The Challenge of Poverty and the Poverty of Islamic Economics

by Mohammad Omar Farooq
SSRN eLibrary 2008

Islamic economics is suffering from "poverty of substance" . As a discipline it is just a "context of post colonial Islamic resurgence." He finds that Islamic economics is focussed on the alleviation of poverty (why? because poverty leads to kufr) rather than achieving affluence. He calls this "economics of poverty".

This is achieved through a "caring society" and via a reliance on the zakat mechanism to alleviate poverty. He cites the situation of roaming zakat payers that cannot find any zakat beneficiaries during the rule of Hadrat Umar and Umar Ibn Abdul Aziz (2nd khalifa). However he questions the extent of effectiveness of zakat, and speculates that the affluence of the times came from redistribution of wealth obtained through conquests and not thru zakat.

Farooq observes that "Islamic economics" is torn between those that want to "Islamize" the current body of conventional economic thought and those that reject conventional economics outright. But neither focuses on poverty. Even Choudhury (of hte Tawhidi economics) does not tackle poverty head-on. Farooq opines that poverty is not caused by shortage, but by failure in distribution/ redistribution.