬َ‫و‬
ََّ‫م‬
‫ا‬
‫ي‬ِ‫ن‬ُ‫ع‬َ‫ف‬ْ‫ن‬َ‫ي‬
،
‫ي‬ِ‫ن‬ْ‫ق‬ُ‫ز‬ْ‫ار‬َ‫و‬
‫ا‬ً‫م‬ْ‫ل‬ِ‫ع‬
َّ
َ‫ف‬ْ‫ن‬َ‫ت‬
‫ي‬ِ‫ن‬ُ‫ع‬
َّ
ِ‫ه‬ِ‫ب‬
• Allahumman fa’nee bi-maa ‘allam-ta-nee wa ‘allim-nee
maa yanfa’u-nee war zuq-nee ‘ilman tanfa’u-nee bih
• (O Allah benefit me with what You have taught me, and
teach me that which will benefit me, and grant me
knowledge which will benefit me)
• [Collected by an-Nasaa’i 4/444, al-Hakim 1/ 510,
Bayhaqi 1/158 & authenticated by Albani in Silsilah No.
3151]