|2.4 Divine Economics Framework|
Religion plays a key role in formulating individual's behavior, which govern the whole economic system of decision making in the economy. Hence the impact of religion on human behavior as an individual, or as a group is now considered to be an important area for extension to traditional economic models (Iannaconne 1991, 1992).
Since all divine religions teach its followers the concept of life hereafter (after death) which is a compulsory part of the faith. The departure of the analysis of divine economics from conventional economics is the concept of two lives, the first one the life on earth and the second the life after death (Nadvi, 1995). In all the divine religions the code of life, belief in life after death and the Day of Judgment will have significant impact on economic decision making of individuals.
According to this the economists believe that expected stream of benefits does not terminate at the time of death. Hence there remains scope for a divine economics that may represent consumer behavior in divine religion's perspective, by Hamdani (2002). The new emerging discipline i.e. Divine Economics as proposed by Dr. Hamdani has wider scope as compared to conventional one, in which religious behavior also play a vital role in the decision making of economic agent for rational choices.
"Divine economics is a science which studies human behavior directly or indirectly to achieve an optimal degree of Falaah from God given resources" (Tashfeen, 2001). The conventional economics studies only welfare of a man in the life on the earth while divine economics studies welfare of a man in the life on earth but also the eternal welfare of the life after the death. In all divine religions, people believe in one God i.e. Almighty Allah and the Day of Judgment (the life here after).
The Reward and Punishment of one's deeds in the shape of the Heaven and Hell are admitted facts of all sects of Divine religions. It is also believed that all the material and immaterial goods in the universe have been gifted by Allah to man, and is accountable the deeds on the earth Dr. Hamdani One of the contemporary proponents of framework defines Divine Economics as "the study of economics and religion in each other's perspective using scientific process".
This framework incorporates standard variables and also some additional social, psychological, environmental and religious variables in the economic analysis, which were previously neglected by economists. Hence this framework allows one to study human behavior with reference to Mahdavi Doctrine and can estimate various socio economic relationships of current and future importance.
3. Economics of Future
Economics of the future is newly emerging subject, which deals with the economic analysis of the current and future scenarios having some future importance. The economic theories / laws which are used for the economic planning and policies of the economies related with the economics of future. Conventional economics uses empirical evidence on past to predict about future economic outcomes while Divine Economics uses all the three methods such as divine revelation, experience / perceptions made by wise men as well as empirical methods.
1. Divine Revelations
2. Experience / perception of wise men in the society
3. Empirical analysis
Source: Divine Economics
The conventional economists formulate the theories/laws of economics on the basis of trends using past data. The 2nd technique ( wisdom / experience / perception ) commonly known as deductive method was being used up to the publication of the General Theory of Employment by J. M. Keynes. Later on the 3rd method i.e. empirical analysis known as scientific technique is used. Different approaches such as Lucas's misperception theory, adaptive / rational expectations, Game theory and regression analysis are used for the solution of the economy's problems and predictions are made accordingly for policy making.
Conventional economics uses empirical evidence on past values to predict the future economic outcomes that may be true or false so the policies implemented on the basis of these economic outcomes may not be fruitful. On the other hand in divine economics above cited three methods such as divine revelation, experience / perceptions made by wise men as well as empirical methods so predictions made by the divine economics will be true in all respects and the policies can be used for research. In general the followers of all the divine religions (Jews and Christians) and in particular the followers of Islam firmly believe on divine books (Bibal), Qura'n and Hadiths.
Source: Divine Economics
The above figure shows that economics of the future can be seen from two distinct views; traditional view and divine view. Under traditional view past data is used to forecast the future. In divine view, the divine revelations have also some importance in shaping a future perception about which further investigation can take place using past data.
The divine view of the future of the globe can be derived from divine religions; Christianity, Judaism and Islam. In former two religions, it is believed that Jesus will come again and establish 'Kingdom of God' on earth. In Islam it is believed that Imam Mahdi (A.S.) will appear and fill the earth with justice and peace as it would be filled with injustice and cruelties. In religious literature, a number of evidences in the support of Imam's arrival can be found. Based on such predictions, the subsequent sections of this paper will present how economics of future can be developed?
How that fulfills the requirements of conventional empiric-based scientific research process more credibly than conventional one? This version of economics can easily incorporate the economic systems of the era of Imam Mahdi (A.S). Ideal level of welfare at globe may be achieved with equitable resource distribution. A number of strategic resources may be exploited to achieve higher level of welfare for average individual. A sketchy view of world economic growth and population increase is given. The analysis shows relationship between demand for resources and increase in number of individuals.
Whole the nature has been created by the All Mighty Allah; a man is His vice-regent on earth. "Seek the other world by means of what Allah has bestowed upon you, and do not be negligent about your share in this world". And do good as Allah have done well by you, and do not seek to spread disorder on the earth". The Holy Qura'n [28:77]. , Islam follows divine guidance on economic activities. Human authority cannot remove these controls imposed by Islam. The prohibition of Rib 'a, gambling, hoardings, introduction of Zakah, dealing in unlawful goods or services, short sales and speculative transactions are some examples of divine restrictions.
According to the statistics the world GDP (comprising180 countries) has reached a sum of US $46,747 billions. The main contributors to the world GDP are USA, Japan, Germany, China, UK, France, Italy, Canada, Spain, Brazil, Russia, Korea, India, Mexico and Australia. Percentage share of USA to the total world GDP is 28.3. While both the emerging economies such as India and China have a share of 1.82 and 5.41 respectively.
Source: International Monetary Fund and World Economic Outlook Database
The reports of IMF and World Bank shows that more than three fourth world resources are owned by the developed countries having less than one fifth world population while 80% rest of the world population has one fifth world resources. 3.2 World Population. In the last few centuries, the number of people living on earth has increased many times over. By the year 2000, there will be 10 times more people on Earth than there were 300 years ago.
3.3.2 Trend of Per Capita World Product.
The product per head, normally defined as the world total GDP divided by the world population
While examining schedule and graph of the world per capita GDP growth rate, apparently it seems that per capita is increasing at increasing rate with slight variation. It has been reported by OECD (1999), that there would be long run boom in the global economy and that would be manifold increase in the world resources. On the other hand the population growth rate is slowing down. Throughout the 1960s, the world's population was growing at a rate of about 2% per year.
By 1990, that rate was down to 1.5%, and by the year 2015, it is expected to drop to 1%. Observing both the growth rates per capita as well as population, the expected conclusion of the above data refutes the Malthusian theory of population that "population increases by geometric progression and will be double after 25 years.
The wealth resources increase by arithmetic progression". This pattern of population and per capita growth rate shows positive results for welfare of global economy. These indicators provide foundation to optimistic future of global economic growth. If there is equitable distribution of resources among world population the existing resources can fulfill wants/needs of people of whole of the globe.
The trends of the world per capita and population may continue, provided, good governance prevails. At macro level global economy is growing positively but at micro level it shows a number of inequalities. This inequality has different causes including lack of good governance at global level. An ideal type of good governance is expected in the era of Imam Mahdi that may peruse global welfare. Contrarily in the world, the governance system is not supportive for ideal governance that keeps welfare level of human beings below desired level.