The fundamental concerns, real-world challenges, and consequences of traditional economics, banking, and finance have become more visible in modern times.
The banking and financial sectors, together with other corporate actors, are continuing the actions that have contributed to Earth’s imbalanced situation. The widespread discussion on sustainable development goals (SDGs), also known as environmental, social, and governance objectives, demonstrates attempts to prevent them (ESG) and Shariah-compliant checks.
For centuries, macro-economists, micro-economists, wealth and asset managers, and the corporate world have sought profit and utility maximization, marginal cost and benefit analysis, Pareto efficiency, and continuous path convergence measurements, and these efforts have generally pushed humanity to the brink of extinction. Natural calamities, such as wildfires, soil erosion, earthquakes, floods, and typhoons, seldom go unreported.
Another alternative is Islamic Economics (IE), which may be the only one to deliver answers based on strong and comprehensive foundations from trustworthy Islamic sources. Epistemological integration is a critical instrument for putting this choice into practice. Approaches for epistemological integration that integrate textual and real-time sources assist training and learning. These techniques can change our minds and impact how individuals view the world.
Consumption and production can be managed if we modify our perspective to the consumption of items we genuinely need, require less, or don’t need. The Shariah notion of Maqasid (objectives) is a major factor in the necessity hierarchy. There are three degrees of necessities in this hierarchy: Daruriyyat (essential), Hajiyyat (intermediate), and Tahsiniyyat (luxurious).
Most people can make earnings with the first two categories while aspiring to the third. The economic world has molded us to chase non-essential desires while ignoring fundamental requirements. Spending one’s income on any need is a legal privilege, but the long-term consequences of such thinking have pushed humanity to the brink of extinction. Such consumer demand is no longer sustainable in terms of supply.
The world evolves as people’s viewpoints shift. Adjusting our perspective on the world may assist with many of our current problems. This perspective is reflected in our usage of resources to create and consume them. We know that consumption is a critical component of any economic system. It displays supply and determines demand levels.
SDGs and ESGs
SDGs and ESGs, on the other hand, are sustainably reachable via a better epistemological knowledge of economic activity, and referring to the Maqasid helps us manage our needs and desires more efficiently. It will govern our consumption, but it will also synchronize supply levels. Questions to consider when we go more into epistemological economic thinking and the Maqasid methodological world include “Do I truly need this item? If so, for what?” to “Will I truly utilize it or dispose of it soon after getting it?” and “Do I influence anyone’s life by disposing of stuff so rapidly and recklessly?” among other questions.
These are simple questions that any customer may ask themselves to see if their purchasing habits are sensible and sound. This will also correct the rational or good supply level. As a result, consumers will become more conscious of their activities, such as the disposal of plastics, gadgets, and clothing, which impact the degree to which specific SDGs or ESGs are met. The supply side, or producers, stay on track, satisfy customer demand, and consider ways to improve their experience. This method of economic reasoning is epistemic in that it feels how goods were provided to the customer and how the consumer uses and disposes of them.
Consumer impression is shaped more completely when they are aware of the source of a product and its usage, and their actions are rooted on solid grounds. All of their acts are carried out more responsibly. Thus, Maqasid may be considered highly normative and anchored in sources of knowledge, such as contributing to environmental preservation, resource usage, product/thing sharing through responsible disposal, and living within one’s means and real requirements without sacrificing one’s quality of life. When consuming or providing a product, the consumer becomes active in an economy by questioning its purpose and intent. When we have a reasonable goal or mission that characterizes living, we can connect with our environment’s reality (Haqiqah). Life gets more honest.
The Maqasid-based epistemological approach in an economy has the potential to shape not only individuals but also industries of finance and banking services in such a systematic and genuine way as to reveal the true teachings, vision, and mission of what the Islamic banking and finance (IBF) industry aspires to achieve. As a result, it is time for stakeholders and shareholders, all of whom are consumers, to rethink their consumption patterns and use and dispose of their possessions responsibly to contribute to the global goals of the SDGs and ESGs. This also makes the Maqasid useful. Furthermore, IBF institutions can universalize their economic activity by appealing to customers all over the globe who are still unaware that IBF is not only for Muslims.
The world now has the opportunity to comprehend IBF via its epistemological foundation and comprehensive Maqasid gateway, where innovation and creativity drive change. Contemplation along these lines allows the IBF to reclaim its reputation as the engine of an Islamic economy or alternative economic system in which contemporary movements for greater data analytics and artificial intelligence are integral, as well as the fuel for greater empirical testing and refinement about sound philosophical foundations derived from Islamic sources of knowledge.
The assessed approach to economic understanding and the reformation of the IBF business based on real-time data demonstrate multidisciplinarity. Maqasid employs an integrative epistemological basis to identify and articulate the greater aim of consumption and production. Combining the two encourages convergence along a long-term development path toward increasing Shariah compliance levels. Higher levels of Shariah compliance equal elevated levels of ESGs and SDGs, which are proportional to a viable environmental solution.
What MAQASID Do For Individuals?
The improvement of everyone’s lives and the avoidance of future tragedies are made possible by slowing human activity on the planet under Maqasid’s good epistemological leadership. This ensures the well-being of many individuals whose lives are in danger today. Resources to assist persons suffering from preventable disasters might be utilized to improve their quality of life. These represent entirely new income sources and industry services. As a result, stakeholders and shareholders must implement the demonstrated economic justification or face the consequences.
Practitioners, especially academics and corporate leaders, should use a detailed analytical framework in which philosophical foundations are critical to determining action objectives (Maqasid). Training, seminars, and workshops regarding such foundations in academia and business may facilitate the exchange of ideas among specialists in texts and situations. This would compel practitioners to reconsider their existing engagement patterns and completely redesign confined, imitated limited, and incoherent programs. The provision of social services serves as the consumer base for all of us. Hence the major emphasis of practitioners’ orientation should be on social needs.
Changing social circumstances will result in the continuance of recent experiences we hear about daily if regulators maintain a watch on the wide variety of activities that such economic reasoning stimulates; a data-driven economy may be, by higher purposes and objectives (Maqasid), established on sound philosophical underpinnings. Such economic activity would have a significant and appreciated global impact. Even if a new economic era is only getting started, new viewpoints are critical to maintaining the validity of the reinvented approach to economic growth, the formation of banking and finance, and other corporate world players.